From the article of 'Petrel'
No.674 / April 19, 1998
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The light and the shadow of US economy
The one behind the economic "Revival"
The contradiction and the confrontation of US society appearing to economic report
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This book is what found by chance when I am looking for books summarizing the current state of recent American economy comprehensively. This book was published in the summer of 1996 and it was immediately before the reelection of Clinton. Though it is a little old, but the basic situation has not changed today and it becomes an explanation of the situation of the United States today as it is, too. I want to take a general view of American economy based on this book.
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Introduction
The author is an investigation organization of the undoubted bourgeoisie named "The International Survey Department of Fuji Integrated Laboratory." The description enumerated the event merely superficially due to that, too. Moreover, it has become a superficial explanation when it gave some explanation. Above all, because their awareness of the issues exists on the point how Japan can learn from the "Success" of United States it has resulted to beautifying it as a case with one "Success" owing to the good economy though frankly admitting the reality of the deepen of the class confrontation of American society.
Naturally, there is not the catching method from the viewpoint of the deepening of corruptness of economy and the getting-bubble at all. Though we aiming at overcoming the rule of the capital are interested exactly even in such a viewpoint, it will not be satisfactory at all in the respect. However, in the point that it is introducing the current state of American economy with enumerating the concrete figures and the cases, it is likely to become help by which we deep the understanding.
The "Revival" of American economy
The American economy in 90's keeps certainly a long term economic expanding that can be called "Revival." Let's summarize the introduced cases easily.
Though the tempo of the economic recovery is dull at the first business recovery in 1991-92, and it was called "The jobless recovery," the aspect changed completely from 1993-94. Individual consumption, house construction, capital investment, and the export rise largely and the economic activity has been activated rapidly. To see the GDP, it recorded from 0.2% on the average of year of 1989-91 to 2.5% of 1991-93, 3.5% of 1994, 4.8% of the April-June period of 1994. Though it becomes dull to the growth rate of about 2% after 1995, it keeps growing up though gradual.
The unemployment rate also decreased according to that, it has decreased rapidly after recording the peak 8% on June and August in 1992, and has changed in 5 and the half percentage level since 1994. This is "the state of full employment substantially" in the viewpoint of the bourgeoisie. Anyway, it is certain that the unemployment rate was greatly improved. Though Clinton committed to increase 8 million employments during the term of office, the number of employer-increase has already reached 10 million persons from January 1993 to June 1996. Though even to say the increase of employment, the parts not few are only the employment of the low wage of hundreds of yen per hour.
Prices have also been in calm state from the first stage of the business recovery to present extremely, the consumer prices have changed at 2% levels, and the producer prices at 1.4% level. The settling of low wage structure and the violent price competition with the low-priced commodity of the developing country are pointed out as the background.
As well known, the trade deficit and the fiscal deficit also reduced, of which people got alarmed as "Twin deficits" at the time, and has recovered to even the lowest in the advanced countries with both the fiscal deficit and the accumulation debt balance of the government section. As the background of the reduction of trade deficit, there is the export's expansion of high technology goods, such as telecommunications equipments, computer, semiconductor, aircraft, for the Asia market that has kept high growth rate until recently.
Moreover, though it has been said up to now that the leading part of American economy is the individual consumption (For instance, its rates occupied in the GDP are 70 percent and higher than 60 percent of Japan), the contribution degree of the capital investment and the export rose largely in the business recovery process at this time. Especially, this both were supporting the growth in '94 and '95. Capital investment has expanded by 7.1% per year on the average from '91 to '95 and recorded 10.1% especially in '94. The leading part is the information relating investment and it has expanded by as many as 14.4 % per year on the average from '91 to '95. Especially, the computer relating investment has expanded by 29.7%. The export has also grown up rapidly due to the support of cheap dollar after the latter half of 1980's. Especially, the exports of goods in '95 recorded the expansion by two-digit level compared with the previous year, the ratio of GDP also became 11.5% as same level as Japan in the same year.Moreover, 40% of the export are the capital goods with high-tech equipments as leading part.
The revival of such American economy also relates to the regaining of vigor of the industry and the enterprise by which the becoming hollow became a problem in 1980's. The expansion of the amount of the shipment of the entire manufacturing industry is remarkable and it recorded 8.5% in '94 and 7.0% in '95. The expansions of such as car, electronic parts, and computers are high by each industry. For instance, to see in four years from '91 to '95, the car expanded 12.3% per year on the average, 15.2% of the computer office equipment, 16.5% of electronic parts and the peripherals, they largely exceed the expansion 6.2% of the entire manufacturing industries. These were the symbols of American industrial decline in 1980's.
The service industry related to information such as the Microsoft and the Netscape has also grown up rapidly as if keeping step with the growth of high-tech equipments, and the United States is securing an overwhelming share in this field. Of course, it is likely that many of the fields form value and is able to be classified into productive labor even if saying "Service industry."
The revival of the US banks is also remarkable. The earnings of commercial banks in the United States got depressed as well as the car and the semiconductor in the latter half of 1980's and it was labeled for a while as "Decline industry lost the international, competing power." For instance, the pure earnings got depressed as many as 14.6 billion dollars in only one year from 17.4 billion dollars of '86 to 2.8 billion dollars of '87, and the bankruptcies increased rapidly. Though the bankruptcy number was 120 in '85, it reached 200 in '88 and 206 banks of the most on the history went bankrupt in '89. They point out for the reason such as the various restrictions unsuitable for age, the rapid increase of the high-risk and high-return dealings, that is, the finances grown up rapidly for such as real estate or the developping countries, the rise of expenditure rate such as the number of employee and the personal expenses.
