America: Home to Low-Paying Jobs or Not

Will the United States be a country in which many people have low-paid jobs for more than another generation? Or can a combination of luck and public policy prevent that? The opposing views were highlighted in front page articles at CNN Money and the New York Times. Each made a good case for its view of the future, but the more critical case is that America can significantly influence the future of its job environment.

CNN Money ran a piece titled “Low Paying Jobs Are Here to Stay.” One conclusion was:

Four of the five occupations with the highest concentration of low-salary jobs are set to grow by 2020. These include farming, personal care, building and grounds maintenance and health care support. All have at least 45% of their employees earning at or below so-called poverty wages.

On the other side of the debate, the New York Times used the example of how a Nissan plant was built in in Smyrna, Tenn., three decades ago. The headline: “In Pursuit of Nissan, a Jobs Lesson for the Tech Industry?” An analysis of federal government policy debates demonstrated that the United States could attack currency manipulation by nations like China as a way to put American manufacturers on a more “level playing field.” The government also could be more aggressive in attempts to get American companies to make products here, either through incentives or penalties. Opponents of these actions call them protectionist and enemies of a free market system.

There seems to be little debate that with no action whatsoever Americans will make less money in general, compared to the cost of living, as the years pass. That will trigger a drop in consumer spending, almost certainly, and with that a slowing or contraction of gross domestic product. Taken to a logical conclusion, low GDP hurts the consumer and business tax base. Harm to that base probably will drive up the deficit and national debt, unless the federal government makes extraordinary cuts to expenses. Given the composition of those expenses, entitlement programs such as Social Security will need to be readjusted.

Taken in short hand, the fate of American wages is not the only issue as far as public policy about how to keep relatively high-paying manufacturing jobs is concerned. The future of GDP and the deficit are just as much at the heart of the matter. A U.S. policy, viewed in that light, is the key to maintaining core parts of federal expenditures that have been in place for generations.

Douglas A. McIntyre