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Columnist: H. James Harrington

Photo: Scott Paton, publisher

  
   

Bon Voyage, U.S. Jobs

Quality professionals must help develop new markets.

 

 


Eight million Americans are currently out of work. For every new job opening today, about three people will remain unemployed. By 2015, another 1.3 million U.S. jobs will be outsourced to countries such as India, Russia, China and the Philippines. During the last four years alone, unemployment increased by 33 percent. The West Coast has been hit the hardest. Oregon’s unemployment rate stands at 7.2 percent, Washington’s at 6.8 percent and California’s at 6.4 percent. By sectors, manufacturing has seen the biggest loss; 1.5 million jobs disappeared during the past four years. Information and technology jobs decreased by 181,500, most of them in software and communications companies. Cutbacks in banking and insurance resulted in 111,300 jobs lost in the financial services sector.

 

 

Pink slips are killing employee morale. The U.S. Department of Labor recorded 8,191 massive layoffs in 2003, which resulted in nearly 1.7 million workers losing their jobs. This is the highest number of people put out of work in one year since the Department of Labor began collecting data. If you consider that the average cost to replace an employee is $65,000, this figure translates to $110.5 billion in added costs to the U.S. economy.

“Fears about job security are understandably significant when nearly 2 million of our workforce has been unemployed for more than a year,” notes Federal Reserve Chairman Alan Greenspan.

Is any part of the economy safe? The answer is yes. To date, the health care industry hasn’t suffered from massive layoffs, but how long will that last? Dubai, United Arab Emirates, is building a state-of-the-art health care city; it’s as good or better than any health care service the U.S. can provide. In fact, Dubai has hired medical talent from North America and Europe to define its design and operating procedures. With U.S. health care costs increasing so rapidly, soon it will cost less to fly to Dubai for major surgery than to pay for comparable treatment in this country. I already know of people who fly to India for major dental work. Individuals from the Middle East, who now buy their health care services from the United States and Europe, will soon seek treatment in Dubai.

Yes, the United States is losing jobs, but so are many other countries around the world. The 20 largest economies lost 22 million manufacturing jobs between 1995 and 2002. China had the biggest loss--50 million manufacturing jobs--during the same seven-year period.

Quality professionals, with their focus on eliminating waste, have contributed significantly to a steady increase in productivity during the last 10 years. Unfortunately, this hasn’t contributed to job security. Output per hour has increased by 300 percent during this decade. But instead of organizations putting this increased productivity to work by making more products, in many cases equipment was left idle and jobs were cut to the bone. Meanwhile, capacity utilization dropped from 84 percent in 1994 to 75 percent in 2003--a plummet of nearly 11 percent. Is it any wonder we have such a high unemployment rate?

The clothing industry is a good example of what’s happening to U.S. industries today. In 1997, about 44 percent of the clothes sold in the United States were made in this country. Just six years later, only 25 percent of the clothes were U.S. made. That’s a drop of 42 percent.

In the past, manufacturing accounted for 50 percent of our jobs. Now that figure is down to 14 percent. During the 19th century, agriculture accounted for 50 percent of our jobs. Now it’s down to 2.5 percent, even though we’re producing more food than ever before.

As quality professionals, we must focus on helping our organizations develop new markets and grow market share. We must help companies expand, which will create new jobs and put more unemployed people to work. Our country can’t remain strong given today’s inflated unemployment rate coupled with the rising costs of Social Security and health care. Developing new markets is key to maintaining the United States’ prosperity. For our own security as well as our country’s, U.S. quality professionals must champion this critical activity.


About the author

H. James Harrington is CEO of the Harrington Institute Inc. and chairman of the board of Harrington Group. He has more than 45 years of experience as a quality professional and is the author of 22 books. Visit his Web site at www.harrington-institute.com.