The Jobs Problem

Newsmax ^ | Wednesday, Jan. 14, 2004 | Paul Craig Roberts

[BlackbirdSST]

Before you make a moronic statement like that again, you better get all the facts.

Like that will stop him. Consider with whom you speak. Blackbird.

[easytree]

Your discussion is interesting but not complete. BLS reports that total employment is up from Jan 1, 2001 to Dec 31, 2003 by 2.5 million. Unemployment is also up by about 2.4 million during the same time frame. So about 5 million joined the job market and during the recession and 2.5 million got jobs, and unemployment rate is now going down.
We are losing job in manufacturing as much from productivity gains as foreign competition, because manufacturing output as a % of GDP is about 5% and has been since the 1950s. It takes fewer people to produce the same output over the last 50 years. Manufacturing tends to go where customers are located, not solely based on labor costs.

[88keys]

I think to a degree your point re: "union wages" is a valid one...

Every day, we read about another corporate giant replacing thousands of American jobs by moving operations to India, China or another foreign country where skills equal to those of Americans can be purchased at a fraction of U.S. wages and salaries.

I also think the author's "First World" to "Third World" points make some sense...

However, this being a topic of such concern to everyone, what I would really like to see is a detailed list of specific "corporate giants" who haved moved US jobs to other countries, including how many jobs were moved, which countries they went to, and whether the companies also created any new jobs here (like a "net" gain or loss of US employees in all jobs, per company)

That information would be more "productive" to the discussion than simply saying "Every day we read about another corporate giant..." etc. etc.

[null and void]

Obviously, U.S. job growth is far from enough to absorb the monthly inflow of immigrants

And yet we're going to grant another amnesty?

I'm going to have a very hard time voting next November.

[pissant]

My under-educated, college drop out buddies run a highly profitable carpentry business. This is repeated throughout the country. Low tech, maybe. But there will always be room for wealth creation by those motivated enough to do so.

[MissAmericanPie]

Get ready for another unexpected and unexplainable economic suprise. Hyper inflation.

[looscnnn]

Not all jobs are moving overseas, some can't be moved (fast food, home repair, etc.), these are the jobs that the Mexicans are coming here for. I think that it could come to a point that we will have most Americans not working. I don't think there has been any cultures that have existed in such a state, we most definately won't if we don't do something.

[looscnnn]

You forgot your </sarcasm>.

[null and void]

Yup. It's how we're going to:

Get a flat tax - everyone in the top bracket.
Pay off the debt - with worthless dollars.
Fund the 'entitlements' - 100¢ on the (hyper inflated) dollar.
Make 'Social Security' payments - we'll get every penny we've ever put in...

[mo]

Two issues NO ONE in the US will address-relative to the rest of the world-the extent of how we regulate and tax BOTH business and employees compounds the problem tremendously. When all is said and done the cost of an American worker is so far greater than that of an employee anywhere else in the world that we may be in a terminal job decline.

[GigaDittos]

That scenario can't possibly happen. You can't achieve that level of unemployment. Do you think the populace will sit around and let this happen, or even the Government? No, I believe that the Mexican influx will level out or a major policy change will be demanded by the citizenry. I mean there aren't but so many Taco Bells, and it people are unemployed they don't go to Taco Bell. Furthermore, the oriental will never let the Mexican take over there food businesses.

It appears that many people are predicting all kinds of horrifying scenarios for the future without any real evidence or proof.

[looscnnn]

First; I believe Japan and Korea have some protectionist laws that are helping them, plus they have a lower wage scale than us.

Second; have you been living in a cave? Space, computers/software and some defense industries are moving overseas. IBM just announced it is moving a bunch of programmers overseas. We buy some defense items from foreign companies.

Third; How can you say that innovation in any area stays here? If that was the case, we would have the market cornered. The fact is that there are many innovations that are created in other countries.

