The Great American Job Sellout

google groups ^ | feb 2005 | Paul Craig Roberts

[dennisw]

"The Great American Job Sellout By Paul Craig Roberts

Americans are being sold out on the jobs front. Americans' employment opportunities are declining as a result of corporate outsourcing of US jobs, H-1B visas that import foreigners to displace Americans in their own country, and federal guest worker programs

President Bush and his Republican majority intend to legalize the aliens who hold down wages for construction companies and cleaning services. In order to stretch budgets, state and local governments bring in lower paid foreign nurses and school teachers. To reduce costs, US corporations outsource jobs abroad and use work visa programs to import foreign engineers and programmers. The American job give away is explained by a "shortage" of Americans to take the jobs.

There are not too many Americans willing to accept the pay and working conditions of migrant farm workers. However, the US is bursting at the seams with unemployed computer engineers and well-educated professionals who are displaced by outsourcing and H-1B visas. During Bush's entire first term, there was a net loss of American private sector jobs. Today there are 760,000 fewer private sector jobs in the US economy than when Bush was first inaugurated in January 2001.

For years the hallmark of the European economy was its inability to create any jobs other than government jobs. America has caught up with Europe. During Bush's first term, state and local government created 879,000 new government jobs. Offsetting these government jobs against the net loss in private sector jobs gives Bush a four-year jobs growth of 119,000 government jobs. Comparing this pathetic result to normal performance produces a shortage of 8 million US jobs. What happened to these jobs?

Over these same four years the composition of US jobs has changed from higher-paid manufacturing and information technology jobs to lower-paid domestic services. Why?

During this extraordinary breakdown in the American employment machine, politicians, government officials, corporate spokespersons, and "free trade" economists gave assurances that America was benefitting greatly from the work visa programs and outsourcing.

The mindless chatter continues. Just the other day Ambassador David Gross, US Coordinator for International Communications and Information Policy in the State Department, declared outsourcing to be an economic efficiency that works to America's benefit. There is no sign of this alleged benefit in US jobs statistics or the US balance of trade.

Repeatedly and incorrectly, US corporations state that outsourcing creates more US jobs. They even convinced a New York Times columnist that this was the case.

The problem is, no one can identify where the US jobs are that outsourcing allegedly creates. They are certainly not to be found in the BLS jobs statistics. However, the Indian and Chinese jobs created by US outsourcing are highly visible.

On February 13, the Dayton (Ohio) Daily News reported that jobs outsourcing is transforming Indian "cities like Bangalore from sleepy little backwaters into the New York Cities of Asia." In a very short period outsourcing has helped to raise India from one of the world's poorest countries to its seventh largest economy.

Outsourcing proponents claim that US job loss is being exaggerated, that outsourcing is really just a small thing involving a few call centers. If that is the case, how is it transforming sleepy Indian cities into "the New York Cities of Asia"? If outsourcing is no big deal, why are Bangalore hotel rooms "packed with foreigners paying rates higher than in Tokyo or London," as the Dayton Daily News reports?

If outsourcing is of no real consequence, why are American lawyers or their clients paying $2,900 in fees plus hotel and travel expenses and two days' billings to attend the Fourth National Conference on Outsourcing in Financial Services in Washington DC (April 20-21)?

On the jobs front, as on the war front, the social security front and every other front, Americans are not being given the truth. Americans' news comes from people allied with the Bush administration or dependent on revenues from corporate advertisers. Displease the government or advertisers and your media empire is in trouble. The news most Americans get is filtered. It is the permitted news. Many "free trade" advocates also are dependent on the corporate money that funds their salaries, research and think tanks.

Another clear indication that outsourcing of US jobs is no small thing comes from the reported earnings of the leading Indian corporations that provide American firms with outsourced IT employees and engineers. During the recent quarter, Infosys' revenues increased by 53%, TCS grew by 38%, and Wipro was up 34%.

On January 1, 2001, Cincinnati-based Convergys Corp had one Indian employee. Today it has 10,000. Why? Because it can hire Indian university graduates for $240 a month, a sum that is a small fraction of the US poverty level income.