However, they overcome these problems rapidly as soon as entering 1990's by executing a drastic restructuring, such as the investment section narrowing down to the strategy field, the great reduction of the number of person, and the development of a new financial commodity, and they came to lead the world finance again in a lot of fields.
The stock prices have also zoomed on the background of such dramatic "Revival" of American economy, it spurs the briskness of economy again, and presents the aspect of the bubble economy.
The restructuring staked the survival and the information relating investment
Then, why did such "Revival" become possible?
"What we can point out first as macro-factor is that the labor productivity being unable to progress from 1970's to 80's quickened the rising tempo in 90's, and that it was especially remarkable in the industries and enterprises leading economy.
The labor productivity rise rate of non-agriculture private section decreased since the latter half of 70's, but it changed to the rise in 90's. The labor productivity is obtained by dividing the amount of production by the amount of the labor required for the production. It shows the amount of production per each unit of working hour. The labor productivity of non-agriculture private section rose 0.8% per year on the average in the latter half of 80's and it became 1.0% in '90-95. In addition, it has achieved the high rising rate of 2.1% the annual rate compared with the last term in January-March period of '96.
The improvement of the labor productivity is more remarkable when limiting it to the manufacturing industry of non-agricultural sections. The labor productivity rise rate rose in the manufacturing industry from 80's, the tendency has become strong further in 90's. The average rise rate per year rose from 2.4% in the latter half of 80's to 3.1% in the first half of 90's. Especially, the rising rate in '94 became a high expansion of 4.0% the ratio compared with the previous year, it was the highest rise rate since '86(4.5%). It was 5.5% the annual rate compared with the previous term in January-March period of '96, the expansions rise further.
Though the labor productivity rises in the first stage of the business recovery usually, the rising tempo does not become weak at this time now entered the sixth year of the recovery either. It is able to say that rising tendency of the labor productivity is clear."
And, what enabled such a labor productivity rise was exactly the violent restructuring and the information relating investments.
Though I can do nothing but omit the concrete content because of the number of pages, the followings are pointed out, that is, the business section's reorganization by active M&A, the external consignment of the business (out-sourcing), the organization reorganization by the reduction of the middle manager, the great rationalization of the clerical work section by using computer or computer network, the aggressive use of military technology, the thoroughly research and adoption of the production method and the quality control of Japan as "Kanban method," and the like. As the result, the production of low-priced, high-quality products became possible by the lower wage and the fewer persons, and the international competing power of the American industry has risen rapidly by the supporting of the cheap dollar then, too.
One of the factors played the biggest role in the process of such dramatic "Revival" of American industry was the violent dismissal and cutback, and the expansion of low wage long time labor. Let's see this respect a little in detail.
The content of employment has deteriorated clearly though the unemployment rate of the United States has been largely improved as already seen. The layoff that was about 320 thousand persons in '90 kept increasing in the business recovery and has reached as many as 630 thousand persons in '93 and 440 thousand persons in '95. According to a certain public opinion poll, the person of 72% answered "Either of my familiar person including I or my family became the target for the layoff in recent 15 years," We can look how the uneasy of employment extends. Though the target of layoff was occupied 60% by blue-collar worker in 80's, the rate of blue-collar worker was decreased to even 30% in '91-92 and the rate of white-collar worker rose to even 50% or more.
It is difficult to find the favorite employment again even if losing the employment as the result of lay-off. If one managed to find employment again, the person who was able to find the employment at full time is about 60% ('91-92 years), and about the half has found employment again by the lower wage than before. The remainder works in the shape like the part and the dispatch. The 60% person laid off once found employment in the office of the lower wage.
Thus, the real wage of the general worker has kept decreasing and the average hour-wages of the general worker was 7.41 dollars in '95, it decreases by as many as 13% in the ratio for '73. The labor distribution rate has kept decreasing and the difference of rich and poor expanded rapidly as the result. The working hour has kept increasing also, and the working hour during the year of the manufacturing industry production worker reached 1,976 hour in '93. It exceeds Japan. The over-fixed working hour of US production worker was 213 hour in '93, and it is far longer than 137 hour of Japan.
Though American's debt constitution is commented so that it is symbolized in the credit card, many of workers do not run "Excessive consumption" and are merely supplementing the lack due to decrease in the net income with debt.
It is said that the emigrant workers who keep increasing recently are working by pay below the lowest fee though the legal, lowest pay of the United States is 4.25 dollars. It becomes a factor to reduce general pay, too. The part work reaches 20% of all employee if including the dispatch that is a part in the wide sense, and it spurs the low wage structure.
It is well known that the dissatisfaction of the worker who pants with the uncertainty of employs and lives and the middle stratum who always holds the uneasiness of the fall has largely shaken the US politics after in 90's in the meantime.
The deepening contradiction on the back of economic "Revival"
Thus, a serious class confrontation is prepared in the back of dramatic "Revival" of American economy. The briskness of the US economy in these days is the one having been supported by the export of capital goods to Southeast Asia, by the expansions of capital investment (the structure so-called "the investment calls the investment"), and by the expansion of consumption due to debts though it is pointed out in this book. Though US people' substantial consumption ability decreases, the product ability rapidly expands by leaps and bound with even making it as an advantageous condition. Therefore, the contradiction of excessive production of the United States will be exposed as extremely serious contradiction when the condition such as the present bubble briskness on the background of the zoom of stock prices and the expansion of the world trade is lost. It will be able to say that it is exactly becoming the reality due to the present critical level of stock prices (abnormally high prices) and the slump of Asian economy.
(Shin'ichi Satomi)