June 08, 2006 09:03 am
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Whether Honda decides to locate in Decatur County or not, we have to take the long view about the fate of the American economy and jobs. All other things being equal, a firm will hire the least expensive labor, since labor costs are a major expense every year. They would be fools not to.
If we want to attract jobs – and keep the ones we already have – we must recognize our disadvantage. We are more expensive by and large than many third world labor markets. And the future bodes ill. Why? Our labor pool is going to shrink. Supply will dwindle, which means that the price per unit will go up.
Adding to the cost of labor in the United States is a slew of governmental regulations that other countries just don’t have. Compare the heavily regulated European economy with, say, Indonesia or Mexico. We saddle firms with expenses, whether for good reasons or not, and this has to make employers wonder about escaping the hassle.
Some jobs can’t be exported, or at least not easily, such as service jobs on the order of sales clerk, fast food attendant, and home health care provider. And we have seen a fairly robust growth in these careers, but they rarely pay well, and they add little to the globe’s overall wealth.
Where does that leave us? Few great powers last without a solid economic base. Usually, the economic power is what made them world powers generally, as they buy influence and of course weapons. Certainly part of our preeminence can be traced to our economic fortunes. If that goes away, then what will become of us?
Strategies to reverse this trend often have negative side effects. Protectionism is not the way to go. That only hurts us. Immigration, to bring the cost of labor down, has all sorts of problems, many of them cultural. And we can’t rely on a temporary military advantage to thwart India and China. Notice, we can’t even deter relatively puny Iran.
If we want to sustain our position in the world, we need to offer superior workers, a population that excels. In other words, the difference maker will be human capital. On that front, how are we doing?
Clearly, we are not genetically superior. Every race has a wide distribution of aptitudes, and we are not only one race anyway. We cannot rely on some inherent superiority. Is it our culture then that will see us through? Is our culture likelier to foster excellence?
Children in certain other cultures value education more. Their parents are hungrier to thrive in competition. We are not a particularly tough or focused nation. Look around. Research the test scores. Check the demographics. We are indulging ourselves into weakness – not just flabbiness of body, but flabbiness of mind and of spirit.
We reap what we do not sow, namely the struggles of our parents. It is because of their labors that we can sit for two hours in a folding chair at the ball diamond while the sun sets. It is a lovely payoff. But what example are we setting for our own children, by our habits and our defensiveness?
The question is how to restore vigor to a culture, to resume building human capital, so that as the globe changes all around us, we insist on a leadership role and deserve it?
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Photos
Nathan Harter