July 20, 2004
Financial Experts Discuss Jobs and the New Economy at NCSL
Meeting
States can help boost America's place in global
marketplace
SALT LAKE CITY - States have an important role to play in boosting
America’s position in the global marketplace, financial experts told state
legislators Tuesday at the National Conference of State Legislatures’
Annual Meeting.
David Wyss, chief economist at Standard & Poor’s, and John
Castellani, president of The Business Roundtable, discussed trade,
outsourcing and economic indicators. They agreed that bans against
offshore outsourcing have a negative impact on state economies. At the
same time, though, the Americans who used to perform those jobs at home
are hurt by offshore outsourcing, they added.
“No public law can overcome a basic law of economics, which dictates
that if work can be done less expensively elsewhere, it should and will be
done there,” Castellani said. “Companies and states that fail to
incorporate or support this basic principle of business will fall behind.”
Castellani and Wyss encouraged states to adopt policies to ensure that
jobs are available and that citizens know how to do those jobs.
“If textile jobs disappear in North Carolina and chip plants appear in
Utah, how do you get the people to the jobs?” Wyss asked. Education can’t
end at 22, he answered. Retraining must be available.
Improving education, reforming tax systems and reigning in the costs of
healthcare and litigation in American would help the country’s economy
continue its upward trend, Wyss and Castellani said.
“Each state has a direct role in this effort,” Castellani said, “as you
are running our education systems and partnering with businesses. …If we
apply to our existing education systems the same guiding principles
governing our episodic activities - those that have led to new plants, and
more and better infrastructure - then we will see improvement in our
education and training systems.”
In the '50s, Wyss said, the United States’ workforce was the most
educated in the world. Other countries are catching up now, and at the
same time, jobs are becoming increasingly complex. “You have to run faster
and faster to stay in the same place,” he said, quoting Alice in
Wonderland.
While education opportunities should increase, the experts said,
healthcare costs should go down. Castellani gave specific ways to
accomplish this: Have hospitals publish data on their success rates on
operations. Make sure everyone who enters the emergency room is treated by
a board certified physician. And implement computerized tracking systems
for all prescription drugs administered in the hospital.
Wyss gave more general observations: “The U.S. healthcare system has an
excess of tests and an excess of specialists. We’ve got too much supply in
medical care.” Reductions in the cost of medicine, though, may take a
rationing mentality, though. “States have to decide,” he added.
Castellani urged states to “let the private sector do what it does
best.”
“Long regarded as laboratories of democracy, let states now become
laboratories of productivity,” he said, “providing innovative solutions to
economic challenges that we face, from improving human capital to removing
many disincentives that hold businesses back from doing their best.”
NCSL is the bipartisan organization that serves the legislators and
staffs of the states, commonwealths and territories. It provides research,
technical assistance and opportunities for policymakers to exchange ideas
on the most pressing state issues and is an effective and respected
advocate for the interests of the states in the American federal system.
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