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Greenspan warns against job protectionism Original Source Link: (May no longer be active)
http://www.thestar.com/NASApp/cs/ContentServer?pagename=thestar/Layout/Article_Type1&c=Article&cid=1077318609849&call_pageid=968350072197&col=969048863851http://www.thestar.com/NASApp/cs/ContentServer?pagename=thestar/Layout/Article_Type1&c=Article&cid=1077318609849&call_pageid=968350072197&col=969048863851
Feb. 21, 2004. 01:00 AM
Greenspan warns against U.S. job protectionism
Outsourcing study to be voted on by GE shareholders
Fed chief says better to improve skills in workforce
WASHINGTON—U.S. Federal Reserve Board chairman Alan Greenspan warned yesterday that "protectionist cures" being advanced to deal with the country's job insecurities would make the situation worse.
Entering the politically charged debate over U.S. service jobs being shipped overseas, Greenspan said a lack of adequate educational training rather than "outsourcing" posed the greatest threat to future American prosperity.
The Fed chief's comments came as the U.S. Securities and Exchange Commission ruled that General Electric Co. must allow a shareholder vote on a proposal to study the risk of damage to the company's brand name by moving some jobs and work outside the United States.
The non-binding proposal, submitted by the International Union of Electrical-Communications Workers of America's pension fund, will be voted on April 28 at General Electric's annual meeting. A similar proposal by the New York City Employees Retirement System won just 5 per cent of the vote in 2000.
"The migration is much more serious now and frankly I think we have a much better understanding of the impact," said Tony Daley, a research economist at the IUE-CWA, whose pension fund owns 92,400 General Electric shares. "Jobs are threatened now for blue-collar and white-collar workers. We as shareholders are concerned about the value of the stock in the last two years."
The IUE-CWA has seized on the export of U.S. jobs abroad as the issue becomes a focus of the U.S. presidential campaign. The economy has shed 2.1 million jobs since George W. Bush took office, and U.S. Senator John Kerry of Massachusetts, the leading Democratic candidate, has criticized "Benedict Arnold" chief executive officers for moving jobs overseas.
Greenspan, speaking to the annual meeting of the Omaha Chamber of Commerce, said it was not surprising there was a high level of job insecurity in the country at present when more than 2 million people in the workforce have been unemployed for more than a year.
He predicted, as he did in congressional testimony last week, that the strengthening economy should lead to stronger employment growth in the months ahead.
"We have reason to be confident that new jobs will displace old ones as they always have," Greenspan said, "but America's job-turnover process is never without pain for those in the job-losing portion."
The Bush White House has backtracked on a forecast in the president's economic report to Congress that said 2.6 million positions should be created this year.
Greenspan said the better approach was to intensify efforts to increase the skills of the U.S. workforce, both in better instruction in such areas as math and sciences in high school, and increased support for community colleges, where much of the retraining of the American workforce occurs.
from the star's wire services
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