Data Shows America`s Job Growth Benefits Immigrants, Outsourcers
On February 20 Forbes.com
told its readers with a straight face that "the
American job-generation machine rolls on. The economy
will create 19 million new payroll jobs in the decade to
2014." Forbes took its information from the 10-year
jobs projections from the Bureau of Labor Statistics, US
Department of Labor, released last December.
If the job growth of the past
half-decade is a guide, the forecast of 19 million new
jobs is optimistic, to say the least. According to the
Bureau of Labor Statistics payroll jobs data, from
January 2001-January 2006 the US economy created
1,054,000 net new private sector jobs and 1,039,000 net
new government jobs for a total five-year figure of
2,093,000. How does the US Department of Labor get from
2 million jobs in five years to 19 million in ten years?
I cannot answer that question.
However, the jobs record for the
past five years tells a clear story. The BLS payroll
jobs data contradict the hype from business
organizations, such as the US Chamber of Commerce, and
from "studies" financed by outsourcing
corporations that offshore jobs outsourcing is good for
America. Large corporations, which have individually
dismissed thousands of their US employees and replaced
them with foreigners, claim that jobs outsourcing allows
them to save money that can be used to hire more
Americans. The corporations and the business
organizations are very successful in placing this
disinformation in the media. The lie is repeated
everywhere and has become a mantra among no-think
economists and politicians. However, no sign of these
jobs can be found in the payroll jobs data. But there is
abundant evidence of the lost American jobs.
Information technology workers and
computer software engineers have been especially heavily
hit by offshore jobs outsourcing. During the past five
years (Jan 01 – Jan 06), the information sector of the
US economy lost 645,000 jobs or 17.4% of its work force.
Computer systems design and related lost 116,000 jobs or
8.7% of its work force. Clearly, jobs outsourcing is not
creating jobs in computer engineering and information
technology. Indeed, jobs outsourcing is not even
creating jobs in related fields.
For the past five years US job
growth was limited to these four areas: education and
health services, state and local government, leisure and
hospitality, financial services. There was no US job
growth outside these four areas of domestic nontradable
Oracle, for example, which has been
handing out thousands of pink slips, has recently
announced two thousand more jobs being moved to India.
How is Oracle`s move of US jobs to India creating jobs
in the US for waitresses and bartenders, hospital
orderlies, state and local government and credit
agencies, the only areas of job growth?
Engineering jobs in general are in
decline, because the manufacturing sectors that employ
engineers are in decline. During the last five years,
the US work force lost 1.2 million jobs in the
manufacture of machinery, computers, electronics,
semiconductors, communication equipment, electrical
equipment, motor vehicles and transportation equipment.
The BLS payroll job numbers show a total of 70,000 jobs
created in all fields of architecture and engineering,
including clerical personal, over the past five years.
That comes to a mere 14,000 jobs per year (including
clerical workers). What is the annual graduating class
in engineering and architecture? How is there a shortage
of engineers when more graduate than can be employed?
Of course, many new graduates take
jobs opened by retirements. We would have to know the
retirement rates to get a solid handle on the fate of
new graduates. But it cannot be very pleasant, with
declining employment in the manufacturing sectors that
employ engineers and a minimum of 65,000 H-1B visas
annually for foreigners plus an indeterminate number of
It is not only the Bush regime that
bases its policies on lies. Not content with outsourcing
Americans` jobs, corporations want to fill the remaining
jobs in America with foreigners on work visas. Business
organizations lie about a shortage of engineers,
scientists and even nurses. Business organizations have
successfully used public relations firms and
bought-and-paid-for "economic studies" to
convince policymakers that American business cannot
function without H-1B visas that permit the importation
of indentured employees from abroad who are paid less
than the going US salaries. The so-called shortage is,
in fact, a replacement of American employees with
foreign employees, with the soon-to-be-discharged
American employee first required to train his
It is amazing to see free-market
economists rush to the defense of H-1B visas. The visas
are nothing but a subsidy to US companies at the expense
of US citizens.
