[Congressional Record Volume 150, Number 21 (Wednesday, February 25, 2004)]
[House]
[Pages H615-H621]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
IMPORTANCE OF SERVICE ECONOMY IN AMERICA
The SPEAKER pro tempore. Under the Speaker's announced policy of
January 7, 2003, the gentleman from California (Mr. Dreier) is
recognized for 60 minutes.
Mr. DREIER. Mr. Speaker, I do not normally use this forum of Special
Orders to address our colleagues, but tonight I want to spend some time
talking about a very important issue. I want to talk about hamburger-
flipping jobs. Actually, I want to talk about the claim made by some
politicians and pundits that the American economy is turning into an
economy of hamburger-flipping jobs.
Now, we all know that hamburger-flipping jobs is a buzzword. It is a
phrase intended to sum up a lot of complex changes that are going on in
the American economy. Obviously those changes are impacting jobs. They
are impacting businesses, they are impacting families, and they are
impacting communities. Talking about hamburger-flipping jobs is a way
to say that our economy is in decline. It says we are losing, quote/
unquote, good jobs, and in their place we are creating bad jobs,
second-rate jobs, no-future jobs.
Sometimes the same people talk about dishwashing jobs, or janitor
jobs, or retail jobs, especially at Wal-Mart or Target or K-Mart.
People use buzzwords because they reduce complicated ideas to a simple
digestible package, and in this case we are talking about a whole host
of very complex economic trends.
It is no surprise that people turn to buzzwords. We no longer have to
worry about viewers nodding off to sleep during long-winded speeches.
They have 200 cable channels from which to choose, and obviously the
unlimited Internet, so they can clearly move on for seconds.
But, Mr. Speaker, I hope that our colleagues will bear with me as I
go through this, because I think it is absolutely critical to dispel
the utterly ridiculous, factually inaccurate, completely fictitious
assertion that the American economy is heading downhill and that we are
replacing good jobs with hamburger-flipping jobs.
Exposing the charade of the hamburger-flipping jobs argument is
absolutely critical, because these buzzwords are at the heart of a
concerted attack on the fundamental basis, Mr. Speaker, of our economic
strength, an attack on the fundamental basis of America's economic
strength.
There are serious people who want to turn back the clock on our
economy, threatening very real gains that have been made by millions
and millions of American families.
Now, it is buzzword time again, Mr. Speaker. Talking about hamburger-
flipping jobs is a way to demean our, quote/unquote, service economy.
What do we mean by service economy? We do have an economy that is
increasingly
[[Page H616]]
based on services, that is true. That means jobs that serve people,
serving people well, customers, clients, taxpayers, patients and
students. This new service economy is, I believe, a good thing. But as
I have said, this is a very complicated subject. It is big.
When we talk about the U.S. economy today, we are talking about an
$11 trillion economy, and that is just in 1 year, Mr. Speaker. The
forces, changes, trends and technologies that are in play here are
global, so the impact is even greater than our Nation's $11 trillion
economy, and the changes run deep. We need to look at changes that have
impacted our country and our economy over the last century, and
particularly over the last two decades, the last 20 years. These
changes over the last two decades are key to this story.
The hamburger-flipping jobs argument is basically a way of saying
that the changes in our economy mean things are getting worse or will
get worse for most Americans. But in fact, Mr. Speaker, things are
getting much better, and they promise to get even better for America in
the future.
{time} 1900
This is an economy that is increasingly based on skilled workers. We
do have a more global economy with complex business, trade,
transportation, communications, and cultural links. We have new
technologies making their way into so many aspects of our lives, and
mostly in ways that are very, very good. By and large, these forces are
working together in ways that are making the American economy work
better in 2004 than it did 2 decades ago back in 1984.
Now, I am using the term ``economy'' in the broadest sense, because
each of these factors, services, skilled workers, globalization, trade,
transportation, communications, and technology, is dramatically
changing the way Americans do the things that make up our lives: work,
shop, go to school, go to the doctor, be entertained, and have fun. In
short, the people who claim that we are creating a hamburger-flipping
jobs economy are asking us to turn back the clock on the past 20 years
of change.
Now, every change has not been good, obviously, and even the good
changes that we have undergone on an overall basis have not been good
for everyone. But I think we are clearly on the path to a better
future, and dramatic course changes at this point could be very, very
bad; would, in fact, I believe, be very bad for Americans.
Now, Mr. Speaker, we have been talking about 20 years of change. I
have not been talking about it just by accident. In fact, one of the
reasons why I am here is that I believe we are now 20 years into a
profound and dramatic period of economic change in America. One of the
most striking things about the hamburger-flipping jobs buzzword is all
the concepts it embodies. Those concepts have been around for a long
time. It is basically a political and economic urban myth listening to
that term: hamburger-flipping jobs.
When I listen to different politicians talk about hamburger-flipping
jobs and what they see as a declining economy, I swear that I have had
a flashback to 1984. The spirit of the rhetoric, the basis of the
ideas, the sense of foreboding, and being on the wrong economic track
reminds me of Walter Mondale's run for President in 1984. Now, I have
recently gotten my hands on his nomination speech before the Democratic
Convention in that year.
