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. [Jobless
Rate Falls to Lowest Level in More Than 4 Years]
The export and import-competitive
sectors of the US 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 US
economy has been unable to create any jobs except jobs
in domestic nontradable 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 & Waste Services account for 17,600.
Health Care & 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
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%, 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 US 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 work force. Economists refer to these
millions of unemployed people as discouraged workers who
have dropped out of the work force. As they have given
up searching for jobs, they are not considered to be in
the work force and, therefore, do not count as
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 US 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
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.
CREATORS SYNDICATE, INC.
Paul Craig Roberts [email
him] is the author with Lawrence M.
for Peter Brimelow`s
Forbes Magazine interview with Roberts about the
recent epidemic of prosecutorial misconduct.