Factory Jobs Gone Forever (Good)

The economic news is good. Economic growth is strong. Business analysts are upbeat. Productivity is high. How good things are demonstrated by the fact that some people feel bad about unemployment of only 5% (unemployment averaged 5.8 percent in the 1990s and 7.3 percent in the 1980s.) Manufacturing output in the U.S. is at an all time high. Despite all the good news, we will never see a return of manufacturing jobs. This is a sign of an improving economy.

Most Americans worked in agriculture a century ago. Despite the romanticized stories, the work was hard and dangerous. Low agricultural productivity forced people to do those jobs. As conditions improved, fewer people were needed to produce greater outputs. Translation: fewer jobs in the fields. The only way the government could preserve jobs down on the farms would be to prevent or reverse progress and make everyone poorer.

Fifty years ago, most Americans worked in factories or supporting manufacturing. Despite the romanticized memories, these jobs were also hard, dangerous and often unhealthy. Technology eliminated many of the tedious, repetitive, hard, dirty and dangerous tasks. If a machine does the work of fifty men, it eliminates fifty jobs. Greater productivity creates more economic activity and more jobs, but they are someplace else.

Manufacturing is going the way of agriculture. Even if we increase industrial output each year, we should expect fewer people to work in our factories because of increased productivity. No sane policy can reverse this trend.

This brings us back to the first paragraph. Unemployment is low. Median incomes are high. U.S. manufacturing output is at record levels. More Americans own their homes and have more equity in them than ever before. All this is thanks to productivity of our people, sciences and technologies. It is a cause for celebration. Why all the gloom and pessimism?

I heard an interesting report on NPR today. According to surveys, most Americans say that the economy is bad. BUT most Americans also say that their personal financial situation is good. The first response comes from what they hear in the media; the second is from what they see and experience personally. So the bad news represents the triumph of fear over experience.

Economics has always been a dismal science and now others are piling on in a race to be negative. The good news is that the bad news is over done. Pessimists don't consider the big picture or the long-term trends. Their vivid imaginations and fevered minds conjure up all sorts of potential disaster scenarios. When these things fail to materialize, they are forgotten, but the feeling of foreboding lingers. The masters of disaster, their outlooks still unprofaned by a positive thought, move on to the next "real bad thing."

Most problems we so fear fail to develop or we are able to deal with them effectively when they occur. That is why the NPR survey is relevant. This is not the picture I get from the media, but it is my experience. The good old days weren't. The best times are still to come.

Posted by Jack at July 18, 2005 10:24 AM