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Wednesday, January 18, 2017

Are U.S. Jobs Eroding or Only Moving?

In a sense, the idea of job loss is much like the street hawker’s shell game. Guess under which shell the pea is and you win! It is a fact that the U.S. is losing jobs- not only in the low rung of jobs (textile manufacturing, appliances, etc.) which have moved to low-labor-coast nations in Southeast Asia, India and Pakistan; but also supervisory and middle-management jobs which, one once thought, were the province of American workers.

In Arizona, for example, “semi-conductor manufacturing, which accounts for the majority of Arizona’s high-paid technology jobs, is declining here at an alarming rate….Those jobs took a hit in 2002 when 7,700 people lost jobs” (Talton D1). The future looks even dimmer: “Over the next 15 years, 3.3 million U.S. service industry jobs and $136 billion in wages will move off-shore … As painful as this year’s job cuts have been, what’s even more painful is that many of those jobs are never coming back, as U.S. employers in a wide range of industries move more and more jobs overseas” (Gongloff 2003 1).


U. S. workers are not giving up easily. According to Schroeder and Aeppel, “Intel Corp Chairman Andy Grove, a pioneer in the American high-tech industry, warned that the U.S. could lose the bulk of its information technology jobs to overseas competitors in the next decade, largely to India and China” (Schroeder & Aeppel A1). The protest is being spearheaded and supported by high-tech employees used to earning more than $70,000 a year, and are now forced to take either lower paid jobs, or still without a significant job at all. Today’s jobless, ther4efore, are no longer at the bottom of the economic ladder.
It would be simple and perhaps naïve to suggest that the loss of such jobs is not because of wages in Asia, but because more productive techniques for manufacturing have reduced the need for some employees. “At least 15 percent of the 2.81 million jobs lost in America since the decline began have reappeared overseas. Productivity improvements at home – sustaining output with fewer workers – account for the great bulk of the job loss. But the estimates being made suggest that the work sent overseas has been enough to raise the unemployment rate by four-tenths of a percentage point or more, to the present 6.1 percent. (Uchitelle 2003 1)


However, it is not only the U.S. losing jobs to Asia. So is Eastern Europe, which had also been haven to many high tech industries. In Hungary, one article states, “Turnstiles that once admitted 3,700 workers a day are chained…IBM shut the plant last November, moving the work to China, where wages are 75% cheaper” (Condon, Butler 2993 44). Further, a “study of 20 big economies find 22 million jobs lost. Even China shows decline….a decline of more than 11%” (Hilsenrath and Bockman A1). Part of this job decline is the move from an agricultural economy to a manufacturing one, which is not nearly as labor intensive.


It is also fair to assume, based on the readings, that some of the Asian nations have university-trained workers who can support the technology perhaps as well as Americans. One Filipino executive’s “only worry is whether the nation’s universities can continue churning out English-speaking, hip=-hop savvy graduates to feed the …voracious appetite” (Hookway A1). India has also trained supervisory personnel, which is why, when you talk to a customer service rep at American Express 800 number, you’ll be speaking to someone in India.


Is this job shift to Asia and India counter-productive for Americans? Yes, when it comes to high tech job loss, No when it comes to finding lower prices for computers and other high-tech gadgets. One can see this at the low-tech level, as well. Going to a Target store, a T.J. Maxx, or even Macy’s or Bloomingdale’s, one can find sweaters and shoes, even underwear, priced rather low, because they were manufactured in Asia by workers barely earning a living wage. We all remember the mess when Kathie Gifford was accused on using “sweat shop workers” to produce her clothing line. The sad fact is that industries are moving out of the U.S. for no other reason than lower labor and other overhead and real estate costs. While one of the articles in the readings suggests that the Bush administration spend millions on retraining those who have lost jobs, that is hardly the answer.


The answer lies in equalizing the cost of doing business by American firms who are now outsourcing their jobs and even entire departments. They may cry foul (and certainly some of their major shareholders will) but, the ultimately fair and equitable solution to losing the SAME jobs to lower-paying labor forces overseas is to set prices at the same level as if they were being manufactured and marketed by American workers. Of course, some will cry “price fixing”. And, in a broad sense, they may be correct. But, if that price equalization is handled by imposing higher tariffs on goods lost to overseas labor forces, who are still under control of an American based firm, then perhaps the flood of outsourcing will slow to a trickle.
What is at stake, of course, is the sector of competition- in terms of cost, price, overhead and quality. Doomsayers claim that overseas production as equal to America’s, especially since the direction and supervision is normally handled by American managers (or, as the Japanese are wont to use, “shadow managers”). Even as unions join high-tech out-of-work managers, even as the once blooming Silicon Valley has now emptied, there is not a sufficient ground swell of opposition to the continued loss of America’s top high-tech jobs. There is no single unified lobbying effort to Congress, and no hue and cry that even George W. Bush could hear from the Oval Office. Tariffs must be readjusted, and profiteering corporations somehow made fiscally more “patriotic” in order to stem this loss of jobs.


REFERENCES:
Condon, C. and Butler, R.: “A Chill Wind Blows from the East” New York: Business Week, September 1, 2003


Gongloff, M.: “U.S. Jobs Jumping Ship” CNN/Money online
money.cnn.com/2003/05/01/news/ economy/jobless_offshore/


Hilsenrath, J. E. and Bockman, R.: “Factory Employment is Falling World-Wide”


Hookway, J.: “At 2 a.m. in Manila, It’s Time to Break for a Midday Snack”


Schroeder, M. and Aeppel, T.: “Skilled Workers Mount Opposition to Free Trade, Swaying Politicians”


Talton, J. “Chip-making jobs are shifting, like sand, from America to Asia” Phoenix AZ: The Arizona Republic


Uchitelle, L. “A Missing Statistic: U.S. Jobs that Went Overseas” New York TIMES, Oct. 5, 2003 www.mtholyoke.edu/acad/intrel/globecon/over.htm


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