Politics & Numbers 2 - Paul Craig Roberts on the loss of jobs in America

Normally I wouldn't post this kind of stuff. I prefer to read it in silence and feign interest in the current political situation in the west. The problem is that when the US falls, it will take us all down with it. And it doesn't look like the economy is heading for an upswing any time soon, either, considering the HUGE trade deficit and the amount of foreign borrowing that is required to keep the economy hobbling along in its current diseased state.

Especially in this case, what you don't know WILL hurt you.

I think I need another triple espresso after reading this one. You may too, but it will be worth it since it provides a better understanding regarding actual situation of the American economy, the GDP, and the loss & creation of jobs.

Enjoy. I did.

Oh, one last thing! I highly recommend following some if not all of these links in the two posts because you will get a MUCH better picture of how thin the ice really is beneath your feet.

Non-politically yours...

Cameron

P.S. You may also want to read Roberts' thoughts on Obama and Global Trade where he explains how "the U.S. government is essentially bankrupt", how official statistics (he doesn't list them, but you can look them up if you wish) show "no growth in median family income in many years", and how Senator Obama's proposed plan for "a lower tax rate for US companies that maintain or increase their US workforce relative to their overseas workforce [Obama seeks Ohio’s blue-collar vote, By Edward Luce, February 19 2008]... shows more serious thought than can be found among Washington policymakers and the economics profession." 

******************************

No Jobs for the New Economy or the Old
By Paul Craig Roberts
January 07, 2008  

http://www.vdare.com/roberts/080107_jobs.htm

December did not bring Americans any jobs. To the contrary, the private sector lost 13,000 jobs from the previous month.

If December is a harbinger of the New Year, it is going to be a bad one. The past year, hailed by Republican propagandists and "free trade" economists as proof of globalism’s benefit to Americans, was dismal. According to the Bureau of Labor Statistics’ nonfarm payroll data, the US "super economy" created a miserable 1,054,000 net new jobs during 2007. [BLS Job Numbers, January 4, 2008]

This is not enough to keep up with population growth—even at the rate discouraged Americans, unable to find jobs, are dropping out of the work force—thus the rise in the unemployment rate to 5%.

During the past year, US goods producing industries, continuing a long trend, lost 374,000 jobs.

But making things was the "old economy." The "new economy" provides services. Last year 1,428,000 private sector service jobs were created.

Are the "free trade" propagandists correct that these service jobs, which are our future, are high-end jobs in research and development, innovation, venture capitalism, information technology, high finance, and science and engineering where the US allegedly has such a shortage of scientists and engineers that it must import them from abroad on work visas?

Not according to the official job statistics.

What occupations provided the 1.4 million service jobs in 2007?

Waitresses and bartenders accounted for 304,200, or 21% of the new service jobs last year and 29% of the net new jobs.

Health care and social assistance accounted for 478,400, or 33% of the new service jobs and 45% of the net new jobs. Ambulatory health care and hospitals accounted for the lion’s share of these jobs.

Professional and business services accounted for 314,000, or 22% of the new service jobs and 30% of the net new jobs. Are these professional and business service jobs the high-end jobs of which "free traders" speak? Decide for yourself. Services to buildings and dwellings account for 53,600 of the jobs. Accounting and bookkeeping services account for 60,500 of the jobs. Architectural and engineering services account for 54,700 of the jobs. Computer systems design and related services account for 70,400 of the jobs. Management consultants account for 88,400 of the jobs.

There were more jobs for hospital orderlies than for architects and engineers. Waitresses and bartenders accounted for as many of last year’s new jobs as the entirety of professional and business services.

Wholesale and retail trade, transportation, and utilities accounted for 181,000 of 2007’s new jobs.

Where are the rest of the new jobs? There are a few scattered among arts, entertainment, and recreation, repair and maintenance, personal and laundry services, and membership associations and organizations.

That’s it.

Keep in mind that the loss of 374,000 goods producing jobs must be subtracted from the 1,428,000 new service jobs to arrive at the net job gain figure. The new service jobs account for more than 100% of the net new jobs.

Keep in mind, too, that many of the new jobs are not filled by American citizens. Many of the engineering and science jobs were filled by foreigners brought in on work visas. Indians and others from abroad can be hired to work in the US for one-third less. The engineering and science jobs that are offshored are paid as little as one-fifth of the US salary. Even foreign nurses are brought in on work visas. No one knows how many of the hospital orderlies are illegals.

What a super new economy Americans have! US job growth has a distinctly third world flavor. A very small percentage of 2007’s new jobs required a college education. Since there are so few jobs for university graduates, how is "education the answer"?

Where is the benefit to Americans of offshoring? The answer is that the benefit is confined to a few highly paid executives who receive multi-million dollar bonuses for increasing profits by offshoring jobs. The rest of the big money went to Wall Street crooks who sold trusting people subprime derivatives.

"Free traders" will assert that the benefit is in low Wal-Mart prices. But the prices are low only because China keeps its currency pegged to the dollar. Thus, the Chinese currency value falls with the dollar. The peg will not continue forever. The dollar has lost 60% of its value against the Euro during the years of the Bush regime. Already China is having to adjust the peg. When the peg goes, Wal-Mart shoppers will think they are in Neiman Marcus.

Just as Americans have been betrayed by "their" leaders in government at all levels, they have been betrayed by business "leaders" on Wall Street and in the corporations. US government and business elites have proven themselves to be Americans’ worst enemies.