- The Washington Times - Thursday, March 11, 2004

Federal Reserve Chairman Alan Greenspan yesterday criticized the “alleged cures” that political candidates are proposing for joblessness — including limits on moving jobs offshore — saying they will erode America’s living standards and do little to reduce unemployment.

Although “new-job creation is lagging badly” for the moment, he said, the best way for Congress to help Americans get and keep good-paying jobs is to improve their math and technical skills so companies won’t be tempted to outsource to better-trained workers in China and India.The Fed chairman said he continues to think the economy is on the verge of faster job growth. But he acknowledged that the extraordinary dearth of jobs in the past three years has been a hardship to millions of people who cannot find work.

He endorsed for the first time an extension of federal unemployment benefits for those workers, which Congress had allowed to expire in December.

“There is a palpable unease that businesses and jobs are being drained from the United States,” particularly white-collar jobs that Americans previously thought were secure, he said in an unusual appearance before the House Education and the Workforce Committee.

“Job insecurity is understandably significant when nearly two million members of our work force have been unemployed for more than six months,” he said.

But erecting barriers to force employers to keep jobs in the United States would be counterproductive and could lead to the kind of trade war that turned a recession in the 1930s into the Great Depression, he said.

“What has made the American economy great is that we allow ourselves to be exposed to more competition than virtually anyone else in the world,” he said.

This has forced Americans to hone their skills in a way that promoted technological innovation and raised living standards, he said.

“A new round of protectionist steps is being proposed” that threatens the progress, he said, referring to legislation that would restrict outsourcing jobs. That legislation was approved in the Senate last week as part of a bill to repeal tax provisions deemed prejudicial to trade.

The European Union instituted sanctions against American companies last week in retaliation for the tax measures, and other countries might respond in kind to the new protectionist measures, Mr. Greenspan said.

“If foreigners were to retaliate, we would surely lose jobs,” he said. “I think we would find much of the extraordinary gains that we have made in the post-World War II period would start to fade.”

America and its nearly 300 million consumers have benefited more than any other country from the globalization that enables companies to provide goods and services cheaper and more efficiently through using technology and outsourcing jobs, he said.

“We as consumers are insisting upon a high-quality product at a low price,” he said, noting that retailers that have not offered inexpensive imports from Asia in recent years have gone bankrupt while those that feature such products have thrived.

Rather than trying to stop the trickle of jobs going overseas, Mr. Greenspan said Congress would better serve the public by ensuring the educational system is geared to supply Americans with the best training to compete in the global labor market.

Recent studies show U.S. students are competitive in math and science through the fourth grade, he noted, but after that, the United States falls well behind East Asian countries, in particular, in providing education and technical training.

A 2002 survey found that U.S. colleges produced one-sixth the number of graduates with science and engineering degrees that Asian schools do.

Companies not only are relocating facilities to Asia to take advantage of the surplus of skilled graduates, but they are enticing Asian graduates to come to the United States to take jobs that they can’t find qualified candidates to fill here.

Congress needs to promote both the teaching of basics such as arithmetic, geometry and calculus, Mr. Greenspan said, as well as the abstract reasoning that workers will need to survive in a highly competitive job market.

“Our school systems should be judged on the basis by which they produce a generic learning that enables people to be in several professions or jobs through their life work,” he said. “It’s so critical that we teach people how to learn.”

Copyright © 2019 The Washington Times, LLC. Click here for reprint permission.

The Washington Times Comment Policy

The Washington Times welcomes your comments on Spot.im, our third-party provider. Please read our Comment Policy before commenting.


Click to Read More and View Comments

Click to Hide