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Job growth over the last five years is the weakest on record?


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By Paul Craig Roberts

2-12-06

Last week the Bureau of Labor Statistics re-benchmarked the payroll jobs data back to 2000. Thanks to Charles McMillion of MBG Information Services, I have the adjusted data from January 2001 through January 2006. If you are worried about terrorists, you don't know what worry is.

Job growth over the last five years is the weakest on record. The US economy came up more than 7 million jobs short of keeping up with population growth. That's one good reason for controlling immigration. An economy that cannot keep up with population growth should not be boosting population with heavy rates of legal and illegal immigration.

Over the past five years the US economy experienced a net job loss in goods producing activities. The entire job growth was in service-providing activities--primarily credit intermediation, health care and social assistance, waiters, waitresses and bartenders, and state and local government.

US manufacturing lost 2.9 million jobs, almost 17% of the manufacturing work force. The wipeout is across the board. Not a single manufacturing payroll classification created a single new job.

The declines in some manufacturing sectors have more in common with a country undergoing saturation bombing during war than with a super-economy that is "the envy of the world." Communications equipment lost 43% of its workforce. Semiconductors and electronic components lost 37% of its workforce. The workforce in computers and electronic products declined 30%. Electrical equipment and appliances lost 25% of its employees. The workforce in motor vehicles and parts declined 12%. Furniture and related products lost 17% of its jobs. Apparel manufacturers lost almost half of the work force. Employment in textile mills declined 43%. Paper and paper products lost one-fifth of its jobs. The work force in plastics and rubber products declined by 15%. Even manufacturers of beverages and tobacco products experienced a 7% shrinkage in jobs.

The knowledge jobs that were supposed to take the place of lost manufacturing jobs in the globalized "new economy" never appeared. The information sector lost 17% of its jobs, with the telecommunications work force declining by 25%. Even wholesale and retail trade lost jobs. Despite massive new accounting burdens imposed by Sarbanes-Oxley, accounting and bookkeeping employment shrank by 4%. Computer systems design and related lost 9% of its jobs. Today there are 209,000 fewer managerial and supervisory jobs than 5 years ago.

In five years the US economy only created 70,000 jobs in architecture and engineering, many of which are clerical. Little wonder engineering enrollments are shrinking. There are no jobs for graduates. The talk about engineering shortages is absolute ignorance. There are several hundred thousand American engineers who are unemployed and have been for years. No student wants a degree that is nothing but a ticket to a soup line. Many engineers have written to me that they cannot even get Wal-Mart jobs because their education makes them over-qualified.

Offshore outsourcing and offshore production have left the US awash with unemployment among the highly educated. The low measured rate of unemployment does not include discouraged workers. Labor arbitrage has made the unemployment rate less and less a meaningful indicator. In the past unemployment resulted mainly from turnover in the labor force and recession. Recoveries pulled people back into jobs.

Unemployment benefits were intended to help people over the down time in the cycle when workers were laid off. Today the unemployment is permanent as entire occupations and industries are wiped out by labor arbitrage as corporations replace their American employees with foreign ones.

Economists who look beyond political press releases estimate the US unemployment rate to be between 7% and 8.5%. There are now hundreds of thousands of Americans who will never recover their investment in their university education.

Unless the BLS is falsifying the data or businesses are reporting the opposite of the facts, the US is experiencing a job depression. Most economists refuse to acknowledge the facts, because they endorsed globalization. It was a win-win situation, they said.

They were wrong.

Paul Craig Roberts was Assistant Secretary of the Treasury in the Reagan administration. He was Associate Editor of the Wall Street Journal editorial page and Contributing Editor of National Review. He is coauthor of The Tyranny of Good Intentions.He can be reached at: paulcraigroberts@yahoo.com

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"Job growth over the last five years is the weakest on record"

I don't believe this for one second. He should have substantiated that with facts.

"Economists who look beyond political press releases estimate the US unemployment rate to be between 7% and 8.5%."

