One of the more common charges leveled at suggestions that Americans put a bit more effort and funding into improving our aging infrastructure is that “those jobs are just temporary.” The layoffs at North Las Vegas’s Amonix Solar Plant might seem to add credence to those attacks [LVSun] because some 200 individuals will be unemployed while the company re-tools for next-gen products. But wait…those were private sector jobs. We should probably look at two propositions regarding government and business relationships before jumping to ready-made ideological conclusions.
#1: There is no such thing in American enterprise as a permanent job.
There are no permanent jobs in either the public or private sector. Some individuals in some individual jobs may be more difficult to fire, reassign, or demote — but that doesn’t mean the individual can’t be fired, reassigned, or demoted. This is especially true if the nature of the job changes. Consider the dilemma of the bookkeeper a few years ago. Bookkeeping tends to be a fairly “solid” job. However, when the Computer Age came upon us and companies discovered the value of spreadsheets that didn’t come from pale green lined columnar pads, and embedded formulas which didn’t require a calculator, our bookkeepers had a choice — learn Excel, etc. or be replaced.
Autoworkers are very familiar with re-tooling layoffs. In July 2001, the Chicago Tribune reported that the Illinois state unemployment numbers came in higher in no small part because of annual re-tooling in automobile plants. By August 2011 layoffs in Michigan were down, but still reflected numbers affected by automotive factory re-tooling. [MILive] Amonix is doing what automakers have done since Ford, retool. This, too, shall pass.
Anyone who has been involved in a merger or acquisition knows that no private sector job is permanent. Corporations are well aware of what they’ve labeled “cultural issues,” a polite term for Who Is Redundant? The Corporate Leadership Council reported in 2003 that 85% of M&A failures were related to issues of efficiently or adequately addressing problems associated with integrating the employees of the business units merged or acquired. [BravermanGroup pdf] Even the decisions concerning how to integrate businesses have implications for retention. Again, in this situation there is certainly no such thing as a permanent job.
Construction sector jobs aren’t any more permanent. Contractors bid for projects. IF the contractor is awarded the winning bid then the general contractor will hire the necessary subcontractors, who in turn will hire other specialists to perform the work. When the work is done, so is the job.
Those who would tell us that any real jobs plan has to create permanent jobs is playing in fantasy land. He or she certainly isn’t describing reality.
#2: There are significant examples of government assistance, and subsidization, of major industrial and infrastructural accomplishments.
We’ve had this argument about government involvement in subsidizing major infrastructural advancements before. Back in the day, as in the early 19th century, we were arguing about what were then called “Internal Improvements.” The ink was barely dry on Hamilton’s 1791 Report on Manufactures when the Jeffersonians started bellowing that the expense of internal improvements (roads, canals, etc.) should be the responsibility of the individuals who wanted the improvements. The federal government did sponsor the construction of the Cumberland Road in 1806, which extended from Cumberland, Maryland to Vandalia, Illinois — much of the alignment is now part of U.S. 40. President Madison vetoed the Bonus Bill of 1817 which would have funded a federal road connecting the south with the east and west.
Flash forward to the canal era, when President Jefferson opined that the construction of the Erie Canal was “little short of madness.” Jeffersonian pronouncements notwithstanding, DeWitt Clinton secured $7 million in funding for the project from the NY state legislature in 1817 and construction was completed in 1825. Clinton’s Folly transformed the logistics of American transportation. Once attractive as a way to transport farm products, the venerable old canal is now a major New York tourist attraction. The Big Ditch spawned some 3,326 miles of waterways constructed between 1816 and 1840. By 1840 Americans were looking at the feasibility of another innovation.
And then came the Pacific Railway Act of 1862:
Sec. 3. That there be… granted to the said company, for the purpose of aiding in the construction of said railroad and telegraph line, and to secure the safe and speedy transportation of mails, troops, munitions of war, and public stores thereon, every alternate section of public land, designated by odd numbers, to the amount of five alternate sections per mile on each side of said railroad, on the line thereof, and within the limits of ten miles on each side of said road… Provided That all mineral lands shall be excepted from the operation of this act; but where the same shall contain timber, the timber thereon is hereby granted to said company…
In other words, federal Land Grants for the purpose of “aiding in the construction,” of the transcontinental railroad. Two of the most significant American accomplishments of the 19th century were facilitated by government subsidies. Are we really going to argue about whether or not government facilitation of funding for infrastructure creates jobs and enhances the economy? However, there is more to the issue than merely infrastructure.
In 1940 the MIT radiation lab created microwave radar, and spun off the Research Laboratory for Electronics which in 1946 started another wave of innovation: “Its work creates or leads to the development of the LISP programming language, optical networking, digital audio, the Global Positioning System, cellular phones, and the integrated circuits behind fiber optic communication.” [MIT]
On the other coast there is the Berkeley Lab, with 76 buildings owned by the Department of Energy, and the facilities owned by the University of California. “Berkeley Lab has six main science thrusts: soft x-ray science for discovery, climate change and environmental sciences, matter and force in the universe, energy efficiency and sustainable energy, computational science and networking, and biological science for energy research.” [link]
Still think federal assistance for basic scientific research doesn’t pay off? If so, I suppose we’d still be popping popcorn on the electric range, answering our hardwired telephones, doing without fiber optics, and wondering if there is such a thing as ‘good’ and ‘bad’ cholesterol. [BLab] And, without the contributions of the Brookhaven National Laboratory we’d have to forget about playing our video games, wherein “Tennis For Two” eventually begat Atari’s “Pong” and “Pong” begat….[BNL]
The bottom line is the bottom line. Without significant infusions of funding for the research, development, and the implementation of ideas as to how to improve our manufacturing, transportation, and marketing sectors we’d have spent far longer in the wilderness, a small country the population of which clung to the eastern seaboard. WE funded our canals. WE funded our transcontinental railroad. WE funded microwave research. WE funded the development of integrated circuits. WE funded the development of de-icing equipment for aircraft, and WE funded part of the research for improved radial tires we use to drive on the Interstate Highway System WE funded. [NASA]
It’s reasonable to assume that there are some graduate assistants in a university sponsored laboratory right now, working on a project that has attracted both government and corporate funding. The project may work, it may not. But if we don’t try we can’t succeed, and it is absolutely certain we’ll never lead the field… in anything. We can’t afford it? Economically speaking, we can’t afford not to — either we stake our flag on the field of research and development and infrastructure advancement, or concede the fields and let other economies benefit from the innovation and invention.
Not much of a choice is it?