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GEOFFREY COLVIN
Bush vs. Kerry: Who's Stupider on Jobs?
Politicians trying to save doomed jobs are doing more harm than good.

George Bush and John Kerry are apparently competing to see who can be stupider on the hot-button issue of factory jobs. I don't propose to declare a winner in this econo-dope derby, but it's worth explaining just how they're so misguided, as well as why two reasonably intelligent Yalies are saying such dumb things, and why they'll continue saying them right up until November.

Bush has just appointed a "manufacturing czar" whose job is to help create more manufacturing jobs. The unfortunate recipient of that honor is one Albert Frink, a successful carpet manufacturer from California who, upon Senate confirmation, will become the U.S. economy's King Canute, single-handedly trying to turn back the tide. John Kerry had earlier proposed a vaguely defined tax break for companies that keep manufacturing jobs in the U.S., a change that would immediately cause every manufacturer in America to call up the IRS and explain how it had been within a smidgen of sending a raft of jobs overseas but had now decided to keep them here, so please give me my tax break. Kerry's more recent proposal to raise corporate taxes on overseas operations generally would do hardly anything to preserve U.S. manufacturing jobs—because the problem is not that they're being shipped abroad.

The problem for workers—though obviously good news for the economy in general—is that every year many of the jobs just aren't needed any longer. It's been happening for decades and will keep happening for decades more. We all know it, but with presidential candidates talking earnest nonsense, most of which gets reported uncritically in the general-interest media, it's easy to forget how overwhelming the trend is.

For example, in 1990, America had 169,000 steelworkers. Just 11 years later, in 2001, we were down to 88,000, a vertiginous 48% drop. Yet even though 81,000 jobs disappeared, the remaining workers produced 17% more steel.

It's the same story in industry after industry: We keep producing more with less. In U.S. manufacturing overall, total sales rocketed from $2.8 trillion in 1990 to $4.3 trillion in 2001. The population grew, and the labor force grew. Yet total manufacturing employment fell 7%. U.S. manufacturing employment overall peaked in June 1979 and has been headed downhill ever since. It won't be going back up.

Why would any presidential candidate even pretend he could reverse this long-term megatrend? The answer is no mystery. Both Bush and Kerry have identified Ohio as this year's Florida, a big state that could go either way and could easily determine the winner. Ohio has lost 237,000 jobs in the past three years, mostly in manufacturing. Two other critical states, Michigan and Missouri, have also lost hundreds of thousands of factory jobs. Add those workers' families and the merchants in their towns, and that's millions of voters who desperately want to believe someone can save their way of life, even if no one really can. In fact, trying to save it could do more harm than good.

As an analogy, consider agriculture. The same trend, producing more with less, has been operating for well over a century. Back in the mid-1800s more than 60% of America's labor force worked on farms. Today the proportion is a tiny 1.3%. Incredible though it seems, the total number of farm workers today is less than it was in 1820, yet our population has grown from 9.6 million to 290 million—and those workers produce so much food that our gravest national health problem is obesity.

The number of farm workers began declining in 1908, and it wasn't long afterward that America began its program of farm subsidies and price supports. Today, like virtually every developed nation, we give billions of taxpayer dollars to farmers not to grow things. Everyone knows it's insanely inefficient, a dead weight on the economy, but we do it anyway.

The same thing is happening with manufacturing. Albert Frink, whose company's annual sales never exceeded $50 million, will administer $15 billion of government programs to help manufacturers, in part to preserve jobs that wouldn't otherwise be economic.

We're headed down the farm road, and whoever wins the election will have promised to take us farther down it. Certainly we should help the people who are losing manufacturing jobs. But we shouldn't extend our doomed efforts to preserve those jobs.

The simple truth, which no presidential candidate can utter, is that America doesn't have too few manufacturing jobs. It has too many.

Geoffrey Colvin, senior editor at large of FORTUNE, can be reached at [email-masked]. Watch him on Wall $treet Week With FORTUNE, Friday evenings on PBS.

From the May. 3, 2004 Issue |

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