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The NYT continues its policy of affirmative action for people ignorant of the world by allowing Thomas Friedman to write two columns a week on whatever he chooses. Today he talks about the job crisis.
He does get some things right in pointing out that we have a huge shortage of jobs. He also notes the growing crisis posed by long-term unemployment in which millions of people are losing their connections to the labor market and risk being permanently unemployed.
However he strikes out in his dismissal of manufacturing as a source of jobs and calling for more high tech centers like Austin, Silicon Valley and Raleigh-Durham. When the dollar falls to a sustainable level it will have an enormous impact in improving the competitiveness of U.S. manufacturing. We stand to gain more than 4 million manufacturing jobs once we get the dollar down to a sustainable level.
To take this a step further, if we followed the German model (of which Friedman often speaks fondly) we would create another 3 million jobs in manufacturing by shortening the average length of the work year. Seven million new manufacturing jobs that would result from a competitively valued dollar and shorter work year is just a bit over 4 percent of the work force, but it is still a far larger number than those employed in Austin, Silicon Valley and Raleigh-Durham.
In addition, those seeing Austin, Silicon Valley and Raleigh-Durham as the future of the United States have not kept up with the present. Just as China and other low-wage countries can undercut the United States in manufacturing goods with their lower wages, so can developing undercut the United States in high tech production with their lower wages. India already has a large and growing trade surplus in software with the United States.
It is difficult to see how this trend will be reversed in the decades ahead, no matter how much we tax ordinary workers to subsidize the centers that Friedman advocates. The arithmetic is straightforward, high tech workers in the United States will not be able to compete with comparable skilled workers in the developing world making one-fifth as much. Furthermore, it is much cheaper to send software programs half way across the world than it is to send cars.
Friedman also wants to cut Social Security and Medicare for retirees as advocated by the co-chairs of President Obama’s deficit commission, former Senator Alan Simpson and Morgan Stanley Director Erskine Bowles. This policy will make Wall Street deficit hawks happy, but it is difficult to see how it will help the future strength of the economy.
31 Comments
The problem with high tech corporations is that they generally out source and/or use high tech to make their stuff. Only requiring people to pack and ship.
But then the way politics have been going, I am not so sure that the majority of people in the country aren’t dumb as dirt and could not handle anything more complex than saran wrap.
This is a crucial distinction to make, vis-a-vis manufacturing and tech service jobs.
I work in the construction industry, and when it comes to high-quality building components US/China made components aren’t even on the map. We don’t manufacture anything, and when we do it’s low end crap. There is no reason for this.
If a building needs sophisticated, high end products, invariably they need to be imported from Germany, France, or Italy. European designers who work in the US are completely shocked and dismayed at how backwards the US is, and frequently have to dumb down and redesign critical project details simply because these products are unavailable locally.
I’d love for the US to be leaders again in making basic things like plumbing fixtures, operable blinds, solar arrays, glass, or even structural steel or infrastructure piping.
The current project I’m on has outsourced large bore pipe from South Korea (yay KORUS!), and pump casings from China. And the funny thing is that a good portion of the recycled steel in both products came from America.
Another job I’m familiar with has a curtain wall glass assembly coming in from South America.
Hell! Sometimes I can’t even handle saran wrap! Uh-oh :)
Mr. 1%, “let them eat cake”, Friedman condescends to campaign for high tech opportunities for the the top 20%. He’s clueless about the remaining 80%. He just wants them to struggle to exist without Medicare and Social Security.
Has he suggested taxing his wife yet?
The reality is that the American job market will not thrive, nor will the middle class, until large corporate employers in technology, manufacturing, etc. are impacted not only by the dollar leveling that Baker indicates but simple labor protection and import/export regulation.
Aside from those changes, the US will continue on its current model, which emphasizes short term profit growth for corporations, and a high dollar.
I’m not holding my breath for change – the powers-that-be in the US do not care one bit whether or not there is a functioning middle class here, that is long term planning and the US doesn’t do that.
I have worked in the the high tech field since the 1960s. My experience with it has been that sometime in the late 1950s consumer electronics started to go down hill. Manufacturers began cheeping out and the products not as well made in most cases. there were a few that still made good stuff. Mostly audio equipment.
