[Congressional Record (Bound Edition), Volume 150 (2004), Part 4]
[House]
[Pages 4538-4541]
[From the U.S. Government Publishing Office, www.gpo.gov]




                              {time}  2130
                   AMERICAN JOBS IN THE 21ST CENTURY

  The SPEAKER pro tempore (Mr. Bradley of New Hampshire). Under the 
Speaker's announced policy of January 7, 2003, the gentleman from 
California (Mr. Dreier) is recognized for 60 minutes as the designee of 
the majority leader.
  Mr. DREIER. Mr. Speaker, I would like to begin this evening by 
reading a brief excerpt from a letter sent by my good friend, the 
gentleman from Michigan (Mr. Dingell). He sent this letter to the 
chairman of the President's Council of Economic Advisers, Dr. Greg 
Mankiw. The dean of the House, the gentleman from Michigan, writes, 
``I'm sure the 163,000 factory workers who have lost their jobs in 
Michigan will find it heartening to know that a world of opportunity 
awaits them in high-growth manufacturing careers like spatula operator, 
napkin restocking and lunch tray removal.''
  Mr. Speaker, I certainly understand my good friend and esteemed 
colleague's deep concern for the loss of manufacturing jobs in his home 
State. Jobs are a big concern on everyone's mind, including my own. I 
believe that there are very few issues that are more pressing or more 
worthy of debate in this Congress than the issue of jobs. But I believe 
the premise behind the gentleman's statement is emblematic of a 2-
decade effort on the part of anti-trade advocates to convince Americans 
that our economy is headed for disaster. It encapsulates a tired, yet 
oft used and mistaken, diagnosis of our economy, that is, that American 
business is going to ship all of our good jobs overseas, finally 
leaving American workers with no job opportunity other than the one 
behind the counter at a local fast-food joint.
  In fact, I recently stood right here a couple of weeks ago and talked 
about the legacy of, quote-unquote, hamburger flipping jobs, that 
argument, and I traced its roots back to 1984. Mr. Speaker, politicians 
and pundits have been predicting the demise of our economy and the good 
American jobs for the last 20 years. The gentleman from Michigan's 
letter to Chairman Mankiw is a quintessential example of the 
persistent, yet just plain wrong, rhetoric that jobs overseas mean 
lower-paying, demeaning jobs here in the United States.
  But let us look at what really happened in this 20-year period from 
1984 to today. Mr. Speaker, profound and profoundly good changes have 
taken place. We shifted over this past 20 years from an economy based 
on heavy industry to our fast-paced, high-technology and ever-growing 
21st century economy. This transformation ushered in a new era that 
fundamentally changed how business is conducted, and it vastly improved 
how we live our lives. Yet the letter written by the ranking member of 
the House Committee on Energy and Commerce proves that the predictions 
of gloom and doom are still alive and well today. He is not the only 
one predicting our hamburger-flipping future.
  Let us take a look at what is being said by the other critics of our 
growing economy. Senator John Kerry, who apparently now has all the 
delegates necessary to become the Democratic Presidential nominee, said 
not too long ago, ``People are worried about their wages, their jobs, 
about how we're going to compete with other countries, where we're 
losing a countless number of jobs to those countries.'' Before he 
dropped out of the Presidential primary, Senator John Edwards 
commented, ``The mills are gone and so are the jobs.'' Mr. Speaker, Lou 
Dobbs, the CNN anchor, rails almost nightly against U.S. companies that 
invest in growing overseas markets, claiming that ``we're exporting 
many, many jobs.'' Paul Craig Roberts, the economist, formerly 
committed to this country's open trade policies and a believer in the 
strength of our economy, has recently done an about face. Several weeks 
ago, Mr. Speaker, he joined our colleague in the other body, Charles 
Schumer, in penning an editorial for the New York Times that claimed 
the American workforce is doomed, stating that, and I quote, ``Lots of 
new jobs are being created, just not here in the United States.'' 
Robert Slater said at a Brookings Institution forum that the United 
States will be a Third World country in 20 years.
  Those are some very dire predictions that we have been receiving, Mr. 
Speaker. These political leaders and pundits are clearly asserting that 
our economy is in decline. They say we are rapidly losing all of our 
good jobs, mostly to foreign competitors, and that we are not creating 
new ones. Based on these claims, they see a very, very dismal future. 
That is why tonight I would like to focus on the heart of this issue, 
jobs, the issue that, of course, is regularly discussed here and should 
be discussed right here. Or more specifically, I want to talk about the 
incredibly fast pace at which our economy is creating exciting new 
types of jobs for Americans.
  As I have said, the issue of job creation is always on the minds of 
the American people, and it is always a very important topic of debate. 
But in light of these growing attacks that are being directed at our 
economy, attacks that question our strength and assert that our good 
jobs are being destroyed or sent overseas, an honest look at the robust 
and dynamic job creation that is currently taking place is particularly 
relevant and timely.
  Mr. Speaker, I am an optimist. I see a bright and promising future 
when I look at our economy. While I believe the doom-and-gloomers are 
correct in observing that our economy is changing, they have completely 
missed the fact that the change that is being made is change for the 
better. Like their

