This is a ch__ch. What's missing?
Posted on 04/23/2006 2:44:37 PM PDT by Dialup Llama
Is your job safe? Not if it can be done abroad. The only safe jobs are in domestic services that require a "hands-on" presence, such as barbers, hospital orderlies, and waitresses.
For a number of years the Bureau of Labor Statistics’ monthly payroll jobs reports have been sending US policymakers dire warnings, only to be ignored. The March report repeats the message. Ninety-five percent of the new jobs created are in domestic services. The US economy no longer creates jobs in export or export-competitive sectors.
Wholesale and retail trade, waitresses and bartenders account for 46% of the new jobs. Education and health services, administrative and waste services, and financial activities account for another 46%.
This has been the profile of US employment growth for a number of years, along with some construction jobs filled by legal and illegal immigrants. It is the job profile of a third world economy.
From January 2001 to January 2006 the US economy lost 2.9 million manufacturing jobs. The promised replacement jobs—"new economy" high-tech knowledge jobs—have failed to materialize.
High-tech knowledge jobs are also being outsourced abroad. According to the Bureau of Labor Statistics, US employment of engineers and architects declined by 189,940 between November 2000 and November 2004 (latest data available). Economist Alan Blinder estimates that as many as 56 million American jobs are susceptible to offshore outsourcing. That would be about half of the US work force.
Offshoring has contributed to the explosion of the US trade/current account deficit over the past decade to $800 billion annually and rising. The US has a trade deficit in manufactured products, including advanced technology products, of more than a half trillion dollars annually, a sum far larger than the oil import bill.
To cover the trade deficit, the US has to turn over to foreigners ownership of its accumulated wealth. This worsens the current account deficit as the income streams on the US based assets now accrue to foreigners.
Many economists pretend that the whopping US trade/current account deficit is evidence that the rest of the world has great confidence in America. They pretend that it is foreign investment in the US that causes the trade deficit, whereas the simple fact is that it is the US trade deficit that gives foreigners the dollars with which to purchase our existing assets.
Traditionally, a trade deficit might indicate that a country’s industries were not competitive against imports from abroad, resulting in a decline in the exchange value of the country’s currency. This would make foreign goods more expensive for that country and its goods cheaper for foreigners, thus restoring a balance.
This does not work for the US for three reasons:
(1) The US dollar is the world’s reserve currency. The dollar can be used to settle all international accounts. Therefore, there is a world demand for dollars. This demand absorbs what would be an excess supply for any other country running such large deficits.
(2) China pegs its currency to the dollar, thus preventing an adjustment in the price of the two countries goods and services. Other countries, such as Japan, intervene in currency markets by purchasing dollars in order to support the dollar and prevent their currencies from rising in dollar value.
(3) Offshoring turns US production into imports. Much of the US trade deficit results from offshoring, not from traditional trade competition. The collapse of world socialism and the advent of the high speed Internet made cheap foreign labor available to US companies. US firms use foreign labor to produce offshore the goods and services that they market to Americans. For example, more than half of the large US trade deficit with China is comprised of goods and services produced by US companies in China for American markets.
How can the US reduce its trade deficit when it deprives itself of exports and fills itself with imports by offshoring its production of goods and services, and when the devaluation of the dollar is limited by the dollar’s reserve role and by other countries pegging their currency to the dollar or by intervening to support the dollar? Obviously, when balance returns to US trade, it will not come through traditional means.
One way balance can return is by the US oversupplying the world with dollars to the point at which the dollar is abandoned as the reserve currency.
Another way is through the limit placed on Americans’ ability to consume that results from replacing manufacturing and engineering jobs with waitress, bartender and hospital orderly jobs. A country that loses high value-added jobs and gains low value-added jobs is in danger of losing its prosperity. Offshoring raises corporate profits in the short-run at the expense of destroying the domestic consumer market in the long-run.
Most economists are confused about offshoring. They mistakenly think offshoring is an example of free trade bringing mutual benefit through the principle of comparative advantage. It is not. Offshoring is an example of companies obtaining absolute advantage by combining high-tech capital with low-cost labor. The gains from absolute advantage are asymmetrical or one-sided. The cheap labor country gains, and the expensive labor country loses.
As Morgan Stanley economist Stephen Roach pointed out on April 7, "average hourly compensation of Chinese manufacturing workers is only 3-4% of levels in the US, 10% of the pay rate of Asia’s newly industrialized economies, and 25% of levels in Mexico and Brazil." Roach also notes that with a rural population of 745 million (about two and one-half times the total US population) and headcount reductions of more than 60 million workers from state-owned enterprises, China will not experience a labor shortage any time soon.
This means that it will be a long time before Chinese wages rise enough to offset the benefits of offshoring. The same can be said about India. Consequently, a large percentage of US jobs is vulnerable to being moved abroad.
LOL! You only think you do. If you can somehow independently create your own wealth without any interaction with other humans then what you say is possible. But with what will you decorate your cave?
This is a ch__ch. What's missing?
Glad for your son...
Where is your company? ;-)
Cheers!
Free trade bump!
Maybe in dollar value but adjust the previous years to today's dollar value and see where it is.
bump for later
I realize this is anecdotal, but if you have or can obtain skills in one of these areas, you shouldn't worry about employment security.
I don't know why people insist on posting this crap from Paul Craig Roberts. His points have been debunked here on FreeRepublic so many times, I'd be embarrassed for him if I knew him personally.
Actually, people working in those jobs today have a higher standard of living than those who worked in those jobs in the past. The only thing that has changed is the definition of what constitutes "the middle class" in the minds of most people these days.
Every hear about the fall of Rome, the sack of Carthage, the decline of Greece? Or how about something more recent, Spain.
Orders for new U.S.-made durable goods increased 6.1% in March, led by strong demand for airplanes, machinery and electronics, the Commerce Department said Wednesday. The increase in new orders was the largest since May 2005 and far exceeded the 2.1% gain expected by economists. The big story in March was continued strength in orders for civilian aircraft, which increased 71% in March after a 60% gain in February. Excluding the 14% rise in transportation goods, new orders rose 2.8% in March, the biggest gain since August. Orders for core capital equipment goods - the best indication of business investment plans - increased 3% in March.
Thank you, A. Pole!
It may seem that way, but the "long-term decline in manufacturing employment" is one of the most misleading statistics that is thrown around these days.
I know a person who spent a lot of time becoming a tool and die person. Today he finds himself working with a lot of people without much of an education who up until a few years ago lived in a nation to the south. His position seems safe, but a lot of people around him have been axed.
As for engineers, I question the advisability of getting an engineering degree these days. What's the point if you are going to have to compete with Chinese and Indian wages?
Look, I'll be the first one to say that perhaps I'm all wet with that last thought, but with offshoring and the like, I'm not convinced engineering is a job of the future, at least in the U.S. I should tweak that a little. I'm not sure it's a job of the future if you were born and raised in the U.S. If you're holding an H1-B, it probably is.
I don't think you can offshore every engineering job. These people have to be on-site in many, if not most cases. My b-i-l is an environmental engineer for a major pharm company. His job is a lock. He has to inspect physical plant, etc and run tests on-site. You can't do that from India
Jim should rate this place "XXX" so young people will be kept from reading your posts.
DO, for as long as I've known you here, you've been nothing but doom-and-gloom.
I'd hate to be your dog.
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