Saturday, December 10, 2011

Where the Jobs Are

...and where they continue to go.

"This country is bleeding middle class jobs profusely, and neither major political party seems to care." - Rep. Betty Sutton (D-Ohio)

After researching and writing about the unemployment situation and our economy for the past three years, there are those who still have visceral feelings towards the unemployed. They are in total denial and refuse to look at the facts...especially those who consider themselves to be "conservative".

While I can fully understand the Republican leaders being in denial and refusing to take any blame for our economic mess (just to get Obama out of office and retain political power again), I can't understand common Republican voters (or those with "conservative values") for being in denial, and having such harsh feelings towards those whose jobs were lost during the recession. I'm quite sure many of the unemployed are also Republicans. I can only conclude that they must get the majority of their "news" from the Fox channel. What else could it be?

Over the last three years there's been a lot of smug people who haven't yet lost their jobs, and continue to berate those that have (15.7 million as of October 2009). Even our country's Republican leaders. They've called the jobless lazy, Socialists, drug addicts, hobos, ignorant, alcoholics, and hippies who just want to live on the government tit.

And they want to drug test the jobless for unemployment benefits, further berating and attempting to influence the general consensus against the unemployed. Senators have even accused them of "gaming the system", to further stigmatize the jobless.

And then they blamed President Obama of being the food stamp king for feeding the unemployed, as though honest and hard-working Americans were being forced to feed millions of lazy jobless bums who refused to find work, even though Obama is cracking down on any food stamp fraud.

Small retailers often fraudulently obtain PIN or card numbers from program beneficiaries and keep the funds without the person’s knowledge. In other cases, beneficiaries purchase water or other beverages with bottle deposits, dump the liquid and then obtain cash for bottle deposits. Peanuts compared to the fraud in the financial, pharmaceutical, and defense industries.

But Republican voters want to rag on the jobless for being lazy and refusing to take non-existent jobs just to live high-on-the-hog on the government dole. Yes, that's what Fox News wants the country to think. But when it comes to criticizing Obama, only then do the jobless numbers come in handy.

But no matter who you want to blame, there are not enough jobs to go around.

According to the study reported by the New York Times, the John J. Heldrich Center for Workforce Development at Rutgers says that just 7 percent of those who lost jobs after the financial crisis have returned to or exceeded their previous financial position and maintained their lifestyles. (See the chart)

More than two years after the recovery officially began, American employers have reinstated less than a quarter of the jobs lost during the downturn, according to Labor Department figures (not including government layoffs). About 8.9 million more are working part time because they cannot find full-time work. In addition to the reported 13.3 million out of work, there are also about 8.4 million that are no longer being counted in the unemployment rate by the Bureau of Labor Statistics.

So why are Republican voters in denial, and having such harsh feelings towards the jobless? Is it because it's a reflection on Republican policies? And these people would rather blame the messenger (the unemployed)?

A great many of those made jobless during the recession are 40 to 60 years old and have worked all their lives. And many were just a few short years away from retiring when they would have become eligible for Social Security and their pensions.

And statistically, older job seekers have been the last ones re-hired. That’s because they are much more likely to be among the long-term unemployed, which will make it more difficult for them to eventually find a job.

So what happened? Did they all just suddenly drop out of the work force and wake up one day and say, "I'm not going to look for a job." Many Republican voters who watch Fox News think so. John Stossel thinks their lazy and calls them "freeloaders" in his attempt to sway public opinion against extending unemployment benefits ("smaller government").

All the smug and pompous ones think so. Many in the working populace still can't grasp the idea that there really aren't enough jobs available (let alone ones that will pay a "living wage"). In the "old days" that may have been true, but one would think that with all the talk about the economy, why are all these smug people blaming the unemployed for not having a job? That is, until it happens to them.

Their own family members can't understand either, "When are you going to get a job?"

Where have all these people been for the past three years since all the mass layoffs began? And have they never heard about the "outsourcing" of jobs over the last 40 years? Have they not heard about our low-paying service economy because our manufacturing base went to Asia? Have they not heard about the declining wages and the millions who are "under-employed" working two or more part-time jobs just to survive - - and that that's why there are so few part-time jobs left to take?

