Why the disconnect between Americans' anxiety about jobs and all the positive news about the economy?
PCR answers this puzzle:
1. Good jobs are being lost but the new jobs are low pay ones with no benefits.
2. The monthly happy talk about employment is NOT backed up by actual counts of jobs from the BLS. The jobs aren't there.
3. Even in a moderately recovering field like IT, the total employment count has not recovered completely. Its just the IT employment has stopped falling like a rock. But those soft number actually include H1Bs! So that the picture for a US resident seeking IT employment is not a bright as the stats would have you think.
Here's a fun fact about labor stats. When a foreign programmer takes a job from a legal US resident under the H1B program, that job is actually added to the total of US IT employment measured in the gov't stats!
Funny, I just got a better paying job in IT few weeks ago..
The head of Lockheed Martin just wrote an editorial in the Wall Street Journal indicating that LM needs 14,000 engineers a year for the next 10 years just to replace those who are retiring -- and that is 22% of the total graduating class for engineers in this country.
A LOT of homeland security-type jobs cannot be outsourced because of security issues. Virginia has a lot of these jobs, our NoVa unemployment is like 0.8%, and you can't find american hi-tech workers available without paying thousands of dollars (My employer offers I think $3,000 for each person I find who takes a job).
1. Rubbish (this has been the economic populists cry since the 1980s, garbage them garbage now). It also makes no sense that only low wages jobs, the vasry jobs that foreigners can so easily do, are being created
2. Rubbish (the monthly job counts COMES from the BLS)
3. And it wont. IT was in a bubble, why should it recover if it was unrealistic to begin with?
"Even in a moderately recovering field like IT, the total employment count has not recovered completely. Its just the IT employment has stopped falling like a rock."
The real reason IT jobs fell like a rock is you don't need as many IT people to do the same work. Hardware is hugely faster and requires less replacement. Software like Office has peaked (Office 2000 is jim dandy, Vista brings no productivity improvement, a server can use Linux).
It's more complicated than just looking at jobs, gotta look at productivity too.
There are two jobs figures.
One asks established companies if they are hiring or firing. It is best at finding union losses, or problems with large "dinosaur" companies.
The other does a survey of households. This finds new start ups, small business growth.
The unemployment rate is 4.7 percent. That means that anyone who wants a job, can get one. Anyone with a job, that is not paid at market rates, can get a better one.
What do employers do when they need more work done, and can't hire people? Either you hire illegals (with the security problems associated with that) you invest in capital improvements (that makes your exisiting workers more efficient) or you move what work you can offshore.
Japan doesn't care for illegal aliens, so they have many many robots. Problem: that isn't very flexible. When the market changes, you are stuck paying off your loan on machinery. That accentuates the normal business cycle into a boom-panic cycle.
The US hires many illegal aliens. I don't like that, because I see it as a security vulnerability. A lot of US companies also work with foreign companies in India and China. WalMart in particular buys lots of stuff from China. Apple for years built their computers in Singapore.
Each has difficulties. There is a lot of work that has to be done. The US GDP is very very large. So long at US productivity is high, US living standards will be high. I don't mind it when other democratic nations such as India increase their productivity. I get concerned when China, which is not democratic, increases productivity, but eventually it will be hard for the Chinese gerontology to order a war against their customers or suppliers. The more that China is integrated into the world economy, the more the "communist" theory will become irrelevant.