Right now most of the stuff I get is from Japan or Europe. Quite a bit from the old Soviet block countries like Bulgaria and Romania and the Ukraine. Some very nice parts etc. Won’t buy Chinese. Most of that is junk.
More nonsense from Dean Baker.
Baker sucks less than Friedman, to be sure.
Not entirely O/T:
American privilege rots an empire from within
Well-paid professionals are contributing to U.S. economy’s demise
Is it fair to ask how we go about getting the dollar down to get those jobs and how low does it have to go? Will anyone be upset about that?
Also shortening the work year sounds neat. How much money do we lose on account of that?
Whatever happened to the conservative credit expansion theory or the liberal spending?
I gotta say Friedman is seldom inspirational. That much is a given.
I have always felt Thomas Freidman is a flat head and he just happen to have an outlet (NYT) to dispense his idiotic views. Fact is this dude has only one goal – to be a mouth piece for stealing American treasure and blood for the benefit of Israel.
I make it a point not to watch obama making a speech, etc. but tonight I, for some insane reason, decided to watch obama on “60 minutes.” What a mistake – he’s an arrogant SOB, to say the very least.
It’s so staged. obama gets the questions prior to broadcast, Steve K (whatever his name is), furrows his brow and asks “tough” questions.
It was sickening.
Social democracy to Oligarchy http://michael-hudson.com/ or Europe goes fascist, austerity, technocrats and central control New World Odor
Dear karenb…his managers have him on a leash. He is “The Decider” now and has to act authoritarian as a demagogue. Thank you for watching for the rest of us,,,you are tyhe assigned sober driver!
When Metlife promoted a person whose background was India to head of IT, he immediately outsourced web development to India – with the first update a disaster. But because the cost was so low the Board looked past the 3 days it took to get the internal web back up – and the 11 pm conference calls required to monitor progress.
But the American contractors – top of the line “Names” – working for the MET had already sub-contracted much of their work to India.
There has to be trade barriers, or there is a race to the bottom.
I’m in Austin with almost forty years experience in ‘hi-tech’ electronics hardware. As for hardware techs/designers the job market here is shit, I’ve been out of work almost 3.5 years and know skilled engineers working as techs when they can find work – contract, naturally. All the good jobs here were outsourced (mine to Bangalore) years ago.
nonsense – true if trade preserves ones “competitive advantage”
but today’s trade laws – and governments like China demanding they be given all trade secrets and process technology via Chinese company owning same, before you get access to China’s low cost workers, means giving away jobs forever.
So in a world of competitive advantage being traded away, Samuelson showed there is no win-win. The US, and the US worker only loses, and those trade secrets that gov grants to American researchers developed are just money down the drain.
The wealthy live in a “relationship” economy – not merit – and they want to keep it that way.
All the customer service people are in India. In fact, I don’t think I’ve spoken with an American customer service person in a year or more! Half the time I can’t understand what they are saying. Perhaps we should just move to India so we can be hired by American companies.
When the dollar falls to a sustainable level
Seven million new manufacturing jobs that would result from a
What exactly is a “sustainable level” for the dollar?
What is the mechanism for achieving a “competitively valued dollar”?
Actually the manufacturing stuff the US makes seems to be high margin, high quality – just goes into things like airplanes & probably military equipment. From some study (might be biases…?) we were doing about the same output as China with about 1/9th the manpower.
If we can balance use of cheaper overseas resources with local design, support & quality control, it makes a growable model. It’s not simple – Chinese & Indian resources are hard to control even up close, much less from a distance.
Tom Friedman is one of those establishment windbags whose basic strategy is to seem brilliant by spouting just what the “establishment” wants to hear.
The idea that manufacturing is coming back in a big way any time soon is a sick hoax. Capital always strives to reduce it’s labor cost and you can’t cut benefits in the USA enough to bring you in line with third-world countries where people are lucky to make $100 in a month.
Tom is a mouthpiece for the banksters and corporists. He’s a real 1-percenter if there every was one.
It is sickening. I can’t stomach to watch either. I thought watching GW was bad. This guy is in a league of his own.
I think most folks see the NYT for what it is. And Friedman fits right in.
