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.
Bump!
In the last five years we've had between seven and ten trauma centers and or hospitals close here in the Los Angeles area. It's come close to compromising the trauma network set up in this region.
If your area is doing well, that's great. I can only address what's taking place in my own area.
What I see next is states taking on providing healthcare to everyone who doesn't have it. As that emerges, I expect to see employers stop providing that type of coverage for employees. What we'll wind up with in ten years is a government provided healthcare system that simply won't work.
I'm not sure if you sit on any committees in your hospital. I used to in the hospital I worked for. It was rather interesting some of the discussions that took place, trying to find ways to cover providing healthcare to those who didn't pay, basically at the expense of those who did.
And let's not forget Portugal.
Not a durn thing is stopping you from buying foreign stocks on the stock market.
Maybe you're rich enough to buy foreign stocks on the stock market, but most people aren't.
Alas, Willie has angered the Viking Kitties....
http://www.freerepublic.com/~williegreen/
Well, I did manage to get one response here - such as it is. Not surprisingly, it doesn't make much sense.
"Maybe you're rich enough to buy foreign stocks on the stock market, but most people aren't."
So, you are telling me no retirement fund, pension, employer or anyone you know is smart enough to buy shares of Toyota or Brisish Petroleum? You must live around pretty stupid people. And I guess you can't even spare $500 bucks to do so yourself, guess you have no retirement planned? Wow, what a sad life you lead, pickin cotton down on the plantation.
"And I guess you can't even spare $500 bucks to do so yourself, guess you have no retirement planned? Wow, what a sad life you lead, pickin cotton down on the plantation."
I just love a cocky know-it-all, who thinks he's a Wall Street type, Mr. Big Bucks. And I can instantly tell you are a male oozing your macho. Actually, I am retired, living on a fixed income like so many other older Americans, although I was able to retire at 58. So, no pickin cotton down on the plantation for me. Been there, done that.
It's a beautiful day, I don't have to go to work, I'm sipping my coffee while looking out at the trees that are now blossoming forth, and am enjoying life, even without running out to buy foreign stocks on the market. Plus, being retired, I don't have to drive much, so the gas prices aren't impacting me 1/10th as much as they are undoubtedly affecting you. I do have some bank stocks however. Good enough for you? So, you just keep scurrying you *ss off at work, earning that money to buy your foreign stocks, and I'll sit here freeping, and doing as I please today, tomorrow, and the next day. Enjoy your fast life, Mr. Coyote.
I suppose anything could happen. You could get hit by a bus on your way home tonight.
"And I can instantly tell you are a male oozing your macho. "
I'm not oozing anything but me. You probably just aren't used to talking to men since you've probably made the ones around you castratos. If you are retired and aren't lame, you are simply a parasite, so why say anything about economic matters at all.
"I'm not oozing anything but me."
But, you see, that's the problem.
It's not wise to tempt the gods with such hubris, my friend.
Reading all posts with interest.
When? What happened?
He was posting as late as the end of last month but that's all I could get from the search engines. Can't review his posting history given his account status.
Guess being gloomy about the economy isn't healthy for your posting status! ;-)
OK, I found the info. I enterered the following on Google:
"Willie Green" banned
I see.
Sigh, I'll miss pinging him to monorail threads...
:-)
Hmmm... I wonder if a policy like that would work here? You can have access to our markets provided you set up some of the manufacturing here in this country.
It's convenient for Mogambo to be able to claim inflation is 20% in his example without having to back it up. Maybe you can share with us exactly what numbers the government is misrepresenting - is it GDP, CPI, employment or all three - and then show us what the government numbers are and how they compare to what the real numbers are. Pulling a number out of the air, for the purpose of an example, is much easier than having to prove it in real life.
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