What Doesn’t Destroy Jobs

Tait Trussell is a national award-winning writer, former vice-president of the American Enterprise Institute and former Washington correspondent for The Wall Street Journal.


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The depth of economic ignorance of the Obama Administration has no bottom. They don’t have a clue how to fix our historic unemployment (9.1 percent in July). In their endless blame game are two major villains they believe with dumb persistence are responsible for our loss of jobs. The Administration levels the guilty charge at 1. Automation and 2. Outsourcing.

As for automation, the President tries to guide voters to think that high joblessness can be blamed on businesses that are too efficient through technology and automation. Obama must believe that anti-free market and pro-union policies have nothing to do with botched hiring. Machines, in Obama’s brain get the blame. He said on NBC, for instance, on June 14 in taking a crack at job reduction:

“[A] lot of businesses have learned to become much more efficient with a lot fewer workers. You see it when you go to a bank and you use an ATM, you don’t go to a bank teller. Or you go to the airport and you’re using a kiosk instead of checking in at the gate.”

The President doesn’t understand that, unlike government, private businesses tries to maximize output with  minimal input. As Economist Henry Hazlitt wrote years ago in “Economics in One Lesson”: A coat manufacturer brings in a new machine, replacing Joe. But Tom just got a new job making or servicing that new machine. Ted just got a job operating the machine. And Daisy can now buy a coat at half what it used to cost. The coat maker now has high profits to spend on new machines, which increases employment.” Old Joe may be enterprising enough to get a new job or, maybe, develop an even better machine.

Real manufacturing output per worker, according to the Bureau of Economic Affairs, showed a rise from 1997 of $75,000 to $149,000 in 2010. This reflects an industry thriving, not in decline.—producing more with less and improving our standard of living.

As noted by wordpress.com, if one had observed in 1973 that polio vaccine keeps people alive and active without the aid of nurses and other workers who were once employed building iron-lung machines, crutches, and wheelchairs, not a lot of people would have griped at the jobs lost as a result of the vaccine discovery. Meanwhile, more people were hired in labs to make and distribute the vaccine.

2. Outsourcing. Democrats have been attacking businesses for sending jobs to India and China, rather than keeping them in the U.S. One reason some work goes to India is because that country has 1 million more bachelors of science graduates than does the U.S. In China, there is no federally-enforced minimum wage. Last October, Obama called out Republicans for “un-American policies” that reward companies for sending jobs overseas. Republican support of outsourcing came after the U.S. Chamber of Commerce had the audacity to make political contributions mainly to Republicans before the mid-term election. The President threatened wiping out any tax provisions that rewarded corporations for sending employment to foreign countries, Ironically, the Obama Administration has spend $1.6 billion in Chinese and other foreign wind-power production, according to a story April 28 in The Examiner.

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  • StephenD

    We need to encourage businesses to stay here or start up here (foreign businesses). To my simple mind, the easiest way to do that is removing the obstacles. These are defined by the businesses themselves. Taxes should be consumer based and flat with each INDIVIDUAL paying something like 22%. You want/need something? Pay 22% tax on it. Regulations should be as minimal as possible to safeguard the welfare of the public. Competition should be open across the board from state to state and country to country with the only restriction (see Regulations) to protect the public which can include tariffs and taxes on foreign companies/countries. I bet it wouldn’t take too much effort to see folks from around the globe once again vying for a piece of the American Pie.

  • mrbean

    Unquestionably, today’s crisis is complex, and to identify its cause is not easy. But the opponents of the free market are not interested in identifying the cause. Their aim since day one has been to silence the debate and declare the matter settled: we had a free market, we had a financial crisis, and therefore, the free market was to blame. The only question, they would have us believe, is how, not whether, the government should intervene. And when you look across the American economy, what you see is that the freer parts, like the high-tech industry, are the most productive, and the more controlled parts, like the automotive, banking and housing industries, are in crisis. Is this evidence that we need more government intervention or more freedom? A free market creates more jobs than can ever be filled,

  • tramky

    Of course Joe can't get another job. All the other clothing manufacturers have brought in the same machine, so Joe's skills are now outmoded & obsolete–his years of experience are now worth nothing in the employment marketplace.

    Joe worked with fabric and has no skills or abilities that will let him now become a design engineer to design a 'better machine.' Yeah, right.

    Of course, this happened when Joe was 55, so he is now unemployable. He is overqualified on the one hand, has no useful skills on the another hand, and is now too old to hire because, well, he's now old and will likely be ramping up on health problems, so no employer wants him loading down their group health plan with likely illness and health problems coming up as he ages. Nope, Joe is done, 10 or 12 years short of Social Security retirement.

    Ever wonder why the guys you see with cardboard signs with the phrase 'God bless!' on street medians at stoplights all look like they're in their late 50s?

    • Lady_Dr

      Listen tramky, Joe could learn to become a design engineer, or he could use his knowledge of textiles and clothing construction to become a salesman, or teach courses like textiles and sewing to younger workers or students in a trade school. He could also go in a totally new direction. With a computer, or even a library card (many libraries have no time limits on their computers until the schools let out), he could learn almost anything. That same library card could open all sorts or doors to him.

      I know because I've done it. I suggest you ask some of those guys at the stoplights – they are either pessimistic liberals like yourself or lazy bums who may be alcoholic, drug users (not addicts, just users) or whatever. And if the government is willing to give them a hand-out why should they bother to work – especially when you have instilled in them the idea that "government owes me".

  • CisscoKidd

    As Affirmative-Action is currently the hot fashion trend when it comes to the employment arena in the United States (as has been for the last 40 years as well), if and when jobs are created–just who is going to be earmarked for those jobs? As everybody knows, Affirmative-Action is based on racial preference. That is, when it comes to employment and educational opportunities in the United States, minorities receive special preferences for those opportunities under Affirmative-Action. The white man does not receive any preferences whatsoever with Affirmative-Action. El nada, numero zilcho, del cero. Because of Affirmative-Action, the subject of jobs and job creation has become something that is basically laughable these days. What a scam! Not only that, the Affirmative-Action scam has become a normal and accepted element of society. Which means, racial preference has become a normal and accepted element of society. I have a feeling this may not be what equality is all about.

  • Ghostwriter

    Ironically enough,I watched "60 Minutes" last night and surprisingly they ran a story similar to what your saying. In some ways,it's veiled criticism of the Obama Administration's economic policies and what they did to this country. It's not often you see that sort of thing on the network news.