'M

“Throughout the elec­tion cam­paign both can­di­dates talked about cre­at­ing more jobs, the most dis­cussed topic in the elec­tion cam­paign, by re­viv­ing the man­u­fac­tur­ing in­dus­try.”

The Pak Banker - - Front Page -

ITT Rom­ney will fight for ev­ery Amer­i­can job." This re­cent ad­ver­tise­ment re­fer­ring to Chrysler's plans to shift jobs to China kicked off one of the many slang­ing matches be­tween US pres­i­den­tial can­di­dates Barack Obama and Mitt Rom­ney. Throughout the elec­tion cam­paign both can­di­dates talked about cre­at­ing more jobs, the most dis­cussed topic in the elec­tion cam­paign, by re­viv­ing the man­u­fac­tur­ing in­dus­try.

Now that the US elec­tion is over and Obama is firmly back in the Oval Of­fice, many would dis­miss the Obama-Rom­ney de­bates over jobs and China as usual cam­paign rhetoric.

But still - as Dieter Ernst, a se­nior re­search fel­low at the East West Cen­ter, Hawaii, said re­cently - we need to know the chal­lenges the US faces in job cre­ation. In a re­cent pre­sen­ta­tion, "In­dus­trial In­no­va­tion and Em­ploy­ment", at a sem­i­nar of new gen­er­a­tion pol­i­cy­mak­ers, Ernst at­trib­uted the per­sis­tent un­em­ploy­ment in the US to a sig­nif­i­cant ero­sion of in­ter­na­tional com­pet­i­tive­ness and in­no­va­tion bar­ri­ers such as lack of in­vest­ment.

From 2001 to 2011, state and lo- cal fi­nanc­ing per stu­dent in the US de­clined by 24 per­cent de­spite a 72 per­cent in­crease in tu­ition fees. This made stu­dent loans ex­ceed $1 tril­lion, more than Amer­i­cans owe to credit card com­pa­nies. This, along with in­ad­e­quate sup­port for in­dus­try-re­lated re­search, has se­ri­ously con­strained US in­dus­try's abil­ity to cre­ate more jobs, Ernst said. It has also re­sulted in a skill mis­match, with 3.2 mil­lion job va­can­cies go­ing un­filled be­cause em­ploy­ers couldn't find suit­able can­di­dates.

Be­sides, US trade deficit in ad­vanced tech­nol­ogy prod­ucts in­creased from $16.6 bil­lion in 2002 to $99.6 bil­lion in 2011, Ernst said, with the in­for­ma­tion and com­mu­ni­ca­tions tech­nol­ogy sec­tor ac­count­ing for the largest share, caus­ing jobs to flee abroad. As Scott Thurm, se­nior ed­i­tor of The Wall Street Jour­nal, said in a widely quoted ar­ti­cle in April: "Thirty-five big US-based multi­na­tional com­pa­nies added jobs much faster than other US em­ploy­ers in the past two years, but nearly three­fourths of those jobs were over­seas."

So can the US get the jobs back? "Reshoring of man­u­fac­tur­ing is pos­si­ble, but it most likely leads to a 'race to the bot­tom' in wages and reg­u­la­tions," Ernst said. Cit­ing the re­lo­ca­tion of Gen­eral Elec­tric's pro­duc­tion fa­cil­ity from China to Louisville, Ken­tucky, in 2009, he said it was made pos­si­ble by a gov­ern­ment sub­sidy of $17 mil­lion, "lean man­u­fac­tur­ing" to re­duce la­bor con­tent and most im­por­tantly an agree­ment with la­bor unions to re­duce new re­cruits' wages to $13 per hour. That's less than $13.97, which makes a worker with three de­pen­dants el­i­gi­ble for food.

Ernst prefers the ad­vanced man­u­fac­tur­ing part­ner­ship strat­egy, which says the US' com­pet­i­tive edge lies in its su­pe­rior ca­pa­bil­ity to use trans­for­ma­tive tech­nolo­gies to pro­vide pack­aged so­lu­tions

Newspapers in English

Newspapers from Pakistan

© PressReader. All rights reserved.