What we really need are productive jobs
Don Quixote on Aug 04 2011 at 5:21 pm | Filed under: Uncategorized
I’d been thinking about two topics for a post and then I realized they are interrelated.
Topic 1 — After the market crashed today, I heard an interview with a financial analyst on the radio. When asked what would turn things around he said one thing: “Jobs, jobs, jobs. We need job growth to get the economy going again.”
Topic 2 — In a comment to another post I made earlier today I pointed out that most government jobs are overhead on the economy, and the more overhead the economy has the weaker it will be.
Then it hit me, we don’t just need jobs, we need productive jobs. More overhead jobs will just drag the economy down further.
Take my job. I’m an attorney. My entire profession is pure overhead. Sure we serve a couple of key functions: (1) we help private people settle disputes; (2) we help put criminals behind bars. But they are overhead functions. Heck, the entire justice system – from meter maids, to police officers, to court reporters, to judges and attorneys, to prison guards — is overhead. Private alternatives like arbitrators and mediators are overhead.
I’m sure you’d have no problem coming up with many other examples of whole professions that are pure overhead. Add to that the fact that we are aging and the retired population (which I hope to join in under a year!) is exploding and it’s a wonder that the economy can function at all under the dual load of overhead and people who aren’t working at all.
Given the trend in Europe and America these days to more and more overhead jobs and retirees and fewer and fewer people who actually produce anything, how do we add productive jobs to get the economy moving again?
Related posts:
- We have met the jobs future. . . .
- In SF Bay Area, stimulous creates 7 jobs at a cost of $16,142,857 per job — sort of
- Oh, about those jobs saved? It’s not true.
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20 Responses to “What we really need are productive jobs”
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Lou Dobbs spent a good deal of time covering the topic – jobs.
Here is a list of companies we’ve confirmed are “Exporting America.” These are U.S. companies either sending American jobs overseas, or choosing to employ cheap overseas labor, instead of American workers.
http://www.cnn.com/CNN/Programs/lou.dobbs.tonight/popups/exporting.america/content.html
A chronic problem since the mid-70′s. The pencil pushers have erased our balance sheet. It’s been a sore point for me since. The mentality of “shop til you drop” is exactly what happened and we got left holding the bag. The only way out of this, since what is now made overseas is not coming back and we all know why, we will have to be innovative and creative. That’s what we’re really good at – an original idea. It will have to come with the caveat that it can never be exported or sold to another country. Everything must be done in-house. Okay, I recant … no more than 20% outsourced. Rather like the French did with American music on the radio years ago – to retain the culture, the radio stations could not play more than 20% of English-speaking music.
The human race really needs very little to survive, when you get right down to it – in spite of the advertisers. We need people who know how to grow or otherwise provide food; we need people who know how to start with a tree and provide shelter; we need people who can make clothing and footwear; we need people who can discover, invent, or otherwise synthesize medicines, and we need doctors. That’s pretty much what we need – and it’s all we need. Everything else is either (depending on your mood) a frill, BS, or – in Don’s term – overhead. Me being me, I’ll eschew happy-talk and just right out front confess that my entire life has been devoted to 95% BS. Solid. Gold-plated. Maybe 99%. Not as positively damaging to society as the ambulance-chasing and class-action brotherhood, but BS nonetheless.
The interesting thing is, probably no more than a century ago pretty much everybody could grow or otherwise acquire their own food (I was seven when I first executed a chicken, which we ate that night), and provide their own shelter. These days, I suspect, just about no one can.
And this leads me to a thought. “Productive” jobs are reactive to societal need, they are not “created.” You cannot “create” a productive, or “real,” or useful job – their creation is a reflection of need. Yes, you can certainly create jobs for overhead – no problem. But if nobody needs that extra farmer, he’ll feed himself and his family – but he isn’t going to be able to earn a living. So I think the genuinely productive jobs will take care of themselves – and the good old government will do what it does best: fill the air with BS and add more and more worthless bodies.
jj – file this under societal need
China exports to this country, it should need to look outside its borders for — of all things — chopsticks. But the country does not have the wood needed to manufacture enough of the slender utensils, which the majority of Chinese still use and throw away.
