In today’s Wallstreet Journal Opinion, The Folly of Subsidizing Unemployment http://on.wsj.com/d4HruL, Harvard economics professor, Robert Barro, argued that the ranks of unemployed workers would be lowered by 4,000,000 if the unemployment benefits of the 14,000,000 unemployed workers had been eliminated, rather than extended.
Professor Barro said, “Suppose…the share of long-term unemployment had equaled the peak value of 24.5% observed in July, 1983…then, the total number of unemployed would have been 10.4 million, rather than 14.6 million.” Wow! That’s a powerful supposition. Unfortunately professor Barro didn’t also put forth a supposition about what those jobs would be. Wouldn’t it be nice if we could all wave a magical multiplier and say, “Ta Da! Look, 4M more jobs!” or, “Ta Da! Look, I just doubled my business!”
Hopefully, everyone can acknowledge there are so many variables in the global economy that it is impossible to predict with certainty the impact of each. Therefore, possible causes and solutions can be argued ad infinitum.
Global(?) Competition
However, unless one is suffering from a severe case of denial, regular readers of the Wall Street Journal might take notice of a much more important economic phenomenon—perpetual trade deficits. Perhaps I am more sensitive to it after having seen my own profession, designing and manufacturing semiconductor “chips”, become dominated by Asian companies. Or, perhaps it’s because I have lived on the West Coast for the last 2 decades and I see a constant flow of freighters arrive at docks with full containers and leave with empty containers. Or, maybe it’s because I see that nearly 100% of the accelerated students in my local school district are Asian. The question is not, “To dole or not to dole.” The question is, “Has the USA permanently fallen behind in the global economic race?”
A front page article in today’s WSJ, In Toledo, the ‘Glass City,’ New Label: Made in China http://on.wsj.com/c6omjt, talked about how Toledo, Ohio used to be a world leader in glass manufacturing. The town is erecting a museum as a tribute to the old days—with glass that was so high-tech that it had to be imported—from China. On the site of the old glass factories, the town is building a casino.
Rather than arguing about the length of unemployment benefits, the conversation should be about how a casino contributes to economic production, where the money comes from that is spent in the casino, and where the money that is used to buy glass (and an increasing percentage of other goods and services) from China comes from. If Professor Barro can explain where the former glass workers in Toledo are now supposed to be working, I’ll start to understand where his other 4M jobs came from.
This touches the underlying premise of my book, Selling Change: workers and companies need to step up to the demands of global competition or someone else, likely in or from another country or from another generation, is going to be eating their lunch at the Milton Friedman Cafe.
Change is not easy. Learning new skills is not easy. Taking a financial hit during the transition is not easy. But, it’s a lot easier than watching your competitor eat your lunch.
http://sellingchange.com
Social