Keep in mind this subsidy to US
corporations for employing foreign workers in place of
Americans as we examine the Labor Department`s
projections of the ten fastest growing US occupations
over the 2004-2014 decade.
All of the occupations with the
largest projected employment growth (in terms of the
number of jobs) over the next decade are in nontradable
domestic services. The top ten sources of the most jobs
in "superpower" America are: retail salespersons,
registered nurses, postsecondary teachers, customer
service representatives, janitors and cleaners, waiters
and waitresses, food preparation (includes fast food),
home health aides, nursing aides, orderlies and
attendants, general and operations managers. Note than
none of this projected employment growth will contribute
one nickel toward producing goods and services that
could be exported to help close the massive US trade
deficit. Note, also, that few of these jobs
classifications require a college education.
Among the fastest growing
occupations (in terms of rate of growth), seven of the
ten are in health care and social assistance. The three
remaining fields are: network systems and data analysis
with 126,000 jobs projected or 12,600 per year; computer
software engineering applications with 222,000 jobs
projected or 22,200 per year, and computer software
engineering systems software with 146,000 jobs projected
or 14,600 per year.
Assuming these projections are
realized, how many of the computer engineering and
network systems jobs will go to Americans? Not many,
considering the 65,000 H-1B visas each year (650,000
over the decade) and the loss during the past five years
of 761,000 jobs in the information sector and computer
systems design and related.
Judging from its ten-year jobs
projections, the US Department of Labor does not expect
to see any significant high-tech job growth in the US.
The knowledge jobs are being outsourced even more
rapidly than the manufacturing jobs were. The so-called
"new economy" was just another hoax perpetrated
on the American people.
If offshore jobs outsourcing is
good for US employment, why won`t the US Department of
Commerce release the 200-page, $335,000 study of the
impact of the offshoring of US high-tech jobs?
Republican political appointees reduced the 200-page
report to 12 pages of public relations hype and refuse
to allow the Technology Administration experts who wrote
the report to testify before Congress. Democrats on the
House Science Committee are unable to pry the study out
of the hands of Commerce Secretary Carlos Gutierrez.
Obviously, the facts don`t fit the Bush regime`s
The only thing America has left is
finance, and now that is moving abroad. On February 22
CNNMoney.com reported that America`s large financial
institutions are moving "large portions of their
investment banking operations abroad." [The
outsourcing wave hits investment bankers]No
longer limited to back-office work, offshoring is now
killing American jobs in research and analytic
operations, foreign exchange trades and highly
complicated credit derivatives contracts. Deal-making
responsibility itself may eventually move abroad.
Deloitte Touche says that the financial services
industry will move 20 percent of its total costs base
offshore by the end of 2010. As the costs are lower in
India, that will represent more than 20 percent of the
business. A job on Wall St is a declining option for
bright young persons with high stress tolerance.
The BLS payroll data that we have
been examining tracks employment by industry
classification. This is not the same thing as
occupational classification. For example, companies in
almost every industry and area of business employ people
in computer-related occupations. A
recent study from the Association for Computing
claims: "Despite all the publicity in the United
States about jobs being lost to India and China, the
size of the IT employment market in the United States
today is higher than it was at the height of the dot.com
boom. Information technology appears as though it will
be a growth area at least for the coming decade."
We can check this claim by turning
to the BLS Occupational Employment Statistics. We will
look at "computer and mathematical employment"
and "architecture and engineering employment."
Computer and mathematical
employment includes such fields as "software
engineers applications," "software engineers
systems software," "computer programmers,"
"network systems and data communications," and
"mathematicians." Has this occupation been a source
of job growth?
In November of 2000 this occupation
employed 2,932,810 people. In November of 2004 (the
latest data available), this occupation employed
2,932,790, or 20 people fewer. Employment in this field
has been stagnant for the past four years.
