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Jobs Come and Go (One of the smartest economists in the world hits the nail on the head)
www.townhall.com ^
| 11/26/2003
| Walter E. Williams
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.
TOPICS: Business/Economy
KEYWORDS: trade; walterwilliams
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To: Willie Green
Some 'crat would have to decide what US widgets should cost in order to decree the proper tariff on foreign widgets.
-tpaine-
a "practical matter"?
-- "a constantly updated database that reflects current market pricing".
--- "do it day-in, day-out and day-in, it all becomes rather routine".
Sure thing willie, it would all be another routine bureaucracy, -- to thousands..
321
posted on
12/21/2003 3:43:32 PM PST
by
tpaine
(I'm trying to be 'Mr Nice Guy', but FRs flying monkey squad brings out the Rickenbacker in me.)
To: Paul Ross
255 - "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. "
Exactly correct. That's how South Korea developed (we taught them as our allies in Vietnam), and it is exactly what is happening now with our enemies (China).
322
posted on
12/21/2003 3:47:55 PM PST
by
XBob
To: tpaine
I thought the purpose was to protect american jobs?It serves that purpose indirectly without getting government involved in micromanaging our lives.How would that protect a US clothing manufacturer? 10 dollar mexican made blue jeans at $11 are still gonna undercut US made at $15. - [If the US can be made/sold at that price, big IF.]
That large of a discrepancy is more likely with Mexican coffee or bananas, considering that we don't have the right climate to grow coffee or bananas competitively. If foreign competition can still beat the tariff differential, good for them! The revenue tariff only serves as a buffer between different systems of government regulations. (Don't forget, those $15 US jeans will probably be a bit lower because tariff revenue can reduce other domestic taxation.)
To: Paul Ross; LoneRangerMassachusetts
256 - "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"
PR, you got it, most of these fools think we are competing with other societies which have our morals, ideals and economics.
They haven't got a clue.
And 'intellectual property' (which our forefather hought so important) means nothing to them (Either the American fools who we argue with and who steal music and software over the internet or the Chinese).
I have spent hours arguing about the concept of intellectual property with those in the 3rd world, and they don't have a clue, yet they want to be 'rich - just like Americans'.
324
posted on
12/21/2003 3:54:01 PM PST
by
XBob
To: Paul Ross
261 - "E.g., Another 14 million service jobs are slated to go in less than 6 years. And as the manufacturing expertise of the Chinese 'partners' equals ours then no U.S. manufacturing will be able to resist the black-hole of Chinese wages. If the U.S. dollar didn't collapse first, EVERYthing will 'have' to be made in China.
All that will remain in the U.S. will be government jobs and necessarily local employment...construction, maintenance and service fields (Grocery, Gas Station, and other stores). All manufactures and all relocatable productive activities will be relocated to China. "
I look for the collapse of the system around 2010.
325
posted on
12/21/2003 4:00:18 PM PST
by
XBob
To: tpaine
Sure thing willie, it would all be another routine bureaucracy, -- to thousands..So what's YOUR proposal, tpaine?
Or are you a naive believer in the compassionate and benevolent invisible-hand of the centralized globo-corporate plutocracy?
To: Willie Green
Willie Green:
No, Williams is dead wrong.
Whether it is business or government, the globo-trend is toward merger, acquisition and consolidation of behemoth and oppressive centralized bureaucracies.
I preach a "solution" that emphasizes more decentralization and local responsibility/self-sufficiency/opportunity.
I believe in capitalism with a small "c": extremely fractured and competitive markets.
From what Williams writes in his article here, -- he too believes in capitalism with fractured and competitive markets.
I simply don't see him touting "merger, acquisition and consolidation of behemoth and oppressive centralized bureaucracies."
In fact, isn't it true that tariffs need to be administered by such bureaucracies?
I thought the purpose of tariffs were to protect american jobs?
-tpaine-
It serves that purpose indirectly
If foreign competition can still beat the tariff differential, good for them!
-willie-
Your answer leads us back full circle.
You claimed, -- "Williams is dead wrong." -- Why?
You two only differ on flat tax type tariffs, from what I see.
327
posted on
12/21/2003 4:16:55 PM PST
by
tpaine
(I'm trying to be 'Mr Nice Guy', but FRs flying monkey squad brings out the Rickenbacker in me.)
To: AntiGuv
Bump that.
To: sly671
there is some good sense to this article, though it may not be too popular.
329
posted on
12/21/2003 4:36:11 PM PST
by
the invisib1e hand
(do not remove this tag under penalty of law.)