My list of “needs” from far away places is pretty short: coffee, cane sugar, silk, vodka, and computer stuffs. At the same time, I know that as the world of humans wants to at least try out what everybody likes, we’ll all have to work for some cash, or adopt a different type of economic system.
I think Dean is right that shorter work time would create more jobs by definition. I just don’t know how we do that here.
In America we do not have the human(e) supports of nationalized health care, education tuition, family support services, long paid vacations, generous retirement income, stable unemployment income, etc. which our counterparts in Europe and the Nordic countries enjoy. Without such safety nets, Americans can’t afford to work less. The monetary losses for existing full time workers would be untenable, and fellow Americans wouldn’t willingly do that to them.
Well, sure. It is fair to ask that question. The value of the dollar is destroyed primarily two ways. One is by the Federal reserve bank creating more of them (unsterilized Q.E) and the other is by continuing to follow imaginary and provably lunatic economic religions such as neokeynesianism. What the genius author of this absurd article basically suggest is that we further engage in the game of fiat value destruction, which is to say dollar value destruction aka inflate away the debt by making it worth less.
Now were one sane and intelligent enough to be worthy of breathing then it would follow that one would ask the question “well, if the dollar is intentionally devalued relative to other versions of fake money, then would not the central banks of other competing nations act rationally and therefore devalue their funny money as well so as not to be at a disadvantage”? The answer is of course yes, they would. And so with that being true what is the logical outcome of all this insane spend/pretend/devalue keynesian voodoo nonsense?
Economic implosion.
If you are in the least bit curious as to what is really going on in the world then I suggest you employ firedoglake merely for it’s entertainment value and visit http://www.zerohedge.com for adult education.
This whole business of outsourcing won’t go on forever. It only works if you can manfacturer a product in a country with a lower standard of living and sell it to a country with a higher standard of living. What is actually happening is that the higher standard of living erodes and the lower standard living rises and the two meet somewhere. This is exactly what we are seeing now.
The only way to stop this is with stricter trade policies. It is in the national interest of the US to tell the financial industry to stick it where the sun don’t shine. We want our brighest minds going into science and engineering, not developing and peddling financial instruments. Banks need to get boring again. They need to be making loans, not betting on commodities and derivatives.
Do yourself a favor (if you haven’t already done so), stop reading and/or buying the NYTimes. It’s a 1% propaganga rag posing as the paper of record; whore motto is “All the news we feel like printing.”
I didn’t write “whore” on purpose. Must have been a Freudian slip.
Well, the ‘R’ and the ‘S’ are so close on the keyboard. Anyway, I thought that you got it right.
The jobs-money system is a total fail. Money creates scarcity. Jobs make work scarce. The linkage between money/jobs and resources is unjust and needs to be severed. A Taoist would understand this: End jobs and everyone will have work.
The politicians and the media never admit to the truth about a competitive job market. It is the very nature of competition to create losers as well as winners. Personal responsibility does not overcome the nature of competition. Any business only needs so many employees and we only need so many business in any community. To deny a “loser” in the job competition the resources s/he needs for a decent life (food, clothing, shelter, health care, education, transportation, communication, tools of a chosen trade or profession and time to enjoy personal relationships and spiritual/cultural pursuits) is to place oneself in a higher status than the denied person. This violates the basic tenet of our Declaration of Independence: We hold these truths to be self evident, that all men are created equal, that they are endowed by their Creator with certain unalienable rights, that among these are Life, Liberty and the Pursuit of Happiness.” That is true for everyone in the world, not just Americans. We are born equal and we end equal — we die and you can’t take it with you.
for more, check out http://my.firedoglake.com/endofmoney/2011/12/09/why-the-economy-cant-work-for-us-all/
An Alternative to Capitalism (if the people knew about it, they would demand it)
Several decades ago, Margaret Thatcher claimed: “There is no alternative”. She was referring to capitalism. Today, this negative attitude still persists.
I would like to offer an alternative to capitalism for the American people to consider. Please click on the following link. It will take you to an essay titled: “Home of the Brave?” which was published by the Athenaeum Library of Philosophy:
http://evans-experientialism.freewebspace.com/steinsvold.htm
John Steinsvold
“Insanity is doing the same thing over and over and expecting a different result.”
~ Albert Einstein