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Home Publications Blogs Beat the Press Thomas Friedman Invented His Own Job, Why Shouldn't You?

Thomas Friedman Invented His Own Job, Why Shouldn't You?

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Sunday, 31 March 2013 05:13

Imagine getting paid to write things on economics that don't make sense for the New York Times? That job may not exist if Thomas Friedman didn't invent it. Hence the headline of his Sunday column, "Need a Job? Invent It." 

As Friedman tells readers, you need to create your own job because:

"there is increasingly no such thing as a high-wage, middle-skilled job — the thing that sustained the middle class in the last generation. Now there is only a high-wage, high-skilled job. Every middle-class job today is being pulled up, out or down faster than ever. That is, it either requires more skill or can be done by more people around the world or is being buried — made obsolete — faster than ever."

One part of this story is just wrong and the other part is at best misleading.

The wrong part is about jobs being made obsolete "faster than ever." The Bureau of Labor Statistics (BLS) actually measures the rate at which jobs are becoming obsolete, it's called "productivity growth." Over the last five years productivity growth in the non-farm business sector has averaged 1.6 percent annually. That's probably somewhat depressed as a result of the downturn, but even if we go back to 2002 we still only get up to 1.8 percent annually. That's well below the 2.8 percent annual rate from 1947 to 1973.

Maybe Friedman was just talking about productivity in manufacturing. This sector generally had had somewhat faster productivity growth than the rest of the economy. It is also where we find many middle paying jobs.

He has a bit better case here, but not much. Over the last five years productivity growth in manufacturing has averaged 2.1 percent, over the last ten years 2.9 percent. This is certainly stronger than the economy-wide average, but even going back over a ten year stretch we just get a rate of productivity growth that is essentially equal to the economy-wide average from 1947-73. (The BLS website doesn't post the productivity for manufacturing before 1987, but it's a safe bet that in the 1947-73 period it also exceeded the economy-wide average.)

Okay, so the claim about jobs becoming obsolete faster than ever is just wrong. The part that is seriously misleading is middle skilled jobs, as opposed to high-skilled jobs, "can be done by more people around the world." Why on earth does Freidman think that jobs like those held by doctors, lawyers, dentists, economists, can't be done by people around the world? There are millions of very smart people in China, India, and elsewhere in the developing world who would be happy to train to U.S. standards in these and other high-skilled professions and work for half of the pay that our professions receive.

The reason that these fields are not all dominated by people from the developing world is that the professionals who fill these positions today have enormous political power. They use this power to keep out the people from around the world. They also use this power to block trade in their services, for example, by making it difficult or impossible for the government to save tens of billions of dollars by allowing patients on Medicare or Medicaid to have major medical procedures performed outside the country. (They could split the savings.) 

But, Friedman instead perpetuates the nonsense that high-skilled workers are somehow protected from international competition by their skills rather than their political power. Of course even the idea that we are increasing becoming a nation of self-employed workers is complete nonsense. In 1973, the self-employed accounted for 6.5 percent of total employment. Last year it was down to 6.1 percent.

Friedman might think that in the new economy people have to invent their own jobs, but the data say otherwise. And that's what Thomas Friedman does for a living.

Comments (23)Add Comment
Why is the rate at which jobs become . . .
written by Keenan, March 31, 2013 8:47
Why is the rate at which jobs become obsolete the same as productivity growth?

Jobs becoming obsolete and productivity
written by Dean, March 31, 2013 9:01
Keenan,

this is essentially what productivity measures -- our ability to produce the same amount of goods and services with fewer people. I don't know what else Friedman can mean by "obsolete," except maybe that he doesn't like the jobs.
Most highly skilled (or at least highly paid) people are protected from local competition
written by Rachel, March 31, 2013 9:48

Many people in the US would be capable of doing the work of our highly paid doctors and scientists (not to mention the SF Bay Area's highly paid nurses). The difficulty is a shortage of training: not just of classes, but of medical residency posts and research assistantships.

The reason we import so much now is because of a conflict between two powerful, self-interested forces: the doctors, etc, find many ways to artificially restrict local supply, keeping many of the disadvantaged from competing with them. But the hospitals and big firms in Silicon Valley, etc., don't want to pay the high wages that would ensue. So they import many workers. Not because we don't have any more talent, but because the doctors, and others can stop the local training but can't stop the importation.

So they also focus on patents and other techniques to restrict goods and services, inflate demand, and artificially raise their incomes.

