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JOB DROUGHT CONTINUES (Paul Craig Roberts; he's wrong, right? The US isn't losing steam, is it?)
Creators ^ | Ap 6 05 | Paul Craig Roberts

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.


TOPICS: Business/Economy; Constitution/Conservatism; Editorial; Government
KEYWORDS: chamberlainbuff; despair; doom; economy; globalism; grapesofwrath; greed; jobs; neville; paulcraigroberts; sackclothandashes; waaaah; wearedoomed; webescrewd
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To: jello_biafra

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...


41 posted on 04/08/2005 11:27:23 AM PDT by kaktuskid
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To: KevinDavis

Tax breaks on companies that keep US workers would be the best method.


42 posted on 04/08/2005 11:27:45 AM PDT by G32
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To: Logophile

"My guess is that you have not actually spent much time in the Third World."

Have you?


43 posted on 04/08/2005 11:28:43 AM PDT by G32
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To: G32
Tax breaks on companies that keep US workers would be the best method.

Why not just reduce taxes on all companies?

44 posted on 04/08/2005 11:29:25 AM PDT by Logophile
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To: ClearCase_guy; churchillbuff
Fact, the Soviet Union had a real unemployment rate of 1.5%
Fact: it was a dismal failure economically.

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.

45 posted on 04/08/2005 11:29:57 AM PDT by jb6 (Truth == Christ)
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To: jb6
Here's another fact: the fastest growing enterprises in America are Dollar Stores, Dollar Trees, etc.""""

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"

46 posted on 04/08/2005 11:31:00 AM PDT by churchillbuff
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To: churchillbuff

Everyone I know in the programming field is in high demand right now. No one who wants a job doesn't have one.


47 posted on 04/08/2005 11:32:14 AM PDT by Lazamataz (Cleverly Arranging 1's And 0's Since 11110111011...)
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Comment #48 Removed by Moderator

To: G32
Have you?

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.

49 posted on 04/08/2005 11:32:42 AM PDT by Logophile
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To: jello_biafra
Yup, stick to the talking points and ignore what you see.

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.

50 posted on 04/08/2005 11:32:46 AM PDT by Always Right
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To: dfwgator
Not outsourcing necessarily, but just look around the IT departments at most US corporations in US-based offices. Let's just say that native US citizens are definately a minority.

My experience differs from yours.

51 posted on 04/08/2005 11:34:16 AM PDT by Lazamataz (Cleverly Arranging 1's And 0's Since 11110111011...)
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To: Lazamataz
Everyone I know in the programming field is in high demand right now. No one who wants a job doesn't have one.

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.

52 posted on 04/08/2005 11:34:42 AM PDT by Always Right
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To: Pondman88
I know an IT guy, whose company outsourced some stuff to India. Well after the Indians screwed up the contract, took them twice as long to perform with triple the workers and the time zone diffrence, the company moved the work back herer.

That's my experience.

53 posted on 04/08/2005 11:35:34 AM PDT by Lazamataz (Cleverly Arranging 1's And 0's Since 11110111011...)
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To: liberty2004

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.


54 posted on 04/08/2005 11:35:48 AM PDT by Montfort (The Democrat Party -- The Party of Death)
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To: Always Right
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.

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?

55 posted on 04/08/2005 11:37:03 AM PDT by Lazamataz (Cleverly Arranging 1's And 0's Since 11110111011...)
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To: Logophile

I said heading that way, not there yet.


56 posted on 04/08/2005 11:37:22 AM PDT by G32
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To: Always Right

"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!!!


57 posted on 04/08/2005 11:37:32 AM PDT by Pondman88
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To: churchillbuff

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.


58 posted on 04/08/2005 11:38:28 AM PDT by Brilliant
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To: Lazamataz
Well sure. If I find out a person is a liberal, I won't hire him (or ESPECIALLY her).

Maybe those Gore-Lieberman stickers on their briefcase doesn't help in interviews.

59 posted on 04/08/2005 11:38:46 AM PDT by Always Right
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To: ClearCase_guy
I think, correct me if I'm wrong, but those numbers are fudged. If I remember correctly, if you stop looking for work after x amount of time, the gov't removes you from the unemployment count. Thus artificially lowering the rate. The folks who had factory jobs (steel mills, etc) and are now on permanent gov't handout would not be counted in that rate. So while yes the economy is improving, IMO it is still a far cry from good.

I would be curious if anyone knows off the top of their heads, if the Euros manipulate their unemployment numbers in the same way or not.
60 posted on 04/08/2005 11:38:50 AM PDT by Wisconsin155 (newbie)
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