A woman from Argonne National Laboratory discusses science and technology careers with 350 Chicago-area high schoolers. Photo by Argonne National Laboratory via Flickr Creative Commons.
Paul Solman answers questions from NewsHour viewers and web users on business and economic news on his Making Sen$e page. Here’s Tuesday’s query:
Name: Don Federman
Question: Regarding your segment, The Great Stagnation, why hasn’t recent technology created more jobs? The answer, which was lacking in your interview, is the fact that NOTHING IS MADE HERE! It doesn’t matter if technology creates a myriad of new products, IF THEY ARE ALL MADE OVERSEAS! Unless something is done to force companies to make goods here, you can kiss decent paying jobs ADIOS!!
Paul Solman: First of all, plenty is still made in America. We manufacture lots of stuff, just not as high a share of the world’s total output as we used to. But that should come as no surprise, right? Exiting World War II, who else was there to compete with, except the Soviet military? And even that seems to have been wildly overrated.
So we helped the world get back on its industrial feet. That’s what the Marshall Plan was all about. We rebuilt Japan too. And once China buried Mao, the world’s largest country with the most excess labor got into the game as well. All employed the same strategy: export to America. Given a much lower standard of living, as evidenced by much cheaper labor costs and looser environmental standards, the strategy worked. And so every other poor country tried to follow suit. No wonder the U.S. no longer rules the industrial roost. Why should it?
All the while, technology has been advancing, replacing the rote with the robotic. Helping esteemed PBS executive Zvi Dor-Ner create a documentary series about business in 1980, I wrote an introduction for the pilot, concerning a computer company that had gone bust. I remember typing a line about brains replacing brawn in American industry and worrying that it had already become a cliche. More than 30 years ago.
So “why hasn’t recent technology created more jobs?” Probably because recent technology, concentrated in computers and biology, has become increasingly sophisticated to run. The jobs it has created of late require skills that most Americans — less than 30 percent of whom earn a four-year college degree — simply don’t have. And recent technology has not created that many jobs, relative to the past. My favorite example is Twitter, with new era technology, valued at an estimated $8 to $10 billion. It employs just 300 people. By comparison, old era United States Steel has a total market valuation a fraction of that, barely $124 million (multiplying its shares by the stock market price of each share) as of close Monday. U. S. Steel employs about 43,000 people, 24,000 of whom are in the U.S.
Watch ‘The Great Stagnation: Why Hasn’t Recent Technology Created More Jobs?’