As for the frivolous, self-serving Th.F., his high salary comes, like that of many other silly demogogues, from a natural monopoly, due to the limited time and education of too many of his readers.
Thomas Friedman: You Too Can Work at Home and Be a Millionaire
written by Last Mover, March 31, 2013 10:17
But Friedman instead perpetuates the nonsense that high-skilled workers are somehow protected from international competition by their skills rather than their political power.


As a bonafide economic illiterate advancing protectionsm for the rich and competition for everyone else, Friedman is pitching the usual rugged individualist bootstrap meme designed to shift attention away from the real problem of deep recession and labor market failure.

Consider how low into the gutter Friedman sinks to join shysters and con men of his ilk. For example, over 90% of work-at-home jobs have long been proven as frauds designed to lure hefty up front payments before dropping the hammer on victims desperate for jobs.

Yes, under free market capitalism anyone can make a better mousetrap to survive, including creating demand for it smack in the middle of a deep recession can't they Mr Friedman.

You too can work at home creating mousetraps and be a millionaire. Call 1-800-JOB-LESS now!
Productivity growth = obsolete jobs
written by Bill H, March 31, 2013 10:31
"this is essentially what productivity measures -- our ability to produce the same amount of goods and services with fewer people."

That statemnent is unquestionably true, but saying that it accounts for obsolete jobs is one of the most silly things you've said recently.

Productivity does not equate to jobs becoming obsolete as whole industries disappear or jobs are shipped overseas. If making 1 million units by 100,000 workers drops to 100,000 onits made by 5,000 workers, you certainly have seen a major productivity growth, but that only explain 5000 job lost. The loss of 900,000 units of production explains the other jobs lost, and those jobs can fairly be said to have become obsolete in a manner that had nothing to do with productivity gains.

Sorry -- productivity does correspond to obsolete jobs
written by Dean, March 31, 2013 10:59
Sorry Bill -- you just gave an example of productivity growth -- what is happening to the money that people used to spend on the products that no one wants or are produced overseas? Presumably they spend it on something and that something has the same or higher value than the items the laid off workers were producing.

And if they are not spending it, then the problem is bad macroeconomic policy that is not making up the shortfall in demand. This is a case of policymakers who lack the skills for the jobs they hold.
...
written by skeptonomist, March 31, 2013 11:21
When it comes to the flight of manufacturing jobs from the US, the crux of the matter is not that more jobs "can be done by more people around the world", it is that people in developing countries have a lower standard of living and are willing to do the jobs, especially in manufacturing right now but probably in other fields requiring more education later, for lower compensation. If everyone around the world consumed at the same level as in the US there would be no flight of jobs. US capitalists with their political power can take advantage of the current imbalance essentially by making things in developing countries and selling them in advanced countries, but this can't go on forever.

Dean's obsession with foreign competition for doctors and other professionals is strange for several reasons, insofar as it is more than a rhetorical device to show how people are subject to different economic rules. Would it be a reasonable idea to import millions of Chinese to work in factories in the US instead of moving the factories to China? US capitalists would probably be OK with this as long as wages remained low. They actually do it as much as possible, using mostly Mexicans instead of Chinese. Most people in the US tend to be opposed to having jobs taken by foreigners (whether or not they work for less) and this is a main reason why the factories and not the workers have moved. In the 21st century mass migration may not be the best solution to economic imbalances.
...
written by watermelonpunch, March 31, 2013 11:56
Yeah, like being self-employed is a viable option for most people with our health care system.

In the U.S. you either go into business because your rich mommy & daddy can support you & provide you with a general & medical safety net while you get your business going...
Or you take a job, preferably at a bigger company, that provides you with decent health insurance.
Or you start a business & take your chances of going bankrupt because of a medical emergency.
Or wait - like MANY people - you work for someone else & still don't have health care, let alone any money or options to start your own business!!!!

Gosh, talk about being out of touch with your fellow citizens.
Thomas Friedman takes the cake.
Mass Immigration Is not Necessary to change the labor market for high end earners
written by Dean, March 31, 2013 12:46
Current immigration is around 1.2 million a year. If we replace 10 percent of the total with doctors and lawyers, instead of dishwashers and farmworkers, we would be adding 120,000 workers a year to these professions. After 5 years we would have increased the number of doctors by more than a third and the number of lawyers by around 25 percent. That would have a huge impact on the labor market for these occupations. It doesn't happen because protectionists rule Washington.
Immigration not key to medial costs
written by AlanInAz, March 31, 2013 2:09
Both Japan and Canada have fewer physicians per capita than the US yet their health care spending is far lower by all measures than in the US. The reason is government price controls across the full spectrum of health related costs. Doctor salaries are only 8% of total health care spending in the US. Even cutting that in half is only a small relative savings. Brain draining the third world to drive down costs in our health care system seems to me to be a bad idea.

