Posted on 02/17/2006 6:05:43 AM PST by A. Pole
The Bureau of Labor Statistics recently re-benchmarked the payroll jobs data back to 2000. Thanks to Charles McMillion of MBG Information Services, I have the adjusted data from January 2001 through January 2006. If you are worried about terrorists, you don’t know what worry is.
Job growth over the last five years is the weakest on record. The U.S. economy was more than 7 million jobs short of keeping up with population growth. That’s one good reason for controlling immigration. An economy that cannot keep up with population growth should not be boosting population with heavy rates of legal and illegal immigration.
Over the past five years, the U.S. economy experienced a net job loss in goods-producing activities. The entire job growth was in service-providing activities—primarily credit intermediation, health care and social assistance, waiters, waitresses and bartenders, and state and local government.
U.S. manufacturing lost 2.9 million jobs, almost 17 percent of the manufacturing workforce. The wipeout is across the board. Not a single manufacturing payroll classification created a single new job.
The declines in some manufacturing sectors have more in common with a country undergoing saturation bombing during war than with a super-economy that is “the envy of the world.” Communications equipment lost 43 percent of its workforce. Semiconductors and electronic components lost 37 percent of its workforce. The workforce in computers and electronic products declined 30 percent. Electrical equipment and appliances lost 25 percent of its employees. The workforce in motor vehicles and parts declined 12 percent. Furniture and related products lost 17 percent of its jobs. Apparel manufacturers lost almost half of the workforce. Employment in textile mills declined 43 percent. Paper and paper products lost one-fifth of its jobs. The workforce in plastics and rubber products declined by 15 percent. Even manufacturers of beverages and tobacco products experienced a 7 percent shrinkage in jobs.
The knowledge jobs that were supposed to take the place of lost manufacturing jobs in the globalized “new economy” never appeared. The information sector lost 17 percent of its jobs, with the telecommunications workforce declining by 25 percent. Even wholesale and retail trade lost jobs. Despite massive new accounting burdens imposed by Sarbanes-Oxley, accounting and bookkeeping employment shrank by 4 percent. Computer systems design lost 9 percent of its jobs. Today, there are 209,000 fewer managerial and supervisory jobs than 5 years ago.
In five years, the U.S. economy only created 70,000 jobs in architecture and engineering, many of which are clerical. Little wonder engineering enrollments are shrinking. There are no jobs for graduates. The talk about engineering shortages is absolute ignorance. There are several hundred thousand American engineers who are unemployed and have been for years. No student wants a degree that is nothing but a ticket to a soup line. Many engineers have written to me that they cannot even get Wal-Mart jobs because their education makes them overqualified.
Offshore outsourcing and offshore production have left the United States awash with unemployment among the highly educated. The low measured rate of unemployment does not include discouraged workers. Labor arbitrage has made the unemployment rate less and less a meaningful indicator. In the past, unemployment resulted mainly from turnover in the labor force and recession. Recoveries pulled people back into jobs. Unemployment benefits were intended to help people over the down time in the cycle when workers were laid off.
Today, the unemployment is permanent, as entire occupations and industries are wiped out by labor arbitrage, as corporations replace their American employees with foreign ones. Economists who look beyond political press releases estimate the U.S. unemployment rate to be between 7 percent and 8.5 percent. There are now hundreds of thousands of Americans who will never recover their investment in their university education.
Unless the BLS is falsifying the data or businesses are reporting the opposite of the facts, the United States is experiencing a job depression. Most economists refuse to acknowledge the facts, because they endorsed globalization. It was a win-win situation, they said.
They were wrong.
At a time when America desperately needs the voices of educated people as a counterweight to the disinformation that emanates from the Bush administration and its supporters, economists have discredited themselves. This is especially true for “free market economists,” who foolishly assumed that international labor arbitrage was an example of free trade that was benefiting Americans. Where is the benefit when employment in U.S. export industries and import-competitive industries is shrinking? After decades of struggle to regain credibility, free-market economics is on the verge of another wipeout.
No sane economist can possibly maintain that a deplorable record of merely 1,054,000 net new private-sector jobs over five years is an indication of a healthy economy. The total number of private-sector jobs created over the five-year period is 500,000 jobs less than one year’s legal and illegal immigration! (In a December 2005 Center for Immigration Studies report based on the Census Bureau’s March 2005 Current Population Survey, Steven Camarota writes that there were 7.9 million new immigrants between January 2000 and March 2005.)
The economics profession has failed America. It touts a meaningless number, while joblessness soars. Lazy journalists at The New York Times simply rewrite the Bush administration’s press releases.
On Feb. 10, the Commerce Department released a record U.S. trade deficit in goods and services for 2005—$726 billion. The U.S. deficit in advanced technology products reached a new high. Offshore production for home markets and jobs outsourcing has made the United States highly dependent on foreign-provided goods and services, while simultaneously reducing the export capability of the U.S. economy. It is possible that there might be no exchange rate at which the United States can balance its trade.
[...]
No Paul, you've discredited yourself. This isn't a conspiracy and, as you should know, measuring job creation by usingthe jobless claim numbers is simply not feasible.
And we just hired an new electrical engineer with two years experience. He got a $15K raise over his previous employer. In the NW, everthing is booming. The aluminum industry is fired back up, Boeing has re-hired 10,000 from the post-911 layoffs, the timber companies are running 24/7, the software industry is humming again, the Biotech firms keep adding jobs and facilities, the ports are busier than ever and expanding, the state is spending (too much) money on transit projects, the wine industry continues to grow, the shipyards are busy, hundreds of startups are coming on line, the coffee industry is strong, the telcom folks are making money, housing starts continue to expand, and you can't find any craftsman who is not busy as hell.