[[Page 4539]]

predecessors who saw the decline of the buggy whip and telegraph 
industries, I believe those who are making the current gloom-and-doom 
predictions are missing the dynamism and innovation that have made our 
economy a global leader and one that continues to spur job creation. 
Literally thousands of new jobs, often in completely new fields, are 
being created routinely.
  But before we get into these new kinds of jobs, I think it is 
important to get a firm understanding of the broad changes that are 
taking place in the American workforce. Throughout much of our economic 
history, fluctuations in employment have been the product of the 
business cycle. In the 1970s and 1980s, half of all employment was 
cyclical, that is, businesses would lay off workers during weak times 
and would rehire them during recoveries. As business picked up, 
employers were able to hire workers for the same jobs using the same 
skills that existed before the economic recession. Often this meant 
rehiring the very same workers. Because the job opportunities after a 
recession looked a lot like the job opportunities before the recession, 
job recovery always quickly followed economic recovery.
  Today there is a lot more than just cyclical change taking place. 
Thanks to growing productivity, improved technology and a highly 
competitive global marketplace, many industries are undergoing 
fundamental changes. In other words, this economy has been experiencing 
a great deal of structural change. It is extremely important to note 
here that structural change is not just another term for permanent 
downsizing. As Federal Reserve Chairman Alan Greenspan has noted 
repeatedly in recent months, for years our economy has been a very 
dynamic job-creating machine. Every quarter, millions of jobs are 
destroyed and millions more are created. In 1999, for example, a 
booming year for the U.S. economy, 33 million jobs were lost and 36 
million new jobs were created. The important distinction between 
structural change and cyclical change is that increasingly the newly 
created jobs are not only new positions in long established companies 
and long established industries; more and more a new job is new in 
every respect, a new type of work in a new business that demands new 
skills.
  Mr. Speaker, this dynamism, which has produced a net gain of 40 
million new jobs over these past 20 years about which I have been 
speaking, means that companies must constantly work to stay competitive 
and workers must continuously pursue more education and more training. 
But it also means that the U.S. continues to lead the world in 
productivity, innovation, and growth. But jobs are still a big concern. 
The U.S. may be the global economic leader, but what exactly are these 
new jobs that today's workers are supposed to be doing?
  Mr. Speaker, workers in our 21st century economy are finding jobs in 
fields such as network and communications administration, business 
administration and management, computer engineering technology, 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.
  Mr. Speaker, these 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 get-rich-quick jobs, but they are certainly 
not hamburger-flipping jobs. Think about the big and growing sectors of 
our economy. Think about what you spend, Mr. Speaker, on 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; auto maintenance and repair; mass 
transit; investments, whether you call it the stock market, pensions or 
securities; government services, which is almost unimaginably big, as 
we all know; leisure; hospitality and tourism.
  Then there are the businesses that service other businesses: 
Engineering, environmental protection services and technologies, risk 
management, export and import financing, express delivery, high-tech 
manufacturing, and biomedical informatics.
  These are the jobs of the 21st century economy. Sure, there will 
always be hamburger-flipping jobs as long as there are hamburger 
eaters, but the vast majority of jobs that this economy is creating are 
good, skilled jobs that pay well.
  But in our ongoing debate about jobs and job creation, the issue of 
offshoring is inevitably raised. Whereas the doom-and-gloom crowd used 
to argue that good jobs will never be created, now they have shifted 
gears. They concede that for a while our economy managed to produce a 
few good service jobs, but today all of those jobs are being exported 
to low-wage countries via offshoring. They claim that countries like 
India and China are siphoning off our good jobs much faster than we can 
create them and Americans are being left with, you guessed it, the 
dreaded hamburger-flipping job.
  So what exactly is offshoring and what is its effect on our economy? 
Since offshoring is a relatively new word in the collective lexicon, it 
is easy to believe that it is a relatively new phenomenon. In fact, 
offshoring has always been a part of the free market. Whether it is a 
Ford plant importing some of its parts from Mexico, a multiplex in 
London showing American movies, or an Indian accountant crunching 
numbers for H&R Block, offshoring is a vital component of our economy.
  It comes down to one core concept, Mr. Speaker, and it is in many 
ways the basis on which this country and our market process was 
established and, that is, competitiveness. Again, there is nothing new 
about competitiveness. U.S. companies have always had to compete to 
survive in the free market. Being competitive has always required 
American businesses to be innovative, increase efficiency, invest 
wisely and employ the best practices that are available. This has, in 
turn, been a boon to American workers. Millions of Americans work for 
global leaders like Hewlett Packard, General Motors, IBM, and Johnson & 
Johnson and millions more work for small and medium-sized businesses 
that serve business customers that include these global leaders. The 
ability of Americans to find good jobs has always been directly linked 
to the ability of American enterprises to compete here at home and in 
the global market.

