Posted on 08/02/2004 2:44:54 PM PDT by Willie Green
For education and discussion only. Not for commercial use.
Despite Fed Chairman Alan Greenspan´s praise for the New Information Economy, his recent comments on job-quality trends in America made it painfully clear that he needs a lesson in elementary internet use.
Responding at Congressional hearings last week to worries that the United States recently has been replacing high-paying jobs with low-paying jobs, Greenspan stated, We have not been able to find a significant, meaningful change in the quality of jobs being produced relative to the quality of jobs being lost for the nation as a whole over the last year.
Actually, Greenspan himself provided some evidence in his own remarks to the Senate and House. For example, he acknowledged that, despite the technical end of the last recession, businesses continue to hire an outsized percentage of temporary workers, who enjoy less job security and receive fewer benefits than permanent employees. Greenspan also admitted that Americans are having difficulty findings new jobs that pay as much as the ones they´ve lost.
More important, however, evidence of declining U.S. job quality is everywhere in the government statistics easily accessible on the internet and for much more than the last year. Moreover, the data reveal that America´s recent successes in job creation have come largely in spite of globalization and its effects, not because of it.
Inflation-adjusted hourly wages are the best measure of a worker´s worth in the new world economy Greenspan and others so uncritically laud. Unlike weekly wages, they can´t be affected by the number of hours a worker stays on the job (although, shockingly, this figure has declined throughout the current economic bounce-back). Unlike benefits, hourly wages don´t reflect employer decisions driven by tax considerations, and they are easier to quantify. Unlike income, moreover, wages don´t reflect all-too-transient changes in asset values (like home
valuations and investment earnings) or government transfer payments that have nothing to do with free markets at all, much less globalization, or the recent move to two income-earner families.
These real hourly wage figures unmistakably show a sea change that coincides remarkably with the decision in the 1970s to open America´s market almost indiscriminately to world trade. For example, real hourly wages for the entire private sector (which are not set by legislative fiat as they are for government jobs), peaked in 1972. The latest figures show them to be 9.5 percent lower. Since December, 2002, with the economy´s technical recovery well underway, they´ve fallen 2.5 percent.
Real manufacturing wages, which are earned by the workers most exposed to imports and outsourcing, peaked in 1978, and have fallen 5.8 percent since. Their decline since December, 2002, has been 1.5 percent. How can job quality remain the same nationally if wages throughout the private sector are falling behind living costs? Further, the persistence of this wage decline and stagnation over three decades is completely unprecedented in American history.
Slicing and dicing the data another way, the Economic Policy Institute shows in a July 27 report that between June, 2003 and June, 2004, the weekly earnings in industries with expanding and fast-growing employment rolls have been 7.2 percent lower than comparable earnings in industries where employment has been shrinking or growing most slowly. Over the last three years, the gap was even wider 9.4 percent.
And the recent differences between the growing and shrinking job categories are revealing. As is well known, manufacturing employment has cratered in recent years, down nearly 20 percent from its 1990s peak of 17.7 million (in June, 1998). Where have most of the new jobs been created? Overwhelmingly in occupations having nothing to do with the global economy. Employment in construction, repair and maintenance, personal and laundry services, and membership organizations and associations are all at their all-time highs or close to them.
The same holds for jobs in government where the employment levels are not only unrelated to the global economy but depend purely on politics and for jobs in education and health care services which are heavily subsidized by government.
Greenspan is informed and politically savvy enough to know that something important is wrong with U.S. labor markets lately. Although job creation has picked up markedly in recent months (thanks largely to unsustainable tax, budget, currency, and monetary stimulus), its pace still lags that of previous recoveries. Wages are remarkably soft for a recovery as well.
The Chairman´s explanation? The nation has not been able to keep up the average skill level in our workforce to match the required increases of increasing technology. His answer? Improve our educational system somehow.
Obviously, American public grade and high schools could be a lot better. But we Americans have been wracking our brains for 30 years searching for remedies, with almost nothing to show for it. So if those who stress education as the problem are serious about helping economically struggling Americans anytime soon, they need to look elsewhere.