It is a remarkable read, Mr. Speaker, and not because it stirs the
soul. It is remarkable to see in such explicit detail the platform on
which Mr. Mondale ran for President back in 1984. He said that taxes
were too low, the deficit was going to destroy our economy, we needed
to adopt a nuclear freeze and negotiate annually with the Soviet Union.
These were the big issues of his campaign back in 1984; and as we all
know, he was, thank God, trounced by Ronald Reagan. Walter Mondale did
not actually use the term ``hamburger-flipping jobs,'' but he said a
few things that show that in 1984, the Democratic Party standard was
firmly entrenched, deeply tied to that intellectual camp believing that
hamburger-flipping jobs as a pejorative were the wave of the future.
Speaking of the Reagan administration, the candidate Walter Mondale
said, ``They crimped our future. They let us be routed in international
competition, and now the help wanted ads are full of listings for
executives and for dish washers, but not much in between.'' He did not
quite say hamburger-flipping jobs, Mr. Speaker, but there it is, the
claim that most of the jobs that were being created were for dish
washers.
He went on to say, ``When the American economy leads the world, jobs
are here, the prosperity is here for our children. But that is not what
is happening today. This is the worst trade year in American history.
Three million of our best jobs have gone overseas.''
Again, that is Walter Mondale talking in 1984 about where we stood.
He said, ``It has been devastating, the worst trade year in American
history. Three million of our best jobs have gone overseas.''
And as if Walter Mondale had a vision of 2004 and the fact that
leading American companies are investing in facilities in places like
China, India, Europe, and Mexico, creating new jobs in those new
countries, Mondale said, ``To big companies that send our jobs
overseas, my message is, we need those jobs here at home, and our
country won't help your business unless your business helps our
country.'' That was Walter Mondale in 1984. Now, this certainly sounds
a lot like the political rhetoric regarding Benedict Arnold CEOs that
we hear today.
We also did some research, Mr. Speaker, to find the earliest
reference that we could come up with to the term hamburger-flipping
jobs, and lo and behold it was in 1984. We found an article in the New
York Times that was basically about this very same issue: the concern
that good American manufacturing jobs were disappearing, often moving
overseas and being replaced by low-paying service jobs, the dreaded
hamburger-flipping jobs. At this point, Mr. Speaker, I would include in
the Record an article in the New York Times which I am going to talk
about.
[From the New York Times, Sept. 4, 1984]
``High Tech,'' Narrated by Walter Cronkite
(By Steven Greenhouse)
It is late afternoon at the Fanuc Limited factory at the
foot of Mount Fuji in Japan, and not a worker is in sight--
not a human one at least. The huge metallic arm of a robot
swivels around and places a small mechanical part into the
machine it is building. In this way, Fanuc's robot-filled,
computer-controlled factory can run eight-hour shifts without
anyone working inside.
That's the haunting opening scene from the probing hour-
long CBS documentary, ``High Tech: Dream or Nightmare?''
which is to be aired tonight at 8. In narrating this timely
documentary, Walter Cronkite makes clear that these 21st-
century manufacturing techniques are a boon to productivity.
With robots replacing people, there's little need to worry
about absenteeism, alcoholism, strikes, shoddy workmanship or
overtime pay.
However, Mr. Cronkite questions just how good this brave
new manufacturing world is for the nation's workers. By
forcing dozens of aging factories to be closed and thousands
of workers to be thrown out of their jobs, robots and other
high-tech production techniques have created what Mr.
Cronkite called ``the blue-collar blues.'' Indeed, one expert
interviewed predicts that technological change alone will
cause a shortfall of six million jobs for American workers by
1990.
The show addresses several of the key issues facing the
United States as it embarks upon another industrial
revolution: What is going to happen to the hundreds of
thousands of workers whose jobs are taken away by machines?
By destroying many high-paying factory jobs, are high-tech
production techniques going to turn the United States into a
nation of $50,000-a-year systems managers and $3.50-an-hour
janitors and hamburger flippers? In other words, is high tech
going to polarize the United States and cause its great
middle class to disappear?
Mr. Cronkite also examines an important corollary economic
question: How healthy is the nation's shift from a
manufacturing economy to a service one? He asks whether this
shift is going on faster than it naturally would--or should--
as a result of imports from countries that heavily subsidize
their industries or pay one-tenth the wages of what American
companies pay. The cameras also look at the unevenness of the
nation's recovery. Thriving Silicon Valley is contrasted with
ailing Rust Bowl cities like Cleveland and Youngstown, Ohio,
which one expert described as ``Manufacturing Appalachias.''
Mr. Cronkite interviews Lee A. Iacocca, Chrysler's dynamic
chairman, who says the nation should be doing more to
preserve its ailing manufacturing base. ``You can't just have
video arcades and drive-in banks and hamburger joints,'' Mr.
Iacocca says.
[[Page H617]]
None of the workers or economists interviewed takes a
Luddite view suggesting that high tech be scrapped because it
throws workers out of jobs. But they caution that unions may
vigorously oppose the introduction of robots--Mr. Cronkite
calls them ``steel-collar workers''--if blue-collar workers
are merely victims of high-tech, if they do not share in the
benefits resulting from high-tech's more efficient production
techniques.
