Where have all the jobs gone?

http://www.alwaysright.org ^ | 03/18/2004 | Jason E. High

[jhigh]

Where have all the jobs gone? Well...nowhere, really. There is much hysteria regarding current employment trends that are leading many to believe that we are losing significant numbers of jobs overseas. Even more frightening is the fact that these conclusions are leading many to believe that we should impose unjust and misguided trade restrictions.

As I am rather fond of doing, let's take a moment and look at the numbers. The number of private-sector jobs in the United States increased by 17.8 million between 1993 and 2002. This means that a grand total of 327.7 million jobs were added. However, an astonishing 309.9 jobs were lost!

Jobs lost almost always means jobs added. Even in the face of more and more "tech-jobs" being sent overseas, the Department of Labor still forecasts a thirty-five percent increase in computer and math-related jobs over the next ten years.

But what about all those jobs going overseas? Well, between 2000 and 2003, nearly 2.8 million jobs were lost in the United States (let's keep in mind that it is the gross job loss, not the net job loss). However, import of manufactured goods rose only 0.6 percent. That doesn't seem to back up the idea that we're losing millions and millions of jobs overseas.

So what's all the fuss about? Well, it all comes down to money, really. Yes, even for the Democrats, the party that puts on the face of compassion for all the poor factory workers in the U.S., it still all comes down to money.

We live in a new age. Some call it a digital age. It is now possible to import white-collar services from overseas, rather than paying a higher wage to Americans to do the same job. Whereas before the only jobs going overseas were minimum-wage factory jobs, we are now outsourcing good-paying technical support and programming positions. This is a constituency with significantly more money, and politicians are noticing.

Either way, trade restrictions are bad for everyone. The more services that we import from overseas, the more money companies have to create high-paying positions and to perform research into new technologies (that usually results in job creation).

This is more communist-style class warfare from the Socialist Democrats. They try to convince the poor that companies are just in it to get rich (what's wrong with that, anyway) and are willing to "stick it" to the little guy any chance they get.

The reality is that companies ARE in it to get rich (duh), but most of them are constantly looking for more ways to get rich. This doesn't include cutting a bunch of low-paying (or even high-paying) jobs and pocketing the savings. It means finding ways to do things cheaper to expand into new lines of business, new markets, or increase revenue in some other way. The idea that companies just cut jobs and pocket the savings is ludicrous. The Democrats know it, and now you do, too.

[ex-snook]

The article gets an 'incomplete'. How many people entered the job market?

[international american]

Kerry is a communist, in my opinion. That aside, we are whoring our middle class for a short term expedient...aka..short term profits, as short term profits are how american executives now get paid. This is the first time in my life that I have been at odds with Thomas Sowell, or GWB. They don't travel the world enough, and dont realize the consequences of outsourcing.

[international american]

" The idea that companies just cut jobs and pocket the savings is ludicrous"

WRONG!! That is their pay plan!

[lelio]

They don't travel the world enough, and dont realize the consequences of outsourcing.

Au contrary, they travel a lot and see that they can make a lot more money by sending labor costs overseas where it is 1/10th the cost. The mistake is thinking that they give two hoots about the middle class here in America.

[international american]

"The mistake is thinking that they give two hoots about the middle class here in America."

They care about their quarterly bonuses, which are now 2-4 times their salary!

[Just another Joe]

Let me be one of the first to critique your article. I assume it's yours.

The number of private-sector jobs in the United States increased by 17.8 million between 1993 and 2002.

Is that total or per year?

This means that a grand total of 327.7 million jobs were added.

Where do you get this fugure? Show some sources. Even if the 17.8 million is per year, it doesn't add up to 327.7 million. Is this number supposed to add in non private-sector jobs (governmental?). If so you're not really putting a good feeling about the government in my body.

However, an astonishing 309.9 jobs were lost!

Only 309.9 jobs, or is that 309.9 million jobs?

Jobs lost almost always means jobs added.

Where did this tidbit of wisdom come from?

Well, between 2000 and 2003, nearly 2.8 million jobs were lost in the United States (let's keep in mind that it is the gross job loss, not the net job loss). However, import of manufactured goods rose only 0.6 percent. That doesn't seem to back up the idea that we're losing millions and millions of jobs overseas.

What is the difference between "gross job loss" and "net job loss?
Are we talking about the difference in numbers between those that found another job and those that didn't or are we talking about the difference between jobs lost and jobs created?
As for the percentage of foreign imports, is it just possible that with the job losses more Americans can't afford to buy things, whether imported or domestic?