Many Americans think that an outsourced job is an existing job that is moved offshore. But many outsourced jobs are created offshore in the first place. On February 11, USA Today told the story of OfficeTiger, "the sort of young technology company that once created thousands of high-paying jobs in the USA, fueling sizzling economic growth." The five-year old startup business employs 200 Americans and ten times that number of Indians. The company has plans for hiring many more Indians to perform "tech-heavy financial services."

Under pressure from venture capitalists who fund new companies, American startup firms are starting up abroad. Thus, the new ventures, which "free trade" economists assured us would create new jobs to take the place of the ones moved offshore by mature firms, are in fact creating jobs for foreigners.

As a consequence, tech jobs in the US are falling as a percentage of the total. Clearly, tax breaks for venture capitalists are self-defeating when the result is to create jobs for foreigners, not for Americans. Why should the American taxpayer subsidize employment in India and China?

These developments have obvious adverse implications for engineering and professional education in America. The BLS jobs forecast for the next ten years says the vast majority of US jobs will not require a college education. University enrollments will decline and so will the production of PhDs as fewer professors are needed.

As India and China rise to first world status, the US falls to third world status where the only jobs are in domestic services.

This has enormous implications for the US balance of payments. Americans' consumption of manufactured goods is heavily dependent on foreign manufacture, whether that of foreign firms or that of US multinational firms that supply their American customers from offshore. How does an economy in which employment growth is concentrated in nontradable domestic services pay for its imports with exports?

Since 1990 the US has been paying for its imports by giving foreigners ownership of its assets. In the last 15 years foreigners have accumulated $3.6 trillion of America's wealth.

America has been able to pay for its consumption by giving up its wealth because the dollar is the world's reserve currency. As America's high-tech and manufacturing capabilities decline and its red ink rises, the dollar's role as reserve currency must end.

When the dollar loses its reserve currency role, America will not be able to pay for the imports on which it has become dependent. Shopping in Wal-Mart will be like shopping at Neiman Marcus.

Until recent years, US companies employed Americans to produce the goods that Americans consumed. Employment supported sales, and sales supported employment. No more. By their shortsighted policy of moving US jobs abroad, our corporations are destroying their American markets.

Economists give assurances that the dollar's decline and fall will bring jobs and industry back to the US. Once Americans are as poor as Indians and Chinese are today, the process will reverse. Multinational corporations will locate in America to take advantage of cheap labor and unserved markets. By becoming poor, the US can become rich again.

You might want to ask the economists and our "leaders" in Washington why we should put ourselves and our descendants through such a wrenching process."

--Jerry Leslie Note: les...@jrlvax.houston.rr.com is invalid for email

[international american]

I fliptooooooooo

[Mad Dawgg]

"So, the question is: why can't social programs meet the needs of their environment as effectively as firemen, cops and trash collectors?"

You are asking the wrong question I think.

Trash is simple, Fires are simple, Law enforcement is simple compared to human nature.

Most Americans are akin to water in how they deal with life. They flow to the least resistance.

Not being poor in America though not at all hard, is however not the path of least resistance. Government programs for poor assistance rarely teach folk how to really handle money. If you can't handle money it does not matter how much money someone gives you it won't be long till you are poor again. If you don't believe me google lottery winners who lost everything.

In all the time you were in school did any government institution teach you how to handle money, how to invest it to make more money, how to spend less than you earn and save the difference?

I never run across a single instance of such a program.

[Mad Dawgg]

"Put it back the way it was before Nafta and stop screwing us. It isn't that hard."

OK, so you ARE saying NAFTA caused unemployment to rise?

[durasell]

Okay, to be honest: I suspect that either you or somebody in your family took a hit related to either out sourcing or off-shoring. And if that's the case, then you have my sincere empathy. I've been broke, worried and pi@@ed off and it's no fun.

But the fact of the matter is, China is not our enemy at the present time. China, India, etc. are playing very, very hard ball capitalism. Now we can either meet this challenge as a nation, the way we always do, or let our future slide through our fingers. But the first thing is to view the problem clearly and define it, because without that there's no solution. And the definition of the problem isn't "treason."