As bad as un-named sources. This is nothing more than an Op-ed.

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"Job growth over the last five years is the weakest on record"

I don't believe this for one second. He should have substantiated that with facts.

The US economy came up more than 7 million jobs short of keeping up with population growth. [. . .]

Over the past five years the US economy experienced a net job loss in goods producing activities. The entire job growth was in service-providing activities--primarily credit intermediation, health care and social assistance, waiters, waitresses and bartenders, and state and local government.

US manufacturing lost 2.9 million jobs, almost 17% of the manufacturing work force. The wipeout is across the board. Not a single manufacturing payroll classification created a single new job.

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So if I'm reading this right (correct me if I'm not) all of this insight hinges upon his opening statement.:

Last week the Bureau of Labor Statistics re-benchmarked the payroll jobs data back to 2000. Thanks to Charles McMillion of MBG Information Services, I have the adjusted data from January 2001 through January 2006. If you are worried about terrorists, you don't know what worry is.

So the BLS rebenchmarked it and Charlse Mcmillion adjusted said benchmarked data? It'd be nice if they went into just a little bit of detail into what the heck that means?!?

Here's what I know:

Last I checked unemployment was sitting at 4.7%, as defined by government standards which is the norm as far as I know. So he points out that the figures don't include discouraged workers. Nor have they ever. They also exclude:

-Military

-Stay @ home moms

-Students

-Retirees

-Those w/dissabilities

-Institutionalized folk

Additionally, 3-4% of the population is always going to be experiencing either frictional or structural unemployment. These are short-term switching of jobs, or retraining to meet new job demands. Therefore an unemployment rate of 3-4% is considered full employment. This would be with no cyclical unemployment(the bad kind of unemployment), which woulld be indicative of a recession or economic downturn. My suspicion is that he's twisting normal unemployment levels and industry turn-overs.

4.7% is pretty darn good, and it matches current leading economic indicators which this imaginary 7-8.5% does not. If we're really loosing all the jobs this article suggests then the GDP should be plummeting, as consumer and and gov't spending drop off.

And while I admittedly know very little about such economic topics, had the author spent half the time explaining how he came up with the numbers, as he did telling us how bad the economy was, I'd probably be a bit more receptive to his blabbering.

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So if I'm reading this right (correct me if I'm not) all of this insight hinges upon his opening statement.:

So the BLS rebenchmarked it and Charlse Mcmillion adjusted said benchmarked data? It'd be nice if they went into just a little bit of detail into what the heck that means?!?

I agree completely with you here. . .

Here's what I know:

Last I checked unemployment was sitting at 4.7%, as defined by government standards which is the norm as far as I know. So he points out that the figures don't include discouraged workers. Nor have they ever. They also exclude:

-Military

-Stay @ home moms

-Students

-Retirees

-Those w/dissabilities

-Institutionalized folk

Additionally, 3-4% of the population is always going to be experiencing either frictional or structural unemployment. These are short-term switching of jobs, or retraining to meet new job demands. Therefore an unemployment rate of 3-4% is considered full employment. This would be with no cyclical unemployment(the bad kind of unemployment), which woulld be indicative of a recession or economic downturn. My suspicion is that he's twisting normal unemployment levels and industry turn-overs.

4.7% is pretty darn good, and it matches current leading economic indicators which this imaginary 7-8.5% does not. If we're really loosing all the jobs this article suggests then the GDP should be plummeting, as consumer and and gov't spending drop off.

But government spending has increased, not dropped off, so that can account for the steady GDP rise.

And while I admittedly know very little about such economic topics, had the author spent half the time explaining how he came up with the numbers, as he did telling us how bad the economy was, I'd probably be a bit more receptive to his blabbering.

I mostly agree with your post, but I am a bit intrigued as to what the author was hinting at, and I would like to see the raw data explained to me, espically the first part. I mean I have no freaking idea what he's talking about and you very rightly brought that up. . . but in the same breath, I am not throwing him into the fire. . .yet ;)

Good Post BTW :cheers:

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