(Yeah, I was afraid
this would catch on when the new
DVD came out . . .)
Posted on 12/07/2005 11:46:30 AM PST by Sonny M
The November payrolls job report was announced Friday with the usual misleading hype. Spinmeisters made the most out of the 215,000 jobs. Looking beyond the glitter at the real facts, this is what we see. Twenty-one thousand of those jobs were government positions supported by taxpayers. There were only 194,000 new jobs in the private sector. Of those, 37,000 are in construction and only 11,000 are in manufacturing. The bulk of the new jobs – 144,000 – are in domestic services.
Wholesale and retail trade account for 20,000. Food services and drinking places (waitresses and bartenders) account for 38,000. Health care and social assistance account for 27,000. Professional and business services account for 29,000. Financial activities gained 13,000 jobs. Transportation and warehousing gained 8,000 jobs.
Very few of these jobs result in tradable services that can be exported or help to close the growing gap in the U.S. balance of trade.
The 11,000 new factory jobs and the 15,000 of the previous month are a relief from the usual loss. However, these gains are more than offset by the job cuts recently announced by General Motors and Ford.
Despite the gains, total hours worked declined, as the average workweek fell to 33.7 hours. The decline in the labor force participation rate, a consequence of the shrinkage in well-paying jobs, masks a higher rate of unemployment than the reported 5 percent. The ratio of employment to population fell again in November.
Average hourly earnings (up 3.2 percent over the last year) are not keeping up with the consumer price index (up 4.3 percent). Consequently, real incomes are falling.
This is not the picture of a healthy economy in which growth in high productivity, high value-added jobs fuels the growth in consumer demand and provides savings to finance Washington's red ink. What we are looking at is an economy that is coming unglued from the loss of jobs that provide ladders of upward mobility, and from massive trade and budget deficits that are resulting in unsustainable growth in indebtedness to foreigners.
The consumer price index measures inflation at 4.3 percent over the past year. Many people, experiencing household budgets severely impacted by fuel prices and grocery bills, find this figure unrealistically low. PNC Financial Services has a Christmas price index consisting of the gifts in the song, "The 12 Days of Christmas." The index reports that the cost of the collection of gifts has risen 6 percent since last Christmas. Some of the gifts have risen substantially in price. Gold rings are up 27.5 percent, and pear trees are up 15.4 percent. The cost of labor (drummers drumming, maids-a-milking) has remained the same.
Populations are hard-pressed when the prices of goods rise relative to the price of labor, because this makes it impossible for the population to maintain its standard of living.
The U.S. economy has been kept alive by low interest rates, which fueled a real estate boom. Consumers have kept growth alive by refinancing their home mortgages and spending the equity in their houses. Their indebtedness has risen.
Debt-fueled growth is qualitatively different from economic growth that results from an increase in high value-added jobs. Economists who look at the 3-plus percent economic growth rate and conclude that things are fine are fooling themselves and the public. When the real estate boom ends, what will be the source of new spending power?
(Yeah, I was afraid
this would catch on when the new
DVD came out . . .)
I was fortunate to have Dr. Graue as my student advisor. He took great interest in his students, even those who weren't shining stars (like myself, although I was a pretty good student, making Dean's List 2 out of 4 years). It was at his insistance and cajoling for 18 months that I changed my major from management to public accounting. Throughout my military and civilian career, my accounting degree has served me well (I've been a CPA for close to 15 years).
I have many fond memories of those Tuesday and Thursday micro- and macro-economics classes with Dr. Graue. You had to come to class fully prepared: classes ran from 7-9 AM, and each class had, at most, a half-dozen students. My experience with Dr. Graue is just another aspect of what made my four years at Gonzaga special.
Out of the 200+ universities that I was eligible to attend on a 4-year ROTC scholarship, I thank God that I chose Gonzaga. Not only was the college experience and education priceless, but the friendships made there endure to this day.
Born in Germany in 1895, Erwin Graue attended high school in Bremerhaven, Germany and emigrated to the United States in 1918. After finishing his bachelor’s degree in economics from Cornell University in 1923, he accepted a position as an industrial statistician in New York City, where he worked until 1925. While working in New York, he continued his studies at the New School of Social Research while collaborating with economists at the University of Chicago. Graue returned to Cornell to complete his doctorate in economics in 1928, and then began work as an assistant professor of economics in the School of Business at the University of Idaho. He married Mount Holyoke graduate Sarah Louise Baker in 1929.
Dr. Graue spent a year lecturing in economics at the University of Ankara, Turkey, as a Fulbright Fellow in 1951. From 1954 to 1965, he directed the Public Utilities Executives’ Course, conducted each summer at the University of Idaho. During his 37-year career at the University of Idaho, Graue received teaching honors and wrote numerous articles in several scholarly journals. Many of his students went on to hold top positions in businesses and corporations in Idaho and elsewhere. Graue specialized in economic statistics, business, and agricultural economics.
Upon his retirement from the University of Idaho in 1965, Graue accepted a teaching position in Gonzaga University’s economics department, where he taught until 1986. At both the University of Idaho and Gonzaga University, Graue earned a reputation as an outstanding teacher and faculty member. He continued to correspond with former students long after they left his classroom. Graue’s letters to his students serving in the armed forces during World War II offered them cheer and news of the University of Idaho, to which they eagerly responded. Erwin Graue died on April 21, 1994, at the age of ninety-nine.
While in the service, I also earned a Master's Degree in Management. Personally, I never saw it as that big a deal, just another challenge to conquer.
Maybe the reason all of you try to attack the writer rather than refute his article (or any part thereof) is because all of you are ignorant high-school dropouts, simply spouting a few economics buzz-words you heard from a talk show or movie.
