The February payroll jobs figures
released last Friday by the Bureau of Labor Statistics
show a continuation of America's descent into a Third
World service economy.
The Bush administration cheered the creation of 229,000
private sector jobs (which still leaves Bush with a net
private sector job loss during his reign). However, once
we look at the
details, the joy vanishes: 174,000 of the jobs, or
76% of the total, are in nontradable services.
Administrative and waste services (largely temporary
help and employment services) account for 61,000 or 35%
of the new service jobs. The remainder are accounted for
by construction (30,000), retail trade (30,000),
healthcare and social assistance (27,000), and
waitresses and bartenders (27,000).
The US has apparently lost the ability to create high
productivity, high value-added jobs in tradable goods
and services. The ladders of upward mobility are being
dismantled by offshore production for home markets and
outsourcing of knowledge jobs.
The BLS reports that the number of employed US technical
workers has fallen by 221,000 in six major computer and
engineering job classifications during 2000-2004. The
largest drops were suffered by computer programmers,
followed by electrical and electronics engineers,
computer scientists and systems analysts.
So much for the new economy that economists promised
would take the place of the lost manufacturing economy.
America's remaining job market is domestic nontradable
services. While India and China develop First World job
markets, the US labor market takes on the
characteristics of a Third World work force. Only jobs
that cannot be outsourced are growing.
The Bush economy has seen a loss of 2.8 million
manufacturing jobs, a rise in the unemployment rate of
1.2 percentage points, and a stagnation in real weekly
earnings.
How bad will things have to get before economists
realize that outsourced jobs are not being replaced?
Indeed, many American companies are ceasing to have any
presence in the US except for a sales force.
Cisco's CEO, John Chambers, declared recently: "What
we're trying to do is outline an entire strategy of
becoming a Chinese company."
Cisco is establishing a new R&D center in Shanghai. The
US corporation manufactures $5 billion of products in
China where it employs 10,000 people.
That is just one company, and there are many doing the
same thing.
The result is abandonment of the American work force
by American corporations. Little wonder the Bush
administration is the first administration in 70 years
to have a net loss of private sector jobs.
If one US company or a few move offshore, their profits
improve and consumer prices are lower. However, when
work in general moves offshore, Americans lose the
incomes associated with the production of the goods they
consume. Domestic production is turned into imports,
with the result that America draws down its accumulated
wealth in order to pay for the imports on which it is
dependent.
The dollar's value and status as reserve currency cannot
forever stand the trade and budget deficits that are now
part and parcel of America's economic policy.
Unless there are major changes soon, America's economic
future is a Third World work force with a banana
democracy's worthless currency.
Paul Craig Roberts, a former Reagan Administration official, is the author of The Supply-Side Revolution and, with Lawrence M. Stratton, of The Tyranny of Good Intentions : How Prosecutors and Bureaucrats Are Trampling the Constitution in the Name of Justice. Click here for Peter Brimelow's Forbes Magazine interview with Roberts about the recent epidemic of prosecutorial misconduct.
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