The Starting Five, 2/3/2015

 

Is the glass half full or half empty? That's the question

we were asked to consider last week as first President

Barack Obama

, and then Gov.

Mitch Daniels

presented their contrasting views of the economy.

In his annual State of the Union address, the

president described what he called "the American promise" this way: "if

you worked hard, you could do well enough to raise a family, own a home, send

your kids to college and put a little away for retirement." He then said, "the

defining issue of our time is how to keep that promise alive."

As far as the president is concerned, the glass

appears to be half full. In the last 22 months, he said, businesses have

created over 3 million jobs. Last year, they created the most jobs since 2005.

He went on to say that American manufacturers are adding jobs for the first

time since the 1990s.

But Gov. Daniels, who gave the Republican response following

the president's speech, had a different take. For him, the glass is half empty.

"The percentage of Americans with jobs is at the lowest in decades,"

he said. "One of five men of prime working age, and nearly half of all

persons under 30, did not go to work today."

The governor sounded the alarm. This year, he said,

may be our last chance "to restore an America of hope and upward mobility,

and greater equality." He said the U.S. is "only a short distance

behind Greece, Spain and other European countries now facing economic

catastrophe."

Like President Obama, Daniels asserted that creating

jobs is the way back to "an America of promise." But he accused the

president of putting business down. "The late Steve

Jobs

— what a fitting name he had — created more of them than

all those stimulus dollars the president borrowed and blew. Out here, in

Indiana, when a businessperson asks me what he can do for our state, I say 'First,

make money. Be successful.' "

As far as Daniels is concerned, the president's faith in

government is misplaced; it's American business know-how that will see us

through. To hear him tell it, the governor's calendar is packed with meetings

in which eager business executives are pushing in front of one another to ask

what they can do for Indiana — besides make financial contributions to

local Republican candidates, that is.

The governor mentioned Steve Jobs. But in an

eye-opening piece

in the Jan. 22 New

York Times, reporters Charles Duhigg and Keith Bradsher write about how the

economics of manufacturing have prompted Apple to outsource engineering,

building and assembly of iPads and iPhones to overseas contractors. Apple

employs 43,000 people in the U.S., but pays 700,000 people in Asia, Europe and

elsewhere. A former Apple executive is quoted, saying Apple's entire supply

chain is now in China.

The iPhone is assembled at a place called Foxconn

City, where 230,000 employees live in barracks and are paid $17 per day and work

six 12-hour days per week. Duhigg and Bradsher note that the Chinese government

has, in many cases, underwritten the costs of numerous industries in their

country, like, for example, the building of worker dormitories.

Given his support for union-busting right-to-work

legislation,

this story makes you wonder what Daniels had in mind when he

linked Steve Jobs and job creation.

It's worth noting that Indiana already has its own

version of the Chinese production model. For years, farms and orchards needing seasonal

labor have hired migrant workers to come here and harvest fruits and

vegetables. These workers often work from dawn to dusk. They also live in

barracks or bunkhouses. The farmers who hire them will often tell you they've

tried to employ local folks, but most Americans either can't or won't do the

work as well as their migrant competition. At least, not for that pay scale.

Both Governor Daniels and President Obama seem to

agree that America has a jobs problem. But the jobs problem is actually a

competition problem. If the terms of this competition are left to business

leaders to decide on their own, the issue will be reduced, as it seems to be in

Indiana, to figuring out how to get the most out of workers for the least

amount of money.

This is why the president proposes creating tax

incentives, making it more attractive for businesses to stay in this country.

Whether these measures are sufficient, though, remains to be seen.

Duhigg and Bradsher write that American business

leaders complain our workers lack mid-level skills and the cost of doing

business here is just too high to allow for the profits necessary to spur

innovation. What's more, as economist Betsey Stevenson tells them: "Companies

once felt an obligation to support American workers. .

. .That's disappeared."

So is the glass half empty, or half full? Maybe, when

it comes to our economic dilemma, it's time to stop thinking in such either/or

terms. Neither government nor business will be able to fix things by itself.

0
0
0
0
0