America's Crisis Is a Job Crisis
Published in Chosun Ilbo
(South Korea) on 12 October 2011
by Cha Hak-bong (link to original)
Japan also needs its own Arab Spring
William Pesek, a columnist for the financial news agency Bloomberg, wrote a column in late August that censured the incompetence of the Japanese government and urged the young in Japan to demonstrate against the state. However, the Arab Spring is thumping the U.S. instead of Japan; demonstrations organized by young professionals at Wall Street in New York are spreading throughout the county. The cause of the spread in America and not in Japan, where the incompetent government neglected its economic downturn for the past 20 years, lies within the unemployment rate. Japan has a 4 percent unemployment rate, in comparison to America’s 9 percent. The unemployment rate among young professionals is under 10 percent in Japan; however, the unemployment rate for the same demographic in the U.S. is close to 20 percent.
Despite the fact that America is home to the world’s most powerful financial and IT companies, it has failed to create jobs. American financial companies once put out astronomical profits through mergers and acquisitions and derivative instruments; however, their ripple effects were limited on employment numbers. Instead, the American financial industry created the “subprime mortgage” beast that led to bad loans and burst a real estate bubble, pushing the world economy to a brink of collapse. At the same time, the American financial industry took bailout money from the government and paid its executives astronomical figures in bonuses, instigating an uproar amongst young professionals.
Although America has the world’s best IT companies, such as Apple, Google and Microsoft, job creations by these companies are limited due to the industry structure. Apple is a tremendous company that has changed the lives of people throughout the world and posted astronomical profits with its revolutionary products such as the iPod, the iPhone and the iPad; however, the company has barely 40,000 employees. The reason is that the components for these products are produced and assembled not in the U.S., but abroad. America proves that even cutting-edge products that can change the world cannot produce enough jobs.
Japan and Germany are two developed countries with relatively low unemployment rates; both countries have robust manufacturing industries, but not financial or IT industries. The number of jobs in the American manufacturing industry declined from 17.6 million in 1998 to 12 million in recent years as Wal-Mart’s low-cost, Chinese-made products replaced goods made in America and as American companies look for low-cost factories overseas.
South Korea is also facing an unemployment crisis. The country quickly overcame the IMF crisis by uniting as one; working day and night and even exporting gold. Consequently, global corporations such as Samsung Electronics and Hyundai Motors thrived. However, the unemployment rate among young professionals is increasing and the price of commodities is increasing as well; the public’s discontent is skyrocketing as livelihoods are becoming more difficult.
In South Korea, the government and the opposition parties claim that they will solve the public’s discontent with welfare and are currently absorbed in preparing a public pledge. However, Greece and many other countries have proven that without job creation, welfare cannot exist. No welfare system can solve the misery of unemployment or save the poor; without job creation, welfare is not possible. An even bigger problem is that the U.S. and the European nations are likely to reinforce their protectionist policies to secure jobs within their own countries. South Korea may experience significant problems if a worldwide job competition does happen, as 80 percent of its economy depends on imports and exports.
William Pesek, a columnist for the financial news agency Bloomberg, wrote a column in late August that censured the incompetence of the Japanese government and urged the young in Japan to demonstrate against the state. However, the Arab Spring is thumping the U.S. instead of Japan; demonstrations organized by young professionals at Wall Street in New York are spreading throughout the county. The cause of the spread in America and not in Japan, where the incompetent government neglected its economic downturn for the past 20 years, lies within the unemployment rate. Japan has a 4 percent unemployment rate, in comparison to America’s 9 percent. The unemployment rate among young professionals is under 10 percent in Japan; however, the unemployment rate for the same demographic in the U.S. is close to 20 percent.
Despite the fact that America is home to the world’s most powerful financial and IT companies, it has failed to create jobs. American financial companies once put out astronomical profits through mergers and acquisitions and derivative instruments; however, their ripple effects were limited on employment numbers. Instead, the American financial industry created the “subprime mortgage” beast that led to bad loans and burst a real estate bubble, pushing the world economy to a brink of collapse. At the same time, the American financial industry took bailout money from the government and paid its executives astronomical figures in bonuses, instigating an uproar amongst young professionals.
Although America has the world’s best IT companies, such as Apple, Google and Microsoft, job creations by these companies are limited due to the industry structure. Apple is a tremendous company that has changed the lives of people throughout the world and posted astronomical profits with its revolutionary products such as the iPod, the iPhone and the iPad; however, the company has barely 40,000 employees. The reason is that the components for these products are produced and assembled not in the U.S., but abroad. America proves that even cutting-edge products that can change the world cannot produce enough jobs.
Japan and Germany are two developed countries with relatively low unemployment rates; both countries have robust manufacturing industries, but not financial or IT industries. The number of jobs in the American manufacturing industry declined from 17.6 million in 1998 to 12 million in recent years as Wal-Mart’s low-cost, Chinese-made products replaced goods made in America and as American companies look for low-cost factories overseas.
South Korea is also facing an unemployment crisis. The country quickly overcame the IMF crisis by uniting as one; working day and night and even exporting gold. Consequently, global corporations such as Samsung Electronics and Hyundai Motors thrived. However, the unemployment rate among young professionals is increasing and the price of commodities is increasing as well; the public’s discontent is skyrocketing as livelihoods are becoming more difficult.
In South Korea, the government and the opposition parties claim that they will solve the public’s discontent with welfare and are currently absorbed in preparing a public pledge. However, Greece and many other countries have proven that without job creation, welfare cannot exist. No welfare system can solve the misery of unemployment or save the poor; without job creation, welfare is not possible. An even bigger problem is that the U.S. and the European nations are likely to reinforce their protectionist policies to secure jobs within their own countries. South Korea may experience significant problems if a worldwide job competition does happen, as 80 percent of its economy depends on imports and exports.