From: wingo%cspara.decnet@Fedex.Msfc.Nasa.gov
Subject: Solutions not more problems Was Re: A Layman's Questions 
News-Software: VAX/VMS VNEWS 1.41    
Keywords: job loss, recession
Organization: University of Houston
Date: Mon, 9 Nov 1992 17:17:00 GMT

In article <bob1.721324207@cos>, bob1@cos.com (Bob Blackshaw) writes...
>In <1992Nov9.033530.8727@umr.edu> wdechent@usenet.umr.edu (William L. Dechent) writes:
> 
>>	How do the loss of American factory jobs and the recession relate
>>to each other?  Did one come first and perhaps cause the other?
> 
>Hmm? Chicken or egg? Not being an economist, but one who does read
>several magazines which publish economic figures, I would think the
>loss of jobs came first and led to the latter.
> 
>It seems to be accepted truth that our economy is two-thirds (or
>thereabouts) driven by consumers. Published statistics state that
>wages and salaries are below 1977 levels. Add to that all of this
>'let's get lean and mean' workforce reduction, and it would seem
>highly likely that consumers have fewer dollars to spend (what
>the pundits call 'confidence').
> 
>So in the process of becoming competitive (that's what they call it),
>we eroded our local consumer base to the point that they had little
>choice but to buy cheaper imports, thus accelerating the workforce
>reductions, and in some cases closing down whole industries.
> 
>In effect, we took dead aim - and shot ourselves in the foot!
> 

That is not the way it works. IF we had not become more competitive we would
be losing far more jobs than we are already due to the fact that American
goods would cost more in relative terms (lower per worker productivity) than
they do now. It is a great tribute to American industry that the American
steel industry is the most efficient in the world today and is a growing 
45 billion dollar a year industry. If we had not become more competitive we
would have continued to lose market share and total jobs.

Yes in the same way that we no longer have 5 million blacksmiths there is a 
loss of jobs as industries transition to new technologies. BUT over the long
haul the new jobs created both pay more and are better for the worker 
(this pertains to manufacturing not service) than the previous workers.

The people that maintain the robots on the GM and Ford & other lines get paid
more and are educated better and have better working conditions than their
manual laborer welding fathers.

For an example of what happens when unions and the like oppose new processes
look at the eastern coal industry. Here in Alabama as well as the rest of the
south the UMWA opposed modernization. As a result most of the deep mines have
closed due to the competition with western coal that is machine dug (higher
per ton productivity, so much so that it is cheaper to mine it there, transport
it to the southeast and burn it here rather than pay the local rates)

The primary reason for the erosion in the consumer base is that jobs have 
shifted from high paying manufacturing to low paying service jobs. The reason
for this is that the people in the rest of the world work cheaper than Americans
so much so that the difference in cost overcomes the difficulty in transportation
across the planet. Another factor here is that transportation also is gettin
cheaper all the time adding fuel to the fire as it were.

A solution? Develop new industries that the other nations do not have and will
have to invest greatly to catch us. This accomplishes two things. Drains their
capital during ramp up and allows us to dominate the market for a specific time.
That is what happened in Aerospace where until recently we overwhelmingly 
dominated.

What we can do now is take the next step and push the technology further with
all of the high tech people from the defense industries. We can channel them
into space related communications technologies and other growing space 
related fields where we still dominate. If we do this right everyone will 
always be playing catch up and we will be making the bucks! The space
communications arena is growing at 20% per year right now, what other market
is growing that fast. WE dominate this market now and can do more. Think about
it.


>>	I've got a lot more I'd like to ask but in the interests of
>>minimizing bandwidth... 
>>--
>>wdechent@clciris.chem.umr.edu    "I know I'm a flamboyant person.  But I don't
>>lie, I would never steal a penny from you.  I'm a good person."  -Cher
>>(taken from Larry King Live on CNN, 10-26-92)   
> 
>Bob.
> 
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