America's savings shortfall is hurting its workers
Are federal fiscal deficits accelerating deindustrialisation in the US? For four decades, employment in US manufacturing as a share of the labour force has fallen further and faster than in other industrial countries. In the mid-1960s, manufacturing output was 27 per cent of gross national product and manufacturing's share of employment was 24 per cent. By 2003, these numbers had fallen to about 13.8 per cent and 10.5 per cent respectively. Employment in manufacturing remains weak, with an absolute decline of 18,000 jobs in September shown in the Labor Department's payroll survey.
At the same time, the orgy of tax-cutting, with big revenue losses, continues unabated. On October 6, House and Senate negotiators approved an expansive tax bill that showers businesses and farmers with about $145bn in rate cuts and new loopholes on top of what were already unprecedented fiscal deficits. These are principally financed by foreign central banks, which hold more than half the outstanding stock of US Treasury bonds. Moreover, meagre saving by American households is forcing US companies also to borrow heavily abroad.
The upshot is a current account deficit of more than $600bn a year. America's cumulative net foreign indebtedness is about 30 per cent of gross domestic product and rising fast. How will this affect manufacturing? The transfer of foreign savings to the US is embodied more in goods than in services. Outsourcing to India aside, most services are not so easily traded internationally. Thus when US spending rises above output (income), the net absorption of foreign goods largely raw materials and manufactures increases. True, in this year and last the high price of oil has also boosted the current account deficit. However, since the early 1980s, the trade deficit in manufactures alone has been about as big as the current account deficit that is, as big as America's saving shortfall (for more detail, see
http://siepr.stanford.edu).
If US households' and companies' spending on manufactures is more or less independent of whether the goods are produced at home or abroad, domestic production shrinks by the amount of the trade deficit in manufactures. The consequent job loss depends on labour productivity in manufacturing, which rises strongly through time. If the trade deficit in manufactures is added back to domestic production to get “adjusted manufactured output”, and labour productivity (output per person) in manufacturing stays constant, we get projected manufacturing employment. In 2003, actual manufacturing employment was just 10.5 per cent of the US labour force, but it would have been 13.9 per cent without a trade deficit in manufactures: the difference is 4.7m lost jobs.
In the 1980s, employment in manufacturing began to shrink substantially because of the then large current account deficit attributed to the then large fiscal deficit: Ronald Reagan's infamous twin deficits. With fiscal consolidation under Bill Clinton, the savings gap narrowed but was not closed because personal saving weakened. Now under George W. Bush, the fiscal deficit has exploded while private saving is still weak. The result is heavy borrowing from foreigners and all-time highs in the current account deficit. The main component remains the trade deficit in manufactures, intensifying the shrinkage in manufacturing jobs.
Is there cause for concern? Note that I do not suggest that the trend in overall employment has decreased, but only that its composition has tilted away from tradable goods largely manufactures. In the long run, growth in service employment will largely offset the decline in manufacturing. However, the rate of technical change in manufacturing is higher than in other sectors. It is hard to imagine the US sustaining its technological leadership with no manufacturing sector at all.
More uncomfortably, more Congressmen, pundits and voters feel justified in claiming that foreigners use unfair trade practices to steal US jobs, particularly in manufacturing, and hence in urging protectionism. The irony is that, if imports were somehow greatly reduced, this would prevent the transfer of foreign saving to the US and lead to a credit crunch, with a possibly even greater loss of US jobs.
The answer is not tariffs, exchange rate changes or subsidies to manufacturing that further increase the fiscal deficit. The proper way of reducing protectionist pressure and relieving anxiety about US manufacturing is for the government to consolidate its finances and move deliberately towards running surpluses in short, to eliminate the US economy's saving deficiency.
The writer is professor of economics at Stanford University
TELECOMMUNICATIONSTele2 hit by incumbent fightbackBy Nicholas George in Stockholm
Tele2, the pan-European alternative telecoms operator, yesterday said it had been hit by the aggressive fightback of several incumbent European operators who were now battling to regain market share.
The Sweden-based company singled out France, Italy and the Netherlands as markets where customer turnover, known as “churn”, had risen during the third quarter, as incumbent operators raised their marketing spend and sharpened their tactics.
Lars-Johan Jarnheimer, chief executive, said development in Italy and France in particular had been a “big disappointment. . . the churn increased and we reacted a bit too late”.
Tele2's most traded B share fell 12 per cent to SKr232 on the news. Investors fear that the company's business model of renting capacity from established operators and then reselling it cheaply as a virtual operator may have reached its limits.
In the three months to September 30 Tele2 added a net 1m new subscribers, giving it 25.9m customers in 24 countries in Europe. Pre-tax profits rose 12 per cent to SKr764m ($106m) on sales up 17 per cent at SKr31.8bn. Analysts said the results and number of new subscribers were below market expectations.
Mr Jarnheimer said incumbent operators had “been very aggressive, it's something that happens from time to time”. Tele2 had experienced the same situation in other markets and had been able to deal with them, he said.
He said anti-churn measures had been put in place in September. “In the first two weeks of October we have seen churn levels going down again. We are still a growth company,” he insisted.
