GREENSPAN SAYS AMERICANS SCREW YOURSELF...(LITERALLY)
Reuters
Fed Officials Say Jobs on Way Eventually (ROFL)
Friday February 20, 6:06 pm ET
By Glenn Somerville
WASHINGTON (Reuters) - A chorus of Federal Reserve officials tried on Friday to reassure Americans that new jobs will emerge to replace the millions of jobs lost in recent years, but warned workers must add skills to stay competitive.
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"There is a palpable unease that businesses and jobs are being drained from the United States, with potentially adverse consequences for unemployment and the standard of living of the average American," Fed Chairman Alan Greenspan told a Chamber of Commerce group in Omaha, Nebraska.
So-called "outsourcing" of jobs by U.S. corporations aiming to pad profits by shipping work to cheap-labor centers in China and India has struck a nerve with Americans and has emerged as an issue in November presidential elections.
Greenspan acknowledged it was an "important and sensitive" issue and it has opened a gulf between those hurt by the phenomenon and economists who back the benefits of free trade.
"It is crucial that this gulf be bridged," he added.
Greenspan said he was confident that new jobs will replace those lost and said a pickup in hiring prospects lay ahead.
"We have seen encouraging signs of late that the labor market is improving," Greenspan said. "In all likelihood, employment will begin to increase more quickly before long as output continues to expand."
DIFFERENCE IN PERCEPTION
Other Fed officials weighed in similarly -- but in terms that underlined the differences between their academic assessment and the raw feeling that many displaced workers feel about seeing jobs disappear.
Speaking to a management conference in St. Louis, the president of the St. Louis Federal Reserve Bank, William Poole, said a strengthening economy will bring more jobs. If U.S. economic expansion is 4 to 5 percent this year as expected, there will be "significant increases" in employment, he said.
"Since employment gains of roughly 125,000 per month are necessary to keep up with the 1 percent annual rate of growth in the labor force, the projected employment growth in excess of that means that we should expect some decline in the unemployment rate by the end of the year from its current 5.6 percent rate," Poole added.
Greenspan said trade protectionism was not the answer to ensuring American jobs and instead recommended "rigorous education and ongoing training" to make sure the skills needed for jobs remained sharp.
CAN'T FENCE IN JOBS
"Protectionism will do little to create jobs; and if foreigners retaliate, we will surely lose jobs," Greenspan said, adding it was preferable to boost American workers' skills so that they can compete in the global marketplace.
Fed Governor Ben Bernanke, speaking to reporters after addressing an economics group, declined to be drawn into a debate on whether a controversial White House forecast for 2.6 million jobs this year was realistic.
He said it depended upon when corporations decided they have "exhausted productivity gains," meaning they could no longer squeeze more output from their existing work forces.
"So I express the view that hiring will strengthen significantly this year, but I wouldn't want to put a number on it," Bernanke said.
In the long run, Greenspan said, part of the answer was that workers must ensure they have the skills to move ahead and to reduce the imbalances in the supply between those who have the skills and those who do not.
"Those imbalances have the potential to hamper the adjustment flexibility of our economy overall," Greenspan cautioned. "The single central action necessary to ameliorate these imbalances and their accompanying consequences for income inequality is to boost the skills, and thus earning potential, of those workers lower on the skill ladder."
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