[BillyJack]

"However, this being a topic of such concern to everyone, what I would really like to see is a detailed list of specific "corporate giants" who haved moved US jobs to other countries, including how many jobs were moved, which countries they went to, and whether the companies also created any new jobs here (like a "net" gain or loss of US employees in all jobs, per company"

I don't have all of the specifics, but this is what I was able to find. Exporting America

Corporations exporting jobs overseas.

3Com 3M A Accenture Adaptec Adobe Systems AMD Aetna Agere Systems Agilent Tech. AIG Alamo Rent A Car Albertson's Alliance Semiconductor Allstate Alpha Thought Global American Express American Standard Amphenol Corp. Andrew Corp. AOL Applied Materials AT&T AT&T Wireless A.T. Kearney Avery Dennison B Bank of America Bank One Bechtel BellSouth Best Buy Black & Decker BMC Software Boeing C Capital One Carrier Cendant Cerner Corporation Charles Schwab ChevronTexaco Ciena Cigna Circuit City, Inc. Cisco Systems Citigroup Coca-Cola Comcast Holdings Computer Associates Computer Sciences Corporation Continental Airlines Convergys Cooper Tire & Rubber Cooper Tools COVAD Comm. CSX Cummins D Dell Computer Delta Air Lines Direct TV Discover Document Sciences Corp. DuPont E Earthlink Eastman Kodak Eaton Corporation EDS Electroglas Electronics for Imaging Eli Lilly EMC Emerson Electric Ernst & Young Expedia ExxonMobil F Fedders Corporation Fidelity Investments First American Title Ins. First Data Fluor Ford Motor Franklin Mint G Gateway General Electric GlobespanVirata Goldman Sachs Goodrich Google Greenpoint Mortgage Guardian Life Insurance H The Hartford Financial Services Group HealthAxis Hewitt Associates Hewlett-Packard HSN I IBM IndyMac Bancorp Intel Intl. Paper Intuit ITT Educational Services J Jacuzzi JDS Uniphase Johnson & Johnson JPMorgan Chase Juniper Networks K KANA Software Kaiser Permanente Keane KLA-Tencor L Lehman Brothers Levi Strauss Lexmark International Lifescan Lillian Vernon Linksys Lockheed Martin Lowe's Lucent M Maritz Marshall Fields Mattel Maytag McDATA Corporation Mellon Bank Merrill Corporation Merrill Lynch Metasolv MetLife Microsoft Monsanto Morgan Stanley Motorola N Nabco National City Corporation NCR Corporation Network Associates Newell Rubbermaid New York Life Insurance Co. Northwest Airlines O Office Depot ON Semiconductor Oracle Otis Elevator Co. Owens Corning P palmOne Parker-Hannifin Parsons E&C Pearson Digital Learning Pericom Semiconductor Perot Systems Pfizer Planar Systems Portal Software Pratt & Whitney Primus Telecom Procter & Gamble Providian Financial Prudential Insurance Q Qwest Comm. R Rainbow Technologies Raytheon Aircraft Regence Group Rohm & Haas RR Donnelley & Sons S SAIC SBC Comm. SEI Investments Siebel Systems Sikorsky Solectron Sovereign Bancorp Sprint Sprint PCS State Farm Insurance StorageTek SunTrust Banks SurePrep The Sutherland Group Sykes Enterprises T Target Tecumseh Telcordia TeleTech Texas Inst. Thrivent Financial for Lutherans Time Warner Triquint Semiconductor TRW Automotive Tyco Electronics Tyco Intl. U Unisys United Online United Tech. V VA Software Veritas Verizon W Wachovia Bank Washington Group Intl. Washington Mutual West Corporation Y Yahoo!

[FITZ]

If all the jobs are going overseas, how come the Mexicans aren't following them? Are they even too mundane for the Mexicans?

They find life on welfare and food stamps and free health care a bit nicer and easier than moving to China --- which most likely has a some control over immigration there. The Mexicans here didn't even follow their jobs back into Mexico --- when NAFTA sent their textile jobs over to Mexico, they stayed and started collecting "NAFTA displaced worker" benefits. Los Trabajadores Fronterizos sued the federal government for extensions of those benefits --- the last thing they would consider doing is moving to where their jobs are.