To: tpaine
You two only differ on flat tax type tariffs, from what I see.He may whine about the globo-marxists, but he's an anti-tariff shill for the globo-corporate bureacrats.
Walter Williams: "It's always "national security," "level playing fields" and "protecting jobs". Don't fall for it -- we'll all become losers."
Like all the other globo-corporate shills, he totally dismisses as IRRELEVANT issues of NATIONAL SECURITY and disparity of government regulation imposed on domestic production.
Think of it tpaine: Walter Williams approves of a despotic federal government that restricts We the People from utilizing our own natural resources while subjecting our economic endeavors to foreign "competition" that is not similarly encumbered.
YES, I said "despotic".
It precisely fits the definition of tyranny when government policies favor foreign entities over the interests of its own citizenry.
Yes, Walter Williams is WRONG.
The bozo doesn't even think we should have a vested interest in our own National Security.
How more goddam WRONG can you get than that?
To: HighWheeler
"The lesson is that you have to be quick on your feet. There is ALWAYS work to be done, sometimes you have to make a change, and you find out it's to your own benefit."
Good comment! I would only add that when you ARE making exceptionally good money, don't spend all of it!! Put aside as much as possible for the day when the job may end and you have to learn other skills. Too many people are in debt up to their necks...all while make some big bucks!
331
posted on
12/21/2003 4:43:11 PM PST
by
Maria S
("…the end is near…this time, Americans are serious; Bush is not like Clinton." Uday Hussein 4/9/03)
To: the invisib1e hand
there is some good sense to this article, though it may not be too popular.Care to explain Walter's naive and cavalier dismissal of National Security concerns?
Ol' Walter bills himself as a "conservative", but his disregard for National Security sure isn't conservative as far as I'm concerned.
To: Willie Green
Wow willie.. Thats quite a little hate on you have for Walt..
He's no god to me either, but I hardly think he's a bozo that "doesn't even think we should have a vested interest in our own National Security."
You need to read up a bit, imo.
Townhall.com: Conservative Columnists: Walter E. Williams
Address:
http://www.townhall.com/columnists/walterwilliams/archive.shtml
333
posted on
12/21/2003 5:01:38 PM PST
by
tpaine
(I'm trying to be 'Mr Nice Guy', but FRs flying monkey squad brings out the Rickenbacker in me.)
To: tpaine
Wow willie.. Thats quite a little hate on you have for Walt.. With his theory of "Trade uber National Security"???
LOL! He's EARNED every bit of venom I can muster!
If I could only get my hands on his economics diploma,
I'd use it to wipe my @$$ and flush it down the commode.
To: Willie Green
335
posted on
12/21/2003 5:23:40 PM PST
by
tpaine
(I'm trying to be 'Mr Nice Guy', but FRs flying monkey squad brings out the Rickenbacker in me.)
To: Willie Green
Care to explain Walter's naive and cavalier dismissal of National Security concerns? I might be mistaken, but I don't think that WEW would advocate, say, General Dynamics selling a bunch of cutting edge nuclear subs to Pakistan.
I scanned the article again...it's sound economics -- let me put it this way: where liberty is protected, free markets promote liberty and prosperity; prosperity, if hoarded, rots. It must, by nature, either grow or die. Prosperity and liberty are mutually dependent.
336
posted on
12/21/2003 5:24:52 PM PST
by
the invisib1e hand
(do not remove this tag under penalty of law.)
To: the invisib1e hand
in other words, prosperity and liberty must be exported.
337
posted on
12/21/2003 5:25:34 PM PST
by
the invisib1e hand
(do not remove this tag under penalty of law.)
To: Paul Ross
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? Agreed! Thanks for pinging me to this excellent article, Paul.
338
posted on
12/21/2003 5:46:20 PM PST
by
Victoria Delsoul
(Freedom isn't won by soundbites but by the unyielding determination and sacrifice given in its cause)
To: Paul Ross
"Try and manufacture something in the U.S. with garage-scale economic backing today."
That's exactly what I've done.
I'm still doing it.
This year was our best year ever.
339
posted on
12/21/2003 6:04:35 PM PST
by
DB
(©)
To: A. Pole
264 - "Imperial Spain had huge reserves of New World gold so she could play outsourcing game for quite long. Read about Spanish decline."
many thanks for the link. that is very interesting, and it is amazing how many things parallel our own US problems.
340
posted on
12/21/2003 7:10:44 PM PST
by
XBob
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