                              {time}  2145

  Therefore, it is no accident that the companies that offshore, all 
those companies that Lou Dobbs rails against on his program on CNN 
almost every night, those companies are the largest creators of jobs 
right here in the United States. By investing in growing markets, which 
maximizes efficiency and increases productivity, these successful 
global competitors are able to turn around and reinvest here in 
America. Companies that are globally engaged employ millions of 
Americans and pay above-average wages. They make the majority of 
investments in physical capital right here in this country. They 
perform the majority of research and development right here in this 
country. They produce the majority of U.S. exports that go into other 
markets around the world. In short, companies that offshore are the 
biggest job creators right here in the United States of America.
  It is important to remember a key point that I discussed earlier. Job 
creation does not preclude job destruction. Remember that figure that I 
gave in 1999, 30 million jobs were destroyed while 33 million new jobs 
were created. This is a reality, and it is painful for some, I will 
acknowledge that, but this is a reality of our dynamic, fast-paced 21st 
century economy. Offshoring functions in the exact same way. Some jobs 
will be lost. The important thing is that more will be created and that 
they will be better jobs, using more skills and paying better wages.

[[Page 4540]]

  So what are some of these new jobs that offshoring is helping to 
create? One example, Mr. Speaker, comes from the software industry. 
U.S. companies outsourced 71,000 software programming jobs between 1999 
and 2002, and those jobs paid an average of $55,000. Those were 
offshored. During that exact same period of time, 1999 to 2002, 
125,000, 125,000, over 50,000 more software engineering jobs, were 
created which pay on average $74,000 a year. Let me go through that 
again. We saw the number of software programming jobs offshored, 71,000 
of them paying on average 55 grand a year, and yet software engineering 
jobs were created to the tune of 125,000 right here in the United 
States, paying on average $74,000 a year. Not only was there a net gain 
in software jobs, but they, as I have said, were higher wage, higher 
value-added jobs.
  Another growing sector, logistics, has not only benefited from higher 
efficiency and productivity, it is actually a direct result of the 
practice of offshoring. As companies engage more and more on a 
worldwide basis looking for high-quality, low-cost goods and services 
throughout the globe, delivery has become a very complex engineering 
task. Complicated supply and distribution lines involve multiple 
sources, often literally a world apart; diverse shipping and 
transportation modes; weather patterns; political unrest that can 
affect ports, airports, and other transportation hubs in the developing 
world; raw material shortages; and, of course, the finicky consumer 
demand, these all come into the mix, and so logistics is a massive 
industry in and of itself.
  All of these complex factors require the highly skilled work of 
logistics experts, and companies pay very well for their expertise. 
Business owners have realized that fast and reliable delivery is one 
more way to cut costs and improve efficiency, and they are turning to 
logistics consultants on a widespread basis.
  Don Westfall, the director of the Research and Supply Chain Logistics 
Council at the Manufacturers Alliance, has called this line of work ``a 
huge growth area for service providers and an important part of 
improving productivity in U.S. industry.''
  Mr. Speaker, demand for these types of workers has risen so 
dramatically in recent years, the Massachusetts Institute of 
Technology, for example, has significantly expanded its logistics 
program and has added a new master's degree dedicated to logistics in 
its school of engineering.
  Other new types of jobs that our robust economy is creating can be 
found simply by looking at the ways we spend our time and our money. 
For example, many people turn to eBay when looking to buy or sell 
anything from sports memorabilia to used books or cars, but the online 
auction is increasingly a place of business, a powerful resource used 
by individuals and small enterprises. Small business owners are using 
eBay to dramatically cut costs and conduct their business. And 
individuals are turning the Web site into a source of full-time work. 
In fact, these kinds of practices have become so widespread today, and 
I met with Meg Whitman last week from eBay and she confirmed this 
again, over 430,000 individuals and small businesses make their living 
on eBay. That is their source of income. Mr. Speaker, we are talking 
about nearly half a million Americans that count eBay auctioneering as 
