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To: nextrade! who wrote (17095)	2/10/2004 7:29:14 PM
From: nextrade!	Read Replies (1) \| Respond to of 306849

Greenspan Calls Globalization and Layoffs a Mixed Blessing computerworld.com Story by Greg Ip FEBRUARY 10, 2004 ( CAREERJOURNAL ) - WASHINGTON -- Federal Reserve Chairman Alan Greenspan said that while globalization and continual layoffs have made it harder for low-skilled workers to find jobs, those factors have actually kept down overall unemployment and made recessions milder. "In recent years, competition from abroad has risen to a point at which developed countries' lowest-skilled workers are being priced out of the global labor market," Greenspan said in remarks via satellite to a London conference sponsored by the British Treasury. He said new jobs in expanding industries will inevitably replace those in declining industries, "but not without a high degree of pain for those caught in the job-losing segment of America's massive job-turnover process." The Fed chairman said that in the early years after World War II, memories of the Depression made big companies reluctant to fire huge numbers of workers unless bankruptcy threatened. But that began to change after President Reagan fired air-traffic controllers striking illegally in 1981. By the early 1990s, cost-cutting layoffs were a "prevalent practice," he said. Greenspan spoke amid debate in the U.S. over the loss of jobs to lower-wage countries such as China and India. Initially manufacturing work was moved overseas, but now service jobs, such as software development and call center positions, are increasingly being sent offshore. While continual job cutting contributes to job insecurity, it also makes employers more willing to hire, keeping unemployment lower than it otherwise would be, Greenspan said. He noted that about a million workers quit or are fired each week while another million are hired. Greenspan's speech brought together several recurring themes from his speeches and testimony of recent years: that deregulation, financial innovation and flexible labor markets have made the U.S. better able to withstand economic shocks, and that protectionism would hurt the U.S. by interfering with that flexibility. The Democrats vying for the U.S. presidential nomination this year have cited rising job insecurity, especially among the middle- and lower-income groups, to attack President Bush's economic record. Wages of workers just inside the 10% lowest-paid rose only 0.2% a year after inflation in the past three years, compared with 1.5% for those just inside the top 10%, recent Labor Department data shows. (In the late 1990s, wages of both grew about 2% a year.) Even the job turnover Greenspan praised is down 15% in the past two years as new opportunities have dried up.