Let me see ... Google.com ... images ... outsourcing ... Here you are!
Posted on 02/26/2004 3:09:59 PM PST by A. Pole
Since January 2001, a three-year period during which the economy has experienced one year of recession and two years of recovery, the U.S. economy has lost 2.6 percent of its private-sector jobs. These losses are not evenly distributed. Construction employment has declined by only 0.1 percent, and employment in oil and gas extraction by 0.7 percent.
Employment declines in manufacturing and knowledge jobs, however, have been dramatic.
Tables prepared by Charles McMillion of MBG Information Services from government data show employment in primary metals down 24 percent; machinery 21.6 percent; computer and peripheral equipment 28 percent; communications equipment 38.8 percent; semiconductors and electronic components 37 percent; electrical equipment and appliances 22.8 percent; textile mills 34.1 percent; apparel 37.3 percent; chemicals 8.3 percent; plastics and rubber products 13.8 percent; Internet publishing and broadcast 40 percent; telecommunications 19.4 percent; ISPs, search portals, data processing 22.6 percent; securities, commodity, investments 6.8 percent; computer systems design and related 17 percent.
Where has employment grown? Private service sector jobs have declined by 0.1 percent. Growth in state education jobs and local government jobs has boosted overall service employment by 0.6 percent.
During the past 12 months, the second year of economic recovery, the U.S. economy eked out 57,000 net new jobs in nontradable low-pay services, leaving the economy millions of jobs short of normal performance.
This is not a picture of an economy that is doing well. Low income jobs in nontradable services are the only sources of employment, while high value-added jobs that pay good incomes continue to disappear.
This job record is not one of a powerful U.S. economy dominating world markets and building consumer incomes for sustained recovery. It is not a record that promises jobs for university graduates. It is not a record that promises a future.
Economists have apologies, but no real explanations, for the loss of jobs in tradable goods and services. They are careful not to blame outsourcing of manufacturing and service jobs, which they claim creates as many new jobs as it loses.
Outsourcing platforms, especially the knowledge jobs platforms in India, are commissioning U.S. think tanks and consultants to do "independent" studies that prove "outsourcing is good for the U.S." Certainly, the people who are benefiting from outsourcing want us to think it is good for us.
For years as U.S. multinationals moved manufacturing offshore, Americans were told that their future was in "knowledge jobs." Today, knowledge jobs are being moved offshore more rapidly than manufacturing jobs were.
What are the unemployed computer engineers and information technology workers supposed to retrain for? What high value-added job can't be outsourced? Only those in the nontradable sector, such as dentists and surgeons. If everyone becomes a dentist or a surgeon, those incomes will be driven down.
Many young engineering graduates have discovered that they invested in acquiring skills for which there are no jobs and are headed to law schools in an effort to retrieve their future. I know young software engineers who are substitute teachers in middle schools, and others who are trying to organize rock bands to play the club and bar circuits.
They have no idea what to retrain for, and neither do the economists who tell them retraining is the answer.
What is happening is easy to discern from the daily announcements of the multinationals themselves. Cheap foreign labor is being substituted for U.S. labor over a wide range of goods and services produced for U.S. markets. Americans are losing the incomes associated with the production of the goods and services that they consume. Because of extraordinary differences in domestic prices and living standards, foreign labor can offer its services to U.S. capital and technology for far lower wages than can Americans. Capitalists maximize profits, not employment in their home countries.
This is a new development. Until the collapse of world socialism and the rise of the Internet, first world capital stayed in the first world, and offshore production was not the motive of foreign investment. As offshore production takes hold and spreads, the United States will lose more high value-added jobs.
A rise in Asian currency values could dampen and eventually end the exodus of jobs from America. The question is: How long does the exodus last before there is a new equilibrium?
In an important new work in trade theory (Global Trade and Conflicting National Interests, MIT Press, 2000), Ralph E. Gomory and William J. Baumol show that it very much matters which industries and occupations countries retain. They explode the free trade assumption that free trade always produces mutual gains. Gomory and Baumol show that in many cases, perhaps a majority, gains for countries come at the expense of other countries. The authors explain why the "man in the street," so derided by economists, is right in his understanding that free trade produces winners and losers.
University of Maryland economist Herman Daly has been making this point for 15 years and Senator Charles Schumer and I more recently. Now, Gomory and Baumol have provided powerful demonstration that trade has winners and losers. Right now, the United States is losing.
Send him my way. Like I said, BOOMING.
You seem content to just complain. Have at it.
Employment is a polite euphemism for slavery. You will never experience freedom [and you sure as heck will never make the big bucks] until you become your own boss.
Yeah, times are tough, especially if you're a CompSci/EE/ChemE major with mediocre grades, who now finds himself in competition with the various Curries and Thai Peppers of the world, all of whom will work for 1/10th the salary you'll work for. But if this little tech-sphere depression spurs the move of techies away from employment slavery and towards entrepreneurial freedom, it could be the best thing that ever happened to us.
Some people get ahead by working their a$$es off, learning as they go, calling in sick when they are ACTUALLY sick, steering clear of office politics, and by figuring out how to get what they want rather than whining about what they don't have. Don't need a degree for that.
High taxes, EEOC, Workers Comp., The Enviromental BS, OSHA, Litigation, Unions, Medical costs, Government intervention, Affirmative Action, Local intervention, high energy costs, on and on and on.
I would only change one thing: they go to the office when they are actually sick. Otherwise, spot on.
A. Pole. Where is a good single source to view the "people benefiting from outsourcing?"
Tnx . .
The point is that when experienced professionals or skilled manufacturing workers switch to the minimum wage jobs or drop out from the job market, it is not good. Even if the unemployment rate is low.
There might be drop in pay in some professions, like engineering, but overall real hourly earnings rose 1.5 percent last year for Americans in general. In fact real earnings have risen over the last three years.
And consumer spending also grew between 4 percent and 5 percent last year.
Let me see ... Google.com ... images ... outsourcing ... Here you are!
You know what they say, "A bitching Freeper is a happy Freeper"
I've had to take pay cuts and go to entry level jobs while switching careers, more than once. That's life.
The fact remains that hourly earnings have been increasing (not decreasing) for Americans in general for the past 3 years.
You are correct. Care to tell me what the increase in productivity was?
Try at least double what earnings were.
I think it's bitchin'. ;)
:~)
Unemployment measures the number of people who search for work and do not have it. People who accept lower paying. less skilled jobs are employed. People who gave up (retire early, move in with relatives, live on odd jobs and savings, etc ...) are not counted.
You can have prosperous, stable, ascending society with relatively high unemployment and you can have poor, troubled one with full employment.
They've changed the way they figure employment. Comparing figures is no longer a meaningful way to determine anything.
True. Employers have been squeezing more production out of fewer workers. But increased productivity is the driving force behind higher living standards.
And as long as unemployment is going down (5.6% is low) and hourly wages are going up, the big picture looks good.
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