Perhaps not in Washington, but elsewhere in the US there is no shortage of low paid lawyers.
Immigration/Medical Costs
written by JP, March 31, 2013 2:57
While I will concede to the theory that an increased population of Physicians holds the prospect to a competitive decline in rates we must first reach a saturation point at which this begins to happen. What that number may be is a mystery to me. There will be competing factors as to how successful this would be.

I can see a scenario where the first movers will simply be absorbed into the current system. The last movers, while they may in fact be making less, may have less effect on total cost than we hope for.

If employed by chains of clinics, hospitals, private healthcare facilities etc. their cost savings can be easily be transferred to the corporation and be called profits due to lower bottom line costs. It is difficult for me to imagine that the healthcare industry will desire, or even see the need, to pass along any decreased costs to anyone but themselves.

AlaninAZ also points out the overall impact that Physician's fees play out in the overall cost of healthcare. Whether his 8% is accurate, or Dr. Uwe Reinhardt's 10% figure is correct we are attempting to remove pebbles from a mountain. I think it will take a bomb of megaton proportions to move the healthcare monolith.

This bomb can take the shape of a public healthcare network. THAT would require a representative government the likes of which we do not have.

And Friedman's job has been innovated/automated as well, at least a bit..
written by John Wright, March 31, 2013 6:52
If one hasn't seen it, here is an example of how Tom Friedman's columns can be created less expensively and with no carbon-dioxide producing globe-trotting.

http://thomasfriedmanopedgenerator.com/about.php

What is surprising is this link was in a New York Times (moderated) comment to a Tom Friedman column a few months ago.

Maybe the Times comments moderator is skeptical of the wisdom of Friedman?
Friedman's new job?
written by Chris Engel, April 01, 2013 4:25
Perhaps he's becoming a distributor of Herbalife and he's setting the stage to pump "Make Money At Home Millionaire" crap.
Definition questioned
written by keenan, April 01, 2013 5:47

In response to Dean's comment that productivity is measuring jobs becoming obsolete -- these two things don't seem necessarily synonymous to me. Aren't there many ways productivity can increase without jobs becoming obsolete? Better management, better infrastructure, better technology, cheaper inputs, discovery of new resources . . . .

Quoting Dean: Productivity measures "our ability to produce the same amount of goods and services with fewer people." But can't it also measure our ability to produce MORE goods and services with the SAME number of people?
...
written by LSTB, April 01, 2013 8:13
Dean writes:

If we replace 10 percent of the [1.2 million immigrants] with doctors and lawyers, instead of dishwashers and farmworkers, we would be adding 120,000 workers a year to these professions. After 5 years we would have increased the number of doctors by more than a third and the number of lawyers by around 25 percent. That would have a huge impact on the labor market for these occupations. It doesn't happen because protectionists rule Washington.


I can't speak for doctors, but given that only 56 percent of the 46,000 nationally accredited law school graduates in 2012 found full-time long-term jobs requiring bar passage, I don't see how importing more lawyers is going to have any impact on the labor market.
Perhaps law is a special case for professions in which increasing supply does not lower price
written by John Wright, April 01, 2013 10:22
Many years ago I remember reading an economist's explanation of why law is one profession that does little to limit new entrants.

He suggested the reason was that new and inexperienced lawyers will attempt legal actions against wealthy individuals and corporations, and these parties would tend to hire experienced (and expensive) lawyers as a result.

Looked at it this way, new lawyers tend to expand the demand for legal services, so encouraging new entrants to the profession may be economically good for experienced attorneys, but not so good for new attorneys.

This may help explain why the employment picture for new lawyers is poor while the economic cost of legal services remains high.