[FITZ]

Union wages contribute significantly to the corporate decision to move operations out of country.

Not really --- that might contribute significantly to the corporate decision to move operations to states with Right to Work laws and little union organization. Moving operations out of the country is a different matter. Besides American interest in unions has been low and fading for decades.

[looscnnn]

I am a little unsure where you are getting the 5+/- million. If employment is up 2.5 mill. and unemployment is up 2.4 mill. that means that a net gain of only 100,000 jobs. 2.5-2.4=.1. So technically, the rate is down. However, if less people are needed to do a job (they are more productive) and there are few new jobs available, were do the people that are unemployed go? Also, you assume that workers overseas are less productive. Take a look at Japan, they are effiecient in their work and work for less. Effieciency is an item that can be moved as easily as money.

[looscnnn]

"Most of IBM's 315,000 employees are today already overseas. But now IBM is planning to move an additional 4,700 programing jobs offshore. They have already hired 500 engineers in India to help with the transition. Americans who are having their jobs replaced are required to train their replacements off shore."

From http://www.e-thepeople.org/article/27989/view?viewtype=best

This is just one example, you can search the internet for more info.

[GigaDittos]

Why can't you change your name to looscann or looscnnon? Anyway, no I don't live in a cave, but thanks for you concern. I think Japan had protectionist laws too, and look what happened to them. They ended up creating false impressions of their economy until the crap hit the fan, the truth emerged and they folded. The Japanese gave a false impression of superiority and the truth was that they were a bunch of inexperienced children with lots of money. It bit them in the end. The United States has been a free market economy since the beginning, that's a long time. Those who think they can quickly surpass us without learning the lessons will eventually fail. You have to go through the steps in order. You can't jump form agriculture to space age in one leap and expect to last. History proves this. Look at the Russians.

[Alberta's Child]

I always take note of quotes such as, "the economy has continued to lose jobs," "the economy isn't creating enough well-paying jobs," etc., because they illustrate a fundamental flaw in this country's thinking when it comes to issues related to jobs and employment.

"The economy" doesn't create any jobs -- it never has, and it never will. Companies and individuals create jobs. If there is a "lack of jobs" in this country, then the best way the address the situation is to sit down with a bunch of potential employers and ask them what keeps them from hiring additional employees right here in the U.S. From my experience, the answers in most cases will have nothing to do with "cheap Third World labor" or anything of that sort -- India and China simply serve as convenient targets for people who don't want to address the real impediments to job growth:

Consider these answers that I would provide to such a question -- and I serve as an excellent case in point because I have never been in a position where "outsourcing labor" was an option:

1. Infrastructure costs. For one of our offices, we are operating at nearly 100% capacity and could easily add several additional employees. But the incremental cost of acquiring additional space for that office is enormous; we would either have to pay very high rent on the larger space (the high rent makes me wonder just how much of the "lost jobs" story is true to begin with -- one would think that office rents would decline as more space becomes available due to layoffs, etc.), or we would have to give up our location in close proximity to a number of our best clients (in which case the need for additional employees might disappear anyway).

2. The cost of training new employees is very high. The basic problem I face is that hiring a new employee is pretty much an adventure, because the credentials they have acquired don't really tell me anything about what they know. The system of higher education in this country has reached a point where my best employee is a high school graduate, and the ones with the most credentials (graduate degrees, etc.) are often the least productive and least flexible.

3. Let's face it -- Hiring employees is a major pain in the @ss. Payroll taxes, insurance paperwork, administrative nonsense, etc. add an enormous cost to the company above and beyond their direct salaries. I read somewhere that payroll taxes and administrative overhead costs in France add $40,000 per year to a typical $40,000/year employee's salary. We aren't there yet, but there's no doubt in my mind that we draw closer to that figure by the day.

[looscnnn]

"I'm going to have a very hard time voting next November."

Are you wearing your Nomex suite, you liable to get flamed for that comment.