their full-time job.
  Two decades ago, few economists could have predicted that in 2004, 
hundreds of thousands of workers would be employed by an online auction 
site that got its start by catering to collectors of movie posters and 
matchbox cars. But this is precisely the sort of dynamism that has kept 
our economy churning out new jobs in the face of rapid change.
  Another area where Americans are spending their leisure time and 
money and spurring job creation in the process is in, and I come from 
California so I have to talk about this, spa services. Massage therapy, 
for example, is a booming industry in this country. Just as we visit 
our internist, our chiropractor, our dentist, these professionals 
provide therapeutic services that many Americans are increasingly 
incorporating into their health care regimes, and rapidly growing 
demand is fueling growth in an industry that pays about $35 an hour, 
sometimes significantly more than that. The American Massage Therapy 
Association estimates that there are nearly 300,000 massage therapists 
in the United States. This is double the number in 1996, and the 
numbers are continuing to grow.
  One might say that a few hundred thousand massage therapists, eBay 
entrepreneurs, and logistics specialists are not so important to our 
economy. One might say that the jobs in these three industries, eBay 
entrepreneurs, massage therapists, and logistics specialists, that 
these jobs are in industries that are not enough to sustain a Nation of 
nearly 300 million people. But, Mr. Speaker, I believe that these types 
of jobs are in fact critical to our economy and to this debate.
  But I believe they are important for a number of reasons.
  First, in terms of sheer numbers, these jobs are not insignificant. 
Just this handful of industries taken together represents literally 
millions of jobs, and in most cases we are talking about very well-
paying jobs, jobs supporting families, sending kids to college, and 
padding retirement plans. But they are also significant because in many 
ways they represent the new face of the American economy: the 
independent contractor, the entrepreneur, the small business owner. It 
is very important.
  Again, these people in these three industries that I have mentioned, 
eBay entrepreneurs, massage therapists, logistics specialists, they are 
part of this new economy consisting of the independent contractor, the 
entrepreneur, and the small business owner. These are the types of jobs 
that are booming the 21st century economy. Yet because of the old 
economy's mindset that is embedded in our employment survey, these are 
precisely the kinds of jobs that are overlooked in our jobs statistics.
  Our primary method of counting jobs in this country is the Department 
of Labor's Payroll, or Establishment Survey. Its numbers are gathered 
by asking a sampling of established corporations how many people they 
are hiring and how many people they are firing. For years this was a 
fairly reliable way of figuring out our unemployment rate. The vast 
majority of Americans worked in factories and businesses that had been 
around for a long time. And because changes in employment were due 
largely, as I was saying earlier, to cyclical trends, as I discussed, 
most workers, whether employed or unemployed, were easy to track 
because when we would see the downturn, we would see people laid off, 
and then because it was reasonably static at that time, once we saw an 
improvement in the economy, people would go back to those same jobs.
  But as we have seen, this is no longer the case. Americans are 
finding jobs in new industries. They are working as independent 
contractors and consultants. They are starting their own businesses, 
all of which are difficult to track using these old methods for 
determining unemployment. If we go looking for workers in their old 
jobs, we are not very likely to find them.
  For example, Mr. Speaker, the Payroll Survey estimates that there are 
roughly 70,000 massage therapists working in this country. That would 
probably come as a surprise to the almost 300,000 massage therapists 
that the American Massage Therapy Association says are working in that 
industry today. The Department of Labor somehow managed to misplace 
over 200,000 workers or 70 percent of this industry's workforce. For 
eBay entrepreneurs the chances of getting counted are virtually zero. 
The Department of Labor does not currently count anyone making a living 
by selling or buying on eBay. No category exists for logistics 
specialists either. And because many of them work as independent 
contractors, prospects for counting seem pretty dim for those workers 
in logistics specialty areas as well.
  Other workers who are largely getting missed by the Payroll Survey 
include the growing number of partners