Just as important, Greenspan missed an emerging trend that seems equally noteworthy: The education premium the pay increases generated by better education and skill levels may be about to shrink. According to the Economic Policy Institute, from the early 1970s and the great opening of the U.S. economy to foreign competition until 2001, wage growth for college-educated American workers did indeed outpace that for other Americans (15.85 percent for college grads, 1.46 percent for Americans with some college, and a whopping 18.5 percent decline for workers lacking a high school degree).
But for highly educated Americans, the times may be a-changin´ for the worse. Although the exodus of many high-paying information technology and professional services jobs to India has not adequately been captured by official data, evidence is now streaming in that the allegedly best and brightest are facing the same kinds of economic pressures already familiar to blue-collar workers.
According to a July 26 press release from the Institute of Electrical and Electronics Engineers, between the first and second quarters of this year, employment among computer software engineers fell by 131,000, among computer scientists and systems analysts by 51,000, among computer hardware engineers by 3,000, and among computer programmers by 16,000. And these jobs losses are occurring during a supposed tech industry recovery!
The longer term trends are even worse. Since their various late-1990s or turn-of-the-century peaks to the present, employment for workers in computer systems design and related services, custom computer programming, and other computer-related services has dropped by 17.38 percent, 16.03 percent, and 27.53 percent, respectively. Yet the total private sector workforce has shrunk by only 1.22 percent since its peak in October, 2000. Put differently, the odds of losing a computer services job in the last few years were only slightly better than the odds of losing a job in the devastated manufacturing sector.
It´s hard to believe that Greenspan´s unwillingness to acknowledge the most important job-quality data is unrelated to his determination to defend current globalization policies at all costs. But let´s give him the benefit of the doubt and offer him his first lesson in browsing government and other relevant data on the web. This, Mr. Chairman, is a mouse....
ping
despite the technical end of the last recession, businesses continue to hire an outsized percentage of temporary workers, who enjoy less job security and receive fewer benefits than permanent employees. Greenspan also admitted that Americans are having difficulty findings new jobs that pay as much as the ones they´ve lost.
You know what really ticks me? This Administration lies and distorts worse than the Democrats! Any one with a single braincell knows how bad things are. According to the IRS and my lying eyes, American wages are DOWN 10%! Who the heck do they think they're kidding?!
THIS will very likely cost Bush the election. The only way he'll ever get in office again will be that Kerry is such an obvious phony! What does it take for Bush to wake up and smell the destruction to Americans all across this nation?
If you look at the details of those statistics, you'll find that incomes were rising for taxpayers in most income brackets. The group that was DOWN and accounted for practically ALL of the statistical decline in national income was the evil 2% at the top -- those in the over $200K income bracket.
According to the IRS data, total INCOME (not the same thing as "wages") is down 5.1% from 2000 to 2002. But look at the numbers for those with income levels below $200,000. For the lowest earning group (<25K) number of returns in this group decreased 2.6% and total income for this group decreased 1.4%, while the average change in income per taxpayer in this group was an increase of 1.3%.
It looks like maybe those with the highest incomes had the biggest decline in income resulting from the clinton recession of 2000.
Fox News quoted different data...that according to the IRS, the top American salaries were up 10-22%. There were several articles using those figures last week. If I can find the story I'll post it.
GO WILLIE
Actually, Bush is beginning to get the message.
Last weekend in Ohio, he explicitly acknowledged that jobs are at risk (assuming they are still around...) and that he, too, was concerned about it.
He wouldn't address the problem if he did not have a proposal in the works for a solution; keep your eyes on the news.
And yes, Kerry is NOT an option.
Employment is up. ASARCO and Phelps Dodge are actually expanding nationwide. Both of these companies pay very well. You know the economy is doing well when the #1 and #2 producers of copper are actually hiring people.
WASHINGTON - One in five Americans laid off from a long-term job in the last three years was still unemployed in January, and most who had found jobs were paid less than they were before, government data showed Friday.
In a report that adds fuel to the debate over the quality of new jobs, the Labor Department said only 65 percent of the 5.3 million workers who were laid off from January 2001 to December 2003 were re-employed by January 2004.
