Obsolescence

Several years ago my wife and I considered a Portuguese Water Dog (PWD) for a family pet. Unfortunately, a breeder informed us that Catherine (then, age 3) was too young to be able to effectively discipline the dog. Even though we did not get a PWD, I uncovered some very interesting information while researching the breed. Years ago, PWDs were paid the equivalent of a man’s wages for the work that they performed. Since a PWD can swim underwater they were utilized aboard ships to retrieve ‘overboard’ items, round up broken nets and swim messages between ships. Unfortunately, the breed became obsolete and was almost lost after technology (electronics) was introduced aboard vessels.

I write to tell you this not because we considered a PWD before Obama but as an intro to an observation regarding technology, obsolescence and US manufacturing.
US manufacturing has been declining in terms of its share of overall US employment since the late 1970s. During the past decade, the number of workers employed by manufacturing has fallen from 17.3 million in 1999 to 11.7 million last year, according to the Labor Department. However, according to the US-China Business Council “the US share of global manufacturing is just over 22% - the same as it was in 1995.” In fact, according to the Bureau of Labor Statistics, “the US led the world with its 7.7% gain in manufacturing productivity in 2008-2009.”

What has declined in not manufacturing output - but manufacturing employment. The primary reason behind this is major gains in productivity; productivity advances achieved primarily through the use of technology. US companies that have survived as competitive global manufacturers have shifted from low-skill manufacturing jobs to those requiring higher skill sets, employing those with the knowledge to handle new technologies.

To reverse this decline in manufacturing employment Obama has vowed to "do every single thing we can to hasten our economic recovery and get our people back to work." and last year signed "The Manufacturing Enhancement Act of 2010 (to) create jobs, help American companies compete, and strengthen manufacturing as a key driver of our economic recovery.” Despite a number of initiatives the administration has undertaken, the job market remains sluggish. In fact, the unemployment rate has stayed flat at a near record high of 9.5 percent. Is unfair foreign competition to blame? Or is there more to the story?

One can well argue that unemployment benefits incent people not to look for work, but we will save this for another discussion.

Unfortunately the gains in manufacturing productivity have been lost on the current administration. Instead of trying to create low paying manufacturing jobs, the focus in my opinion, needs to be on educating workers and soon-to-be workers so they can handle the higher skilled jobs upon graduation, and not on competing with low wage countries for low paying manufacturing jobs. We are pursuing policies which will make some of our work force obsolete sooner or later, just like the PWD years ago.


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