Posted on 12/18/2003 3:32:00 PM PST by sly671
Jobs come and go Walter E. Williams
In 1970, the telecommunications industry employed 421,000 switchboard operators. In the same year, Americans made 9.8 billion long distance calls. Today, the telecommunications industry employs only 78,000 operators. That's a tremendous 80 percent job loss.
What should Congress have done to save those jobs? Congress could have taken a page from India's history. In 1924, Mahatma Gandhi attacked machinery, saying it "helps a few to ride on the backs of millions" and warned, "The machine should not make atrophies the limbs of man." With that kind of support, Indian textile workers were able to politically block the introduction of labor-saving textile machines. As a result, in 1970 India's textile industry had the level of productivity of ours in the 1920s.
Michael Cox, chief economist at the Federal Reserve Bank of Dallas, and author Richard Alms tell the rest of the telecommunications story in their Nov. 17 New York Times article, "The Great Job Machine." Spectacular technological advances made it possible for the telecommunications industry to cut its manpower needs down to 78,000 to handle not the annual 9.8 billion long distance calls in 1970, but today's over 98 billion calls.
One forgotten beneficiary in today's job loss demagoguery is the consumer. Long distance calls are a tiny fraction of their cost in 1970. Just since 1984, long distance costs have fallen by 60 percent. Using 1970s technology, to make today's 98 billion calls would require 4.2 million operators. That's 3 percent of our labor force. Moreover, a long distance call would cost 40 times more than it does today.
Finding cheaper ways to produce goods and services frees up labor to produce other things. If productivity gains aren't made, where in the world would we find workers to produce all those goods that weren't even around in the 1970s?
It's my guess that the average anti-free-trade person wouldn't protest, much less argue that Congress should have done something about the job loss in the telecommunications industry. He'd reveal himself an idiot. But there's no significant economic difference between an industry using technology to reduce production costs and using cheaper labor to do the same. In either case, there's no question that the worker who finds himself out of a job because of the use of technology or cheaper labor might encounter hardships. The political difference is that it's easier to organize resentment against India and China than against technology.
Both Republican and Democratic interventionist like to focus on job losses as they call for trade restrictions, but let us look at what was happening in the 1990s. Cox and Alm report that recent Bureau of Labor Statistics show an annual job loss from a low of 27 million in 1993 to a high of 35.4 million in 2001. In 2000, when unemployment reached its lowest level, 33 million jobs were lost. That's the loss side. However, annual jobs created ranged from 29.6 million in 1993 to a high of 35.6 million in 1999.
These are signs of a healthy economy, where businesses start up, fail, downsize and upsize, and workers are fired and workers are hired all in the process of adapting to changing technological, economic and global conditions. Societies become richer when this process is allowed to occur. Indeed, because our nation has a history of allowing this process to occur goes a long way toward explaining why we are richer than the rest of the world.
Those Americans calling for government restrictions that would deny companies and ultimately consumers to benefit from cheaper methods of production are asking us to accept lower wealth in order to protect special interests. Of course, they don't cloak their agenda that way. It's always "national security," "level playing fields" and "protecting jobs". Don't fall for it -- we'll all become losers.
©2003 Creators Syndicate, Inc.
Not that much different??? Today's "capitalism" IS the Red Chinese system. That's the system that is a runaway success with this form of Capitalism.
Why would they remain here? As society collapses from higher and higher welfare rates and unemployment rates --- why not move to where the people in the society are productive and working? If a town had 1,000 factory workers and 1 factory owner, with the factory owner getting very wealthy by having the cheapest labor possible, the 1,000 will need to be supported by welfare programs. That won't lead to a stable society.
Nice deflection on your part. It cuts both ways. Would your ancestors be proud that we are giving away our way of life to the 3rd world and other enemy nations (PRC)?
Jobs, a whole lot of them, have moved from country to country, throughout the ages, and new ones have cropped up. Only one minor example being the manufacture and use of Dungarree ( you know, what jeans used to be called and what that fabric is ), which originated in India and then trnasmogrified to the USA. :-)
If you're talking about the US, it's an odd analogy.
