577 The jobs lie

One of the biggest lies and collective misinformation during the recent campaign were about the economy, specifically jobs. I thought I'd go crazy every time I heard the mantra about the worst economy in 70 years.

The current down cycle for jobs began in July 2000. A stimulus package was proposed but not supported by President Clinton. By the time Bush took office in January 2001, 217,000 jobs had already been lost and by the time his economic plan became law in June 2001, job loss was around 600,000. His tax cuts didn’t go into effect until August 2001.

Two examples of positive moves by business, using advances made possible by the internet.

Hand written inventory forms no longer necessary. “In the past, when the 100 sales reps of TaylorMade visited the 10,000 golf shops around the U.S., they would spend nearly two hours a day counting the titanium drivers and 9 irons left in inventory before filling out order forms by hand. That all changed in January when TaylorMade doled out handheld devices that sport bar-code readers and Internet connections. Now reps simply point the handheld at the bar code on each club to automatically tally inventory. Then they can focus on helping the retail customer boost sales. Sales-rep productivity is up 25%. And the system helped boost sales this year, allowing TaylorMade to beat rival Callaway as the world's No. 1 golf-club seller.” Business Week. http://businessweek.com/magazine/content/03_47/b3859623.htm

Multiple computer systems that can’t communicate have been replaced. “In the mid-'90s, the appliance maker Whirlpool, after expanding around the globe, was stymied by hundreds of computer systems that couldn't talk with one another. Whirlpool couldn't figure out how many products to make or to hold in inventory. Today, there's far less guesswork at the $11.8 billion company. Nearly every Whirlpool site worldwide is linked by e-business software. This has helped cut inventories from 15% of sales in 1997 to 12% today.” Business Week.
http://businessweek.com/magazine/content/03_47/b3859637.htm

But keep in mind, improved productivity means fewer jobs in one place, and more jobs somewhere else. The company that supplies the paper inventory forms for the salesmen may eventually take a hit as more firms use this system. Fewer staff in the home office are needed to process the information. Shortened sales call time may mean larger sales territories and fewer salespeople. Fewer computer support people may be needed at Whirlpool if there are fewer competing systems that need constant attention. Salespeople and software designers of the older, less effective systems, may be hitting the streets looking for work. Maybe that means fewer people going out for lunch in the business location, less demand for wait staff; maybe those computer support people will live in India instead of Indiana; maybe the improved productivity will hurt the competition and some of its people will suffer.