``I think the real issue is the social cost of the change--
who pays for it, how it's paid,'' said Harley Shaiken, a
technology expert at Massachusetts Institute of Technology.
Mr. Iacocca suggests that government, labor and management
should undertake a massive retraining program to salvage the
lives of 45-year-old workers laid off at Youngstown's steel
mills and Detroit's assembly plants. Mr. Shaiken proposes
government assistance to help the jobless move to areas where
jobs are abundant. And Thomas R. Donahue, the secretary-
treasurer of the A.F.L.-C.I.O., suggests a shorter work week
to help spread the jobs that remain.
The documentary is more cerebral, more theoretical than
most. It is long on interviews--most of them excellent--with
experts such as economists, corporate executives and robotics
pioneers. At the same time, the show is short on interviews
with workers whose lives have been turned topsy-turvy by
technology. One or two detailed interviews with these victims
of technology would have made the show more compelling.
The documentary is at its most interesting when is shows
how the antiseptic new high-tech factories operate. An
enjoyable and informative takeoff on Chaplin's ``Modern
Times'' was a speeded-up sequence showing the construction of
a jumbo jet in Boeing's highly automated factory.
The camera work in that sequence and many others is superb.
By zooming in on computer screens, for example, the
photographer helps make some of these difficult new
technologies comprehensible. In addition, the camera conveys
the eerie, often alienating qualities of these technologies.
At the program's conclusion, Mr. Cronkite asks what is
going to happen to the workers of the 1990's--that is to say,
to children now in school. He wonders whether high tech will
provide enough jobs to match what will presumably be their
impressive skills and education. That, however, may be the
stuff of another documentary.
Mr. Speaker, the article that I talk about is a news analysis of the
probing hour-long PBS documentary that was entitled ``High-Tech: Dream
or Nightmare?'' Again, this is back in 1984. It was an article about a
television documentary by then the Nation's leading TV personality,
Walter Cronkite. Remember, this was 20 years ago, 1984, the very early
days of cable, before satellite television. The networks were really
king and spoke to a majority of the American people.
The New York Times describes the haunting opening scene of the
documentary: a robot-filled, computer-controlled Japanese factory. No
human workers in sight. The article reads, ``Walter Cronkite makes
clear that these 21st century manufacturing techniques are a boon to
productivity.
``However, Mr. Cronkite questions just how good this brave new
manufacturing world is for our Nation's workers. By forcing dozens of
aging factories to be closed and thousands of workers to be thrown out
of their jobs, robots and other high-tech production techniques have
created what Mr. Cronkite called `the blue-collar blues.' Indeed, one
expert interviewed predicts that technological change alone will cause
a shortfall of 6 million jobs for American workers by 1990.''
Again, this was a New York Times piece in 1984 giving an account of
the Walter Cronkite documentary.
It goes on to ask, ``What is going to happen to the hundreds of
thousands of workers whose jobs are taken away by machines? By
destroying many high-paying factory jobs, are high-tech production
techniques going to turn the United States into a Nation of $50,000-a-
year systems managers and $3.50 an hour janitors'' and, yes, Mr.
Speaker, ``hamburger-flippers?'' As I have said, hamburger-flippers is
the buzzword for the very, very negative service economy, and we see it
used that way back there in 1984.
I quote again, Mr. Speaker: ``Mr. Cronkite also examines an important
corollary economic question: How healthy is the Nation's shift from a
manufacturing economy to a service one?'' Again, that is 1984, the New
York Times reporting on the Walter Cronkite documentary.
Now, Mr. Speaker, Lee Iacocca, referred to in this article as
Chrysler's dynamic chairman, was always better at turning a phrase than
most. He argued in the piece that the country needed to protect its
manufacturing base saying, ``You can't just have video arcades and
drive-in banks and hamburger joints.''
That kind of argument, Mr. Speaker, has a timeless feel to it. We
heard a lot of it in 2003, and we will continue to hear a lot of it in
2004. It is just so amazing that we go back and hear the exact same
thing having been said 20 years ago.
I believe that stepping back and looking at this issue over a longer
time frame like this 20 years is actually very important for us to
understand just how mistaken and how really dangerous the hamburger-
flipping analysis that was offered in 1984 and is being offered in 2004
is, and that Cronkite documentary and the New York Times were right
when they said massive changes were under way in America. The U.S. was
entering a period of profound economic and technological change. To say
it was the dawn of a new industrial revolution probably is not the best
choice of words, because the fundamental change in the economy was the
shift from the heavy industry-based economy of the middle 20th century
to the more technologically and skill-based new economy of these past
20 years, from 1984 to 2004.
It is not easy to describe the new economy, Mr. Speaker; but some
aspects are very clear. It used more communication technologies to
connect people from all corners of the world. Information technology,
digital technology, and the Internet exploded during that 20-year
period. It was faster. Business adopted just-in-time production
schedules that relied on very precise planning and transportation
models, and there was a lot of change. That was true for business, and
it was true for people as well.
