Staying ahead of the lions
David R. Gergen
`Out on the savanna of Africa, a gazelle wakes up every morning knowing that day he must run faster than the fastest lion or he will be eaten by sundown. Nearby, a lion wakes up knowing he must run faster than the slowest gazelle or hewill go to bed hungry. If you want to compete intoday’s world marketplace, you’d better be ready to run fast, too.”
That was the message delivered a few years ago by Fred Smith, hard-charging CEO of Federal Express, to budding entrepreneurs gathered for a conference in Tennessee. It expressed a core belief of many leaders in corporate America, Asia and, more recently, Europe. In a world where a trillion dollars changes hands every day in financial markets, where high-tech workers in California must compete with young scientists in Bangalore, India, where goods flow easily across borders, a corporation must be nimble and often ruthless to survive.
Until recently, this globalization–or turbo capitalism–was regarded as a win-win by mainstream thinkers. Trade would expand, smart companies would move ahead, and workers along with consumers would prosper. In many respects, reality has lived up to theory: Spurred by growing trade, the world’s economic wealth has expanded by 50 percent in the past five years, adding $10 trillion to our economic well-being. America has also produced many of the superstars, such as Microsoft, Intel and Federal Express.
But it is now dawning that this new economic age carries a higher price than first advertised. Early this month, about 1,000 business leaders, political figures and scholars from around the globe met at the annual World Economic Forum in Davos, Switzerland, where they focused on globalization. While there was much to celebrate, there were also rising concerns about economic stress and social disintegration in the industrialized countries.
The central question is whether the advanced nations will create enough well-paying jobs in this new age. In the past five years, the number of unemployed people in united Germany has nearly doubled to 4.2 million, the highest since World War II. Layoffs are inevitable, say German employers, when labor contracts and social benefits required by government have driven up the cost of labor in the German chemical industry to $43.40 an hour, almost twice the cost of a U.S. chemical worker. Across Europe, job creation is anemic and unemployment has soared to 10 percent or more in many countries.
America, of course, has taken a different course, holding down labor costs and social benefits. As a result, companies have created nearly three times as many jobs as the Europeans, but many are part time, wages are stagnant or falling for average workers, and income inequality is rising. Hearing Washington politicians boast about how many jobs they had created, a worker for TWA is widely quoted as saying, “Yeah, my wife and I have four of them.”
The problem is aggravated because political and economic pressures, including a need to attract more investment, are forcing governments to downsize at the same time corporations are. Thus, at the very moment a worker’s employment is threatened, so is his government safety net–a double whammy.
Coming away from Davos, columnist Thomas Friedman captured the political implications of all this in the New York Times, pointing to a growing public backlash against global integration and free-trade agreements. “The losers are now asserting themselves,” embodied in the supporters of Pat Buchanan in America, the outbreak of labor unrest in France, or the chilling popularity of Gennadi Zyuganov, head of Russia’s resurgent Communist Party and current front-runner in the presidential elections scheduled this year.
No one at Davos knew exactly how to ease the process of globalization in advanced countries, but it was a U.S. senator, Bill Bradley, who gained the most attention for concrete ideas. Bradley believes that at a minimum, every worker should enjoy three forms of security: help in training for future employment and guarantees that when he leaves, he can take his health insurance and pension with him. Surely, more reforms will be needed, but these represent a good place to start–especially here in America, where too many workers now feel like gazelles.
COPYRIGHT 1996 All rights reserved.
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