The Jobs That Aren`t
The 248,000 new jobs in May looks
good as an aggregate number, which is the only number
the public got. Looking at the components of the figure
American job growth is concentrated
in low paid domestic services, such as restaurants and
bars, temporary help, and health care and social
assistance. Of the 248,000 new jobs, 213,000 are in
domestic services and construction.
These are not jobs that can help to
massive US trade deficit by producing tradable goods
The good news is that 32,000
manufacturing jobs were created in May. If this growth
in manufacturing jobs continues for the next 84 months,
by June 2011 the US economy will have regained the June
2001 level of
The bad news about the new
manufacturing jobs is that only 13,000 of them are in
products that are part of the global high tech
economy—computer and electronic products,
semiconductors, and electronic instruments. The rest are
scattered among food manufactured products, wood
products, and roofing metal for the domestic housing
Something is wrong. We are told
that we live in a global economy, but the jobs that are
growing in the US are not part of the global economy.
Advanced technology products are touted as America`s
manufacturing advantage. However, the US suffered its
first-ever trade deficit in advanced technology products
in 2002. The deficit grew significantly in 2003 and is
growing this year.
Charles McMillion at
MBG Information Services in Washington DC forecasts
the US 2004 deficit in advanced technology products to
be $35 billion.
US manufacturing employment peaked
in June 1979 at 19,553,000. In May 2004 US manufacturing
employment stands at 14,405,000, a decline of 26%.
We are told not to worry, that this
only means US manufacturing has become more productive.
A large percentage of the population once worked in
agriculture, but today, thanks to productivity, a tiny
percentage of the work force provides our food.
It is true that manufacturing has
become more productive. But it is also true that US
manufacturers are increasingly assemblers of foreign
made parts. More and more US brands are made abroad.
Unlike manufacturing, US agricultural employment did not
decline historically because of outsourced food
Our export future was to be in
services. We would be the world`s supplier of high tech
services and earn foreign exchange from service exports
to pay for our imports of manufactured goods.
The problem with these assurances
is that the US trade surplus in services peaked at $91.1
billion in 1997. It has since fallen to $59.2 billion, a
drop of 35%. Our surplus in services is only about 10%
of our trade deficit in goods.
Because the US dollar is the
world`s reserve currency, we can get away with this
extraordinary imbalance for long enough to dig ourselves
into a deep hole.
Perhaps US employers have been
saving up high value-added jobs for
June graduates and we will get good news the first
Friday in July when the June jobs numbers are announced.
But don`t hold your breath. In the
past 40 months (three previous graduating classes), the
US economy lost 376,000 jobs in professional and
business services and 220,000 jobs in professional and
Since January 2001, the US has
64,000 fewer accounting and bookkeeping jobs, 16,000
fewer architectural and engineering jobs, 223,000 fewer
computer systems design and related jobs, 123,000 fewer
management jobs, 532,000 fewer information jobs
(including telecommunications, ISPs, search portals,
data processing), 117,000 fewer jobs in air
transportation, 80,000 fewer jobs in chemicals, 122,000
fewer jobs in plastics and rubber products, 178,000
fewer jobs in apparel, 128,000 fewer jobs in textile
mills, 523,000 fewer jobs making computer and electronic
products, 297,000 fewer jobs making machinery, 134,000
fewer jobs making electrical equipment and appliances,
and 209,000 fewer jobs making transportation equipment.
If job disappearance of this
magnitude continues, textile engineers, mechanical
engineers, chemical engineers, electrical engineers, and
computer engineers will disappear as American
Few trends, including decline, move
in a straight line. However, with massive trade deficits
in manufactured goods including advanced technology
products, with shrinking trade surpluses in services,
with US job growth concentrated in low-pay domestic
services, and with the Bureau of Labor Statistics
predicting the majority of US job growth over the next
decade to be in low-skilled domestic services, the US
work force is taking on a Third World complexion.
That is the truth about jobs.
Craig Roberts was Associate Editor of the WSJ editorial
page, 1978-80, and columnist for “Political Economy.”
During 1981-82 he was Assistant Secretary of the
Treasury for Economic Policy. He is the author of
Supply-Side Revolution: An Insider`s Account of
Policymaking in Washington.