As economic fortunes go one way, employment goes the other way.
How can that be? The answer is simple: The American economy is being driven, and riven, by two forces -- rising productivity and expanding globalization. Thus the paradox: Profits increase as jobs stagnate. And while both Republicans and Democrats say they wish to provide "good jobs at good wages," both parties are mere spectators to this ongoing phenomenon.
Let's start with the economy itself. Since the year 2000, the gross domestic product of the country has increased by 9.9 percent. But in that same period, total employment has fallen by .2 percent. To put it another way, the gain of an additional $969 billion in annualized output has been achieved with 221,000 fewer people employed. Why? The answer is productivity, defined as output per given unit of input. Such output, of course, can be generated by either workers or machines. And productivity surged a remarkable 6.8 percent in the second quarter of 2003, a sign that all those information-technology professionals are earning their pay.
At the same time, the globalization of trade has cut like a scythe through old-line manufacturing employment -- 2.4 million factory jobs lost, just since President George W. Bush took office. That's a spectacular statistic, made all the more spectacular by TV reporters standing in front of shuttered factory gates. But how does one evaluate those data, when it's equally apparent that the overall U.S. economy is far from shuttered?
As a percentage of the work force, manufacturing has been shrinking since the 1950s, from more than a quarter to less than a twelfth. Yet total employment has nearly tripled during that same half-century, from 50 million to 137 million. And thanks to productivity increases, manufacturing output has nearly doubled. That's how countries enrich themselves, by doing more with less. So one might ask, Is the transformation from an industrial economy to an information economy really so bad? Would we really be happier returning to the days when men did dangerous physical labor in smoke-belching factories?
In any case, such questions might be moot because neither elephants nor donkeys have a plan for reversing the de-blue-collarization of the U.S. work force.
On Labor Day, Bush pledged to create a "jobs czar." Yet it soon turned out that there was less than met the eye -- and then, nothing at all. First off, the czarship was an assistant secretary post at the Commerce Department, one of 12 assistant secretaries at that cabinet agency -- each one lower on the chain of command than the six under secretaries, not to mention the deputy secretary, who reports to the secretary. How much clout will such a fourth-tier "czar" wield? And then, to top it off, it turned out that the Bushies weren't really creating a new position at all, but merely renaming an existing assistant secretaryship.
And what of Democrats? The Democratic mantra this year, like every year, is "fair trade." So most of the presidential hopefuls ritualistically speak of modifying, for instance -- or even scrapping -- the North American Free Trade Agreement. To be sure, manufacturing jobs are going to Mexico because of NAFTA, but they are also going to other countries, such as China. And if the United States slapped on new tariffs and trade restrictions on imported goods, the price of those goods to American consumers would rise and the risk of a recessionary worldwide trade war would increase.
Watch for those issues to be raised at the next meeting of the World Trade Organization, which starts tomorrow in Cancun, Mexico. A few Democrats will show up at that resort, soak up the sun, and bluster about "unfair trade" for the benefit of cameras and microphones. But fierce words mean nothing in the face of global trends; to put it bluntly, the manufacturing cat is out of the bag -- and the cats go anywhere in the world.
America may be a great place to run a company -- total profits soared to $904.8 billion last quarter, nearly double the level of just a decade ago -- but it's not such a great place to build a factory, where pollution laws and liability concerns put profits at risk. The smokestacks and their jobs are gone, and they're gone for good. No matter what any politician says.