June 21, 2003
From the desk of Mindles H. Dreck:Regional/Sectoral Unemployment
Jonah Goldberg puts this letter on The Corner:
Jonah:Is anyone else getting suspicious? I work in the high tech area as an engineer. I socialize with many "working class" people. I attend a church that has a majority of its members working in non-professional fields. Nobody is unemployed and as a matter of fact, nobody can find enough people to fill the available slots where they work.
At my place of employment, our best and least best engineers are leaving for fantastic offers at Lockheed Martin, Raytheon, Grumman, etc. At our church, the tradespeople have more work than they can possibly accomplish. My family had to search for over a year to find a builder to execute a renovation at our house. The lead guy on our framing crew said that a few years ago he only hired people with experience. Now, he'll take anyone who is a hard worker. Every fast food place, convenience store, gas station or whatever that I frequent has a "now hiring" sign posted every which way one looks. Something just doesn't add up.
I wonder if you would take one of your columns and analyze the "high" unemployment rate that the Left has latched onto as the only chink in George Bush's armor. I'm suspicious that extended benefits and other government perks haven't caused some folks to just kick back and stop working. I don't have the answer, but as an engineer, when facts just don't go together logically, I get suspicious.
Let's not see vast conspiracies around every corner. The companies cited in this letter are defense contractors, whose business has naturally picked up in the last few years. Other sectors, such as finance (ahem) are shedding jobs the way Elizabeth Taylor shed husbands.
I've argued before that is this actually a growing strength of the U.S. economy. We see greater volatility within sectors but less across the economy as a whole:
Some job loss is due to the inevitable results of creative destruction. Eastman Kodak just released a very disappointing sales report. Part of the blame was due to SARS---but much of it was the public's turning away from using film. Digital photography is rapidly dominating the market. The gods of creative destruction are %$*& bastards who must be appeased. They demand their victims.
How many people are losing jobs in the financial sector because fewer are needed today to get the same work accomplished? We must never forget that a technologically innovative economy will be very “disruptive.” Higher productivity always means that somebody is going to lose their job! Thankfully, though, the employment loss may be of a short duration and the individual better off in the long run.
I'm a computer programmer. Every day I send out 20 or 30 resumes, and get no reply.
More and more jobs specify security clearance -- for programming jobs at retailers!
Yesterday another local company (Binghamton NY) announced they were laying off another 150 people. The company I used to work for (XO Communications, in San Jose CA) went bankrupt.
I've (last month) gotten phone calls from California headhunters hoping the east coast job market was better than it is in CA -- it's not.
Sure is nice to have an economy that totally sucks, doesn't it. Makes Republican jackasses happy, at least. Me, I'd rather have a job.
The machine tool industry is dying. The company I used to work for (laid off) picked up a few orders recently but, only because Ingersoll of Rockford Illinois went out of business.
Lockheed had a few machines on order with Ingersoll and is working to get them finished. Aerospace looks good now but, how will it succeed without supporting infrastructure?
http://www.kansascity.com/mld/kansascity/business/6080709.htm
And Gary, the concept happy Republican jackasses has no meaning.
Yeah...I'm a Computer Programmer, too. I got laid-off a year ago in the Bay Area and promply picked and relocated to Phoenix. Found a job in a couple of months and bought a house with a mortgage payment lower than my rent was in Cali.
The company I work for is retail, doesn't require clearance, and is hiring more developers and managers every week.
Goes to the Regional/Sectoral concept. Software is hurting, but only where there are 1000 candidates for every position.
Re: the machine tool industry:
My job '91 to '99 was as a domestic high tech manufacturing/process engineer. It was a true, out-on-the-factory-floor job and we were running at 120% capacity for months on end.
Beginning in about '97, everyone could see domestic manufacturing withering on the vine. I bailed out of the factory and into a design engineering group in 2000 - they were outsourcing EVERYTHING to Asia, beginning with Malaysia (now 'too expensive'), then to Korea (now 'too expensive') and now all roads lead to China (sometimes Taiwan).
Hey, cheap manufacturing in Asia is old news, right? Point was, actual conversion cost was absolutely out of the formula - it all boiled down to design cost savings. The design team was saving 10s of millions on design engineer salaries and cheaper tooling, which quickly washed out any conversion cost difference in our high complexity/low volume/high mix product lineup.
It is amazing now to see old factory co-workers I haven't seen in years at layovers in Inchon, Narita and Hong Kong, then finding out that they are staying in the exact hotel I am, doing business with a different manufacturer in the same area.
The US employees have been cut harshly, esp. in the design teams. Our little manufacturing team has grown, because all of the cheap design teams come with factories that are big black holes, all we know is that we get the labor for 'free' with the material and we have to bootstrap their manufacturing capability due to the product complexity.
We continue to keep a few key DEs on hand to train the outsourced design team. Those design teams are getting pretty damned good at designing stuff.
Just recently, we took away the last business my old factory had been clinging to (R&D prototyping) and farmed it out to an overseas factory. All of us are extremely ambivalent about the change, but the fact is, that is what free markets are all about. And, no . . . telling myself that doesn't help me sleep better at night.
It makes me feel slightly better that we are not likely to do the same thing with the defense industry re: tooling. I think the 'free' education for the Chinese design teams is a whole 'nother thing.
"Yesterday another local company (Binghamton NY) announced they were laying off another 150 people"
New York's high taxes are destroying many jobs. New Yorkers only have themselves to blame for electing liberal politicians who promised them something for nothing.
Where is this mythical place where unemployment is low? As an engineer and programmer, I have spent the last 6 months out of work. In the last 3 years, I have spent more than one whole year unemployed. Heck, I would love to swing a hammer. I sure cannot find employment as an engineer nor programmer. As someone whose ex-wife was born in Cuba, and since she still has relatives there, I do not believe that there is a snowball chance in heck of getting a clearance. Add to it the financial fallout from the dotbombs, and there is a 100% certainty of being DQed for any clearance.
Peter, unemployment is under 4% in the D.C. area, and if you check the Washington Post job listings, you'll find there's plenty of stuff you don't need a security clearance for. I know in your field it's tough everywhere right now, including here, but since you're willing to look outside the tech sector, you might consider the lovely Washington metro area. We moved here last year for that very reason, found decent jobs within a few months, and bought a house last week. If we'd gone to live near my family in Seattle, I think we'd be living with them by now.
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