Greenspan warns against 'protectionist cures' to deal with U.S. job losses
MARTIN CRUTSINGER
Canadian Press
Friday, February 20, 2004
Federal Reserve Chairman Alan Greenspan delivers his Monetary Policy Report to the Senate Banking Committee Feb. 12. (AP /Dennis Cook)
CREDIT: (AP /Dennis Cook)
ADVERTISEMENT
WASHINGTON (AP) - U.S. Federal Reserve chairman Alan Greenspan warned Friday that "protectionist cures" being advanced to deal with the country's job insecurities would make the situation worse.
Entering the politically charged debate over U.S. services jobs being transferred overseas, Greenspan said that it was a lack of adequate educational training rather than "outsourcing" which posed the greatest threat to future American prosperity.
Greenspan, speaking to the annual meeting of the Omaha Chamber of Commerce, said it is not surprising that there's a high level of job insecurity in the country at present when more than two million people in the workforce have been unemployed for more than a year.
He predicted, as he did in congressional testimony last week, that the strengthening economy should lead to stronger employment growth in the months ahead.
"We have reason to be confident that new jobs will displace old ones as they always have," Greenspan said, "but America's job-turnover process is never without pain for those in the job-losing portion."
The issue of jobs - how to create them, find them and keep them - has dominated talk on the 2004 presidential election campaign's early primary season. Sen. John Edwards, now the chief challenger to front-runner Sen. John Kerry for the Democratic presidential nomination, has sought to highlight the issue repeatedly at various stops.
The Bush White House has backtracked on a forecast in the president's economic report to Congress which said 2.6 million jobs should be created this year.
Greenspan, without referring directly to the political campaign or the individual candidates, said that the current anxiety about losing jobs to other countries is not new. There were fears about losing jobs to low-wage Japan in the 1950s and 1960s and to low-wage Mexico in the 1990s and more recently to low-wage China, he said.
However, Greenspan also said the recent migration of service sector jobs, such as employees working in telephone call centres, to India is a new phenomenon. But he cautioned that any answer that involved erecting trade barriers in this country would be wrong.
"The protectionist cures being advanced to address these hardships will make matters worse rather than better," he said.
© Copyright 2004 The Canadian Press |
