Posted on 04/08/2005 11:00:44 AM PDT by churchillbuff
In March, the U.S. economy created a paltry 111,000 private sector jobs, half the expected amount. Following a well-established pattern, U.S. job growth was concentrated in domestic services: waitresses and bartenders, construction, administrative and waste services, and health care and social assistance.
In the 21st century, the U.S. economy has ceased to create jobs in knowledge industries or information technology (IT). It has been a long time since any jobs were created in export and import-competitive sectors.
The Bureau of Labor Statistics forecasts no change in the new pattern of U.S. payroll job growth. Outsourcing and offshore production have reduced the need for American engineers, scientists, designers, accountants, stock analysts and other professional skills. A college degree is no longer a ticket to upward mobility for Americans.
Nandan Nilekani is CEO of Infosys, an Indian software development firm. In a Feb. 18 interview with New Scientist, he noted that outsourcing is causing American students to "stop studying technical subjects. They are already becoming wary of going into a field which will be 'Bangalored' tomorrow."
Bangalore is India's Silicon Valley. A 21st century creation of outsourcing, Bangalore is a new R&D home for Hewlett-Packard, GE, Google, Cisco, Intel, Sun Microsystems, Motorola and Microsoft. The New Scientist reports: "The concentration of high-tech companies in the city is unparalleled almost anywhere in the world. At last count, Bangalore had more than 150,000 software engineers."
Meanwhile, American software engineers go begging for employment, with several hundred thousand unemployed. I know engineers in their 30s with excellent experience who have been out of work since their jobs were outsourced four or five years ago. One is moving to Thailand to take a job in an outsourcing operation at $875 a month.
A country that permits its manufacturing and its technical and scientific professions to wither away is a country on a path to the Third World. The mark of a Third World country is a labor force employed in domestic services.
Many Americans and almost every economist and policymaker do not see the peril. They confuse outsourcing with free trade, and they have been taught that free trade is always beneficial.
Outsourcing is labor arbitrage. Cheaper foreign labor is being substituted for more expensive First World labor. Higher productivity no longer protects the wages and salaries of First World employees from cheap foreign labor. Political change in Asia has made it easy to move First World capital and technology to cheap labor, and the Internet has made it easy to move cheap labor to First World capital and technology. When working with First World capital and technology, foreign labor is just as productive -- and a lot cheaper.
This is a new development. It is not a development covered by the case for free trade.
Outsourcing's apologists claim that it will create new jobs for Americans, but there is no sign of these jobs in the payroll jobs data. Moreover, it doesn't require much thought to see that the same incentive to outsource would apply to any such new jobs. By definition, outsourcing is the substitution of foreign labor for domestic labor. It is impossible for a process that replaces domestic employees with foreigners to create jobs for domestic labor.
Now biotech and pharmaceutical jobs and innovation itself are being moved offshore. The Boston Globe reports that Indian chemists with Ph.D. degrees work for one-fifth the pay of U.S. chemists. American chemists cannot give up 80 percent of their pay to meet the competition and still pay their bills. Rising interest rates will make it difficult enough for Americans to make their mortgage payments, and the dollar's declining exchange value will raise the prices of the goods and services that have been moved offshore.
Americans are unaware of the difficult adjustments that are coming their way. By the time Americans catch on to outsourcing, its proponents will have changed its name to "strategic sourcing" or "partnering."
Corporations, economists and politician have written off American labor. No end of the job drought is in sight.
Yup, stick to the talking points and ignore what you see.
Tell me, how many high-end manufacturing jobs are in your area? Chip fabrication, chip testing, etc.
Unless you're living in Taiwan, I'm figuring 0.
Well, Intel, Sitix, Motorola, On Semiconductor...
Tax breaks on companies that keep US workers would be the best method.
"My guess is that you have not actually spent much time in the Third World."
Have you?
Why not just reduce taxes on all companies?
You've got to look at more then just the figure. You've got to look at what jobs and what income brackets are growing.
Here's another fact: the fastest growing enterprises in America are Dollar Stores, Dollar Trees, etc. This is because they even sell cheaper then Walmart. But why are they growing so quickly? Because it is a fact that the fastest growing income bracket (their prime bread and butter) is the $25,000 and below bracket.
Our salaries are moving down to meet the upward moving third world salaries, but our cost of living is only rising.
I was at the supermarket last night. Overheard a guy say - - "They want that much for graham crackers? I'm going to the dollar store"
Everyone I know in the programming field is in high demand right now. No one who wants a job doesn't have one.
Yes I have. And I can assure you that whatever economic problems we think we have, the United States looks like paradise compared with some of the poorer countries in this hemisphere.
WTF are you talking about. I've been paying attention the the economy for 30-years and I always looked at growth, unemployment rate, and inflation. Them ain't talking points. Besides I am doing quite well, as are most people I know.
My experience differs from yours.
You ought to visit DU. They are all out of work programmers and IT guys who are brilliant in their field, and now only have job offers from McDonalds.
That's my experience.
It would nice to know the degree to which each factor impacts in inflation. I will need to keep my eyes open about these matters.
Well sure. If I find out a person is a liberal, I won't hire him (or ESPECIALLY her).
Liberals are always out of work. Who needs the lazy lawsuit-happy eco-weenie harassment-imagining deadwood?
I said heading that way, not there yet.
"Besides I am doing quite well, as are most people I know"
Thats the funny thing, the liberal tards in my neighborhood will harp on the bad economy argument, but if they open their eyes, they'll notice that EVERYONE has a job, a good job, and some wives stay home!!! But its a DEPRESSION!!!
when the unemployment rate is at 5%, you can't and don't want to create a lot of jobs. It just drives up inflation.
Maybe those Gore-Lieberman stickers on their briefcase doesn't help in interviews.
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