In that gap, Jae Lee, the president of Georgia Chopsticks, saw a business opportunity. Lee started his chopsticks business in Cochran in November, sent a couple of samples overseas, and within a few months needed to expand. The Americus plant cranked up in May and can already produce 2 million chopsticks a day, sending them primarily to supermarket chains in China but also to companies in Japan, Korea and the United States.
“I knew there was a need,” Lee said. “I thought I could make a profit.”
http://timesfreepress.com/news/2011/jun/16/georgia-plant-makes-chopsticks-china/?news
It’s pretty easy to create jobs….the government could pay people to dig holes and fill them up again. Or they could pass the elevator safety and economic opportunity act, which in an economic sense would be roughly equivalent. Creating *productive* jobs is a lot harder.
The legal field, and also the finance industry, perform a role which is analogous to the function of a governor on an engine. The role is essential, but the governor should consume a very small proportion of the engine’s power output. If the governor is scarfing up 30% of the engine’s power, something is badly wrong. And I don’t think there’s much question that today, the legal and financial industries are considerably too big in proportion to the rest of the economy.
SADIE: “Rather like the French did with American music on the radio years ago – to retain the culture, the radio stations could not play more than 20% of English-speaking music.”
Yes, SADIE, that’s true…and so the French got horribly abused with French EUro-Pop, which should have been referred to the international criminal courts.
I fully agree with the theme of this post, incidentally. BTW, JJ: as far as “We need people who know how to grow or otherwise provide food”, sadly…most people have no idea where their food comes from or how lucky they are to have it in such abundance and at such a low price.
Bien sûr, Danny, along with rap and with distinctly American visuals.
MC Solaar
http://www.youtube.com/watch?v=i_6Y_xxPQsw
It is truly a sad thing that people do not know where their food comes from. It is equally sad that almost all people do not know the impact of the quality of this food on people’s health and behavior. I believe that the growth in degenerative diseases is due in large part to the declining nutritional value of the food we grow, and that this decline in quality is inversely proportional to the growth of the so-called “healthcare” system of this country and the huge expense of this healthcare. Charles Walters wrote a book call “Unforgiven”. In it he outlines the economic history of the US as related to its agricultural production. Walters makes the case that in agriculture man is debited and nature is credited and that this phenomenon is repeatable almost ad infinitum. Further, that a food commodity, as a raw material, produces a trade turn of 7:1, meaning that every dollar paid on the farm will re-produce itself 7 times in the national economy! This, of course, constitutes national income! This amounts to an almost perpetual money machine, one that produces something at minimal cost compared to the income it generates. When we have had parity in farm prices we had prosperity and freedom.Now factor in the general decline in health of our citizens and also, I believe, the lack of our citizens inability to think critically, and you have our present day situation. Raw materials of all kinds, including mining has a trade turn of about 6. Less than 5% of the people are connected to agriculture so the American population is completely ignorant of this resource that we have right under our feet as a means of contributing greatly to solving our economic and physical well-being problems. WW II was fought by kids coming off of the farms who had common sense and a working knowledge of how the physical world worked. Vietnam, Iraq, Afghanistan, the War on Drugs, the War on Americans via Homeland Security is being waged by lawyers and politicians. You can make your own conclusions as to who the winners and losers are/were in these conflicts (no disrespect to posters here).
Greetings:
I spent most of my worklife in the printing industry. At one point, there was a major philosophical debate about whether printing was a “manufacturing” industry or a “service” industry. Now, to anyone other than an MBA or a consultant, it was a manufacturing industry, but as our government and business leaders had decided that manufacturing had somehow become beneath Americans, the “service” moniker struck a chord with many otherwise intelligent people.
So, one day I found myself dozing my way through a training session that would sharpen/update my thinking in this regard. When asked if printing was a “manufacturing” or “service” industry, I replied. “If you have to wash your hands before you go home, it’s a “manufacturing” industry; if you don’t, it’s a “service” industry.
