Where Have All the Jobs Gone?

[marmar]

from Dissent magazine:



Where Have All the Jobs Gone?
Judith Stein - June 9, 2011 11:00 am


In May, the unemployment rate rose to 9.1 percent. The economy added only 54,000 jobs, much fewer than the 300,000 that the economy requires each month to make a dent in that rate. Even the better April figure (222,000 new jobs) did not match what was necessary.

After two years of recovery, why are the job numbers so weak? Each month when the numbers disappoint and unemployment insurance applications rise, commentators talk about the weather, rising oil prices, an earthquake abroad, or a holiday at home. But manmade and natural road bumps happen all of the time. Clearly, something else is going on that eludes the continually surprised economists and commentators.

The nation’s pattern of job growth over the past twenty years offers clues. We can divide the economy into tradable and nontradable sectors. The tradable sector consists of the goods and services that can be produced in one country and consumed in another (autos, computers, wheat). It is subject to fierce international competition. Activities in the nontradable sector must be produced and consumed in the same country (firefighting, nursing, home construction). This sector is immune from international competition, but not from the downward pressure on wages that affects the tradable industries.

Between 1990 and 2008, the economy added 27.3 million jobs to the base of 121.9 million. But 26.7 million of those jobs were in the nontradable sector. Government and health care topped the list in job growth, followed by real estate and retail. In the tradable sector, manufacturing lost jobs, which were off-shored. (This decline was matched by some additions in high-end management and consulting services, computer-systems design, finance, and insurance.) Virtually all of the new employment was in the nontradable sectors. Unemployment was low, but because many of the new nontradable jobs paid less than those lost, inequality rose. Americans kept up their consumption by increasing their household debt—sustained by low interest rates, which nations like China and Germany kept down by using dollars accumulated from their trade surpluses to purchase U.S. debt. Because the United States was making fewer products but consuming the same amount, the trade deficit rose to nearly 5 percent of GDP by 2008. .............(more)

The complete piece is at: http://dissentmagazine.org/atw.php?id=468

[FreakinDJ]

1. Manufactured Goods vs: Service Sector

I think it is highly inaccurate of the write to refer to the Manufacturing sector as "The tradable sector"

Call customer support and you'll see what I mean. GE even outsources the programming for their HUGE Turbines to India. If an engineer on the job needs some changes made to the operating program he must send it via internet to India for the code to be modified.

This is a systemic problem that reaches much further then just "Tradeable and Non-Tradeable Goods.

The problem is clearly in the US Tax Code

[RKP5637]

2. Excellent article, succinct analysis! Thanks! n/t

[GSlackeaux]

10. Corporate conspiracy behind unemployment problem

It is my understanding that the high U.S. unemployment figures
are the direct result of deliberate corporate employee layoffs
and lack of company expansion  - with the precise intent to so
greatly constrict the workforce and economy as to damage Pres.
Obama's reelection chances.  If it harms the country, so be it
- if it advances the "good" of the Republican cause.
  
     Many of us recall the startling figures last year,
showing that corporate profits were at their greatest levels
in 60 years.   Thus it is now clear that what we are seeing is
the Republican/ corporates' deliberate betrayal of the
American people for political gain.                           
                                                              
                                                              
             
      One of Reagan's maxims was "never criticize a
fellow Republican."  The new corollary is "never
give a Democrat an even break."  It's the current version
of "all's fair in love and war."  No amount of
lying, betrayal and sabotoge should be avoided in the goal of
defeating the democratic enemy.
    Yes, it IS a conspiracy. >  Slackmussen

[George Wythe]

3. Today in America there are nearly twice as many people working for the government

than in manufacturing, farming, fishing, forestry, mining and utilities combined. In 1960, it was just the opposite.

[bhikkhu]

5. Not because government expanded, though

but because the other sectors you list have been in long-term decline.

The (R) explanation is obvious enough, but leads to nothing in the real world, as it misses several points entirely - our available energy per-capita peaked in the 70's, real costs have risen steadily, and the real capacity to turn that energy into affordable goods has declined. Most particularly it has declined relative to other countries, as far as manufacturing, and there is nothing government can do about it.

Fishing, forestry, and mining also depend on natural resources. We don't create them, and management becomes increasingly difficult as population and demand increases; at a certain level of use they go into decline. In most of the world these are in decline - it just happened faster here.

[bhikkhu]

6. dupe

[Warpy]

4. Everywhere but here

I found some cotton summerwear online and ordered it. The labels said it was made in Jordan.

I don't begrudge the people in Jordan the ability to make clothing, sell it abroad, and feed their kids, far from it.

What I do despise is the fact that we are no longer permitted to do so.

The problem wasn't that multinational corporations opened factories abroad. That was a good thing. The problem was that they closed them all down here. That was a terrible thing, not only for us but for the country as a whole. Just how are we going to survive the next big war if we not only don't make our clothing, we don't make the cloth that goes into it?

This is a national security issue and I'm shocked that it has never been addressed as such.

[GSlackeaux]

11. US Gov paid companies to send production overseas?

As I understand it, starting with Bill Clinton, and ever
after, our wonderful government virtually PAID our
corporations to go overseas with manufacturing. Anyone have
the details?   G.   

[kelly1mm]

7. Technology has had a big effect on jobs in the legal sector. I used to

have a receptionist/assistant and a paralegal. When both left over a period of 18 months due to having children in 2008-2009, I did not replace them, instead using more technology and doing more myself. Gross revenues went down but net profits went up. In my smallish area, I know of at least five othe professionals that have trimmed their staff and replaced them with technology.

[snot]

8. K&R'd

[patrice]

9. K&R