More US jobs have been lost during this administration than since Herbert
Hoover’s time: 3.2 million jobs gone
are now 9 million unemployed. (Hoover’s term was worse, but is that any consolation?)
The "strong recovery" being promised isn’t going to fix the problem.
The economy will get better, but most of the jobs lost will stay lost.
Companies will do better, but Americans need to brace for a lower quality
of life than their parents and grandparents had.
Historically, about 40-45% of jobs lost during a recession have been recovered
quickly (a relative term if you’re one of the unemployed), then more jobs
were slowly added to the economy as the country and economy
It’s different this time.
New jobless claims were down to "only" 395,000 in the last reported
week [400,000 is the economists’ "magic number" for this measure]. New jobs
created were just 0.057 million. At that rate, it would take 56 years to
aren’t exactly booming yet.
More than 85% of the jobs lost (2.8 million) were in manufacturing and many
of those moved to Mexico, China, India and other low wage countries. Worse
yet, this time around non-manufacturing jobs have left and are continuing
to leave the country.
The reason is simple: money. The average annual salary of an electrical engineer
with five years experience in San Jose, CA is $106,000; in Bombay it’s about $5,000
[BW 10/6/03: Engineering
on the Cheap]. In the year 2000, there were 195,000
H1B visas issued to allow engineers and
other high tech workers into the US – this year it’s down to 65,000, since
they can be hired even more cheaply to work in their own countries.
The job exports also affect another measure of how the economy is doing:
productivity. That’s essentially the Gross Domestic Product divided by the
number of employed.
Productivity appears to be going up, but all is not as it seems.
shuts their last US factory and fires 2,000
workers, the company contribution to the GDP remains the same but there are
that many fewer workers so productivity "goes up" even though nothing
really changed (at least not for the better). Add the 130,000 H1B workers
that are not in the country now and you get another "productivity boost." And
the millions of manufacturing jobs gone forever lift the measure yet again.
The US is well on the way to becoming even more of a service economy than
it is (80%). Your grandchildren may have to look forward to a future career
of waiting for cruise ships to dock, hoping there are going to be a lot of
current trends continue.