I want to focus on this last concept first, namely, change. The new
economy, some call it the service economy, but I think a better name
for it is the 21st century economy. It meant a lot of change, and
change that has happened very quickly. To give an example, the pace of
economic change in the past 20 years compared to the preceding era of
economic stability, which I would say ended up in a period of
stagnation; I looked at the list of companies in the Dow Jones
industrial average. The Dow Jones has compiled an average of the stock
prices of a select handful of the Nation's leading businesses since
1884, and it is intended to reflect the market generally, the Dow 30.
Now, from 1963 to 1983, the Dow Jones average included 30 companies.
Over those 20 years, 26 of the 30 companies were the exact same. Only
four dropped off and were replaced by new companies. Now, that is
obviously stability that we saw from 1963 to 1983; and for the most
part, during that period of time it was good, it was comfortable, and
it was stable.
The 26 companies, Mr. Speaker, that stayed the same through the
entire 20-year period are Allied Chemical, Aluminum Company of America,
American Can, AT&T, American Tobacco, Bethlehem Steel, DuPont, Eastman
Kodak, Exxon, General Electric, General Foods, General Motors,
Goodyear, Inco, International Harvester, International Paper Company,
Proctor and Gamble, Owens-Illinois Glass, Sears Roebuck, Standard Oil
of California, Texaco, Union Carbide, United Technologies, U.S. Steel,
Westinghouse, and Woolworth. Those were 26 of the 30 companies that
remained constant during that 2-decade period from 1963 to 1983. Of
course, by the mid 1970s, the economy was not performing well, to say
the least. I will discuss that more later. But as I said, the line
between comfortable stability and very uncomfortable stagnation can be
quite thin.
Looking at the Dow Jones Industrial Average over the period of
transition into this 21st century economy, that is, the past 20 years,
shows a very, very different picture. From 1984 to 2004, there was a
remarkable turnover of 16 new corporate faces among the 30 included in
the Dow Jones Industrial Average, those 30 businesses. Today, the Dow
Jones Industrial Average's 30 includes the following companies: 3M,
Alcoa, Altria Group, American Express, AT&T, Boeing, Caterpillar,
Citigroup, CocaCola, DuPont, Eastman Kodak, Exxon, Mobile, General
Electric, General Motors, Hewlett-Packard, Home Depot, Honeywell,
Intel, IBM, International Paper, Johnson & Johnson, J.P. Morgan Chase,
McDonald's, Merck, Microsoft, Proctor and Gamble, SBC Communications,
United Technologies, Wal-Mart, and Disney.
[[Page H618]]
{time} 1915
The new companies read like a Who's Who of the economy of today,
including Boeing, Citigroup, Hewlett-Packard, Home Depot, Intel,
Johnson and Johnson, JP Morgan, Microsoft, SBC, Wal-Mart and Disney.
This list may be the most succinct way to respond to the hamburger
flipping jobs argument, Mr. Speaker. The new economy, the service
economy, the 21st century economy, the changes in the American economy
over the past 20 years have seen the rise of these new corporate giants
and the industries and technologies they represent. They represent the
revolution in computer software and hardware, the revolution in
telecommunications, the revolution in global finance, the global
entertainment business, the revolution in retail, distribution and
supply management. They are now key faces in the American economy.
Those companies that survived, those that were there throughout the
last 20 years, like AT&T, General Electric, General Motors, Eastman
Kodak, Exxon, IBM and Proctor & Gamble, all adopted those same
technologies and techniques to make themselves 21st century economy
leaders. In other words, change swept through those companies even when
the names stay the same.
Change is scary, I will acknowledge that, Mr. Speaker. It is scary
for businesses, and businesses are not actually alive. Businesses are
really just organizations of people, and we all know that change is
scary for people. Change often leads to uncertainty and confusion, at
least temporarily, and even when it is not affecting some directly, it
does create anxiety. No doubt about it, the 21st century economy has
brought change and anxiety.
Tracking the early history of the hamburger flipping job political
urban myth, I came across another absolutely striking article from the
New York Times. This article was just 2 years after the previous one
that I mentioned. This one was written in 1986. In terms of our 20-year
time frame, this was still basically the start of this process of
moving towards the 21st century economy.
The article is entitled The Average Guy Takes It on the Chin. It is
by Steven Greenhouse. He authored the article that I quoted from
earlier about Walter Cronkite's documentary, and it is a rhetorical
precursor to the message of the two Americas that we are hearing about
today in this Presidential campaign.
This article from 1986 begins: ``For millions of breadwinners, the
American dream is becoming the impossible dream. Even the most basic
tenet of the dream, that a young family will be more prosperous in its
middle age, has grown more elusive. The statistics tell the harsh story
of Americans struggling just to stay in place economically.''
Obviously this was not a good news piece written back in 1986. It
tells the story, which was very real in that year, of the economic
stagnation that struck this country in the 1970s, which culminated with
the wrenching economic downturn that we saw in the early 1980s. Well,
the economy began to grow in 1983. It was entering the period of
profound change that I have talked about, and the eventual outcomes
were not clear obviously at that point.
Frank S. Levy, a professor of public policy at the University of
Maryland, is quoted as saying, ``From the end of World War II to 1973,
everybody was getting better off, but from 1973 through now,'' that was
1986, ``that has stopped,'' he said.
The article goes on to say, ``Economists generally agree that the
only way workers can manage to make substantial strides in real
earnings during the years ahead is through steady and strong
productivity growth, which very few economists are predicting now.''
