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.
Then they need to get a new job in a new field.
So you don't think we need any hospital employees in this nation any longer. Well, that's an interesting take.
well obviously we have too many if people in the field arent getting raises
Where are those people coming from?
It's not more people spending; it's people spending more -- their retirement savings, for example.
It will take war with China or Russia (another cheap source for lots of competent engineers) for us to see the problem.
One only has to look at the educational structure of Russia and China. The only thing that the Commies do right was/is teach their children math and science. Most Russian kids could easily beat ours in a math or science competetion.
That's terrific, more power to you. Save as much as you can... I was earning more than I had ever made in my life up till September, then the company I worked for let me go, after 8 years, with a severence package of "we'll pay you till the end of the day." I know they lost a client over that, since I was working on a project, and they never sent anyone to replace me. It took me nearly 4 months to find another job, and I'm now working for what I made nearly 10 years ago, a 40% pay cut.
While I had put away alot of money into my retirement funds, I now wish that I had saved a lot more than I had. When you're making alot of money, saving 15% in the company's 401K seems like plenty, but I could have saved more, and I should have.
Mark
Unions would have entirely lost their clout were it not for the public employee unions.
i save 15% and the company matches another 5%
You're not a recruiter of illegal immigrants, are you? (-;}
Good catch. No one ever accused protectionists like PCR of being consistent. It's unfortunate that Paul's rant didn't include the spurious claim that compensation for workers is falling. Had he done so, he might have had to explain how it is that the demand for waiters and waitresses is so strong, along with financial services, if no one's incomes are increasing.
Not exactly true. In the auto manufacturing business, stampings, production and assembly are all done stateside where the jobs are located. Contrary to all the media lies, there is no financial gain to import auto parts from other countries due to the logistical and shipping costs involved.
If these jobs are being sent abroad then it is to broaden the scope of sales in foreign countries. Case in point being Canada where due to our trade treaty with them, US cars sold in Canada must be made in Canada.
Another case in point being Honduras where Toyota stepped in to help build their infrastructure after the devastation caused by Hurricane Mitch. They poured millions upon millions of dollars to help rebuild the roads and bridges that had been destroyed. Now the only vehicles (well not really ALL the vehicles but you get my point) you see are Toyotas.
The Lamestream media loves to accentuate the declining sales of US auto manufacturers claiming a bad economy but the reality is that foreign automakers are boosting our economy by building new plants in corporate friendly states. Here in Michigan we are suffering and jobs are indeed being lost but for every job lost, there are at least 2 more being created in an area of this country that will not tolerate unions.........
Great, yet another thread illustrating economic illiteracy
If you've worked the register in the wholesale and retail sector, you're probably aware that the wages aren't what you can support a family on. Some middle to top level managers can make a decent income, but that's not a majority of the positions. As for waitresses, again you can find a nice restaurant where you can make a decent living, but that's not the majority of restaurants. Do most waitresses get a healthcare package? Do they get paid vacations? Do they have a dental or vision plan? In most instances no.
I can't state for certain how many, but In Los Angeles they are adding tens of thousands of new classrooms. Each one of them are going to be manned (or womaned) by teachers. Each of them will be a government employee with a decent salary and great benefits. Who's paying for that? Who is paying for the principals, the janitors, the on site nursing staff, the counselors and psychologists? What percentage of those jobs are being driven by the need to educate the children of foreign nationals?
A few years back, Kansas City had more government employees that private sector employees. I'd wager that if we knew how many cities were in the same position, it would probably answer some of your questions.
Then I'm sure you have an alternative and reliable source to show us what our real job growth is, given our $12 trillion economy is growing between 3-4% a year (that is, of course, unless you believe the GDP numbers are also massaged LOL) and can also show us what the real rate of inflation is and why the bond market is missing your higher figures. Then you could also explain how it is our real per-captia consumption has more than doubled in the past 30 years while our household net worth has more than doubled, since just 1994, if jobs, income and GDP are not growing, and we are losing all our purchasing power to inflation.
If you're in the 25% tax bracket and you make $70K, your 15% contribution is $10,500. Plus your company matches $3500. Total contribution is $14,000
Since you don't pay taxes on the $10,500, you're really only out of pocket $7825.
So $7825 nets you $14,000 just to start.
I put in every penny I can.
Staffs have been cut, wages have been frozen, hospitals are closing their emergency rooms, trauma centers and entire facilities. Despite this your brilliant comeback is that there is a glut of labor.
There are a number of problems but I'll mention only two. Indigent care for tens of millions of individuals and hundreds of billions of dollars sapped off the healthcare industry by insurance middle-men.
It's not really an over abundance of healthcare workers. If you knew anything about this field, you would know that there is a nursing, pharmacist and tech shortage at present. Positions go unfilled for months and there are even bidding situations.
Too many workers... LMAO
Yeah, given the howls and demands for goobermint to "do something" about the price of gas or even ATM fees can you imagine the noise if people couldn't get their $39 DVD players?
But this hue and cry was all so predictable. The one hard and fast rule of job growth under any republican president is that they're simply "burger flipping jobs". Those of us who paid attention during Regan could see this one coming a mile away.
We just didn't expect so much of to be coming from the "right". But then in the last couple of years the economic knowledge of the "right" has been on a par with the rats, all slobering at the mouth for goobermint to do something. Heck, you read any thread on FR about imports from China and half the comments look like Schumer's proposed legislation.
Go figure.
Been saying for a long time that the value of the new jobs created will not support American when the downturn comes and come it will as all economies cycle through downturns.
Do you see people starving on the streets or losing their homes yet?
There's just no meat to this article!
Yes, I have worked in the retail sector - bagging groceries, shagging carriages and ringing up sales. And yes, I am aware that the wages paid for those jobs are not what I could support a family on. But I was 16-17 years old and didn't have a family to support! All I wanted at the time was money to take girls to the movies and such and maybe buy a used car to drive them around in. There were no fellow baggers trying to support a family and that was back in 1978! It's always been the case that you couldn't support a family in that type of job be it 2006, 1978 or 1955. If you had a family to support, you learned some skills and got a real job.
But I think you missed the point of my post. If all these jobs are being created in retail, waiting tables and bartending, then it implies that there are a lot more people out there who can suddenly afford to buy more consumer products, go out to eat in restaurants and go club-hopping.
It stands to reason that if our economy is going down the crapper, that they would actually be laying these people off because people just wouldn't have the money to go shopping, dine out and hang out at the bar afterwards.
So I take the rapid growth in the services industry as a sign that the economy is very robust.
The old we're drowing in debt argument. This will be a hard line for you to prove in light of the incredible increases in family net worth (family assest minus debt) in the country. The Fed actually tracks that information. You can find it here - Page 110 of 124
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