During these four years, there have
been employment shifts within the various fields of this
occupation. For example, employment of computer
programmers declined by 134,630, while employment of
software engineers applications rose by 65,080, and
employment of software engineers systems software rose
by 59,600. (These shifts might merely reflect change in
job or occupation title from programmer to software
These figures do not tell us
whether any gain in software engineering jobs went to
Americans. According to
Professor Norm Matloff, in 2002 there were 463,000
computer-related H-1B visa holders in the US. Similarly,
the 134,630 lost computer programming jobs (if not
merely a job title change) may have been outsourced
offshore to foreign affiliates.
Architecture and engineering
employment includes all the architecture and engineering
fields except software engineering. The total employment
of architects and engineers in the US declined by
120,700 between November 1999 and November 2004.
Employment declined by 189,940 between November 2000 and
November 2004, and by 103,390 between November 2001 and
There are variations among fields.
Between November 2000 and November 2004, for example, US
employment of electrical engineers fell by 15,280.
Employment of computer hardware engineers rose by 15,990
(possibly these are job title reclassifications).
Overall, however, over 100,000 engineering jobs were
lost. We do not know how many of the lost jobs were
outsourced offshore to foreign affiliates or how many of
any increase in computer hardware jobs went to foreign
holders of H-1B or L-1 visas.
Clearly, engineering and
computer-related employment in the US has not been
growing, whether measured by industry or by occupation.
Moreover, with a half million or more foreigners in the
US on work visas, the overall employment numbers do not
represent employment of Americans. Perhaps what
corporations and "studies" mean when they claim
offshore outsourcing increases US employment is that the
contacts companies make abroad allow them to bring in
more foreigners on work visas to displace their American
American employees have been
abandoned by American corporations and by their
representatives in Congress. America remains a land of
opportunity–but for foreigners–not for the native
born. A country whose work force is concentrated in
domestic nontradable services has no need for scientists
and engineers and no need for universities. Even the
projected jobs in nursing and school teachers can be
filled by foreigners on H-1B visas.
In the US the myth has been firmly
established that the jobs that the US is outsourcing
offshore are being replaced with better jobs. There is
no sign of these jobs in the payroll jobs data or in the
occupational statistics. Myself and others have pointed
out that when a country loses entry level jobs, it has
no one to promote to senior level jobs. We have also
pointed out that when manufacturing leaves, so does
engineering, design, research and development, and
On February 16 the New York Times
reported on a new study presented to the National
Academies that concludes that outsourcing is climbing
the skills ladder. A survey of 200 multinational
corporations representing 15 industries in the US and
Europe found that 38 percent planned to change
substantially the worldwide distribution of their
research and development work, sending it to India and
China. According to the New York Times, "More
companies in the survey said they planned to decrease
research and development employment in the United States
and Europe than planned to increase employment."
The study and discussion it
provoked came to untenable remedies. Many believe that a
primary reason for the shift of R&D to India and China
is the erosion of scientific prowess in the US due to
lack of math and science proficiency of American
students and their reluctance to pursue careers in
science and engineering. This belief begs the question
why students would chase after careers that are being
The main author of the study,
Georgia Tech professor Marie Thursby, believes that
American science and engineering depend on having "an
environment that fosters the development of a
high-quality work force and productive collaboration
between corporations and universities." The Dean of
Engineering at the University of California, Berkeley,
thinks the answer is to recruit the top people in China
and India and bring them to Berkeley. No one seems to
understand that research, development, design, and
innovation take place in countries where things are
made. The loss of manufacturing means ultimately the
loss of engineering and science. The newest plants
embody the latest technology. If these plants are
abroad, that is where the cutting edge resides.
The United States is the first
country in history to destroy the prospects and living
standards of its labor force. It is amazing to watch
freedom-loving libertarians and free-market economists
serve as full time apologists for the dismantling of the
ladders of upward mobility that made the America of old
an opportunity society. America has begun a polarization
into rich and poor. The resulting political instability
and social strife will be terrible.
CREATORS SYNDICATE, INC.
with Lawrence M.
for Peter Brimelow`s
Forbes Magazine interview with Roberts about the
recent epidemic of prosecutorial misconduct.