What are more jobs worth?

• Author: Steel, Gordon M.
• Position: Viewpoint

On March 14 and 15 of this year, President Bill Clinton and Secretary of Labor Robert Reich hosted a job summit in Detroit, to which they invited European labor ministers. In itself, this isn't surprising. The vast majority of developed countries are concerned about unemployment. The issue, however, is substantially more complex than merely creating jobs -- it is, to use President Clinton's words, creating "more and better jobs."

While this objective is intuitively appealing, I'm not sure any one nation can achieve it over a prolonged period. Historically, several countries have been able to exploit a comparative advantage in natural resources, location or technical skills to develop a barrier to outside competition and to create a strong local economy. But these barriers tend to be short lived, as other countries eventually develop comparable, or even superior, abilities and compet on the basis of lower costs. So, in today's economy, is the goal of more jobs really compatible with the goal of better jobs?

To hazard an answer to this question, you first need a quick review of worldwid employment. Dynamic changes have taken place in the forces that drive national economies and create jobs. Initially, possessing natural resources was critical to most countries' growth in national wealth (or gross domestic product). In th 19th century, for example, the United Kingdom was the predominant global economic power with its massive coal resources, sophisticated capital allocatio and leading-edge technology. Because of this, its population enjoyed a premier standard of living. These competitive advantages were fleeting, however, as petroleum use grew rapidly and sophisticated international markets eroded Great Britain's economic hegemony.

Even technology is no longer critical to establishing a sustainable competitive advantage. Short product-life cycles and reverse engineering combine to limit the term of a prolonged competitive edge. The video recorder, the fax machine, the compact disk recorder and DRAM (dynamic random access memory) integrated circuits were each invented in either the United States or Europe. But, today, Japan is dominant in all of these markets.

The evolution of markets and economies clearly has been key in redefining job content and structure. In the late 1800s, the economy of the United States was heavily agrarian. Cotton, tobacco and other crops fueled much of the country's growth. Today, less than three percent of the American...