But we won't tell that to Paul Craig Roberts.
How Conservatives Went Crazy
America’s Superpower Days are Over
The Grave Threat Is the Bush Administration
Could Someone Recommend a President?
How to End the War
The Greatest Strategic Disaster in US History
Does Anyone Know What We Are Doing in Iraq?
And that's just over the last 6 months!
Sure. This total collapse of the employment situation completely explains why total wages are up and retail spending is vigorous.
After all, the first thing I do when downsized from an engineering job to that of a waiter is head over to my local electronics store and pick up a plasma TV. (/sarcasm)
Sometimes I think FR needs emoticons so I can put little ROFLing smileys all over doom-and-gloom articles like this.
Perhaps you misunderstood my point. When someone in the media starts off a diatribe against President Bush with an admission to having reinterpreted previously examined data, and then proceeds to scream about how bad the data is, I take the new interpretation with about a ton of salt.
As soon as I read the opening line of this piece - and I have no idea who the writer is - I discounted the rest of it because the author admitted that the data had been re-cooked. Why was the original presentation of the data wrong? He never said.
The U.S. economy was more than 7 million jobs short of keeping up with population growth. That’s one good reason for controlling immigration. An economy that cannot keep up with population growth should not be boosting population with heavy rates of legal and illegal immigration.
Employment growth relative to population growth is an utterly meaningless statistic. And there is a very good chance that "controlling immigration" would actually make things worse in this regard.
The fastest-growing segment of the U.S. population is the "frail elderly" -- people who are 80+ years old and haven't worked in years. Another rapidly-growing segment is the very young (we've had something of a miniature "Baby Boom" here in the last 10-15 years). Neither of these age groups are even marginally employable for the most part, unless you consider overturning all child labor laws in this country and sending Grandma back to work at the age of 90.
Over the past five years, the U.S. economy experienced a net job loss in goods-producing activities.
Another meaningless statistic, since many jobs in "goods-producing activities" don't involve "goods-producing activities" at all.
U.S. manufacturing lost 2.9 million jobs, almost 17 percent of the manufacturing workforce. The wipeout is across the board. Not a single manufacturing payroll classification created a single new job.
Again -- a meaningless statistic. The single biggest factor in the decline of "manufacturing jobs" in this country is not out-sourcing, or automation, or plant closings . . . it is the re-allocation of jobs that never involved "manufacturing" in the first place.
Jobs in this country are categorized according to the industry code of the employer under the North American Industrial Classification System (NAICS), regardless of what individual jobs entail. An accountant who works for General Motors is considered a "manufacturing" employee, while an accountant who works for an accounting firm is considered a "professional service" employee. So if General Motors shuts down their accounting division one day and contracts their accounting work to an outside firm that hires all of GM's former accountants, their accountants magically transform from "manufacturing" employees to "professional service" employees even though the job description hasn't changed at all.
Offshore outsourcing and offshore production have left the United States awash with unemployment among the highly educated.
It's not the "offshore outsourcing" and "offshore production" that have left these folks unemployed . . . it's the severe career limitations that come with a high degree of specialization among these "highly educated." The dirty little secret in this country is that too much formal education is actually a career impediment, not an asset.
Today, the unemployment is permanent, as entire occupations and industries are wiped out by labor arbitrage, as corporations replace their American employees with foreign ones.
I challenge the author of this article to provide an accurate number of people who are "permanently unemployed." When you take the physically/mentally disabled and "pathologically unemployable" out of the mix, I'm willing to bet this number is statistically insignificant.
There are now hundreds of thousands of Americans who will never recover their investment in their university education.
This probably means their "investment" was a rip-off. That may be a serious problem, but it certainly isn't an indicator of economic malaise.
The economics profession has failed America. It touts a meaningless number, while joblessness soars. Lazy journalists at The New York Times simply rewrite the Bush administration’s press releases.
What the hell is he talking about? Has he read a Paul Krugman article lately?
Do you believe this crap? Retail sales and housing starts break records and this guy has his head in the sand.
Well with the Administration's neglect of illegal immigration,
maybe you'll have the opportunity to defeat terrorism in your own backyard someday.
Roberts is an economist who was one of the architects of the Supply-Side revolution. He drafted the pivotal Kemp-Roth tax bill which implemented it. And was a solid supporter of President Reagan, and was a top deputy to his Treasury Secretary, Donald Reagan.
That bears repeating.
The goverment should not be in the jobs business; they should fight wars, build roads, and stay the hell out of the way.
Thanks for the info. It lends more credibility, but my objection to the "rebaselined" data stands, until further review of the it. I'm a professional skeptic, I guess.
Much of the American "middle class" is retiring. Hence, 4.7% unemployment.
He also deliberately falsifies information to whip up his troops, so despite his credentials, he's just another hack journalist.
They can sell apples!
Of course those people aren't.
I'm talking about highly educated people with professional degrees in their 40s and 50s, who have a lot to offer in the marketplace.
The days when you could make 80K turning a screwdriver at a factory are over.
"Highly educated people with professional degrees" often do not make successful businessmen.
I tell you, DOOOOOOOOOoooooooooommmmmmmmmed!
Isn't it amazing this writer only chose the GWB years, and didn't calibrate 1992 thru 2000, the Clinton years.(I didn't read the article so I can't say this for sure.)
If you did calculate the 90s, I suspect the same patterns would appear, outsourcing of jobs, a large move to the service sector (think about all the software companies which emerged in the 90s), and a big improvement in productivity (automation), which results in less manpower doing the same amount of work.
This quest to blast the Bush years as being somehow evil and uncaring is getting tiresome.
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