Freeman

ARTICLE

Microcosm: The Decline of U.S. Competitiveness

JUNE 01, 1992 by DONALD SMITH

Mr. Smith, a frequent contributor to The Freeman, lives in Santa Maria, California.

During my long stint in the aerospace industry, I spent 10 years as a publications supervisor. I was responsible for the production of reports, proposals, manuals, technical papers, and slide and chart shows. In those Great Society years of 1965-1975, ominous changes occurred in our workplace.

When I took over the publications group, which usually numbered around 12 people, we used one of the typists as a part-time clerk. She answered the phone, typed memos, filed, collected and recorded time cards, and generally handled administrative details. For these duties, we allowed eight hours of overhead charge for the week, and this was quite realistic. The remaining 32 hours were spent on direct-charge work, which means she spent 80 percent of her time making money for the company and 20 percent on the unrecoverable costs of doing business.

By 1971, because of increased federal regulations imposed on defense contractors, this job had grown to a full-time position: 40 hours a week spent as an overhead charge. By the time I left in 1975, I not only had a full- time administrative clerk, but another typist was authorized to assist her when needed.

Thanks to the Great Society and the increased complications of doing business with the federal government, we had to expend more than 40 hours a week in lost time to produce the same amount of work we had turned out 10 years earlier. We not only had to contend with affirmative action and OSHA, but with edicts from such federal departments as Defense, Commerce, Labor, and HEW, as well as state and county bureaucracies. All these involved forms, and most required memos and letters as well as exhaustive bookkeeping. And there was record-keeping. Lots of it. We even had to record each employee’s overtime, keeping a kind of point system so that each person had an equal share of the premium pay, as though we were passing out party favors.

This alone proved to be an added cost, since overtime, up to that point, had always been regarded as nothing more than a way to meet a deadline. The idea had been to get the job done and then go home. So, we used to meet an overtime assignment by grabbing the best people and getting the job out as fast as possible, saving the company and the government money in the process.

With the coming of the Great Society, however, we had to be fair. We had to bring in the slower and less productive people to do little more than stay out of the way, at premium rates, in order to justify the workers who were there to get the job out.

Bond drives required additional record-keeping. The federal government leaned heavily on defense contractors to have their employees buy bonds through payroll deduction. Management made it clear that everyone was expected to participate. The few holdouts were repeatedly reported, and lists were kept on every level of the management hierarchy.

What I have noted here is the little world of a rather insignificant organization that existed almost 20 years ago. The importance of this microcosm, however, is that it was not unique. It was, in fact, typical. During the Great Society years, government intervention into private industry grew at an alarming rate, and if it has since been retarded, which i doubt, it has never been stopped. Most certainly it has not been reversed.

I haven’t kept a close tab on the activities at the old post, but I know that the 40-hour group clerk is still a fact of life, and the non-productive paperwork is worse than ever. No one produces more work than before, but it requires far more overhead to do the same job.

It is interesting to note that the Great Society years are precisely when foreign manufacturers began to make deep inroads into traditionally American markets. The automobile is the obvious example, but let’s not forget that the commercial aircraft market is no longer an American show either, with the Concorde and the Airbus coming to us from foreign factories. In electronics we see pretty much a lost cause, and clothing and shoes are rapidly disappearing down the black hole.

The irony is that the chief adversary of American business is our own government. Our declining role in world markets is not solely the fault of management or labor. It is the fault of stifling government regulations. We cannot have one employee in 12 assigned to government paperwork and still hope to survive in a competitive world.

Government should take its hands off the free enterprise system and let people get back to work. Private industry cannot continue as the nation’s record-keeper. It cannot provide for the health care, the recreational and psychological needs, and the baby sitting of its employees.

Let companies hire according to their needs, and let them get rid of unproductive employees. Above all, let’s eliminate the mountain of paperwork and use the talents of every employee in the cause of honest competition. As long as we are forced to employ 40-hour group clerks, we have little chance of surviving.

ASSOCIATED ISSUE

June 1992

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