They try to convince the poor that companies are just in it to get rich (what's wrong with that, anyway) and are willing to "stick it" to the little guy any chance they get.

Companies ARE in it to get rich just as you say. It's not that they are looking for a way to stick it to the little guy, just that they won't protect their workers the way companies used to.
If the worker gets in the way of more profits, especially for the CEO and BOD, too bad.

This doesn't include cutting a bunch of low-paying (or even high-paying) jobs and pocketing the savings.

And yes, it DOES include this if they can get smaller numbers of people to do the same amount of work (domestically) OR if they can get a larger number of people to do it for less money (outsourcing or off shoring).

Now, you tell me where I'm wrong and lets' discuss it.

[Rockitz]

I posted the following about a month ago.

---

Manufacturing is the art of turning raw materials into a marketable product of greatly increased value. Without manufacturing, there is no source of wealth beyond a nation's natural resources and the creative skills of it's people and the middle east nations who have not developed their people and built a manufacturing capability with the money they've received from their oil resources will very soon find out that they are once again a third world nation.

While automation should naturally reduce manufacturing jobs, the people who planned to go to those manufacturing jobs did not develop their skills to do anything else and those manufacturing jobs have now gone overseas. The same thing is happening with white collar jobs (i.e. software is being developed in India).

With the free trade agreements, the race to the bottom began in earnest. Who will do what for less? Without global parity in wages, jobs will continue to leave this country. Unless you are in an export-controlled capacity or you are directly involved in the manufacture of an item with a large percentage of its cost associated with distribution (such as raw lumber and dog food) or you are involved in direct service to the two prior established groups, your job is going overseas. Right now the US is leaking capital at an increasing rate in terms of debt. That accelerating debt is keeping us level for now, but don't count on that continuing forever.

Unfortunately, this nation is headed for another depression unless global parity in wages is accepted by the workers in this nation. With the unions directing US workers, I don't expect that to happen soon enough.

---

Yes, W and the Fed are largely responsible for keeping us from depression to date, but I wonder how much longer we can tread water without true wage parity. Kerry and the liberals may tell the people what they want to here, but in the mean time, we're sinking fast.

[TommyDale]

If the unemployment rate was 5.7% under Bill Clinton, and is now 5.6% under GW Bush, then there has been an increase,
regardless of how many new entries into the job market or population growth.

[neutrino]

Either way, trade restrictions are bad for everyone. The more services that we import from overseas, the more money companies have to create high-paying positions and to perform research into new technologies (that usually results in job creation).

And the basis for this assertion is....what, exactly? The article quotes some statistics (unsourced statistics, BTW) and then comes to an unrelated conclusion.

First of all, if we take a purely capitalist approach, there is no reason for companies to create high-paying positions. If the company wishes to maximize shareholder value, then it should minimize pay to the degree possible. One cannot help but wonder how many highly qualified Chinese businessmen we could hire instead of our current crop of multi-million dollar per year CEOs. I'm a shareholder - where are my increased earnings? To my shame, I still own a few miserable shares of Lucent - which used to have Bell Labs. You remember them, surely - they invented the transistor. They're finally up above $4 per share again - after falling from $55. Lucky for me I didn't believe their promises that global revenue would propel them to new heights; I bailed out in the forties.

The second issue is the premise that companies will invest more money in research. Truth is, the current emphasis on short term earnings results (i.e., the next quarterly earnings report) has resulted in a decrease in research.

I urge you to read a short paper (4 pages) on the subject at this site

You'll find that the U.S. share of total world R&D is shrinking. With the exception of the high tech companies (7-10 percent of the US economy) the other 90% of our companies don't do much R&D. There are also indications that more research is being committed to product line extensions instead of true innovation.

No, the U.N.'s globalist free trade policy is NOT good for the U.S.A. It is merely a welfare scheme writ large - and U.S. workers are footing the bill. Again.

[ARCADIA]

Where have all the jobs gone?

That question is irrelevant; what people are really asking is where have all the good well paying sustainable jobs gone. Adding, hundreds of thousands of publically funded low wage underwear checkers at the local airports is a far cry from the kinds of jobs that we have been losing. BTW, since the rate of unemployment has held at a constant ~6% over a four year period the official job lost can easily top the 10-15 million range. The statistics can be managed; the reality is something else.

So tell us.... where are these hundreds of thousands of new highly paid US jobs?

