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Is a service economy stable?
Jack Balshaw 10/31/01

Much has been made lately of the fact that this country is transitioning from an industrial economy to an information economy, all within a global economy. Sometimes these are referred to as manufacturing and service economies. I've become uneasy that the nature of a service economy is such that it doesn't provide a stable format for national economic security.

During the last decade we have seen an economic crisis in far off countries suddenly have worldwide ramifications. The new "global economy" seems to mean that no country is secure within itself. Events, economic or other, in foreign countries can quickly cause chaos anywhere.

We have generally presumed that conditions in other countries won't significantly hurt us. But, they can. We have continually seen our manufacturing jobs (clothing, steel, athletic shoes, TV's, etc.) move to locations that can supply cheaper labor. We have also seen many of our service or information jobs move to countries such as Ireland and India for the same reason.

While manufacturing jobs can also move off shore, they are at least anchored somewhat by the large investments already made in the physical plant used in the manufacturing process. Service jobs often have no more investment then a computer workstation in a leased building. Think how easily major service employers could relocate. Just as telemarketing operations are located and relocated to parts of the country (or world) where cheaper labor is available, any job where the day-to-day work consists of mainly sitting at a workstation and interacting electronically could similarly be instantly relocated.

We have seen enough during the last two decades to know that business has no inherent responsibility or loyalty to its employees. When the bottom line dictates, business does what is best for the business. I believe, given this basic capitalistic rule, that this country needs to have a Plan B in the event some technological breakthrough makes it just as easy and less expensive to employ a European or an Asian than it is to employ an American.

In the early days in the last century, before unions and employee rights, labor was poorly paid and had no job security. While there may now be certain job and retention rights, they are valueless if a company wants to relocate its operation nationally or internationally. In preparation for possible massive job relocations, I think information workers need to consider organizing. At least until the government shows it has a Plan B.

Unions seems a bad word to many. Who needs them? Health insurance, the 40-hour workweek, vacation time, job safety, seniority, protection against age and sex discrimination, pension plans, etc. are common in most workplaces. Have you ever thought how these benefits came into being? They came mostly from union actions. What will these benefits be when computer related jobs can be done from anywhere?

In most instances the average person pays no attention to what is happening around him in the legislative or business world until it begins to negatively impact him. By then, it's usually too late to do anything about it. Laws get passed and later on we say, "I didn't know that would affect me". Jobs get eliminated or relocated and we say, " I didn't know anything was going to happen".

If anything massive happened to our service economy everyone in the country will be saying, " I didn't think that could happen". Perhaps it is time for government to consider several global scenarios of how the service economy could turn around and bite us. Perhaps it is time for employees to consider, " If I can do this job sitting in front of a computer, couldn't someone in North Dakota or Europe also do it from there?"

If nothing else, the September 11 tragedy should have taught us that it's dangerous to assume "business as usual" will be the trend.


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