[durasell]

I've seen some hopeful signs in recent years and as much as it pains me to do so, I have to credit Old Navy and Starbucks. I don't completely understand the phenom, but they seem to have attracted a lot of welfare kids to work there. More than once I've overheard them talking about attending classes at Hunter, City College or getting GEDs. I think this may be related to workfare, but am not sure.

[nopardons]

There have been American companies with global reach for at least 100 years.If you want to go back to the beginnings of our nation, premanufacturing,we traded with foreign nations,but were the least advanced;so it wasn't applicable.

You might want to look up the word treason again,but this time,get someone to explain what the words actually mean.And I see that you don't understand what sedition means either.

It really doesn't help you,really it doesn't,for you to continually write such posts,month after month,year after after year,when the facts contradict you.I have refuted you so many times,that it is quite ennui inducing to keep writing the same facts over and over again.I only do it,so that the lurkers will get to see the facts and not just your emotional,ill educated screeds.

But,for any newbie lurkers,here are some historical facts from "THE GOOD OLD DAYS- THEY WERE TERRIBLE",by Otto L. Bettmann...

"To most workers,the miseries of employment were more acceptable than the alternatives:unemployment.Layoff- a constantthreat-meant ruin,and the bands of tramps that menaced the countryside during the 1870s included descent men who were merely jobless and in despair.The crisis year of 1877 saw an estimated two and a quarter to three million men unemployed.In the depression of 1893-1898 the total was four million-almost one out of every five workers."

If a person was injured on the job (those who worked in coal mines, steel mills,the railroad,sweatshops et al),they lost their jobs.

"Between 1881 and 1900 American labor staged 2378 strikes involving six million workers." These men struck when profits rose,but their wages fell. And guess what? It did not help the workers...the courts ruled against them every time and the nation,as a whole,saw the strikers are Commies band were put down by the police,who gained MORE power in putting down the strikers!

You try to talk about what it was like when Washington and Jefferson were alive,but that has no relevance at all.Try learning the historical facts from the time it does matter! Nothing has changed all that much;except that it is actually better now.

[Mad Dawgg]

"More than once I've overheard them talking about attending classes at Hunter, City College or getting GEDs. I think this may be related to workfare, but am not sure."

Yes but is anyone teaching them ABOUT money. Not teaching them how to get money. Hell money is free for the taking in most convenience stores in the USA.

Money is easy to get in the USA, knowing what to do with it once you get it is the real barrier to wealth.

[durasell]

Don't know about the money thing. Probably not. However, they may be learning how business functions. If you figure that five out of a hundred make it out, then that's something.

[nopardons]

I know several headhunters in the IT field...they are swamped and working to the nth degree to find people to fill a massive amount of jobs. Yes,far more jobs are out there,right now and have been for well over a year;good paying jobs! No,they are NOT easily filled,for several reasons.There are NOT enough Americans who are qualified for them and some who are,are 1)TERRIBLE WORKERS 2)LIE ON THEIR APPLICATIONS 3)HAVE UNBELIEVEABLY BAD ATTITUDES.

No,there aren't enough talented Americans out there,for the number of empty jobs.

Unlike some here,who love to spout off about things they know nothing about,when I post something,it's a fact. I'm not here to lie,play games,make others believe what is only true in my mind.

[snowsislander]

Yet, more Americans are employed than at any time in our nation's history.

