Jobs Gone ... and Coming

George Rebane

[This editorial appears today (16 January 2010) in The Union’s print and online (here) opinion sections.  This is the submitted version.]

Some people around here have given up on real economic development for our county.  They see that the federal trough has been slopped and ready for all the little piggies who can recite the proper slogans.  Times are tough and everyone is hungry, so what’s there to think about?  Let’s dive in.

It appears that a growing number of our more progressive and pragmatic neighbors have concluded that Nevada County’s economic future lies in the land of grants and loans, all connected by something called green.  They believe that we will climb our way out of this recession by stepping on stacks of carefully prepared grant proposals and loan applications while chanting ‘green is good’.  On the other side await the smiling feds ready to place around our collective neck a collar inscribed ‘Ward of the State’.

There is no doubt that these are hard times.  Since December 2007 the country’s economy has shed over 25 million jobs out of a total of about 151 million jobs that were still worked in 2008.  We admit to an unemployment rate of 10+% while everyone knows that the true rate is closer to 17%.  The California and local numbers are higher.

Normally a growing economy continually sheds jobs and replaces them with even more.  That’s how a healthy and free economy adjusts to changes and efficiently reallocates available resources.  And with accelerating technology that pace is increasing yearly.  But in a recession jobs are shed without replacement, and many businesses take that opportunity to reassess and reconfigure while waiting for the recovery.

Important to the workforce is how many and what kind of jobs will return.  The Bureau of Labor Statistics reports that future “employment growth (will be) concentrated in the service-providing sector, continuing a long-term shift from the goods-producing sector of the economy. From 2008 to 2018, service-providing industries are projected to add 14.6 million jobs, or 96 percent of the increase in total employment.”

This job growth by income will be in the shape of a dumbbell – good growth in both the high and low paying jobs, and little growth in technology-targeted mid-range jobs where most people work.  Of course, service jobs come in several varieties ranging from brain surgery to flipping hamburgers.

The largest growth sector will involve professional and business services that include technology jobs.  Shrinking sectors will be manufacturing and mining which will loose another 1.2 million jobs.  “By 2018, the goods-producing sector is expected to account for 12.9 percent of total jobs, down from 17.3 percent in 1998 and 14.2 percent in 2008.” (BLS)  The big wealth producing sector will, of course, be technology and its first adopters.

But all this happy talk about the recovery assumes business cycles as usual.  With the national debt and unfunded obligations accelerating to trans-astronomical levels by more economy killing programs on the way, this recovery will be anything but normal.

Big government’s solution is to again raise taxes, restrict markets, create more money out of thin air, and use the same stuff to fabricate jobs – mostly of the mandated green variety.  Toeing the party line, the mavens at the Center for American Progress call for ‘investing’ $150 billion ANNUALLY to create and sustain 1,700,000 green jobs (man your calculators!).  But that is bankrupt Euro zone aping socialism, and such jobs will not grow the economy because they will be sustained only by misapplied monies first taken from wealth producing enterprises.

There’s no room here to rehash the nature of our national workforce and its ability to compete in the world marketplace.  We now must import too many of the technologists needed to create wealth.  Our own sons and daughters have for some time been picking easier avenues to reach their anticipated pots of gold.

I believe that Nevada County can return to the days when it generated wealth and exported cash to needier regions in the land.  There is always hope that we can get Sacramento to eventually lift its heavy heel and permit our golden state to soar again.

But that hope is gone if we all hunker down, and on bended knee apply for welfare from the good folks in Ohio.  Of course, the path of those monies goes through Washington where some of it stays behind, and to every arriving dollar a thick rule book is attached that specifies how and by whom it is to be used.

By taking advantage of our county’s natural beauty and great location, we can do better.

George Rebane is a retired systems scientist and entrepreneur in Nevada County who regularly expands these and other themes on Rebane’s Ruminations (www.georgerebane.com).

 

Comments

[Russ]

The American Thinker has some interest charts and stats on construction and manufacturing jobs at Jobs, Jobs, Jobs