But his remarks failed to ease investor concerns. As one Stockholm-based analyst said: “In southern Europe they are losing customers and this is not acceptable if you are going to be treated as a growth company. They talk about anti-churn measures but basically this means increasing marketing and cutting prices and that will hit margins.”
The company gave no new information about the progress of its SKr4.95bn bid for Song Networks, the Nordic broadband network supplier, which rival TDC of Denmark is also trying to acquire.
Analysts said Tele2's attempt to buy its own infrastructure also appeared to indicate that it was moving away from the resale model.
In its key Nordic market Tele2 said it had seen a stabilisation of margins in the Swedish mobile operations despite increased competition. In Russia and the Baltic area there had been strong subscriber growth.
Average revenue per customer, Arpu, fell to SKr140 per customer against SKr160 a year earlier, reflecting the subscriber growth in eastern and central Europe where Arpu was generally lower. 美国财政赤字伤及制造业
联邦财政赤字正在加速美国“去工业化”吗？ 40 年来，作为劳动力的一部分，美国制造业的就业人数较其它工业化国家下滑的幅度更大，速度也更快。在上世纪 60 年代中期，制造业产值占国民生产总值的 27% ，制造业的就业人数占到总就业人数的 24% 。而到 2003 年，上述数字已分别降至 13.8% 和 10.5% 左右。目前制造业的就业形势依然疲软，劳工部的薪资调查显示， 9 月份制造业的职位净减少 1.8 万个。
与此同时，造成巨大政府收入损失的无节制减税势头依然不减。 10 月 6 日，参众两院的谈判代表批准了一项宏大的税收法案，给企业和农场主带来约 1450 亿美元的减税厚礼，并在已是史无前例的财政赤字上又捅上了新的窟窿。这些资金主要由外国中央银行提供。这些外国央行持有超过半数的美国未偿国债。此外，美国家庭微薄的储蓄正迫使美国企业也向海外大量举债。
结果是，目前每年的经常账赤字超过 6000 亿美元。美国的累计海外净负债相当于其国内生产总值的 30% 左右，并且还在迅速攀升。这将对制造业造成怎样的影响呢？外国储蓄向美国的转移更多体现在货物上，而不是服务上。除了向印度外包，大多数服务并不能如此轻松地在国际市场买卖。因此当美国的支出高于产出（收入）时，外国货物的净进口就会增加，其中大部分是原材料和制成品。诚然，今年和去年，高企的油价也已加剧了经常账赤字，但自上世纪 80 年代初以来，仅制成品一项的贸易逆差已与经常账赤字几乎一样大，而经常账赤字与美国的储蓄缺口一样大 ( 详见
http://siepr.stanford.edu) 。
如果美国家庭及企业在制成品上的支出与这些商品是本国还是海外生产基本无关，那么国内产值下降的数目就相当于制成品贸易的逆差。由此带来的职位损失取决于制造业的劳动生产率，而美国的劳动生产率始终升势强劲。如果制成品的贸易逆差被重新追加到国内产值上，以获得“调整后的制造业产出”，而制造业的劳动生产率（人均产出）保持不变，那我们就能推算出制造业的就业人数。 2003 年，制造业实际就业人数仅为美国劳动力总数的 10.5% ，但如果没有制造业贸易赤字，这个数字本该是 13.9% ：差额就在于 470 万个丢失的就业岗位。
在上世纪 80 年代，制造业就业人数开始大幅萎缩，原因在于当时的巨额经常账赤字，而后者要归咎于当时的巨额财政赤字，这就是罗纳德?里根 (Ronald Reagan) 臭名昭著的双赤字。在比尔?克林顿 (Bill Clinton) 巩固财政的措施下，储蓄缺口收窄了，但没有消失，因为美国的个人储蓄减弱了。今天在乔治? W ?布什 (George W. Bush) 的领导下，财政赤字迅速扩大，但私人储蓄仍然疲软。结果就是向外巨额借贷，以及处于历史高点的经常账赤字。这其中主要的原因仍是制造业的贸易逆差，它加剧了制造业岗位的萎缩。
有没有担心的理由呢？请注意，我没有暗示总体就业趋于下降，我只是说，它的组成已经远离以制成品为主的可贸易商品。长期而言，服务业就业的增长将在很大程度上抵消制造业就业下降，但是，制造业中技术变革的速度要快于其它行业。很难想象，如果完全没有制造业，美国仍能维持技术领先地位。
更令人不安的是，越来越多的国会议员、专家和选民振振有词地认为，外国人利用不公平的贸易手段窃取了美国人的就业机会，特别是在制造业，并因此敦促实行贸易保护主义。具有讽刺意义的是，如果进口因某种原因而大大减少，就将阻止外国储蓄向美国转移，从而带来信用崩溃，甚至可能导致美国就业岗位更大幅度的丧失。
解决之道不在于关税、汇率或对制造业的补贴，这些会进一步扩大财政赤字。对政府来说，要想减轻贸易保护主义压力，并缓解有关美国制造业的忧虑，合适的做法是巩固其财政，简言之，就是审慎地朝贸易顺差的方向发展，消除美国经济中储蓄不足的状况。
本文作者是斯坦福大学经济学教授。