[dennisw]

Kerry is a communist, in my opinion. That aside, we are whoring our middle class for a short term expedient...aka..short term profits, as short term profits are how american executives now get paid. This is the first time in my life that I have been at odds with Thomas Sowell, or GWB. They don't travel the world enough, and dont realize the consequences of outsourcing.

Outsource good paying jobs abroad. What a fine way to get commie Kerry and other RATS elected who will promise their socialist solutions. Which will ultimately be disastrous, make the situation much worse. But who cares as long as Kerry and the RATS are promising?

[ARCADIA]

But who cares as long as Kerry and the RATS are promising?

For one, those who are unemployed; for another, those who are currently feeding them. A promise no matter how disingenous is far better then being ignored.

[Just another Joe]

jhigh, I hope you're not posting and running.
You haven't returned to defend your article.

[jhigh]

Where do you get this fugure? Show some sources.

The Cato Institute

Even if the 17.8 million is per year, it doesn't add up to 327.7 million.

There was an increase in jobs added of 17.8 million jobs...the TOTAL jobs added is 327.7 million.

Only 309.9 jobs, or is that 309.9 million jobs?

Yes, that's a typo. Sorry.

What is the difference between "gross job loss" and "net job loss? Are we talking about the difference in numbers between those that found another job and those that didn't or are we talking about the difference between jobs lost and jobs created?

Both or either...I don't care which. I'm just tired of the 2.8 million jobs lost being thrown around as if it was anything that even remotely resembled the state of unemployment in this country.

Companies ARE in it to get rich just as you say. It's not that they are looking for a way to stick it to the little guy, just that they won't protect their workers the way companies used to.

And your solution is what? Government intervention? Why is it the government's job to make sure that you have, or anyone else, has a job?

And yes, it DOES include this if they can get smaller numbers of people to do the same amount of work (domestically) OR if they can get a larger number of people to do it for less money (outsourcing or off shoring).

Be realistic, though. A company that is going to survive is not going to remain stagnant. They are going to grow their business. This includes adding jobs.

jhigh, I hope you're not posting and running. You haven't returned to defend your article.

Absolutely not. I usually post an article and then take off for a while, to give time for replies, etc. I appreciate, and welcome, intelligent debate.

[Spruce]

I have them. No you can't have one.

[RightOnline]

Let me tell you what this article DOESN'T say: what percentage of jobs lost in the last, oh, say, five or so years have been truly lost to "outsourcing" vs. new efficiencies (automation, etc.). Look up the numbers. Shoots these arguments all to hell.

[ARCADIA]

If it were simply automation then we would have had a higher demand for advanced machinery. So we would have seen an increase in jobs for those who make, install, program, and maintain the new equipment. Unless, of course, all of those functions were farmed out to offshore providers.

If it were a matter of efficiency then we would have had more capital to invest in ever more competitive products; we would have once again had expansion in order to benefit from the market gain resulting from the increased efficiencies.

As long as the moneys are invested within our borders we will see a rise in economic activity; the economy does not have to remain static for there to be employment. On the contary that would be a disaster. But, once you take your investment capital offshore you are in decline. Every net dollar sent abroad is capital that we will have to work for very hard for in order to get back. Not only are we failing to develop our own people and resources, but we are actually setting up competitors which we will later have to overcome.

[Just another Joe]

OK, to address some of your points.

There was an increase in jobs added of 17.8 million jobs...the TOTAL jobs added is 327.7 million.

An increase over what?
We've created 327.7 million jobs and lost 309.9 million... Ahhhhh, THAT'S where the 17.8 million jobs added figure comes from.
Now the question is, what is the percentage of higher salary jobs lost to lower percentage jobs created?
If forced to give an opinion I might guess that is why the import of manufactured goods only rose 0.6%.

That doesn't seem to back up the idea that we're losing millions and millions of jobs overseas.

The jobs that are going overseas are not neccessarily manufacturing jobs anymore. The IT professional jobs are starting to move with increasing rapidity.

And your solution is what? Government intervention?

No, that's not my solution but if we don't stop the trend all that will be left in America is service jobs that pay $7.50 an hour for your manual labor and CEOs that make multimillion $ salarys.

Be realistic, though. A company that is going to survive is not going to remain stagnant. They are going to grow their business. This includes adding jobs.

It isn't a truism that to grow the business you need to add jobs.
The company I work for, in the past 2 - 3 years, has cut better than 10,000 jobs but the business continues to grow. More and more responsibilities have been given to the remaining employees until the camels' back is about to break.

Glad you don't post and run. Debate is the lifeblood of this site.

[Ed_in_NJ]

Would you like FRies with that?