Where the Jobs Went

Long gone are the days when high school graduates could move from the podium to a family-wage job in a mill or doing construction. Those jobs have dried up, for many reasons but four are most influential:

• Outsourcing of manufacturing, communications and other jobs to China, India, Mexico and elsewhere
• Automation that displaces workers with machines
• The 1990s and 2000s push to reduce business expenses and maximize profits, resulting in fewer workers, reduced benefits and a shift to non-benefited part-time jobs.  The changed rules in the 1980s -- allowing for mergers that would have been forbidden under antitrust laws before -- eliminated business ties to communities and their workforce.
• Worker productivity improvements  American workers have become more than four times more productive than we were in 1970.  (4.57 times more productive in 2011 according to the US Bureau of Labor Statistics)

But there's something else going on here too.  When we look at federal government policy, we see incentives for businesses to invest in equipment, new factories and moving factories from one place to another.  We also see disincentives for businesses to hire new workers or even to continue employing those they already have.

Consider the following:

•  The United States is one of the few countries that expects employers to pick up the costs for health insurance.
•  Social Security and Medicare payments by businesses for each employee rose from about 5% in 1970 to 7.65% today.  
• The ability of businesses to expense capital improvements or to accelerate their depreciation makes investing in equipment a good deal (unlike investing in labor).
• Local governments bend over backwards to attract new factories, providing all sorts of tax and infrastructure benefits to businesses.  There are rarely any attached requirements involving employment targets, pay levels or benefits expectations.
• The US Tax Code continues to reward businesses that move their manufacturing or other enterprises offshore.  

Why does this matter?  It matters because there is no golden day approaching when businesses will step up their hiring to accommodate all of the new workers entering the labor force.  Unless policy changes are made (including reintroducing tariffs that protect domestic manufacturing), those low skilled jobs are not coming back.  We need highly skilled workers and a lot of them, if we're to reduce the numbers living in poverty in Oregon and the nation.

Let's see some real energy toward early childhood, K-12 education, community colleges and our university system.  If we don't invest now and do what's needed to inspire our kids to go on to higher education, they'll be stuck in low wage jobs dependent on public assistance to get by.  In spite of the talk about "job creators", there has been no effort by industry to create jobs.  Most industries have focused on shedding jobs for their bottom line.

Change policies, invest in education, send a clear message to parents and kids that college isn't an option, it's a necessity.

See also: Punishing Work

Leveraged Buyouts and Local Timber

Reverse Free Trade