And it says, ``Many economists point out that other countries such as
Japan and West Germany have achieved higher growth in productivity.
Some even suggest that the United States may be starting to undergo the
same wrenching economic decline that the British have experienced in
recent decades.''
Now, remember again, this was written in 1986, Mr. Speaker.
I mention that quote because at the beginning of this past 20 years,
there was a very real concern, fear some would say, that foreign
countries like Japan and West Germany were more productive and were
more successful. They would dominate the 21st century economy. In fact,
many here in this Congress at that time, I remember very vividly
standing here listening to those who would argue that we had to model
the U.S. economy after the economies of Japan and Germany, their
industrial planning models.
Now, Mr. Speaker, of course, jobs are key, and the prospect that they
will be scarce does breed anxiety. Again, this 1986 New York Times
article goes on to say, ``As young workers enter the job market, many
can find only low-paid jobs in the service sector.'' It goes on to
quote Sandra Shaber of Chase Econometrics who said, ``For every 25-
year-old I read about making $300,000 on Wall Street, there are
hundreds of 25-year-olds working as fast-food people or hospital
orderlies earning $3.50 an hour.''
Now, there it is, Mr. Speaker, the vision of the service economy,
meaning one well-paid Wall Street success story and hundreds of 25-
year-olds working in fast-food chains and cleaning bedpans.
In my view, the New York Times article obviously failed in predicting
the future, but it actually did an excellent job in summarizing the
recent economic history up to that point back in 1986. The problem was
slow productivity. They were right on target.
The article highlights, ``When asked the reason for lagging income
growth, economists speak with rare unanimity: Slow productivity is
Public Enemy No. 1,'' these economists said back in 1986. It goes on to
quote Audrey Freeman, executive director of the Conference Board. She
said, ``In the long term, the only way to get wages to increase without
inflation is to increase productivity, but we haven't been doing very
well in that department.'' Again, that was said in 1986, portending the
future.
The fundamental problem was productivity. They got that right, Mr.
Speaker, but the economists in this article got just about everything
else dead wrong. Here is what they had to say about the ongoing
transition to more services in the economy. They said, ``As the
Nation's economy moves from manufacturing to services, the productivity
problem compounds. It is generally easier to turn out more widgets per
hour than to squeeze more hourly output from lawyers, travel agents or
hamburger flippers.''
Not to belabor the point, but I would quote again from the article,
``The experts are not optimistic about the outlook for productivity
growth. `I really don't see productivity growth coming back to the 3
percent levels that we had in the 1950s,' said Douglas P. Handler, a
productivity specialist with Wharton Econometrics.' And, `There is very
little on the horizon that would cause us to be optimistic about
productivity improvements over the remainder of this decade.''' Again,
this was written in 1986, 18 years ago at the beginning of this move
that started 20 years ago towards this 21st century economy.
Finally, I cannot pass on the fact that the author goes out of his
way to point out that the one group of people that is not able to see
how bad things were in the American economy in 1986 were the American
people.
In the face of all the economists in the article, the author notes,
``Nonetheless, households are stubbornly refusing to change their
spending habits. And spirits, despite the grim income statistics,
remain high. According to the University of Michigan Survey Research
Center, consumer confidence is far higher than it was during the recent
times of double-digit inflation, interest rates and unemployment.''
Well, Mr. Speaker, this article is a great example of the kind of
anxiety about technology replacing jobs and service jobs being bad,
foreign countries like Japan being better prepared for the economy of
the future than America, and productivity being dead in the water with
no hope in sight.
As I said, this article was from 1986, nearly 20 years ago, but if
you listen to the political debate today in 2004, you hear many of the
exact same themes: Technology threatens jobs, losing jobs to lower-cost
foreign competitors. You can almost take every reference to Japan and
simply change the country name to China, and you get a tangible sense
that the future is not good.
I am not going to go chapter and verse through all the doom and gloom
[[Page H619]]
predictions and warnings of those who think that America and its people
are actually threatened by the 21st century economy. We do not have the
time to do that, and it is obvious to those who have been listening to
this national debate over the years, whether the issue was trade with
Mexico, the creation of the global trade rules of the WTO, trade with
China, or the recent bursting of the Internet bubble.
Instead, let us remember that 20 years is a pretty long time. Yes, we
hear many of the same concerns in 2004 that were voiced in the late
1980s, but we can now judge how accurate, how sensible, how thoughtful
those concerns were 20 years ago. In fact, I believe that we can look
at how things played out over the past 20 years, the dire predictions
and the reality, and learn a thing or two about how the similar line of
thinking would impact our future going forward.
So did America turn into a Nation of a few $50,000-a-year systems
managers and an army of $3.50-an-hour janitors and hamburger flippers,
a handful of Wall Street wizards lording it over a middle America of
fast-food servers and hospital orderlies? Did the American dream become
the impossible dream? Remember, we are no longer in the world of
economic or academic theory when we answer these questions. For a
moment, we do not need projections from the Conference Board, Chase
Econometrics or Wharton Econometrics. We have just lived these 20 years
from 1984 to 2004.
