Jobs and the Economy

September 9, 2003

September 9, 2003

Newspapers and television are trumpeting the loss of manufacturing jobs in the U.S. President Bush plans to launch a new job creation program.

I think this whole issue needs to be put in perspective. We are struggling to come out of a stubborn recession -- although not a deep recession. The unemployment rate is 6.1 % -- not a very high rate in historic terms. I was in Europe three weeks ago where unemployment from Germany, to France, to Spain is 10% or higher. In the spring, our economy grew a solid 3.1 %. Countries in Europe can only dream of that kind of growth. The Japanese economy hasn't grown in a decade. Our economy, even when it is sputtering, is still the envy of the world.

Our economy is changing all the time. That's what happens in a dynamic free market environment. We lose jobs in one place and add them in another. There has been a huge increase in service jobs. Just take a look at farming. All of my life I have watched the hand-wringing and crying over the loss of farmers. When lilltve the country roads near my farm in Illinois, I recall the neighbors that were there when I grew up. They are gone. Big machinery came in and agriculture that was once a labor-intensive industry is now capital-intensive. The average size of a farm is five times the size it used to be. We don't employ as many people as we used to. Some of our production is shifting to other countries. Brazil is growing our soybeans. Change is painful but necessary.

It's much the same in our manufacturing sector. Technology has replaced many workers --systems manufacturing and robots. Of corse, some manufacturing jobs have gone off shore to China.

However our future hinges on preserving a flexible economy that can react to changes in consumer demand and can utilize new technology. President Bush may talk about saving jobs, but if the economy continues to expand, I think, the problem will take care of itself.

Until next week, this is John Block reporting from Washington.