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Drop in U.S. inflows spooks dollar
Job Disinformation from The New York Times
By Paul Craig Roberts
via VDare.com
Friday, February 3, 2006
http://www.vdare.com/roberts/060203_jobs.htm
On Friday, Feb. 3, the Bureau of Labor Statistics released the
nonfarm payroll jobs report for January. New York Times reporter
Vikas Bajaj wrote an upbeat news story, obviously based on a Labor
Department press release rather than any study of the BLS report. If
the rosy view of Ethan Harris, chief economist for Lehman Brothers,
is typical, Wall Street has no more idea than Bajaj of what the jobs
report really says.
The export and import-competitive sectors of the U.S. economy have
been tanking for a long time. To keep the story manageable, let's
just go back to January 2001. The latest BLS payroll jobs report
says that January 2006 is now the 61st month that the U.S. economy
has been unable to create any jobs except ones in domestic non-
tradable services, most of which are low-paid.
Of the 194,000 private-sector jobs created in January, 46,000 were
in construction (and most likely went to Mexican immigrants, both
legal and illegal) and 136,000 were in domestic services: Financial
activities (essentially credit agencies) account for 21,000.
Administrative and waste services account for 17,600. Health care
and social assistance account for 37,500. Waiters, waitresses and
bartenders account for 31,000. Wholesalers account for 15,100.
There were 7,000 new jobs in manufacturing in January, but the total
number of manufacturing jobs in January 2006 is 48,000 less than in
January 2005. Over the past five years, millions of manufacturing
jobs have been lost. At the rate of 7,000 new manufacturing jobs per
month, the lost manufacturing jobs over the past five years would
not be regained for 34 years.
Does anyone remember when reporters were curious? In his rosy jobs
report, Vikas Bajaj does let it out of the bag that "economists
estimate that the nation needs to add roughly 150,000 jobs a month
just to keep up with population growth." That translates into
1,800,000 new jobs per year to stay even with population. Over the
past 61 months 9,150,000 new jobs were necessary in order to prevent
population growth from pushing up the unemployment rate.
How many new jobs have been created over the past five years and one
month? According to the Bureau of Labor Statistics' latest
revisions, a total of 1,054,000 net new private sector jobs were
created over the past 61 months (January 2001 through January 2006).
Add the total net government jobs created over the period for a
total net job creation of 2,093,000 jobs over the past 61 months.
That figure is 7,057,000 jobs short of keeping up with population
growth!
What, then, does it mean for Bajaj to tell the Times' readers that
the unemployment rate has fallen to 4.7 percent, a rate that
economists consider to be essentially full employment?
How can the economy possibly be at full employment if the economy is
7 million jobs short of keeping up with population growth!
The unemployment rate does not measure the millions of Americans who
have lost their jobs to offshore outsourcing and to foreign workers
brought into the United States on work visas. These millions of
Americans have exhausted their unemployment benefits and severance
benefits, and have been unable to find jobs to return to the
workforce. Economists refer to these millions of unemployed people
as discouraged workers who have dropped out of the workforce. As
they have given up searching for jobs, they are not considered to be
in the workforce and, therefore, do not count as unemployed.
If you are an American engineer whose job has been outsourced to
India, China or Eastern Europe, where the cost of living and
salaries are far below U.S. standards, or you are an engineer who
has been forced to train as your replacement an Indian engineer
imported on a H-1B or L-1 work visa, where do you go to find a new
engineering job? All the companies are doing the same thing.
It is amazing to hear politicians and corporate executives blabber
on about a shortage of engineers and scientists when there are now
several hundred thousand unemployed American engineers. The
corporate executives, whose own bonuses grow fat from replacing
their American employees with foreigners who work for less, spread
disinformation about "shortages" so that Congress will give them
more H-1B visas. This is one of the greatest frauds ever perpetuated
on the American people.
If the unemployment rate is now at essentially full employment, why
only a few days ago did 25,000 Americans apply for 325 jobs at a new
Chicago Wal-Mart?
Americans are not being told the truth about anything, not about
Iraq, not about Iran, not about terrorism and not about the
disastrous state of their economy. The information is available, but
the people have no way of finding out about the economy if they are
not trained economists with some knowledge of the data (except by
watching Lou Dobbs on TV). Few economists themselves will tell them,
because if they do they will lose their corporate and government
grants. It is not in the corporations' interest or the Bush
administration's interest for Americans to know what is happening to
them.
Washington-based economist Charles McMillion of MBG Information
Services tells it the same way (and he has been doing so longer than
I have). Here is his summation of the January payroll jobs
report: "The familiar pattern continued with almost all job growth
occurring in industries that face little or no outsourcing or import
competition: construction, health care and social services,
restaurants and bars, credit agencies and wholesalers."
Gentle reader, the politicians, the media, and the corporations are
all lying to you.
---------------
Paul Craig Roberts was assistant secretary of the treasury in the
Reagan administration, associate editor of The Wall Street Journal
editorial page, and contributing editor of National Review. He is co-
author of "The Tyranny of Good Intentions." He can be reached at:
paulcraigroberts@yahoo.com.
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