Posted on 06/07/2005 8:14:42 PM PDT by A. Pole
In May, the Bush economy eked out a paltry 73,000 private sector jobs: 20,000 jobs in construction (primarily for Mexican immigrants), 21,000 jobs in wholesale and retail trade, and 32,500 jobs in health care and social assistance. Local government added 5,000 for a grand total of 78,000.
Not a single one of these jobs produces an exportable good or service. With Americans increasingly divorced from the production of the goods and services that they consume, Americans have no way to pay for their consumption except by handing over to foreigners more of their accumulated stock of wealth. The country continues to eat its seed corn.
Only 10 million Americans are classified as “production workers” in the Bureau of Labor Statistics non-farm payroll tables. Think about that. The United States, with a population approaching 300 million, has only 10 million production workers. That means Americans are consuming the products of other countries’ labor.
In the 21st century, the U.S. economy has been unable to create jobs in export and import-competitive industries. U.S. job growth is confined to nontradable domestic services.
This movement of the American labor force toward Third World occupations in domestic services has dire implications both for U.S. living standards and for America’s status as a superpower.
Economists and policymakers are in denial, while the U.S. economy implodes in front of their noses. The U.S.-China Commission is making a great effort to bring reality to policymakers by holding a series of hearings to explore the depths of American decline.
The commissioners got an earful at the May 19 hearings in New York at the Council on Foreign Relations. Ralph Gomory explained that America’s naive belief that offshore outsourcing and globalism are working for America is based on a 200-year-old trade theory, the premises of which do not reflect the modern world.
Clyde Prestowitz, author of the just published “Three Billion New Capitalists: The Great Shift of Wealth and Power to the East,” explained that America’s prosperity is an illusion. Americans feel prosperous because they are consuming $700 billion annually more than they are producing. Foreigners, principally Asians, are financing U.S. over-consumption, because we are paying them by handing over our markets, our jobs and our wealth.
My former Business Week colleague Bill Wolman explained the consequences for U.S. workers of suddenly facing direct labor market competition from hundreds of millions of Chinese and Indian workers.
Toward the end of the 20th century, three developments came together that are rapidly moving high productivity, high value-added jobs that pay well away from the United States to Asia: the collapse of world socialism, which vastly increased the supply of labor available to U.S. capital; the rise of the high speed Internet; and the extraordinary international mobility of U.S. capital and technology.
First World capital is rapidly deserting First World labor in favor of Third World labor, which is much cheaper because of its abundance and low cost of living. Formerly, America’s high real incomes were protected from cheap foreign labor, because U.S. labor worked with more capital and better technology, which made it more productive. Today, however, U.S. capital and technology move to cheap labor, or cheap labor moves via the Internet to U.S. employment.
The reason economic development in China and some Indian cities is so rapid is because it is fueled by the offshore location of First World corporations. Prestowitz is correct that the form that globalism has taken is shifting income and wealth from the First World to the Third World. The rise of Asia is coming at the expense of the American worker.
Global competition could have developed differently. U.S. capital and technology could have remained at home, protecting U.S. incomes with high productivity. Asia would have had to raise itself up without the inside track of First World offshore producers.
Asia’s economic development would have been slow and laborious and would have been characterized by a gradual rise of Asian incomes toward U.S. incomes, not by a jarring loss of American jobs and incomes to Asians.
Instead, U.S. corporations, driven by the shortsighted and ultimately destructive focus on quarterly profits, chose to drive earnings and managerial bonuses by substituting cheap Asian labor for American labor.
American businesses’ short-run profit maximization plays directly into the hands of thoughtful Asian governments with long-run strategies. As Prestowitz informed the commissioners, China now has more semiconductor plants than the United States. Short-run goals are reducing U.S. corporations to brand names with sales forces marketing foreign made goods and services.
By substituting foreign for American workers, U.S. corporations are destroying their American markets. As American jobs in the higher-paying manufacturing and professional services are given to Asians, and as American schoolteachers and nurses lose their occupations to foreigners imported under work visa programs, American purchasing power dries up, especially once all the home equity is spent, credit cards are maxed out and the dollar loses value to the Asian currencies.
The dollar is receiving a short-term respite as a result of the rejection of the European Union by France and Holland. The fate of the Euro, which rose so rapidly in value against the dollar in recent years, is uncertain, thus possibly cutting off one avenue of escape from the over-produced U.S. dollar.
However, nothing is in the works to halt America’s decline and to put the economy on a path of true prosperity. In January 2004, I told a televised conference of the Brookings Institution in Washington, D.C., that the United States would be a Third World economy in 20 years. I was projecting the economic outcome of the U.S. labor force being denied First World employment and forced into the low productivity occupations of domestic services.
Considering the vast excess supplies of labor in India and China, Asian wages are unlikely to rapidly approach existing U.S. levels. Therefore, the substitution of Asian for U.S. labor in tradable goods and services is likely to continue.
