Trends

A Bridge to Better Solutions

When the citizens of Oceanside, California, recently celebrated the opening of the Murray Road Bridge, which spans 660 feet across the flood-prone San Luis Rey River, the occasion marked the first time in California history that a local agency had built a toll bridge. It was also one of the infrequent instances of a community having figured out a user-pays solution to a problem that usually gets solved by going to the state or federal government for money.

Constrained by the property-tax limit set down by the 1978 Proposition 13 and by voters' refusal (in 1980) to approve a $4.2-million bond issue to build a bridge, Oceanside officials had to resort to "creative financing" for the project. They set up a nonprofit corporation, which sold $5.2 million in mortgage revenue bonds, to be repaid by the Murray Road Bridge's 50-cent roundtrip toll, collected via automatic toll equipment.

Oceanside residents first balked at the idea of a toll-there are hardly any toll roads or bridges in all of California-but the bridge did get built.

An added advantage of the dedicated revenue from the bridge's tolls is that it assures funds for maintaining the bridge: bridges that are either privately owned (as is the Ambassador Bridge linking Detroit and Windsor, Canada) or operated by a corporate-like government entity (as is New York City's Triborough Bridge) almost never have maintenance problems, while many other of the nation's bridges are literally falling down.

America's Amazing Employment Story

With the seemingly persistent high rate of unemployment, many Americans are wondering what's happened to jobs. "But for the U.S.," wrote management expert Peter Drucker recently in the Wall Street Journal, "another question is at least as important-perhaps much more so-and yet it is never asked: Where have all the jobs come from?" The number of US jobs increased 45 percent between 1965 and 1984, Drucker noted. At the same time, as the post-World War II baby-boom generation reached maturity, America's working-age population increased 38 percent. That jobs increased at an even faster clip is a remarkable accomplishment for the US economy, especially considering the "energy crisis," two recessions, and a severe shrinking of the "smokestack" industries (such as steel and autos) that rocked that period. By contrast, over the last decade Japan's jobs increased by only about 10 percent (half the US rate during the same period), and in Western Europe the number of jobs has actually declined since 1974. In a recent issue of Policy Review, US Chamber of Commerce officer Grover Norquist noted that in 1983 alone the US economy produced 4 million new jobs, more than the Canadians since 1965 and four times as many as the British created from 1952 to 1982.

What is most fascinating and instructive about this phenomenal job growth is that big business and government-the major source of new jobs during a 40-year period that extended through the '60s-contributed hardly at all to the recent employment explosion. Indeed, Drucker observed, "Government stopped expanding its employment in the early '70s and has barely maintained it since. Big business has been losing jobs since the early '70s."

Rather, small and medium-sized businesses have generated nearly all these new jobs. And contrary to what many might assume, most of these high-growth businesses are not high-tech firms (which account "for no more than 10% of the jobs created in the past 10 years") but what Drucker calls "low-tech" or "no-tech" enterprises (such as clothing makers and restaurant chains). What all these fast-growing businesses have in common "is that they are organized for systematic entrepreneurship and innovation."

The dynamic growth in American jobs, Drucker contended, disproves an increasingly discussed theory, developed by the late Russian economist Nikolai Kondratieff, that every 50 years or so a developed economy enters a 20-year period of unavoidable stagnation. While smokestack industries appear to conform to the "Kondratieff wave," Drucker maintained, "the job-creation by entrepreneurial and innovative businesses in the U.S. simply isn't compatible with Kondratieff."

Reasons for optimism about the US economy come from elsewhere, as well. Business Week, in a recent cover story, predicted that with various technological and labor innovations, the economy "is poised for a strong, sustained surge in worker efficiency."

A number of experts' projections for productivity gains, quoted by Business Week, range from 2.7 percent to 3 percent a year until at least 1990. This compares to a rate of less than 2 percent from 1970 to 1978 and zero from 1978 through 1982. Assuming productivity increases of slightly more than 3 percent a year for the period 1983-86, Data Resources, Inc., forecasts economic prospects for those years that, Business Week quipped, "outshine even the Reagan Administration's controversial budget projections," which are widely dismissed as self-servingly optimistic.

A major cause of the productivity boom, Business Week reported, is increasing computerization within both the manufacturing and service industries, as well as labor concessions allowing the more efficient use of workers. The installation of automated teller machines, for example, enabled a California bank to cut its 8,000-person work force by 700 and to close 30 of its 400 locations. And in one Cadillac plant, workers agreed to changes allowing flexible work assignments that reduce the amount of manpower needed to produce engines.

Drucker's observations about entrepreneurship and job creation, along with the emerging productivity increases achieved through innovation, are in interesting juxtaposition to the current debate over "national industrial policy"; for it seems ever more clear that the truly wise national policy is simply to leave the market free so that individuals may follow their own creative forces.

Opening the Door to Immigration Debate

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