Actually, more people were employed for most of 2000 (in non-farm employment) than now:

Employment, Hours, and Earnings from the Current Employment Statistics survey (National)

Series Catalog:

Series ID : CEU0000000001

Not Seasonally Adjusted
Super Sector : Total nonfarm
Industry : Total nonfarm
NAICS Code : N/A
Data Type : ALL EMPLOYEES, THOUSANDS

Data:

Year	Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Sep	Oct	Nov	Dec	Ann
1995	114551	115213	115972	116803	117523	118243	117008	117268	118180	118780	119017	119015	117298
1996	116315	117252	118056	118890	120017	120681	119642	119931	120673	121383	121842	121815	119708
1997	119269	120125	121007	121979	123052	123701	122709	122770	123770	124673	125063	125196	122776
1998	122636	123405	124121	125159	126240	126902	125833	126069	126874	127652	128052	128215	125930
1999	125462	126445	127158	128305	129176	129906	129039	129093	129867	130804	131262	131403	128993
2000	128763	129428	130526	131525	132481	132998	131777	131785	132450	133007	133372	133308	131785
2001	130433	131098	131690	132094	132800	133179	131686	131613	131871	132072	131880	131491	131826
2002	128602	129069	129672	130257	131023	131404	129959	130044	130559	131227	131346	130933	130341
2003	128248	128660	129148	129800	130559	130890	129549	129601	130253	131045	131207	131026	129999
2004	128365	128976	130019	131150	132068	132527	131384	131416	132127	133139	133406	133200(p)	131481(p)
2005	130538(p)

p : preliminary

In fact, as a percentage of the total population, we are not even close to a record:

Year	Population	Max Non-farm Employment	Percentage
2000	282192162	133372000	47.2%
2001	285102075	133179000	46.7%
2002	287941220	131404000	45.6%
2003	290788976	131207000	45.1%
2004	293655404	133406000	45.4%
2005	295507134(e)	130538000(p)	44.17%

Admittedly, the 2005 number of 44.17% is kind of fragile since the population number is just a census projection and the employment number is just a preliminary for a single month instead of a maximum for the whole 12 months, but generally it is useful to see that we sure aren't cooking with gas with respect to employment.

[nopardons]

Our unemployment stats are very low;far lower than in many a previous year.

[snowsislander]

Our unemployment stats are very low;far lower than in many a previous year.

Hmm. Let me rant just a little bit the "unemployment rate."

First, you are completely right: The number that the BLS calls an "unemployment rate" (and they have a multi-page explanation for how they come up with it) is indeed at a very low point.

But, in my opinion, that number is most useful for telling you that we aren't firing a lot more people than we hire in the last few months. Other people's opinion of that number may vary, of course, and I won't quibble with people citing it. But in absence of actual population figures and employment figures, I personally think it is a less-than-useful number.

It is my opinion that one can infer easily from statistics such as the percentage of the population that is employed whether or not we have a lot of people employed.

I have to admit that one thing that peeves me about the "unemployment rate" is little notes like this one about arbitrarily changing the "labor force":

Persons Not in the Labor Force (Household Survey Data)
   
   There were 1.8 million persons who were marginally attached to the labor
force in January, about unchanged from a year earlier.  (Data are not sea-
sonally adjusted.)  These individuals wanted and were available to work and
had looked for a job sometime in the prior 12 months.  They were not counted
as unemployed, however, because they did not actively search for work in the
4 weeks preceding the survey.  The number of discouraged workers, at 515,000
in January, was slightly higher than a year earlier. Discouraged workers, a
subset of the marginally attached, were not currently looking for work speci-
fically because they believed no jobs were available for them.  The other
1.3 million marginally attached had not searched for work for reasons such
as school or family responsibilities.  (See table A-13.)

This doesn't strike me as anything other than engineering the numbers. Maybe other folks can work their way around it, and I am glad that they can, but I find it hard to put much credence in whether or not the government could determine just how discouraged somebody is.

Let's look at table A from the actual report from the BLS:

Table A.  Major indicators of labor market activity, seasonally adjusted

(Numbers in thousands)
______________________________________________________________________________
                         |    Quarterly    |                          |
                         |    averages     |       Monthly data       |
                         |_________________|__________________________| Dec.-
        Category         |      2004       |       2004      |  2005  | Jan.
                         |_________________|_________________|________|change
                         |   III  |   IV   |  Nov.  |  Dec.  |  Jan.  |
_________________________|________|________|________|________|________|_______
     HOUSEHOLD DATA      |                 Labor force status
                         |____________________________________________________
Civilian labor force.....| 147,677| 148,136| 148,313| 148,203| 147,979|  (1)
  Employment.............| 139,608| 140,092| 140,293| 140,156| 140,241|  (1)
  Unemployment...........|   8,069|   8,044|   8,020|   8,047|   7,737|  (1)
Not in labor force.......|  76,003|  76,282|  76,109|  76,437|  76,858|  (1)
                         |________|________|________|________|________|_______
                         |                 Unemployment rates
                         |____________________________________________________
All workers..............|     5.5|     5.4|     5.4|     5.4|     5.2|   -0.2
  Adult men..............|     5.0|     4.9|     4.9|     4.9|     4.7|    -.2
  Adult women............|     4.8|     4.7|     4.7|     4.7|     4.6|    -.1
  Teenagers..............|    17.1|    17.1|    16.5|    17.6|    16.3|   -1.3
  White..................|     4.7|     4.6|     4.6|     4.6|     4.4|    -.2
  Black or African       |        |        |        |        |        |
    American.............|    10.6|    10.8|    10.8|    10.8|    10.6|    -.2
  Hispanic or Latino     |        |        |        |        |        |
    ethnicity............|     6.9|     6.7|     6.7|     6.6|     6.1|    -.5
                         |________|________|________|________|________|_______

Notice how the civilian labor force shrank in January? Well, it's not because the population shrank. It's because the BLS changes the way it counts the labor force based on their survey of people's feelings. Now, maybe it's just my background, but I don't place all that much credence in government surveys asking questions like "do you feel marginally attached to the labor market", but evidently a lot of economists do.

I personally like to just know how many people are employed, and how many people live here.

That type of participation rate makes more sense to me than arbitrary breakdowns of how many folks have feelings of discouragement.

And if you want to compare countries, participation rates are generally more useful than "unemployment rates" because other countries also use different criteria for defining unemployment, although some harmonization has been going on.

[e_castillo]

We had some really big layoffs in the networking field. Mostly at Nortel. Got pretty ugly and still is in some fields.

I never heard Home Depot was an evilplace to shop... Something we need to know about?

[Mudboy Slim]

Muchas gracias, mi amigo...MUD

[international american]

"There are NOT enough Americans who are qualified for them and some who are,are 1)TERRIBLE WORKERS 2)LIE ON THEIR APPLICATIONS 3)HAVE UNBELIEVEABLY BAD ATTITUDES."

This is the part that disturbed me the most. If this is
prevalent in the workplace, we have indeed slipped into a decline.

[Toddsterpatriot]

It's a boom time and any American who can't get a good job today,is either not willing to move,or is incompetent.

Don't talk about Havoc that way. He's not incompetent. He said so. In fact, he's a math major.

[Protagoras]

I just signed on and saw you pathetic post defending your namecalling.

Did you call the mods yet?

Be sure to add the multiple posts calling people traitors for disagreeing with your moronic ideas.

Cowards call people traitors from the saftey of their keyboards.

[Protagoras]

I never heard Home Depot was an evilplace to shop... Something we need to know about?

They carry items not made in this country. Many on this thread will call you a traitor to your country for buying such items and shopping in such places.

Of course, those people are mentally defective, but hey, that's the game.

[Protagoras]

You must be a traitor. Guilty of treason, if you disagree with her.

[FrankR]

"This is the one issue that the dems have that they can gain traction on. My question is why are they not using it?"

Because...they CAUSED it...for the most part.

Companies are leaving for reasons such as exhorbitant taxes, high salaries/benefits, unions, excessive government regulations (i.e. OSHA, EPA, etc.) and EEO regulations.

The vast majority of these are Democrat creations or inspirations; given free reign, the liberals would tax and regulate us into obscurity. This mass migration of jobs is the culmination of 40 years of democRAT rule.

Another is the "diploma mill". Low cost/free education is a great thing for people who really want an education. However, some just want the "paper". This is why we see job ads for college graduates starting at $10.00 per hour. Many of the college grads today are still at high school sophmore level when they get out.