Pretty much same-same with the overhead types.
11B40…nicely put, but not sure that criterion totally works. If you’re an auto mechanic or a doctor or a nurse, you’ll probably want to wash your hands before you go home, yet those are clearly service industries. But if you’re up in the pulpit running the rolling mills in a steel plant, then hand washing will not be necessary, yet steel-making is manufacturing.
The number of people needed on farms and in related jobs to feed Americans is limited because of vast productivity improvements; however, I think there are considerable growth opportunities because of export business. A lot of people in China, India, and elsewhere can now afford better diets. Agriculture is something the US has traditionally done well; we have land, incentives, knowledge, and infrastructure in the form of roads, railways, inland waterways, and ports. It would be worthwhile thinking about what factors might be acting to constrain our potential in this area.
One of the best ways to get rid of overhead jobs would be to drastically reduce regulation. The more Congress regulates – Sarbases-Oxley, ObamaCare, Dodd-Frank all Street “reform” – the more overseers (accountants, lawyers, etc) company must employ to ensure that they’re in compliance. This would also reduce the number of government overseers making sure companies comply with all of this complex regulation.
More….Onerous state and federal legislation not only forces companies to expend a lot of energy, it makes it very difficult to launch new businesses. See the recent Investor;s Business daily interview with Home Depot co-founder Bernie Marcus (http://www.investors.com/NewsAndAnalysis/Article/578920/201107201835/Marcus-Home-Truths-On-Jobs.aspx):
“IBD: What’s the single biggest impediment to job growth today?
Marcus: The U.S. government. Having built a small business into a big one, I can tell you that today the impediments that the government imposes are impossible to deal with. Home Depot would never have succeeded if we’d tried to start it today. Every day you see rules and regulations from a group of Washington bureaucrats who know nothing about running a business. And I mean every day. It’s become stifling.
If you’re a small businessman, the only way to deal with it is to work harder, put in more hours, and let people go. When you consider that something like 70% of the American people work for small businesses, you are talking about a big economic impact.”
11B40: I spent most of my worklife in the printing industry. At one point, there was a major philosophical debate about whether printing was a “manufacturing” industry or a “service” industry.
Definitely manufacturing, even a craft.
Don Quixote: Topic 1 — After the market crashed today, I heard an interview with a financial analyst on the radio. When asked what would turn things around he said one thing: “Jobs, jobs, jobs. We need job growth to get the economy going again.”
That’s correct. The economy will remain weak as long as there is high unemployment due to low aggregate demand.
Don Quixote: Topic 2 — In a comment to another post I made earlier today I pointed out that most government jobs are overhead on the economy, and the more overhead the economy has the weaker it will be.
Government has a lot of functions, including building roads and other infrastructure, plus scientific research for the long term payoff.
Don Quixote: Then it hit me, we don’t just need jobs, we need productive jobs. More overhead jobs will just drag the economy down further.
There’s no clear dichotomy between overhead and productive expenditures. Clearly the people building a new road think they are producing something of value, but as it isn’t sold or marketed, it can also be considered overhead.
In any case, of course, productive jobs are essential, but it’s also important to understand the underlying economic problem, which is lack of demand. The economy suffered a substantial shock and demand dropped precipitously. The threat is that the economy will return to equilibrium, but still having high unemployment. This will result in continuing weak demand going forward.
Productive jobs are necessary, but the problem is that capital is still sitting on the sidelines. There is no reason to invest while there is still the threat of deflation in large sectors of the economy.
The EPA has been a real thorn in the side of jobs and the coal industry has taken a huge hit. If I remember that stats correctly, 50% of our electric grid is powered by coal production.
(1-minute)
http://www.youtube.com/watch?v=HlTxGHn4sH4&feature=player_embedded
Sadie – There’s also an article about her latest job-killing regulations in the WSJ – “The Cost of Lisa Jackson”. I don’t have a WSJ online subscription, but here’s a blog post w/excerpts: http://www.redstate.com/aglanon/2011/08/04/lisa-jackson-is-using-the-epa-to-destroy-the-coal-industry/
>>But if nobody needs that extra farmer, he’ll feed himself and his family – but he isn’t going to be able to earn a living.>>
But what is earning a living other than feeding oneself and one’s family?