Why are all the smug ones in denial about the real economic conditions in this country and around the world? Are they afraid it will happen to them? Is that why they chastise, insult, and blame the unemployed and Wall Street protesters? Is it just easier to make the poor and unemployed the scapegoats?

The GOP's current bill (Middle Class Tax Relief and Job Creation Act of 2011) to extend the payroll tax and unemployment benefits also includes a provison for the Keystone XL oil sands pipeline, with a glaring omission of the surtax on millionaires. It also includes "reforms" (cuts) to unemployment insurance (per the GOP drug test proposal) and a "change" (cut) to federal retiree benefits. Whatever happened to our "kinder and gentler" nation? Read: The Disappearance of the Compassionate Conservatives

“Three or four million heads of households don’t turn into tramps and cheats overnight, nor do they lose the habits and standards of a lifetime. They don’t drink any more than the rest of us, they don’t lie any more, and they’re no lazier than the rest of us. An eighth or a tenth of the earning population does not change its character which has been generations in the moulding, or, if such a change actually occurs, we can scarcely charge it up to personal sin.” – Harry Hopkins, Federal Relief Administrator under Franklin D. Roosevelt – 1933

"Thanks to the globalization of the economy, big corporations and corrupt governments can make stuff in countries where it is legal to pay slave labor wages and then ship their products into the United States for free."- Rep. Betty Sutton

Despite their claims, large American multi-nationals actually pay a lower "effective" tax rate here than they do overseas. "High taxes" is not why they're not creating jobs. The effective corporate tax rate has been steadily declining for decades, almost exactly when outsourcing began escalating after the Vietnam War, and when the middle-class and labor unions began declining. Read: "Workers of the Western World".

It's not necessarily over-regulation or high taxes, it's lower wages overseas that trumps the aforementioned. How can American workers compete when engineers in China are paid the same as McDonalds workers here in the United States? And how can anyone compete with robots? They can't. (Re: regulations - See the smog in China)

Even with China's growing GDP, using Social Capitalism, it isn't making their own domestic workers consumers (because they sell to countries like the U.S.). Chinese wages are too low to grow their own middle-class to America's previous standards.

Businesses in China pay a 25% corporate tax, but it's not taxes that keep their businesses from growing, but it is low wages that keeps China's domestic workers from spending. Yet American multi-nationals are betting billions of dollars that China will grow into the world’s biggest consumer market within a few decades.

And then there's India. Mister S. Gopalakrishnan, the co-chairman of Infosys (the pioneering Indian outsourcing company) told Chrystia Freeland (the Global Editor-at-Large of Reuters news service) bluntly that "the per capita consumption of the Western middle class would have to decline as the developed and developing worlds meet somewhere in the middle.”

But Virgil Bierschwale of Keep America at Work, argues, "It does NOT have to decline, and a much better solution would be for us to raise them to our level, or watch everything that every American has ever bought (meaning homes) become worthless because nobody will have the money to buy it."

As of last year America had 10 million vacant homes due to foreclosures. Did they all just suddenly drop out of the work force and wake up one day and say, "I'm not going to look for a job and pay my mortgage any longer." A lot of Fox News viewers might believe so.

As Chrystia Freeland says, "The past 150 years have been an astonishing economic victory for the workers of the Western world. The bad news is that workers in the developing world have been left out, and their entry into the global economy will have complex and uneven consequences."

Forbes thinks if you look for work in either the healthcare or technology industries, you might have a fighting chance. It's either that or McDonalds...if you're lucky. They usually hire extra help during the summer months and are one of the corporations that are betting on China to be the world’s biggest consumer market.

"Around the late 1970's some con-men disguised as corporate executives convinced America and its people that we would be rich if we would send our jobs to other countries." (BRIC scores by Virgil Bierschwale at Keep America at Work)

The following was originally posted by Rep. Betty Sutton, a Democrat from Ohio's 13th Congressional District. Politifact checked her numbers...they are accurate.

Did you know that we buy about a half a trillion dollars more stuff from the rest of the world than they buy from us? The U.S. balance of trade is not only mind-blowingly bad - it is the worst in the world. It is being projected that the U.S. trade deficit for 2011 will be 558.2 billion dollars. That would be an increase of more than 11 percent from last year.