(Seas) Unemployment Rate
Labor force status: Unemployment rate
Type of data: Percent
Age: 16 years and over
Check out the Civilian Employment and Unemployment figures since 1948. The charts are great.
Also, up here in Ct, we have a glut of Engineers, me being one of them, only an AS, but 7 years experience as project engineer/designer.
The issue is not lack of engineers, it is lack of jobs.
If Thomas Edison griped about the lack of jobs in backward America, we would still be reading by candle light. Engineers have knowledge. Engineers who want to lead can become like Edison. It's not that hard to create things. You just have to get off your ass and go do it. Bill Gates figured this out in his first year of college. He left the stuffy academics to their pretentions and created a whole new sector in the computer industry that was avoided by IBM, Digital, and Sun.
Colorful imagery aside, your post is an excellent example of socialist sophistry. A nice thing about liberty is that capitalism permits what you espouse: you are free to form and run businesses that put jobs first and risk takers rewards second. If the market values your offerings, you will enjoy success. If not, jobs are at risk. It appears, however, that, while not a risk taker yourself, you are willing to assist in distributing the risk takers rewards.
"Who will help me plant the wheat?" asked the Little Red Hen.
"Not I," said the duck.
"Not I," said the pig.
"Not I," said the dog.
"Not I," said the chimera.
...fast forward....
"Who will help me eat the bread?" asked the Little Red Hen.
"I will," said the duck.
"I will," said the pig.
"I will," said the dog.
"I will," said the chimera.
Sorry OC. That is fuzzy wishful thinking...more akin to liberalism than any brand of conservatism.There is absolutely no reason, once they get into the outsourcing addiction for the 'entrepreneur' to remain an employer here. Use your own logic. It is just not cost-effective. Particularly after they have proved their outsourcing model to produce superior returns. Not when you can pay 27 cents an hour in China.
Plus, besides the cognitively self-decieving rationalizations, they suddenly transform the supply chain for their production into an increasingly more competitive one that prevents them from exercising any economic discretion on their future production plans.
They are trapped into the vortex of Chinese low-cost labor. Once they set up a trained work force in the China and Indian regions, guess what else you have defacto set up? That's right. Your next competitor...one who can flout the Chinese labor laws with impunity...and undercut you.
Once the 'partners' you have had to work with feel sufficiently confident they have learned from you all proprietary info they need to, (with regard to product manufacture or systems development, and client lists, etc...) then they set up their own independent entity duplicating...and competing with your company for your own business. Totally disregarding and evading the contractual non-compete provisions, and the intellectual property rights you are entitled to. Intellectual property rights BTW Which they (and all their fellow nationals) deem an unfair infringement on their 'right to compete.' Hello. End of true capitalism, by virtue of handing the entire means of production to those who are essentially lawless and implicitly reject our system and laws.
And have I mentioned before that China is ruled by unrepentant hard-core communists? And India by dyed-in-the-wool redistributionist Third World socialists? Amazing how the capitalists in the West have become so short-term thinking, and so short-sighted, they can't see the 'New Economic Program' of Russia, circa 1925-1930 being reprised here....on an even grander scale. Historical Note: By sucking the West dry of a lot heavy capital, and then nationalizing it...it helped precipitate and deepen the Great Depression.
An off-base and ignorant assertion. Your pejorative attacks on those whom you mistakenly 'presume' to be doing nothing. With assumptions such as this, it explains a great deal why you are overly smug and arrogant. Try and manufacture something in the U.S. with garage-scale economic backing today. You are competing against all of China, and its horde of intellectual property violators. Your design patent may as well be used for toilet paper.
Bump To The Top!
Why should they remain? Did they remain in the imperial Spain where the domestic production was outsourced to be paid by the colonial gold? You indulge in wishful thinking.
Good point, Willie.
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