Did the American dream die over the last 20 years? For nearly all
Americans, nearly all Americans, the answer is a resounding no. Did
Japan take over the global economy as was predicted? The answer, an
obvious no. Did U.S. jobs decrease? Another obvious no.
Over those 20 years, over those 20 years the U.S. economy put 40
million people to work, and pay was up. Did incomes fall? No. Pay and
real incomes increased. As I said earlier, the forces that ended up
shaping our economy over those 20 years actually impacted just about
every aspect of our lives, your lives, Mr. Speaker. A focus on better
services, more skilled workers, more global integration, more
international trade, better transportation, revolutions in
communications and technology, they impacted every corner of life here
in America.
So let us take a moment to take a broader look, step back and think
about the big activities in our economy and in your life. Are you
consuming more or less? For most people the answer is a lot more, and,
remarkably, much of the stuff we buy is relatively less expensive and
usually more technologically advanced than it was 20 years ago. Is your
television set bigger? Almost certainly. Do you have more choice in
what you watch? I am from Los Angeles, so I am biased about the
quality, but say what you will about the products of the American
entertainment industry, there are many, many more choices available to
viewers in 2004 than there were in 1984.
Do you have a computer in your home today, and did you back in 1984?
Do you use the Internet? Do you communicate with friends and family
over e-mail? Do you go on line to check the weather forecast or movie
times, or shop for something that is hard to find, or hear about sales
at your favorite stores? You did not do any of those things 20 years
ago, Mr. Speaker.
{time} 1930
Did you have a cell phone 20 years ago? Again, this is an easy one.
You probably do today, and almost certainly did not 20 years ago. Many
millions of Americans feel better because they have their cell phones
with them and can contact family and friends in a pinch.
Do you travel more? Fly more? Are you driving a better car than you
did in 1984? The answer to all of those questions is almost certainly
yes, as automakers have stretched themselves to the brink putting new
technologies into cars that get better mileage, break down less, are
safer, are environmentally cleaner and are packed with technology.
Think about the times you had to take your automobile back to the shop
20 years ago juxtaposed to today. The kind of technology that is packed
into the cheapest car in 2004 was considered to be cutting-edge
technology in 1984.
Has health care improved? Now, people are concerned about health care
costs, obviously. And now is not the time to go into that debate. We
talk about it regularly around here. But, clearly, since 1984, the
number of new treatments and improvements in new technologies have been
staggering. We can and will debate about how to pay for it all, but
there is no denying that health care in America has taken a huge leap
forward, and I am convinced that we are now on the brink of a new
biotechnology revolution.
Is education improving? Again, education is never good enough, but we
have made great strides in education since the middle 1980s.
We could go on all day thinking about how things have changed over
the last 20 years, but it is clear they have changed a lot. The U.S.
economy is turning out bigger, better, and more advanced products and
services. There is no question that the doom and gloom predictions of
20 years ago proved to be way off the mark. Contrary to the Mondale
prediction of 1984, the U.S. economy did not crash and burn.
So did the service sector slow U.S. productivity growth, as was
outlined in that Steven Greenhouse article in the New York Times in
1986? The answer: a resounding no. Did most twenty-somethings end up
working in fast food and other low-skilled jobs while a few made it
big? The answer is no. Did computers and robots replace millions of
workers and leave them unemployed or flipping hamburgers? The answer is
no. But that is actually a complicated issue that we need to get into
in greater detail.
Now, Mr. Speaker, if we want to know the why behind the fact that 20
years ago there were predictions of doom and gloom and then those 20
years ended up resulting in such great strides, we need to look at the
core economic question. That question is: Did American productivity go
up? The answer is, yes, it went up dramatically.
In fact, productivity has been going up so rapidly, and we have all
heard this recently, some people now think that the problem is not
productivity; they think it is now a jobs problem. Remember that scary
New York Times piece in 1986? ``The Average Guy Takes It on the Chin,''
was the title of the article. Greenhouse and his gaggle of economists
and productivity experts pointed out that increasing productivity was
key to the future. They were right in 1986 when they said that
productivity was key to the future. The thing they got wrong was their
prediction of doom and gloom. They missed the productivity revolution
that was emerging then and there right before their eyes.
They predicted the hamburger-flipping jobs future. In 1986, that was
excusable, because predicting the future is tough. I know, because I am
sorry to say I did not buy Microsoft, Intel, and Cisco stock back in
the mid-1980s. But some people still serve up the same ideas that we
heard in 1984. It is like they were locked in a time capsule for the
past 2 decades and missed the massive economic changes that have
occurred.
The fact is, Mr. Speaker, something happened to American businesses
on the way to the hamburger-flipping future, or, more accurately, a
number of things happened. As I mentioned earlier, American business
underwent a revolution in computer software and hardware, a revolution
in telecommunications, a revolution in banking and finance, a
revolution in transportation and delivery, and a revolution in retail
distribution and supply management.
We saw companies like Citigroup, Hewlett-Packard, Home Depot, Intel,
Johnson & Johnson, JP Morgan Chase, Microsoft, SBC, Wal-Mart, and
Disney become part of the corporate elite. Overnight and express
delivery services exploded. The Internet became a place of business
with eBay, Yahoo!, Amazon and Google getting started back then.
