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|Rights Holder||SR Communications DBA, Eden, Utah|
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|Paper||Ogden Valley News|
Page The Ogden Valley news Volume XVII Issue XXI April 15, 2010 Solid U.S. Job Gains a Positive Sign for Weber County’s Small Business Sector China, Inc. – A Book Review By Forrest Brown With the recent journey of my twentytwo year old son Alex to northern China for a year’s stay to learn Mandarin Chinese and karate from the Shaolin monks, my mind has been thinking a lot lately about this vast country in Asia. I had read the book China, Inc. some years ago so it was good to have a reason to review it again. Written in 2005, China, Inc. is about the rise of the next global superpower and the challenges and opportunities that it presents to America and the rest of the world. The author, Ted C. Fishman, is a former floor trader and member of the Chicago Mercantile Exchange who ran his own trading firm until 1992. His articles have appeared in The New York Times Magazine, Money, Harper’s Worth, Esquire, USA Today, GQ, and Business 2.0. The very first statement in the Introduction of this book captures the very essence of what Mr. Fishman is trying to convey. He writes, “China is everywhere these days. Powered by the world’s most rapidly changing large economy, it is influencing our lives as consumers, employers, and citizens. The words MADE IN CHINA are as universal as money: the nation sews more clothes and stitches more shoes and assembles more toys for the world’s children than any other. . . . China has also become the world’s largest maker of consumer electronics, pumping out more TVs, DVD players, and cell phones than any other country . . . . The nation is making parts for Boeing 757s and exploring space with its own domestically built rockets. China has between 100 and 160 cities with Powerful Swing - The U.S. economy added an populations of 1 million or more (American average of 54,000 jobs monthly during 2010’s by contrast has 9, while Eastern and Western first quarter. While not impressive versus traEurope combined have 36). China is buying ditional employment gains, the 54,000 average oil fields internationally . . . . China is buying rise is worlds apart from the 753,000 average the world’s scrap metal, as well as enormous monthly loss during 2009’s first quarter. amounts of steel . . . . China is laying down As expected, the nation’s unemployment (jobfiber optic at a rapid rate.” less) rate remained at 9.7% in March, matching Other interesting facts that Mr. Fishman the rate of the two prior months. It is still feasible brings to light are things such as, General that the rate could actually move slightly higher Motors expects the Chinese automaker to be in coming months—despite solid job gains—as bigger than the U.S.’ market with some 74 hundreds of thousands of people reenter the labor million Chinese families now able to afford force in search of more plentiful jobs. automobiles. Also, in China, there are 186 Where the Jobs Are - Of the 162,000 net new MBA programs, China has 320 million peojobs reported for March, 48,000 were tied to the ple under the age of fourteen (which is more Census. With modest declines in other governthan the entire U.S. population), American ment employment sectors, 123,000 net new jobs companies make a 42% return on their China were added in the private sector, the largest gain operations, and more people use the Internet since May 2007. Some economists had feared in China than in the United States. that most, if not all, of the expected March gain However, the great phenomena that the would be temporary Census jobs. world is seeing taking place in China, accordJob gains in March were spread across the ing to the author, has been the migration economy. An estimated 60% of industries ZIONS BUSINESS cont. on page 12 of 220 million “surplus workers” from the added jobs in March, the highest share in four countryside to the industrial central and western regions of China. In contrast the entire new programs amount of people working in the United States is around 140 million. The laborers in for diabetics China also work for much less than the rest of the world. For example, apparel workers Our goal is to decrease medications and Our programs include treatments for We take in the U.S. make an average of $9.56 an hour improve your health with exercise, physical muscle and joint pain including back most while in places like El Salvador they average and neck. Home visits available. therapy, and nutritional counseling. $165 an hour. But in China, apparel workers insurances make between 68 and 88 cents an hour. This Insurance may cover has grabbed the attention of many business the cost of this program. Highlights • Weber County experienced a decrease of 2,700 jobs (-2.9%) from a year ago. Joblessness registered 7.6%, up from the 7.1% unemployment rate one year ago. • The Zions Bank Small Business Index for Utah was 95.9 in March 2010, up from a revised 91.6 in February 2010. • Utah’s unemployment rate was estimated at 7.1% in the latest month, up from the revised 6.9% rate of the prior month. Total Utah employment fell an estimated 27,700 jobs during the past 12 months. • The strongest U.S. job gain in three years is one more sign of renewed U.S. economic growth, ultimately a positive development for Utah’s small businesses. • The U.S. economy gained an estimated 162,000 net new jobs in March, slightly less than the 190,000 gain expected. However, job gains of the two prior months were revised higher. The U.S. unemployment rate remained at 9.7% in March Jobs Transition - The American economy saw a net rise of 162,000 jobs during March, the strongest monthly gain in three years. The reported gain was slightly below expectations of a rise of 190,000 jobs. However, job data of the two prior months was revised to show 62,000 additional jobs. Following revision, the U.S. economy has added jobs during three of the past five months. Consensus forecasts hold expectations of hundreds of thousands of new jobs to be reported over the next few months. Yes . . . more than one-half million of the jobs to be reported in coming months will be temporary Census jobs. Yes, when these jobs are completed in 4-6 months, they will detract from employment totals then. However, the majority of jobs being created in the economy will be permanent jobs, providing meaningful income gains to tens of thousands of American families. years (CNNMoney.com). The goods-producing component of the economy added 41,000 net new jobs during March, the first gain in three years. The longsuffering construction sector added 15,000 jobs during the month, the first gain since the summer of 2007. Manufacturing added another 17,000 jobs, the third consecutive monthly gain, cementing the notion that the nation’s manufacturing sector has helped lead the way toward U.S. economic recovery. The nation’s much larger service-providing sector added 82,000 jobs last month, with gains in wholesale and retail trade, transportation, professional & business services, leisure & hospitality, and education & health services. Job gains in the health care sector since the recession started in December 2007 now total 588,000, with 27,000 net new jobs in March. Pain Continues - Despite the more favorable nature of the March data, much in the way of employment pain and suffering still exists . . . . • The “underemployment rate”. . . the total of those officially counted as unemployed, those working part-time hours who would prefer to work full-time, and those discouraged workers who have left the labor force but would accept a job if one were offered, rose slightly to 16.9% from 16.8% in February. • A total of 15 million people are counted as unemployed, close to record levels. • Of the 15 million unemployed, a record 6.5 million, or 44% of the total, have been out of work for at least six months, a record high. That figure rose by 414,000 last month alone. A Better Story - The job gains and losses reported above, and the primary focus of media coverage of the job market, comes from a monthly survey of roughly 375,000 businesses, known as the establishment survey. The unemployment rate comes from a different survey, one conducted monthly of 60,000 households. It has a disadvantage of a smaller sample size, but includes estimates of the self-employed and other workers who are excluded from the larger establishment survey. The more encouraging employment story being told by the household survey is worth mention. While the U.S. economy officially added 162,000 jobs during March, the household survey estimated a much stronger 264,000 rise. More importantly, while the establishment survey noted a net gain of an identical 162,000 jobs during the first quarter just ended, the household survey estimates that total employment jumped by 1.1 million jobs during the quarter. Many economists would suggest that the household survey can be a better measure of job gains during transition periods from job contraction to job creation. U.S. economic performance is a component of the Utah Small Business Index. Employment gains and losses are key factors relative to U.S. economic growth or recession. The Zions Bank Small Business Index for Come see our new offiCe (801) 745-1700 4776 East 2600 North ~ Eden Located down behind the old car wash at the end of the cul-de-sac. 801-745-4000 2555 WOLF CREEK DR. EDEN STORE HOURS: MON. - SAT. 7 AM - 10 PM SUNDAY 7 AM - 9 PM Aspen Mills Bread 50c OFF with coupon Expires 5/1/10 piece Champs Chicken from the Deli 50c OFF with coupon Dept. Expires 5/1/10 3 lb. Bag Mandarin Tangerines $1.00 OFF with coupon Expires 5/1/10 from the Produce Dept. Frozen Food Purchase of $15 or more $1.00 OFFwith coupon Expires 5/1/10 Valley Market Store Made Brats $1.00 OFF with coupon Expires 5/1/10 from the Meat Dept. Design & Maintenance Sprinkler Systems, Lighting Waterfalls & Ponds Custom Patios & Fire Pits Demolition & Renovation Snow Plowing, Salt & Sanding leaders across the world as we see company after company move some, if not all, of their manufacturing operations to China. But China is a communist country, how can they be such an economic force in today’s global market system? What Mr. Fishman points out is that “all this change has happened on the watch of the Chinese Communist Party, once the most radical and fearsome enemy of private enterprise the world has ever seen.” The Party still owns all the land in China, but by and large stays out of the “way of a people determined and resourceful enough to undermine the old radical regime.” One benefit mentioned in the book from Mao’s early days of collectivism was the establishment of a mobilized workforce that could move around geographically. Those left in the countryside served as a “reserve army” to support the Party’s industrialization projects when called upon. As millions moved into the cities the Party organized social institutions such as “housing, schools, and a health care system” to take care of its people, which has increased China’s standard of living from one of the poorest to one of the most improved among industrial nations. Although the Communist Party in China still controls the media and many other aspects of this nation, they have allowed their people to use such things like the Internet to become a global economic force like no other. China now dominates many industries that the U.S. initiated such as televisions, DVDs, computers, and electronics. Where the former Soviet Union failed, the People’s Republic of China has excelled. On the educational front, Mr. Fishman reports “China has 17 million university and advanced vocational students (up more than threefold in five years), the majority of whom are in science and engineering. China will produce 325,000 engineers this year. That’s five times as many as the United States . . . . There are 186 MBA programs in China.” The Chinese are also way ahead of us in research in many areas. In 2005 our government authorized $282 billion to finance applied development and innovation research. China in 2004 spent $60 billion on basically the same type of research and development, which, in total dollars, is somewhat lower than the U.S. What you have to take into consideration is that engineers and scientists in China make between one-sixth and onetenth of what American technical experts make. This means that although the U.S. spends nearly five times what China does on research and development, we have less than two times as many researchers (743,000 compared to 1.3 million). Next February, my wife and I will visit this strange land of China as we go to pick up our son in the northern province of Jilin. As outsiders, we Americans must remember that the bottom line is this: China is a much different culture than ours, but it is a force that we as a nation must reckon with or we will be like passengers at the rail station who fail to jump on this economic train that is moving full steam ahead.