And possibly, customers of experienced lawyers are reluctant to seek a discounted price as they "want the best".
More on productivity and obsolete jobs
written by Dean, April 01, 2013 11:04

In response to Keenan, if we can produce more goods and services with the same number of people, then we should produce more goods and services. If we don't, it is again a failure of demand management -- a problem of the people running the fiscal and monetary policy lacking the necessary skills for the job. (btw, this is 100 percent mainstream economics.)
Real Jobs
written by Curtis, April 01, 2013 11:39
Raising sheep, growing food the Permaculture way may be the only way to go. Check out Resilience.org.
...
written by seffieandcoco, April 01, 2013 11:44
Dean is right on when he says medicare should be paid for medical care outside of the US. That would establish competition and there are huge numbers of "family preference" immigrants who would benefit who now only get medical care when they visit their kids in the US. On the other hand bringing in more doctors from Bangladesh or Pakistan of Afghanistan will only generate more tests and surgery and higher costs. These doctors expect the same standard of living as native American doctors and they can run the bills up just as well. The medical profession is already wide open for foreign doctors....have you been to a hospital lately? Our local hospital has more doctors from the University in Baghdad than any American school. The legal profession is essentially closed due to their licensing system which is controlled by the bar association unlike the medical situation where licensing is controlled by the state and not the AMA. How many Bangladeshi attorneys are there? How many Afghan attorneys in comparison to the medical profession. The best solution to the medical problem is simply to put all doctors on a fixed salary no matter what they do. Let the doctors treat patients. If they are not paid to do unnecessary surgery they will not do it. Combine that with tort reform and you will see a huge decrease in medical costs.
Productivity = obsolete jobs most of the time...
written by Noah Campbell, April 01, 2013 5:59
This is nit picky but productivity growth does not always mean lost jobs. As one who has worked many years in construction, I can assure you that in some instances employment actually goes up with productivity growth. The extra productivity goes into higher quality.

The other example I can think of is with the birth of the auto industry. Ford increased productivity and at the same time employment because the price of automobiles went way down and essentially opened up a new market.

But at the macro level you are right. And people should not fear this. Productivity destroys some jobs but then opens up avenues to create a bunch of new, usually better, jobs that hadn't even been considered. Think about IT. Lots of menial jobs destroyed but new jobs like "web developer" that couldn't have even been imagined 30 years ago.

And you're right that we need to beat back the lobbies. Outfits like the AMA and ABA are definitely doing a lot of damage to the economy. But beating the lobbies has to be done before importing a bunch of educated people. Up here in Canada they have a points system for immigration (heavily weighted to education) but the equivalents of the AMA and ABA are still very powerful so that stories of taxi driving MDs, JDs and PhDs are common.
its whom you know, Low-rated comment [Show]
immigration isn't stifled by Americans
written by Alex, April 03, 2013 11:59
Someone up-thread wrote: "Most people in the US tend to be opposed to having jobs taken by foreigners..." I disagree with this in the context of medicine - most people in the US just plain don't care if someone else's job is taken by foreigners, as evidenced by, like, every economist in the last half-century who has condescendingly explained that factory workers should suck it up and accept more trade. Few people are doctors, so few people are going to stick up for a doctor's right to make a quarter million dollars while the rest of us pay outrageous medical bills ($160 for a 5 minute conversation at my last doctor's appointment, where I just got scolded and told I'd have to come back in 2 weeks! Glad I have insurance, but there's no reason for the bill to be that high).

Unless that person's argument is that Americans are just too racist to accept foreign doctors. Some definitely are, but I disagree that most are. There's no way to measure that, though, (I assume people lie to pollsters about such questions) so maybe we'll just agree to disagree there.

And to answer Keenan because goddammit poor prof. Baker can't be expected to answer the same question 30 times: having the same people produce more goods and services only works if demand for those goods and services increases.

For example, an employer with 50 workers can produce 10 million widgets instead of 5 million like before because of some tech advance. The public is still only willing to buy 5 million at the going market price. So the employer fires a portion of her workforce to cut costs and produce less, which lowers the cost per widget so the price can go down a little more can be sold. But some people still had to be fired for the price to go down. That's all Dean Baker is saying.
Also, outsource Thomas Friedman
written by Alex, April 04, 2013 12:26
I forgot to add that I really, really want the NY Times to flatten the world by outsourcing Thomas Friedman's job. Find an Indian professor or Thai diplomat to write about foreign affairs. Or maybe get a new taxi driver to write his column each week - it'd have to be translated and/or edited, but I worked doing both and I was paid less than the minimum wage, so that's not too much expense for the Times.

We'd learn a lot more, they could spend less (Friedman's expense account alone...), and Friedman would be fine because he's already soaked that dead-tree publication dry.

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.

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