Just as important as those success stories is the fact that the
revolutionary business practices and technologies infiltrated just
about every level of American economic life. The corporate dynasties
that survived the past 20 years, AT&T, GE, General Motors, Eastman
Kodak, Exxon, IBM, and Proctor and Gamble, remade themselves into 21st
century economic leaders. American small business remade itself as
well. Computers, cell phones,
[[Page H620]]
pagers, credit cards and scanners are part of nearly every business in
America today, even very small businesses.
Does your dry cleaner take credit cards? Does your auto mechanic have
a diagnostic computer to check your car? The buzzwords for business and
the economy of the last 20 years are concepts and strategies like
supply chain management, just-in-time delivery, distribution centers,
information management, customer relations, forecasting and planning.
It is about adding value to the raw materials and basic goods.
To businesses, the result was a massive jump in their ability to
serve their customers better. And I do not just mean customers like you
and me, but business customers too. The ability to harness technologies
that improved planning, customer service, and communications created
jumps in productivity and efficiency. To customers, whether the
customer is General Motors being served by a parts supplier or a family
being served by Wal-Mart, the result has been greater choices and lower
prices.
I am going to repeat something here: the ability to harness the new
technologies, use technologies, those technologies created the
increased productivity and efficiency. That is the key here, because
machines do not harness technology, Mr. Speaker, people do. And that is
why people, millions and millions of smart, skilled, hardworking
Americans have been at the heart of the revolution of the 21st century
economy.
Again, in our search for a suitable buzzword, the ``services
economy'' really does not do it. It is a ``business serving customers
economy.'' Still not catchy, but business serving customers is really
more accurate.
We do have a service economy. Providing a service of some kind to
someone represents 65 percent of everything produced in America, and
those services account for over 80 percent of U.S. jobs. The 20-year-
old predictions that the service economy would be based on hamburger-
flipping jobs or dish washers, lawn workers, and retail salespeople
clearly missed the mark. We have lived through the 20 years creating
this 21st century economy. We are in the Internet Age, the 500-channel,
50-inch-TV age, the prices-are-falling-at-Wal-Mart age. This is not the
hamburger-flipping economy.
Mr. Speaker, jobs concern people. Mom and pop always want their kids
to be able to get a decent job, if for no other reason so that they do
not have to keep supporting them. That was at the heart of family
anxiety in 1984 and 1986, and that will remain the biggest economic
question in 2004 and 2006. And we lived through the Internet bubble in
the late 1990s. We know that every boy and girl in America is not going
to be a Silicon Valley multimillion dollar entrepreneur or
biotechnology engineer. Mom and pop are practical enough to understand
that. But that is not the problem. The important question is what are
the 21st century economy jobs going to be? What will Jimmy and Nicole
be doing in 6 years? The fact is that they, like most American workers,
will be in the business of serving someone tomorrow, next year, and in
2010.
Of course there will still be fast-food jobs, retail jobs, lawn care,
janitorial, and house-cleaning jobs. There will be construction jobs.
There always will be. And as the number of people in America grows, and
we are approaching 300 million Americans in this great land of ours,
the number of those jobs will grow. But our economy created 40 million
new jobs over the past 20 years. Forty million jobs since the birth of
the argument that the service economy meant nothing more than
hamburger-flipping jobs.
So let us get down to brass tacks. What kinds of jobs are the
American people doing in the 21st century economy? And I am going to go
through this litany here, Mr. Speaker.
Network and communications administration, business administration
and management, computer engineering technology, electronics
engineering technology for all the machines that are not computers,
health information technology, legal support, accounting, marketing,
advertising, customer relations, news and information reporting, tax
preparation and planning, highly specialized transportation and
delivery, human resources support, pension and benefits management,
purchasing and global sourcing, demand forecasting, inventory control,
warehousing, and distribution.
Now, Mr. Speaker, these are not CEO jobs. They are not get-rich-quick
jobs. But they are good jobs using very valuable skills. They are
service jobs that are a part of just about every kind of business in
America today. They are not Bill Gates, and they are not hamburger-
flipping jobs.
Think about the big and growing sectors of our economy. Think about
what you spend your money on, Mr. Speaker: health care; biotechnology
and pharmaceuticals; elderly care; education; movies, entertainment and
digital gaming; recreation; telecommunications, cable, satellite TV and
radio, phones, cellular and wireless networks; fashion; insurance; real
estate; autos, maintenance and repair; mass transit; investments,
whether you call it the stock market, pensions, or securities. We all
know that more than half the American people are members of the
investment class, as many as six in 10. Government services, which is,
as we all know, almost unimaginably big. Leisure, hospitality, and
tourism.
Then there are the businesses that serve other businesses:
engineering, environmental protection services and technologies, risk
management, export and import financing, express delivery, high-tech
manufacturing, and biomedical informatics.
Mr. Speaker, the 21st century economy, the business serving customers
economy, is based on all of these things. Not robots, robot
technicians, and a bunch of fast-food workers and lawn workers. As we
have made the transition of the past 20 years, more than half of all
service jobs and a large majority of new service jobs paid above the
average wage. And as I said earlier, low-paying hamburger-flipping,
retail and janitorial jobs continue to grow as our population grows,
but executive and professional jobs are growing much, much faster.