As I have written about previously, the United States is the worst in the world at a lot of things, but as far as the economic well-being of our nation is concerned, our balance of trade is particularly important. Every single month, far more money goes out of this country than comes into it.

Tax revenues are significantly reduced as all of this money gets sucked out of our communities. The federal government, state governments and local governments borrow gigantic piles of money to try to make up the difference, but all of this borrowing just makes our debt problems a whole lot worse.

In the end, no amount of government debt is going to be able to cover over the fact that our national economic pie is shrinking. We are continually consuming far more wealth than we produce, and that is a recipe for economic disaster.

The "current account balance" is one key indicator of how a country is doing economically. The following is how the CIA World Factbook defines "current account balance"....

This entry records a country's net trade in goods and services, plus net earnings from rents, interest, profits, and dividends, and net transfer payments (such as pension funds and worker remittances) to and from the rest of the world during the period specified.

If someone were to ask you what countries in the world have strong, thriving economies right now, what countries would you think of? Would countries like China, Germany, Russia and Saudi Arabia come to mind?

Well, all of those nations have huge positive current account balances. In fact, China has the best current account balance in the world at +$305 billion. So who is on the other end of the scale? The following information comes directly from a CIA World Factbook chart.

  • 190 Turkey $ -48,420,000,000
  • 191 Canada $ -48,500,000,000
  • 192 India $ -51,780,000,000
  • 193 France $ -54,400,000,000
  • 194 United Kingdom $ -56,190,000,000
  • 195 Spain $ -63,650,000,000
  • 196 Italy $ -67,940,000,000
  • 197 United States $ -470,200,000,000

The United States is rated dead last at number 197.

Just take a close look at those numbers for a minute. The U.S. had a current account balance of negative 470 billion dollars in 2010. That figure was almost 7 times worse than the next worst country (Italy). Not only does the United States have the worst current account balance in the entire world, the truth is that no other country is even in the same ballpark as us.

We are bleeding wealth so fast that it is hard to even describe it. But perhaps a real life example can help put this all into perspective.

One 22-year-old Saudi Arabian student has a collection of sports cars that is worth more than 12 million dollars. Reportedly, his collection includes at least three Lamborghinis, five Ferraris and five Porsches.

And guess who paid for it? You did. Every month, billions of dollars go out of the United States to help pay for the insane lifestyles of the ultra-wealthy oil barons of the Middle East.

Meanwhile, dozens of major U.S. cities are degenerating into hellholes. Once upon a time, Detroit was one of the greatest industrial cities that the world has ever seen. It was the envy of the entire globe. But now Detroit is an utter nightmare....

  • An analysis of census figures found that 48.5% of all men living in Detroit from age 20 to age 64 did not have a job in 2008.
  • If you can believe it, the median price of a home in Detroit is now just $6000.
  • Only 25 percent of students in Detroit graduate from high school.

So what happened to Detroit?

Well, just as has been happening in so many other U.S. cities, industry has been leaving at an astounding pace. As I have written about previously, an average of 23 manufacturing facilities a day were shut down in the United States during 2010. Overall, the U.S. has lost a total of more than 56,000 manufacturing facilities since 2001.

This country is bleeding middle class jobs profusely, and neither major political party seems to care.

Chart by Virgil Bierschwale at Keep America At Work (Click to enlarge)

American family budgets are being stretched tighter and tighter these days. There are not nearly enough good jobs to go around and yet the cost of everything just seems to keep going up.

Many families are going into massive amounts of debt in an attempt to make ends meet. According to a recent CNN article, credit card use in the United States is experiencing a major upswing once again....

Purchases made with credit cards rose 8.2% in the first quarter of 2011, 9% in the second quarter and 10.6% in the third quarter, according to First Data.

Of course American consumers were out in force on Black Friday once again this year. They gleefully filled up their carts with cheap plastic crap made overseas, and many racked up huge credit card balances in the process. But most of us never stop to think about those that make all of these cheap plastic products for us.

Thanks to the globalization of the economy, big corporations and corrupt governments can make stuff in countries where it is legal to pay slave labor wages and then ship their products into the United States for free.

