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Those Jobs Numbers: More Bad News For College Graduates
Deceit about jobs is taking over from deceit about the Iraq war. Lost in the hoopla about 248,000 jobs created in May is the discouraging pattern of job creation.
Why didn't the pundits touting the "good news on the jobs front" tell us that 176,000 of the jobs—or 71%—are concentrated in low-paying domestic services that cannot be outsourced?
Here is where the May jobs are: restaurants and bars 33,000; health care and social assistance 36,000; temporary help 31,000; retail trade 19,000; transportation and warehousing 15,000; financial activities 15,000; real estate 9,000; services to buildings and dwellings 8,000; education 8,000.
This repeats the pattern of last month and, indeed, of every month in the new millennium. Our economy is not creating jobs that are part of the high tech global economy or that require university education. The jobs that made America a land of opportunity where people could rise are missing.
If we add the 37,000 construction jobs created in May, then 213,000—or 86%—of May's jobs are in sectors that do not face import competition and cannot be outsourced. Neither do they produce exports to close the massive trade deficit.
The US economy might be part of the global economy, but jobs are not being created for the US work force in that part of the economy.
Despite the obvious facts, pundits continue to mislead the public that all is well on the jobs front. Writing in the Washington Times (Offshoring Which Jobs?, June 6), Alan Reynolds touts the Bureau of Labor Statistics projection that one million new jobs will be created for computer specialists during the ten year period from 2002 -2012.
What Mr. Reynolds doesn't tell you is that the BLS does not say that these jobs with American firms will be filled by Americans. Neither does Mr. Reynolds tell you that of the 10 occupations predicted to provide the most jobs, seven require no college education.
US firms might create 1 million jobs for computer specialists, be they Indian, Chinese, East European or American, by 2012, but so far the economy is still losing computer jobs. There are 8,000 fewer than a year ago and 223,000 fewer than in January 2001.
For the last 40 months the only sectors of the US economy that have experienced net job growth are: construction, financial activities, education and health services, restaurants and bars, membership associations & organizations, and government.
Together these sectors created 3.35 million jobs of which health care, government, and restaurants and bars account for 73%.
During the same 40 months the US economy lost 4.35 million jobs in manufacturing, wholesale trade, retail, transportation & warehousing, utilities, information, and professional & business services.
Despite Sarbanes-Oxley, legislation that greatly increased the accounting burden on US firms, Americans lost 64,000 accounting jobs, many of which were outsourced to the Philippines.
Despite the loss of 1 million jobs, the US economy found the need for 67,000 more jobs in legal services.
With fewer architectural, engineering, computer, information, and manufacturing jobs than four years ago, what becomes of university graduates trained for nonexistent jobs in the high tech economy? They have to retrain to wait tables and serve drinks when they graduate. When the vast majority of new jobs are in domestic services that only require short term on the job training, what sense does a university education make?
Pundits are fond of citing "studies" paid for by Indian offshore jobs platforms that "only" 3.3 million US jobs will be outsourced in the next ten years. For an economy that has lost 1 million jobs since January 2001, this is a crippling amount.
For an economy that has only 1.1 million jobs in "computer systems design and related" and only 1.26 million jobs in "architectural and engineering services," 3.3 million more jobs to be outsourced is a devastating blow to students who pursue difficult curriculums in college in hopes of a career.
Jobs deceit reached new heights with a New York Times columnist's report from a visit to India. True, he said, Indians now have many of our computer jobs. However, he effused, Americans were getting rich as a result. The proof: Indians were working on American brand computers, cooled by American brand AC, drinking American brand soft drinks.
The columnist was impervious to the fact that none of the American brands he named were made in America by Americans![The silver lining of outsourcing overseas, by Thomas L. Friedman, NYT February 27, 2004,]
Americans are being taken for a ride on jobs, just as they were on Iraqi "weapons of mass destruction" and terrorist links to al Qaeda.
The jobs mess will be just as big and just as costly as the Iraq mess.
Americans are being manipulated beyond their means.
[Sources for the jobs data are the Bureau of Labor Statistics and Charles McMillion at MBG Information Services in Washington, DC]
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Paul 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.