U.S. Labor Force: One Foot in the Third World

Chronicles Magazine ^ | Tuesday, June 07, 2005 | Paul Craig Roberts

[oceanview]

none of my engineer collegaues at work are sending their own children into the field. none. you can find dozens of articles on what is happening to enrollment, its no secret. and if you pulled foreign nationals out of the US programs, the numbers would be much worse.

[oceanview]

just type the phrase "declining engineering enrollment" into google and read what comes up, and be sure to select the current articles from 2003/4/5, not the old stuff.

just heard of another project today at work sent to India in fact.

[FreeReign]

none of my engineer collegaues at work are sending their own children into the field. none. you can find dozens of articles on what is happening to enrollment, its no secret. and if you pulled foreign nationals out of the US programs, the numbers would be much worse.

You ignore the specific statistics I give you and instead you cite some vague antedote about engineer collegues who don't "send" their children into the same field of work.

Most kids don't work in the same field of work as their parents, most parents don't "send" their children into any particular field and most Engineers being hired today don't have parents who are engineers. Your antedote can be easily shot down. Meanwhile you ignore the specific statistics that I documented for you in post #438.

BTW, the small sector of a large company that I work for has hired 800 engineers over the last 2 years.

[Paul Ross]

That article strained mightily trying to deny a "relationship"...but ultimately could not disprove its own data. A demon of its own devise.

But that was not my point. I don't have to make it. All economics theory concur in the fundamentals. A nation which imports more goods and services than it exports will have balance of trade pressures against its currency value. Other things, countervailing policies of the exporting countries (such as securities purchases in the impacted currency by those who export to the U.S.) may hold that value up for a time. See below, in the body of the article about Alan Greenspan's concerns. But that exporter behavior is not economically required conduct. Nor is it necessarily able to stay ahead of the drag on the negatively impacted currency.

So I ask you again, could we have hit a tipping point? Just look at the history. The history was shown fairly clearly there...the decline starts out at the end of 2001 and keeps going. Alan Greenspan's comments from February were hopeful. I recommend them. You might find them interesting. At least you will benefit educationally from reading him, as you are so bereft of knowledge and understanding in these issues. I will warn you in adavnce, that recently, however, Mr. Greenspan has struck a markedly less optimistic note...which I will save for your edification at a later time if you are foolish enough to assume this is his and "the" last word on the subject.

Greenspan: Trade Deficit 'Poised to Stabilize'

By Paul Blustein
Washington Post Staff Writer
Friday, February 4, 2005; 4:58 PM

Federal Reserve Board Chairman Alan Greenspan predicted today that the U.S. trade deficit will level off and possibly shrink in months and years to come, in a speech that took a less alarmist view of the trade gap than the Fed chief has offered in the past.

Greenspan cited the decline in the U.S. dollar as the main factor that is "poised to stabilize and over the longer run possibly to decrease" the trade deficit. A cheaper dollar makes U.S. products more competitive against goods produced abroad.

Up to now, trade figures have defied expectations that a weakening dollar would cause the gap to narrow. Even though the greenback has fallen steadily against most major currencies since early 2002, U.S. imports have continued to surge, and exports have failed to keep pace. The result is a trade gap that was running at an annual rate of more than $600 billion in the first 11 months of 2004, far above the previous year's record of $497 billion.

That trend should change, Greenspan contended in a speech delivered at a conference in London, a text of which was published on the Fed's Web site. Foreign firms, which have been restraining their prices in the U.S. market to stay competitive, will soon be forced to raise the prices of the goods they ship to the United States, the Fed chief said.

"We may be approaching a point, if we are not already there, at which exporters to the United States, should the dollar decline further, would no longer choose to absorb a further reduction in profit margins," Greenspan said.

As for American firms, he added, "U.S. exporters' profit margins appear to be increasing, which bodes well for future U.S. exports."