Clothes? but said farmer can grow flax for linen, or cotton, and raise sheep for wool to be made into fabric. If you’re fed and clothed, what else do you need? The only other devastating cost I see would be taxes. It seems to me that we no longer have property ownership rights – we just rent the land from some form of government.
There are certainly the niceties we all enjoy, but when it comes right down to it, we just need food, water and clothes.
One blog I read had a comment by a woman who belongs to that group that tries to be self-sustaining. She said she could no longer find clothing made in the USA, so she bought a sewing machine (didn’t say where it was made) and started making her own clothes – till she could no longer find fabric made in the USA. There used to be mills – especially in the Carolinas – but no more. And I’m here to tell you … I used to sew, but the cost of fabric these days make it more practical to buy clothes.
I believe the better terms are profit-center jobs and cost-center jobs. Profit-center jobs are the ones that produce product/services which bring in money in exchange. Cost-center jobs are infrastructure jobs that either feed or maintain the profit-centers, such as purchasing, maintenance and HR or defend the monies brought in, such as legal, security, and accounting. Cost-center jobs are usually where companies fail. They are often in the meetings while the profit-center workers are out making profit. So they tend to come to dominate decisions, expanding their “important” area while decreasing those dirty jobs down on the floor, i.e., middle-management spread. That does not however, mean that cost-centers can’t contribute to the bottom line if they remain lean and efficient.
We now live in a middle-management world, filled with cost-center workers with their spreadsheets and powerpoint presentations. The sad part is, that many of these cost-center workers have grown weary of servicing the profit-centers and altered their charter into fields no longer enhancing the bottom line. HR goes on a diversity kick to the detriment of hiring quality workers, legal, sales, and public relations head off on a “green” campaign with not thought to how the changes will damage the product.
Take government for instance. NOAA goes off on a climate change bender to the detriment of weather forecasting and nautical charting (both of which aid businesses to bring in profits, i.e., tax dollars). NASA spend time and mony on “muslim outreach” instead of spending that money on space or aeronautical matters. Or you have the EPA, who was very successful in environmental improvement but now, with the government program grown imperative, can’t stop meddling, damaging and generally trying to destroy American business and way of life.
@Z – “Government has a lot of functions, including building roads and other infrastructure, plus scientific research for the long term payoff. “
Infrastructure and roads are investments but only productive if they are tied to increasing business by making the movement of raw materials and produced good easier to expand markets. Scientific research is also a decent investment but it is a cost-center. Government itself is a cost-center. It can do activities that collectively aid the profit-centers but it can never be a profit-center itself as it is a defensive measure against threats. Also, all jobs paid for by government funds, employee, contractor or supplier, can never be a net benefit to the Treasury since that is their source. They are simply keeping up the money movement in the economy not growth.
Greetings: especially “David Foster”
I appreciate your feedback as often my brevity becomes the soul of my half-wit.
If you’ll permit me a bit of belated contextualization, my attempt to lead others out of their darkness was very much in a printing industry milieu, but your points are well taken. Secondarily, my facetiousness was aimed at the overall subject which, in attempting to assign a level of importance to something I considered an inanity worthy of nothing more than a college “bull session”, very much wasted my time in hashing over a subject that was of no big whoop.
Adding to my overhead, they were.
suek
And I’m here to tell you … I used to sew, but the cost of fabric these days make it more practical to buy clothes.
It sums up the fabric of America in more than a pun way.
I’d phrase it this way:
“Manufacturing job” – Creating the thing of value that someone wants to buy from you
“Service job” – Assisting a prospective buyer in *locating* or choosing the thing that he wants to buy from someone else
We have more and more of the service jobs, and less and less of the jobs that actually produce things of value.
In my opinion, that’s not a good thing and leaves us vulnerable as a nation – to China in particular.