OK, genius, what are your credentials? Your attitude is giving Idaho conservatives a bad name. Disagreeing with PC Roberts on economics is like disagreeing with Bill Parcells on football. I know they know more than I do about there professions, they know they know more than I do about there professions. So what? That's what I love about FreeRepublic--it's a great place for discussion and an exchange of ideas.
Based on what I've seen in the job market and in my industry in particular, I would make the case that any American who speaks proper English and is reasonably presentable to a prospective employer has to try very hard to be unemployed these days.
For the past 15 months, I've been the Controller for a staffing agency in Dallas. Your words ring true: I've seen us place a new candidate in a permanent position in as little as 2 hours. Although we focus more on the admin support positions, our clients are now coming to us for more difficult (executive) searches. I'm pushing to add a recruiter strictly for accounting (Controllers and CFOs) next year.
Nonsense, the service jobs he describes pay poorly. You would be lucky to even have health insurance offered. You would pay the entire premium yourself. I hope to God you are wrong because as a service oriented economy, the Amerixcan worker is toast.
Tell it to the automotive industry. Tell it to the aerospace (non-defense) industry. Tell it to machine tool industry.
Garbage.
thanks for the bio, very impressive.
There will be a ripple effect...when people lose good paying jobs, they will have to take service jobs which pay less and have few benefits. Such people will soon not be able to afford the home they have-much less consider buying a new home. Eventually, the government will not be able to hide the fact our economy is taking a huge hit via outsourcing and allowing illegals into this country.
The manufacturing cuts will occur. My husband works for GM. GM is building a factory in India and expanding the one in China. Ford will lay off American workers soon. Who knows where they will manufacture...it won't be in the US.
I have no patience for people who harken back to a brief period in our nation's history (the post-WW2 years from 1945-1960) and incessantly lament that "things were better back then" for one reason or another in economic terms, without recognizing that this period was not the norm in U.S. history -- it was an anomaly.
LOL, thanks. I had another one of those unforgettable moments on a thread during the Katrina aftermath a few months ago, and Freepers still remind me of it occasionally.
. . . our clients are now coming to us for more difficult (executive) searches.
I have a theory about this. Does your company have any ideas about why this is happening?
It is really very simple, who in there right mind would pay high US labor rates when they can pay low Chinesse/Indian/whatever labor rates? Who in there right mind would buy high priced American goods when they can buy cheap Chinesse/India/whatever goods? This is really all Paul Roberts is saying and he is entirely correct.
Frankly, ownership is clueless. It's because we have one recruiter who's been here 30 years, is #1 in the state of Texas, and has built quality relationships with clients.
I've played a small role by posting these leads, when they occur, on a finance/accounting network that I've been associated with over the past 18 months. It is limited to those who have earned annual comp of 6 figures.
When I go to the meetings, I often leave shaking my head: there is so much financial/accounting firepower that's unemployed, it's unreal. However, that's still the nature of my field, due to demographics: there's a major glut of 50+ accounting professionals in the marketplace.
What's your theory?
Bwahahahahahahahahha!
That's a good one. Got any other Fairy Tales for the peanut gallery such as:
All those dollars invested in foreign economies are busily creating huge middle classes in places like India and the Pacific Rim - gargantuan future markets for US-based services.
Have you ever stopped to think that these "gargantuan future markets" won't be filled by expensive US-based services, but by lesser priced local-based services? If a market is smart enough to become "middle-class", why would it be dumb enough to overpay for American "services"? No, I didn't think so.
Third World, here we come!
"I have no patience for people who harken back to a brief period in our nation's history (the post-WW2 years from 1945-1960) and incessantly lament that "things were better back then" for one reason or another in economic terms, without recognizing that this period was not the norm in U.S. history -- it was an anomaly."
But if we bomb everyone else's industrial facilities into rubble, those happy days can come right back!
.....for $27 an hour. Yeah - I can imagine it.
I think an ideal CEO/CFO-type has a broad background in a wide array of areas. These people are increasingly hard to find in an age when everything is so advanced that knowing minute details is almost a necessity.
The makers of windows, doors,.... etc, etc are all doing VERY well right now.
But are they selling product in the PRC?
Spot-on. HR types lay out very specialized requirements, and given today's glut of senior financial professionals, it's a buyer's market. Within our network, the rule is: don't send your resume unless you can meet at least 90% of the requirements. It has nothing to do with their ability to do the job.
I think an ideal CEO/CFO-type has a broad background in a wide array of areas.
You're obviously not in HR, you make too much sense. In today's market, "jack-of-all-trades" guys like me are in little or no demand.
Having recently received a raise that gets me closer to market (I'm still about 15-20% away), my resolution for 2006 is to focus on improving my area of operations, i.e. just worry about myself. Although I had a productive year in improving operations (and the bottom line), it left me with a few too many ends to tie up.
There's other areas to tackle, most specifically convincing ownership to trade in their antiquated, top-heavy 401k for a Simple 401K that will benefit the employees, and allow ownership to sock more of their money away. I know, GOOD LUCK!!! LOL!
Don't know, but there's a lot of sales activity at Home Depot/Lowes. While we were repainting our house earlier this year, I took my teenage son with me on a couple of my many trips to Home Depot.
It was a great Econ 101 lesson for him: seeing the customers from our tiny area, buying different home improvement products manufactured by a variety of companies. I tried to "paint" a picture as to how our economy works...at least he appeared interested during the time we were selecting our paint and supplies.
BS Business, minor economics, MS Management, over 44 years in military and civilian business. Owned and flipped small business after retirement. And what else do you want to know?
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