Must be a full moon, because I agree with Robert Reich

Mickey Kaus links to this Robert Reich commentary that took my breath away because it was both blunt and correct. The key parts:

America has been losing manufacturing jobs to China, Latin America and the rest of the developing world. Right? Well, not quite. It turns out that manufacturing jobs have been disappearing all over the world. Economists at Alliance Capital Management in New York took a close look at employment trends in 20 large economies recently, and found that since 1995 more than 22 million factory jobs have disppeared. In fact, the United States has not even been the biggest loser. Between 1995 and 2002, we lost about 11 percent of our manufacturing jobs. But over the same period, the Japanese lost 16 percent of theirs. And get this: Many developing nations are losing factory jobs. During those same years, Brazil suffered a 20 percent decline. Here’s the real surprise. China saw a 15 percent drop. China, which is fast becoming the manufacturing capital of the world, has been losing millions of factory jobs. What’s going on? In two words: Higher productivity.

Alas, I could not find a copy of the report on Alliance Capital Management’s web site (UPDATE: Ha! Found a cached version), but I did find a much longer Wall Street Journal story on it. Here’s a bit more, with special reference to China:

Joseph Carson, director of global economic research at Alliance, says the reasons for the declines are similar across the globe: Gains in technology and competitive pressure have forced factories to become more efficient, allowing them to boost output with far fewer workers. Indeed, even as manufacturing employment declined, says Mr. Carson, global industrial output rose more than 30%…. The job losses in the U.S. have become a hot-button political issue in Washington. Some U.S. manufacturers and labor unions complain that American manufacturing jobs are fleeing to low-cost Asian countries, like China, which is keeping its currency cheap to make exports inexpensive. While there’s no doubt some U.S. jobs are moving to China, India and some other low-cost countries abroad, Mr. Carson says that isn’t the entire story. “The argument that politicians are throwing out there is that we are losing jobs and nobody else is, and that is wrong,” says Mr. Carson. “What I found is that the loss of manufacturing jobs that we have seen in the U.S. is not unique. It is part of a global trend that began many years ago.”

Here’s a bit more from the actual report:

One of our more interesting findings is that, taken on its own, China’s job losses are double the average of the remaining 17 countries for the same seven-year period. Manufacturing employment in the 17 largest economies other than China fell a little more than 7%, from 96 million in 1995 to 89 million in 2002. In contrast, China’s fell a whopping 15% in the period, from 98 million in 1995 to 83 million in 2002. Notwithstanding the continuous influx of foreign investment and new employment, China has been unable to escape the drive toward productivity enhancement and the resultant downsizing of the manufacturing workforce. In 2002 alone, although nearly 2 million factory jobs were created, China’s manufacturing employment level for the year was below 1998 and far below 1995. Global competition has forced domestic firms to relocate offshore in order to remain competitive. But in a recent survey of domestic corrugated box makers, 40% indicated that the relocation of domestic manufacturing plants to overseas locations has caused a reduction in revenues in this cycle. (emphasis in original)

Fascinating.