"Get A Real Job" - The great mobilization of Labor

Featured Article: Monday, 9 February 2009 by John Murdock



We have only begun to see the first phase of a great shift of labor away from unproductive employment. Significant job losses are a result of the inefficient utilization of labor. From recent job losses we can infer that both labor productivity and corporate profitability are low. Therefore, a reallocation of labor is a necessary step in correcting the ills of America. Unemployment will surely remain elevated as struggling businesses, in an effort to boost profits, lay off employees.

The inefficient use of labor is a major dislocation in our economy. Should the reallocation of labor proceed quickly then the overall consequences of this dislocation will be minimized. If reallocation is delayed, then many healthy corporations will remain less competitive for a prolonged period of time. Unfortunately, the end result of delaying labor transition will be U.S. corporations losing their competitive advantage in the world marketplace.

What has been the response of government to the coming shift of labor?

As usual, current government policies are promoting the exact opposite of what is needed, namely, a prompt reallocation of labor. An anemic or even negative growth rate will result from these poor government judgments. The following are just a sampling of the flawed policies which promise future hardships for our people:

1. Short-term vision: Our central government lacks a policy for creating lasting jobs. Current ploys focus on buoying up failing and uncompetitive industries like the automobile and banking industries. Instead, our focus must be redirected to encourage ingenuity, research and development, innovation, and enhanced productivity. Labor and capital must be reallocated into productive and innovative enterprises that comprise the true growth engine of America.

2. Double-standards: Our central government has failed American industry. Foreign enterprises (especially Chinese) fail to uphold environmental responsibility, worker health and safety standards, and acceptable benefits for employees. In addition, they accept heavy government subsidies to enhance their competitive advantage in the marketplace. It's no wonder we can't compete. The costs of doing business in the first world are first world rules, rights and regulations. Foreign enterprises must uphold the same values and practices that American ones do. Businesses that don't uphold these values must not have access to our free markets.

3. Phoney bailouts: Our central government must allow the American people the opportunity to change jobs by stopping the bailouts to zombie corporations. Leave it to free markets to fix the dislocations. Otherwise, poorly-run companies that would have failed will continue to promise their employees false expectations that will come to an end sooner rather than later.

4. Government Deregulation: Our central government must exit the business of legislating business. Current accounting standards (Sarbanes/Oxley), prohibitive rules and regulations, and other socialist measures have excessively raised the cost of doing business in America. Government legislation is inflationary. Let us only permit legislation that is win-win for everyone instead of a select few. 

In summary, the best thing that came happen to our economy right now is to permit the free market to
correct the labor/capital dislocation as fast as reasonably possible. Government interference will only delay the needed correction and prolong the agony.