Greenspan's forecast of a declining trade gap contrasts with predictions by many other economists and experts. Indeed, according to widely publicized projections by Catherine L. Mann of Institute for International Economics and others, the current account deficit -- the widest measure of the trade gap -- could widen from the 2004 level of about 6 percent of gross domestic product, to 8 percent of GDP by 2008 and even higher levels by 2010, unless current policies and other factors change.

In an apparent reference to such forecasts, former treasury secretary Robert E. Rubin, appearing at the same conference as Greenspan, said that the U.S. budget and current account deficits "may have a tendency to get worse rather than better."

But Greenspan, more than any other figure, commands the attention of financial markets, and his comments helped buoy the dollar, which was trading late today at $1.2877 per euro, the highest exchange rate in three months against the common European currency.

Greenspan himself has previously issued much gloomier pronouncements on the trade deficit, focusing on the growing dependency of the United States on inflows of foreign capital. The trade gap essentially requires the United States to borrow hundreds of billions of dollars annually from abroad, because foreigners take the dollars that Americans pay for imported goods and invest them in U.S. securities such as Treasury bonds.

In late November, Greenspan sent stock prices and the dollar reeling when he suggested that the trade deficit, and the attendant accumulation of U.S. securities by foreigners, would almost certainly cause a further decline of the greenback. "Given the size of the U.S. current account deficit, a diminished appetite for adding to dollar balances must occur at some point," he said in that speech.

The Fed chief did not repeat that admonition Friday, although he did not repudiate it either, acknowledging that the immense amount of money and goods traversing national borders makes forecasting difficult.

"I have argued elsewhere that the U.S. current account deficit cannot widen forever but that, fortunately, the increased flexibility of the American economy will likely facilitate any adjustment without significant consequences to aggregate economic activity," he said, in a passage that footnoted the November speech. "That argument will be tested, I suspect, by possibly new twists and turns that will emerge in a seemingly ever-more complex international economic and financial structure."

Greenspan was speaking in advance of a meeting among finance ministers and central bank governors of the Group of Seven major industrial countries, for whom the U.S. trade deficit has been a major source of concern.

Reflecting those worries, Mervyn King, governor of the Bank of England, told the conference: "There is likely to be a limit to the amount of debt that one country can issue as a result of persistent deficits before investors start to worry about its ability or willingness to repay." King's comments were posted on the Bank of England's Web site.

But Greenspan said that in addition to the dollar's fall, other factors should cause the trade deficit to narrow, including a reduction in the U.S. budget deficit, which would cause demand for imports to decline.

Apparently referring to President Bush's promise to shrink the budget gap in half by 2009, Greenspan said, "The voice of fiscal restraint, barely audible a year ago, has at least partially regained volume."

© 2005 The Washington Post Company

[FreeReign]

just type the phrase "declining engineering enrollment" into google and read what comes up, and be sure to select the current articles from 2003/4/5, not the old stuff.

You still ignore the specific statistics I give you. This time you're telling me to google-count a MSM propaganda phrase.

LOL!

[A. Pole]

most parents don't "send" their children into any particular field

Did your children go to collage? Most of students might not admit this to you, but many listen to the advice of parents in that matter. In most cases I know it was so.

[oceanview]

its funny that IBM, one of the leaders in offshoring, would run a lecture like this:

https://www-927.ibm.com/ibm/cas/archives/2004/workshops/workshop_12.shtml

with some quotes:

"Enrollment in computer science (and in computer engineering) is down 50% over the past three years across North America." (2001-2004)

"A number of prominent newspapers (including the LA Times) have run recent stories about the 23% plunge in CS enrollments from 2002 to 2003."

the sad part is that US industry, who caused this problem, uses this data to argue for MORE OFFSHORING and MORE H1B visas - which makes the problem worse and worse. Or they blame the K-12 public school system, the same system that cranked out the engineers who created the telecommunications and internet revolution in the 1990s, all of a sudden collapsed in 2001-2005? Its laughable.

my observations are not anecdotal, unless you believe I wrote the articles and presentation given above.

