04.01.11
Manufacturing left because of the big bad US government
On the opinion page of the Wall Street Journal, the loss of American manufacturing is explained. It’s entirely the fault of the government, sucking away new workers who want its teat because they’re weak and afraid.
This was startling to me since many of the things I write about have to do with preservation of manufacturing jobs in the US arms industry. And these private sector jobs are solely because of the US government, its politicians, and the taxpayer. And no one ever wants to eliminate them, not corporate America and certainly not conservatives.
Unsurprisingly, this doesn’t even enter into the WSJ discussion by pundit Stephen Moore, who mixes the usual business antagonisms toward local government workers with the national picture.
Again, it’s the rotten teachers’ fault because they can’t be fired. And everyone is apparently clamoring for the private sector to take over firefighting and police work.
One way that private companies spur productivity is by firing underperforming employees and rewarding excellence. In government employment, tenure for teachers and near lifetime employment for other civil servants shields workers from this basic system of reward and punishment. It is a system that breeds mediocrity, which is what we’ve gotten.
Most reasonable steps to restrain public-sector employment costs are smothered by the unions. Study after study has shown that states and cities could shave 20% to 40% off the cost of many services—fire fighting, public transportation, garbage collection, administrative functions, even prison operations—through competitive contracting to private providers. But unions have blocked many of those efforts. Public employees maintain that they are underpaid relative to equally qualified private-sector workers, yet they are deathly afraid of competitive bidding for government services.
“Surveys of college graduates are finding that more and more of our top minds want to work for the government,” the man writes. “Why? Because in recent years only government agencies have been hiring …”
Everyone’s going for the security. They don’t want to work for the private sector where they can be fired because it’s cheaper to use foreign labor — except for security work or weapons manufacturing.
In any case, we ran this economist’s graph on hiring by the government a number of weeks ago:
For the past eleven years the vast majority of federal government hiring has been in homeland security.
The WSJ piece, which I suppose you should read, does not make any mention that American big business — like GE — is fine with making weapons with US workers, because the government and, by extension the taxpayer, pays for it. There’s no talk of firing ‘underperformers’.
However, manufacturing of non-military goods by the same company? That’s another matter entirely.
“Sadly, we could end up with a generation of Americans who want to work at the Department of Motor Vehicles,” concludes Moore. It’s their cowardliness, he implies. They don’t want to work for the private sector, which isn’t hiring anyone except those who are willing to work at jobs that don’t earn a middle class living, because they might get fired.
It’s an unusual argument. But it fits with the Ayn Rand-ian thing that you’re a weakling if you can’t make it as a millionaire or billionaire in corporate America. Ted Nugent spouts it all the time. The fired, the underemployed, government workers, unionized teachers — every manjack of them inferior.
Scott said,
April 3, 2011 at 11:42 pm
Manufacturing left this country as the right and the left de-regulated the economy and the global economic barriers were removed. Globalization and government hands of policies is why American manufacturing went overseas. For the American businessman its a race to the bottom. Union membership and manufacturing in the US went hand in hand up until the Republican Congress amended the Wagner Act, enacting the Taft-Hartley Act in 1947 to give employers and state officials new powers against strikers and unions. The law also required union leaders to sign a non-Communist affidavit as a condition for union participation in NLRB-sponsored elections.
America’s economy has only been as strong as its unions, as the unions are what built American manufacturing in America during the first half of the 20th century. The right pursued its fear politics of red baiting and the pro-unionists were a major target. In the 1960’s the Democrats were to caught up in the civil rights movement to pay attention to the Unions (many of whom paid big bucks for Democratic campaigns). Greed is the reason manufacturing has left the United States and we are now a service based economy with a widening trade deficit.
Today big business is paying historically low taxes and have been since the emergence of Reaganomics. By giving tax cuts to the wealthiest Americans we hope that they will use that money to employ Americans and create jobs in America. However we see that is not happening (fact: low-middle class business hires more Americans than big business), supply side economics and the trickle down theory has not created manufacturing jobs under 3 administrations. Deregulation continued in the 90’s as Clinton signed NAFTA.
Manufacturing is leaving the United States because we are not protecting the jobs from corporate greed. If you think the American economy has become more protectionist since the 1900’s you could not be further from the truth as the highest tax bracket payed out 70-80% of the income between the 40’s to the 60’s. Union membership peaked at almost 40% in the late 1940’s.
Its the evolution of capitalism and our current stage is the informative economy. We will not regain American manufacturing for two reasons: cheap labor and efficient production (machines that require no humans). In the long run we lose because we have nothing to little to sell and much to import.