Jobs, jobs, jobs

There's class warfare, all right, but it's my class, the rich class, that's making war, and we're winning.

            ▪          Warren Buffet, New York Times, November 26, 2006.

The signs are there.  Granted, there are many ways to interpret the signs showing the economic status of the United States, but I see signs all around me that say the United States is in decline.  Every day I pass the building that housed the Buster Brown Shoe Company and I am reminded that almost all of the shoes worn in the United States are manufactured in other countries.  I live in a building that housed the manufacturers of shoes, Catholic school uniforms, gun holsters and party supplies.  It’s a loft apartment building now.  On my way to work, I pass closed factories and abandoned burned out buildings.

Michael T. Snyder writes, “What we are witnessing is the slow-motion deindustrialization of the United States.” 

There are statistics that back up this assertion.

 The statistics and graphics show what is also plainly obvious; that manufacturing is a less significant part of the American economy.  The difference between manufacturing and finance is that the latter does not employ a large labor force.  It does not, therefore, contribute to the standard of living of the average American. 

From the diagram below, it can be seen that the number of people employed by manufacturing has declined significantly.  Even if the total amount of manufacturing has increased, the labor force necessary to maintain the factories and do the work has clearly declined.  Several factors including automation have led to less need for laborers.  

 There are now fewer jobs for manufacturing than at the end of the Great Depression.  It is ironic that many of these jobs consist of assembling parts that are manufactured in other countries.  Even those jobs are in danger of extinction.

Here is an example of a job that is decreasing if not vanishing because of automation:  Lathe and Turning Machine Tool Setters, Operators.  From an article on job losses:

“Turns out there are still people who make things in this country, cutting and shaping metals and plastics with these old but faithful machines. The main reason this job will be declining in the next decade is due to a gradual switch to computer-controlled machines. Oh, and did we mention robots? That’s right, companies will start to rely more on robots to do the tasks that people once did in order to cut costs and be more competitive. So these tool setters will gradually be phased out and switched with computer programmers who understand how to run the new technology.”   

There are dozens more jobs being replaced with automation described in the article which can be found at the following address (URL):  http://www.mainstreet.com/slideshow/career/employment/endangered-professions-25-declining-jobs?cm_ven=outbrain&psv=outbrainselectedarticle&obref=obnetwork

Jobs being shipped overseas have received a lot of attention in the news.  Even if other jobs in other sectors are available, there is downward wage pressure from the increase in overseas employment by American companies.  Wages and income have been virtually stagnant since the 1980s. 

From an article entitled “The Only Things That Matter… And No One Talks About” written by Phoenix Capital Research comes a summary of the problem that is concise and understandable.  Here is a small excerpt:

“The fact of the matter is that the US economy, on a structural basis, is BROKEN. Starting in the early ‘70s, we outsourced our manufacturing and began shifting to a services economy (particularly financial services). We also outsourced our wealth to Asia, OPEC, and Wall Street.

“Because of this, the average American has seen his income decline dramatically in the last 30 years. This is obvious to anyone with a functioning brain. Forty years ago one parent worked and people got by. Today both parents work (if they can find jobs) and still can’t have a decent quality life.

“THESE are the items that matter for economic growth: jobs and income. If you want people to have money for them to spend and consequently boost economic growth, they need to have decent jobs that pay them well.”

When I read this, I was reminded of a story about Henry Ford who reportedly gave his employees good wages so that they would be able to purchase his automobiles (and to reduce turnover at his factory).  Of course, for most manufacturing jobs, the employer could not assume that giving his employees better wages would result in increased demand for his particular product, but as a general principle, the better the wages for the most people, the greater the demand for products of all kinds.

Increasing profits by employing an overseas workforce is both shortsighted and ultimately self-destructive. 

On some level, I am sure that companies shipping their manufacturing jobs overseas realize this, but it seems that they are not persuaded by arguments such as the above because they assume that their small stake in employment will not significantly affect the purchasing power of the public.  Other companies will pay the wages that will buy their products.  On the other hand, some executives have taken a decidedly anti-labor and anti-United States attitude.  Remarks from an editorial by Bill McClellan in the St. Louis Post-Dispatch from May 2, 2011 are revealing:

David Farr received the Citizen of the Year award in March. He is the CEO of Emerson. He is best known for complaining about labor laws, environmental regulations and health care reform. In November of 2009, he spoke at a luncheon in Chicago and said, "What do you think I'm going to do? I'm not going to hire anybody in the United States." He would instead expand in what he called "best-cost" countries.

…

We're not hiring in the U.S.

This is serious stuff. Farr, and others of his mind-set, are talking about breaking a social contract. It's an unwritten contract, but it's real. It's what we've always told our young people: If you work hard and do the right thing, you'll have an opportunity. There is no pot of gold at the end of the rainbow, but there is a job.

In Farr's defense, it really is cheaper to send work overseas. People in developing countries — "best-cost" countries — will work for very little.

On the other hand, Farr made $24.8 million last year. That's $476,923 a week. Figuring a five-day workweek, that's $95,384 a day. Which means $47,692 each morning before lunch.

The signs say that if this trend continues, we will cross a line beyond which the demand for products will drop.  It is a downward spiral fed by corporate greed and consumer frugality, and it portends poorly for the United States.

It’s a long way down, and it will take a while, but we will see abundant blame and recriminations, political opportunism, and proposals for solutions that are self-serving and frequently counterproductive.  Fasten your seatbelt, because it has already started.