[FreeReign]

most parents don't "send" their children into any particular field

Did your children go to collage? Most of students might not admit this to you, but many listen to the advice of parents in that matter. In most cases I know it was so.

My four kids are too young.

I work in a group of 9 engineers. None of our parents were engineers.

[oceanview]

the salary numbers mean nothing. the NBA pays alot more then that, that doesn't mean there are alot of new job openings for people in the NBA, but for those that are, the salary numbers are great.

the stats on what is happening to enrollment are undeniable - parents are piling their kids into law schools.

[A. Pole]

My four kids are too young.

When they are ready for college I am sure you will be helping them to make the good choice.

[Toddsterpatriot]

"Enrollment in computer science (and in computer engineering) is down 50% over the past three years across North America." (2001-2004)

How much did enrollment grow during the tech bubble? Why are you surprised enrollment dropped after the bubble burst?

[oceanview]

when mom and dad, who are paying the tuition bills, come along and say "no way I am paying for that" - they listen.

[FreeReign]

the salary numbers mean nothing. the NBA pays alot more then that, that doesn't mean there are alot of new job openings for people in the NBA, but for those that are, the salary numbers are great.

I gave you both salary numbers and the number of people employed. Sorry, please try again.

[Toddsterpatriot]

That article strained mightily trying to deny a "relationship"...but ultimately could not disprove its own data. A demon of its own devise.

Where is the relationship prior to 2001?

The history was shown fairly clearly there...the decline starts out at the end of 2001 and keeps going.

Yes, and the decline will keep going until it stops. When I showed you the recent 10% drop in the Euro you said " 10% Is that all you got? After the dollar's previously falling 50% against the EU." I don't mean to make fun of your poor math skills, but when did the dollar drop 50% against the Euro?

[FreeReign]

the stats on what is happening to enrollment are undeniable - parents are piling their kids into law schools.

The stats on the number of engineers employed and the salary that they make is undeniable.

[FreeReign]

When they are ready for college I am sure you will be helping them to make the good choice.

I will. There are many good fields. So far if I were to guess, maybe one will become an engineer.

[oceanview]

if you want to believe the BLS, go ahead.

[Toddsterpatriot]

if you want to believe the BLS, go ahead.

How can you argue with logic like this?

[Paul Ross]

Your earlier position:

"Inflation is *already* factored in from *all* sources, and corrected, when someone says "CPI adjusted."

I pointed out that it certainly couldn't have included the cost of travelling abroad. You shifted then to arguing that foreign travel wasn't covered. I replied that it wasn't "ALL" sources then.

Now, your reply was: Incorrect. All American sources, yes. All foreign sources, no."

I repeat. Not *ALL* sources, eh?

By your new positon I guess imports, since they are clearly a "foreign source", aren't counted after all.

Looks like your shift has hoisted you by your own petard.

You've contradicted yourself, and your earliest position.

Nice debating with you.

[defenderSD]

I know what you mean. I was a software developer from 1990 through 2001, working primarily as a high-paid consultant. Then the whole thing just turned upside-down in 2001. 80% of new development was for internet applications and the requirements of employers became incredibly stringent. They wanted people who already knew everything about web development. There also seems to be some unspoken but very real age discrimination against people over 40 in software development, and I was in my early 40's by 2001. I had to give it up--there was just too much new stuff to learn and it wasn't worth the effort to me because I had alternatives open to me.

Fortunately I had made quite a lot of cash from consulting and stock investing in the 90's and I sold a lot of stocks in '99 and 2000 before the bear market started in the summer of 2000. Now I'm an entrepeneur doing a few different things at once: real estate renovations, stock investing & trading, and some oil & gas investing. But if I hadn't invested my income well during the 80's and 90's and then sold in 99-2000, I would be in tough shape today. I'd be working away learning all this new web development software, fighting age discrimination, and I probably would have ended up working in some really cold place where young people don't want to work (like Milwaukee). Yes, it's tough out there in engineering and software development. You have to work long and hard and be one of the best in your field.