If the American economy of the past 20 years, this new 21st century
economy that has revolutionized the way businesses serve their
customers, is so great a success, why is any of this an issue? How can
somebody in 2004 say that we are becoming an economy of hamburger-
flipping jobs and not be ridiculed and laughed off the national stage?
A big part of the answer is that our economy has been undergoing a
big long transition, which is the 20-year story, but we live day to day
and year to year in an economy where things get better or worse. In
economic terms, we have trends, which are the long-term big picture,
and cycles, which are shorter term. The trends can last a couple of
decades, even the better part of a century. The cycles are business
cycles that last a couple of years or maybe one decade.
Most economists, or at least economic historians, would agree that
our Nation's economic history has been dominated by the Industrial
Revolution and the creation of the global industrial economy. We had a
largely agrarian economy when our country was born. America then
underwent a long transition, a transformation, really, to being the
world's leading heavy industrial economy. That long economic transition
took up the bulk of our Nation's history. It was well under way by the
1840s and probably climaxed in the 1960s.
Big historical trends rarely have bright-line starting and stopping
points. Politics and history can work that way with elections,
assassinations, wars and treaties providing clear historical dates to
look back on. Economic change is different, Mr. Speaker. Even big
dates, 1929 and the stock market crash or 1930 and the Smoot-Hawley
Tariff Act, are really not that significant when looking at big trends.
The big economic trends in the first part of our Nation's history was
the transition from the agrarian economy to the industrial economy.
{time} 1945
That was a transition that probably took 100 years. There was no
single point where 1 day, or 1 year, America had an agrarian economy,
and the next year it was industrialized. And single events were not
that important. Instead, the spread of increasingly heavy machines, in
early factories, railroads, and on farms, were key. And technologies
always take time to go from
[[Page H621]]
invention to standardization and widespread use.
Mr. Speaker, we are now clearly in the second transition. Heavy
industry is no longer the king of the American economy. Instead,
businesses, large and small, are harnessing technologies and skilled
workers to create an economy based more on providing better service to
customers than on the specific product itself. This has been going on
for 20 years now. Twenty years happens to coincide with the birth of
that political urban myth where everyone ends up with a hamburger
flipping job. Over those 20 years, jobs are way up, incomes are way up,
and technological improvements are spreading throughout our lives. Very
few Americans would take the 1984 life-style outlook that they had over
the 2004 life-style, but we have had business cycles over those 20
years as well.
We have had years of booming growth, we have had years of slow
growth. We have had two actual recessions when the economy shrank. We
have had lean times that did not fit the academic test of a recession,
but certainly felt like a weak economy.
In the midst of any one of those lean times, the fact that the
economic trend over the previous decade was very good really did not
matter much. Things were worse than the year before or the year before
that. In addition, during the first part of the current 20-year
economic growth trend, time had not passed enough to tell the
difference between a trend and a cycle. The start of a trend can look a
lot like the upside of a cycle.
The economic slowdown that began in 2000, the final year of the
Clinton administration, was clearly the downside of the cycle that
began in 1992, the final year of the Presidency of George H.W. Bush. In
the past 20 years, we had at least two cycles, one ending in a
recession in 1991, and the other in a recession in 2001. We are almost
certainly into a third cycle with growth again picking up.
The U.S. economy has been growing strongly for the past 2 years. It
grew at a staggering 8.2 percent annual rate in the third quarter of
last year, surpassing even the most optimistic projections and marking
the strongest pace in nearly two decades, 20 years. Unemployment claims
are dropping, and workers' wages and benefits have climbed in recent
months. Family incomes are up. Consumer spending is up. Inflation is
low. The housing sector has been very strong, and business
productivity, as we all know, has been incredibly strong.
At this point in the business cycle, the big economic issue has been
jobs. Remember, in the short term, we are coming off of some years like
1999 and 2000 where unemployment reached such low levels that most
economists could not imagine numbers so low. In that context when the
recession and slowdown in 2001 resulted in 6 percent unemployment, it
created real concern, especially among the recently unemployed, and
that is understandable.
Politics reacts far more to the short-term cycle than the long-term
trend, so it is easy to see why everyone is talking about the struggles
of recent years rather than the incredibly good news of the last 20
years. But as we deal with the political realities of the short term,
we must not lose sight of the big picture.
The hamburger flipping job argument is not just false, it is actually
a dangerous thing. Twenty years ago this kind of rhetoric did not get
the chance to hurt our economy because hard-working and innovative
Americans kept right on forging new technologies, revolutionizing what
businesses do and how they do it, and improving the way Americans go
about living their lives.
But today, thanks to the short-term business cycle we are coming out
of, the hamburger flipping argument resonates with a lot of people, and
it is resulting in some very misguided and dangerous proposals. It is
generating calls for protectionism, calls for policies that stifle the
very environment that has allowed skilled American workers to harness
new technologies and bring about our booming 21st century economy.
Mr. Speaker, attempts to undermine the principles that are the
foundation of this economy threaten the progress and prosperity that
has come about over these two decades. That is why debunking the
hamburger flipping argument once and for all is not just critical to
understanding the good news of the last 20 years, it is essential to
ensuring that our future remains bright as well.
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