[[Page 4541]]

in Limited Liability Corporations or LLCs. The establishment of new 
LLCs is exploding, doubling in some States in just the last 3 years. 
But because these entrepreneurs are partners in new business startups, 
they are not counted in our jobs statistics.
  And the Payroll Survey is not just ill-equipped to accurately portray 
our economy in 2004, it has historically been a poor indicator of job 
creation during a recovery. During the recovery of 1992, the Department 
of Labor's numbers showed job creation as relatively anemic.
  As more and more data became available and a clearer picture of the 
economy emerged, the Payroll Survey was significantly revised to show 
that job creation had actually been quite robust. And that was over 10 
years ago, before much of the boom in independent contracting, Internet 
entrepreneurship, and small business startups that, as I said, are such 
a big part of our economy today.
  However, we do have at our disposal another survey which is strong 
precisely where the Payroll Survey is weak. It is the Department of 
Labor's Household Survey. Instead of asking businesses if they are 
hiring or laying off, the Household Survey asks individuals and 
families if they are working. By going straight to the employees, this 
survey is well suited to more accurately portray employment in our 
economy. Whereas the Payroll Survey counts established jobs in 
established businesses of established industries, the Household Survey 
counts any and all types of jobs, or more precisely, it counts people 
no matter what type of job they have. This approach allows the 
Household Survey to track workers like the self-employed. And, in fact, 
this survey shows that 31 percent of job growth right now is in self-
employment. Thirty-one percent of our job growth is in self-employment. 
In other words, one third of all job creation is entirely missed by the 
Payroll Survey.
  Therefore, it is no accident and no mystery why the Payroll Survey 
shows a net loss of 2.4 million jobs in the last 3 years and the 
Household Survey shows a net gain of 1.4 million jobs. That discrepancy 
is pretty significant during the highly politicized time that we are 
in, and it is huge in terms of the average American's peace of mind, 
which is why an honest discussion of what is really going on in the 
economy is so critical.
  To be sure, while a fast-paced dynamic economy in which new jobs are 
constantly being created is good for all of us in the long run, it also 
means that rapid change is a way of life. That can be exciting. And, 
Mr. Speaker, we all know it can also be scary. The only way we can 
continue to succeed and lead the world as the strongest, most 
innovative economy is to significantly step up our commitment to 
education and training and, yes, retraining.

                              {time}  2200

  New jobs mean new skills to be learned, new technologies to develop 
and harness. But if we keep competing and innovating and remain 
committed to learning and using new skills, our 21st-century economy 
will continue to thrive and, Mr. Speaker, so will American workers. 
They are doing it today, and they can continue to do it in the future. 
We will keep creating new and better jobs, whether it is a specialized 
service in a booming industry like logistics or massage therapy, or an 
increasingly skilled part of a globally-competitive sector like 
software engineers whose jobs are supported by inexpensive computer 
programming labor in India, or an entirely new line of work that was 
just unheard of, inconceivable just a few years ago, like e-Bay 
entrepreneurship where, as I said, approaching a half a million 
Americans are working in their full-time jobs.
  There is no doubt that many of the cutting-edge industries of today 
will eventually become routine or even obsolete. What is important is 
that through technology, innovation, investment, and education hard-
working Americans keep on embracing change and propelling our economy 
forward.

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