As U.S. students seek employments immune from outsourcing, engineering enrollments are declining. The exit of so much manufacturing is destroying the supply chains that make manufacturing possible. The Asians will not give us back our economy once we have lost it. They will not play the “free trade” game and let their labor force be displaced by cheap American labor.
Offshore outsourcing is dismantling the ladders of America’s fabled upward mobility. The U.S. labor force already has one foot in the Third World. By 2024, the United States will be a has-been country.
Cheers,
CSG
GE is setting up facilities in China with the agreement that they must be manned with Chinese workers and that the technology is shared (and stolen by) the Chinese. World class facilities are being built to build machine tools, aerospace, power generation, etc. The multinational corporations are selling us down the river so that a few CEO's can become billionaires. Manufacturing creates a trickle down effect on the economy. You buy a widget, the widget maker buys machines and material, the machine builder buys machinery and material......The Wal-Mart and service economy creates no wealth or trickle down economic developement. The only way to save this country is to have a revolution and throw the two partys out of office.
Possibly, but I think our most sensitive military secrets are not owned by GE, but rather by the federal government. GE might be giving away its own technology, and if that's the case, then the solution is for GE shareholders to fire their management.
Personally, I'm a stockholder in GE and a lot of other companies, and I always vote against management because they typically represent only their own interests.
I'm not in favor of increasing the minimum wage. I'm not pushing any socialist edict.
Oceanview said "those 25000 GM workers who lose their auto jobs, they are going to be able to find other jobs at the same pay level. right?" That doesn't have anything to do with % of the labor force, it was a question about those GM employees.
As always, you and yours ignore the social costs that society has to pick up and pay, that out weigh the few dollars saved.
You and yours ignore the fact that despite job losses in the furniture industry, average real hourly wages have still risen since NAFTA.
Hey Swanky, even your mathematically challenged buddy here says that WalMart's purchases from China are only $20 billion. Now if WalMart bought $220 billion last year, Chinese purchases made up about 9.1% of the total.
For you public school math students, 9.1% is less than 100%. I'd even go so far as to say much less than 100%.
Really? Have you tried to purchase "made in USA" clothing lately?
Correct analysis.
Did you make this number up? Or do you just not know how to multiply and divide?
Quote: Hey Swanky, even your mathematically challenged buddy here says that WalMart's purchases from China are only $20 billion. Now if WalMart bought $220 billion last year, Chinese purchases made up about 9.1% of the total
I'm going to use the argument that Paul Ross brought up that the 20 billion they bought is really 80 billion in the true US dollar equivalant.
My local walmart has way more than 10-15% of it's goods made in china. More like 65-75%.
Hey Toddster why won't you take me up on my bet that my local WM has 65-75% of it's products that say made in China on them??? You keep on hedging and make snide remarks.
I know I have won this bet. As before I will even pay you lodging and travel expnses. However bring $1000 in cash.
Clueless!!! Paul Ross was talking about PPP. PPP involves living standards in China.
My local walmart has way more than 10-15% of it's goods made in china. More like 65-75%.
Everyone is aware of your poor counting skills.
Hey Toddster why won't you take me up on my bet that my local WM has 65-75% of it's products that say made in China on them???
The value of WalMart's purchases from China is less than 10% of total WalMart purchases.
I know I have won this bet.
You also knew the following :Also china holds the majority of our treasuries. In a sense they US by the balls. Oversmplication of course but bascially true in a nutshell.
75 posted on 03/31/2005 6:41:37 PM CST by superiorslots
We all know how that turned out, don't we?
Yeah, I see this is your typical response to things that get in the way of your Free Trade mantra, insult the other guy. Very "intellectual" of you. Good day to you and your delusional "reality".
Quote: The value of WalMart's purchases from China is less than 10% of total WalMart purchases.
You are the one clueless. Have you ever even been in a Walmart? I know you and your friends don't hang around the little people.
If you are so sure that WM only has 10% or less of it's product made in china why won't you take my up on my bet???
Any sane person can go to their local WM and see the % of product made in china (Min 65%).
WM is the one posting funny numbers.
Toddster you are so chicken sh*t and you know it.
How are the median wages, what is the distribution of these wages (across different types of jobs), what about people without the wages and how is the cost of living?
It's an insult to show you can't multiply?
TO ALL:
I'm remaking my bet with toddster. His contention is that 10% or less of the products in a WM are made in China. I say a minimimum of 65% and I bet $1000 I am correct. However he won't take me up on my bet and always comes back with insults and snide remarks.
Also toddster why did you use the word "arse" in one thread a while back? Are you even American?? I do not know one red blooded american than uses the word Arse. Of course I guess I am oneof the little people and not the novou (sic) rich.
How many different items does a typical WalMart stock?
These are all good questions. Please ping me when you post the answers.
Have you adjusted that for the top 10%? Or the top 5%? Or the top 2% ouliers? Oh or don't we know enough about Statistics to understand that radical outliers will skew the whole average? Or maybe you do and don't feel like seeing the real results? I'm betting on the last.
I posted arse because I thought it was rude to use the word ass. Any more "facts" you want to pull out of your ass?
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