Another 15 percent had left the labor force and were not counted as unemployed.
Of those who lost full-time wage and salary jobs and found new ones, 57 percent earned less than they had in the positions they lost, the worst result in 10 years.
"About one-third experienced earnings losses of 20 percent or more," the department's Bureau of Labor Statistics said in the report.
Recent employment growth has buoyed the economic record of President Bush, but Democratic presidential contender John Kerry has argued that the new jobs now appearing are inferior, a claim Treasury Secretary John Snow disputed Friday.
"In fact, what the evidence shows is that we are creating jobs across the board," Snow told WDAY radio in Fargo, N.D. "There is no evidence that these are the so-called low-paying jobs, the hamburger-flipper jobs, that demean American workers."
Economists are divided on the issue because of disagreements over which data best measure job quality. But Jared Bernstein, senior economist with the liberal-leaning Economic Policy Institute, said the new report showed how painful the recent slump has been.
"We focus a lot, as we should, on the benefits of a more global economy and the greater exposure to free trade," Bernstein said. "But we probably focus too little on the costs, and this report provides a window to what this creative destruction actually looks like at the level of working families."
The Labor Department report, conducted as part of a monthly poll of households about employment, focused on "long-tenured" employees, the 5.3 million displaced workers who had held their jobs for at least three years.
And 6.1 million Americans were laid off from jobs they had held for less than three years.
The report may stir up the controversy over the shift of jobs to low-wage countries because it said 43 percent of workers cited plant or company closings or moves as the reason they were out of work. The report did not indicate whether the work had moved overseas or elsewhere in the United States.
"Nearly one-third of long-tenured displaced workers lost jobs in manufacturing," the report said, a stark measure of how much pain the factory sector suffered in the 2001 recession and the slow recovery.
The re-employment rate for laid-off manufacturing workers was 60 percent, five percentage points below the overall success rate.
Factory workers were also paid less in their new jobs, with 64 percent reporting lower earnings.
Here we see Alan Greenspan admitting to one and all, in broad daylight, that American workers are getting mugged by the free traitors. Make no mistake, there is no difference between sending jobs to low wage venues and importing low wage workers.
The excuse for such actions is lower prices for consumers, but it is a deal with Satan; and the charge extracted is lower wages, worse jobs, and a more difficult job market.
If you want on or off my offshoring ping list, please FReepmail me!
From Art Pine, Bloomberg News
snip
A 2.2 percent rise in wages in the 12 months through May has been more than offset by a 3.1 percent gain in consumer prices. (That figure is distorted because the high gains of the upper elites is factored in. Average Americans have lost, not gained.)
snip
After accounting for inflation, wages and salaries have been growing less than a third as fast as they did after previous recessions, Stephen Roach, chief economist for Morgan Stanley & Co. in New York, said in a note to clients this week. The rise in pay this time is "far short of the nearly 10 percent gains that occurred in the first 29 months of the preceding six cyclical recoveries," Roach wrote. "This translates into a shortfall of $280 billion in 'missing' real personal income."
I'll keep looking. I still can't find the article I'm looking for.
The remaining taxpayers will, of course, be forced to pick up the health and welfare benefits for these formerly employed citizens.
That's a G-D lie. If anything, American workers are overqualified for what's available these days.
I hope he is, but I've got my doubts. All candidates lie thru their teeth when it's election season.
Not to blow my own horn (honk, honk), but I predicted the same thing about two years ago. I still believe it. If anything, it's gotten worse.
For some reason, people choose to believe what is printed in USA Today rather then the evidence of the the want-ad section of their local newspaper.
Here is another excellent article on the subject from propect.org on high wage America...still not the article from last week. ARGH Does anyone know where it was or who
published it?
snip
The Economic Policy Institute recently reported that in the past eight recoveries, the labor share of total income growth never fell below 55 percent of total income. In this recovery, labor's share is just 29 percent. The gap between executive compensation and worker compensation has never been wider, either. These are the results of an altered social compact and shifts in political power that have both domestic and global dynamics.
One word: "Capital Gains".
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