It is important for all of us to learn what actually happens to these people that are working so hard for slave labor wages. The following comes from a recent article in the Guardian....

At the Hung Hing factory the researcher found that the 8,000 workers put in up to 100 hours of overtime a month, far in excess of the legal maximum. Workers say they have to sign a document agreeing to work additional overtime on top of the legal maximum. The basic wage was £132 a month (up to £250 with maximum overtime payments) but wages were paid up to three weeks late.

Workers complained of inadequate training with the factory machines and last year one worker died when he fell into a machine. They said there were frequent injuries and concerns over the chemicals used. There were also complaints about the standard of the dormitories, where water for washing and flushing toilets is turned off at 10pm.

How in the world are American workers supposed to "compete" for jobs at those wage levels?

As I have written about previously, Professor Alan Blinder of Princeton University is warning that 40 million more U.S. jobs could be sent offshore over the next two decades if nothing is done to stop this.

But instead, our "representatives" in Congress just keep pushing more "free trade" agreements as the answer to our problems. Congress has passed new free trade agreements with South Korea, Colombia and Panama, and the Obama administration has made "the NAFTA of the Pacific" a very high priority.

Well, if "free trade" is supposed to create so many jobs, then why was last decade the worst decade for the creation of jobs since the Great Depression?

If you can believe it, zero jobs were created between 1999 and 2009. The following comes from an article in Washington Monthly....

"If any single number captures the state of the American economy over the last decade, it is zero. That was the net gain in jobs between 1999 and 2009—nada, nil, zip. By painful contrast, from the 1940s through the 1990s, recessions came and went, but no decade ended without at least a 20 percent increase in the number of jobs."

But our leaders don't care about us. In fact, even the members of Obama's "jobs panel" have been shipping jobs out of the United States at a very rapid pace.

The U.S. has run a negative balance of trade with the rest of the globe every single year since 1976. During that time, the U.S. has run up a total trade deficit of more than 7.5 trillion dollars with the rest of the planet. That 7.5 trillion dollars could have gone to support U.S. workers and U.S. businesses. But it didn't. Instead, it went out of the country and it made foreigners wealthier as our own cities slowly rotted.

Now we are actually passing laws that encourage wealthy foreigners to come in and buy up pieces of the United States. For example, there is actually a bill in Congress that would automatically give residence visas to any foreigners that are willing to spend at least half a million dollars to buy houses inside the United States.

The idea behind the bill is that this will get the housing market moving again. There aren't enough Americans with good jobs to buy houses, so we have now decided to beg foreigners to buy them. How bizarre is that?

Until our horrendous balance of trade is fixed, the employment situation in this country is going to continue to get worse. Any politician that tries to sell you on a "jobs plan" that does not address our balance of trade is either totally incompetent or is straight out lying to you.

The economic infrastructure of America is crumbling a little bit more every single day. If something dramatic is not done, we will continue to bleed businesses, bleed jobs and bleed wealth.

Please share this information with as many people as you can. The American people need to understand what is happening to the economy. We need to work to wake up as many people as we can before it is too late.

Moderator: Maybe the smug ones will wake up too! With 27 million Americans unemployed who aren't driving consumer demand (and with lower wages here and slave wages overseas to drive up domestic and foreign production for goods and services due to lack of demand), and with banks and corporations hoarding $3.2 trillion in non-invested funds, and as this country continues to profusely bleed middle class jobs overseas, it's no wonder there aren't enough jobs. So why don't the Republican voters blame the outsourcers instead of the unemployed?

College students are graduating with law degrees and can't find work at McDonalds. Established lawyers who have been practicing law for years were laid off and can't find work; many of their jobs were also outsourced. I suppose this should be called reverse trickle-down economics. With millions of people unemployed, even the demand for a lawyer's service has declined, or because consumers or companies don't have the money to hire one. But Fox News pundits and their followers must think these people are lazy too.

And the smug ones will always blame the jobless.

My related posts:

How the CEOs are faring:


  1. That's why corporations have been lobbying congress to loosen restrictions on Visas. To hire people with degrees from overseas for lower wages here, rather than the much lower wages they'd get overseas. Meanwhile we have college grads that are qualified here, but aren't being hired at a fair wage.

  2. "Neither Europe nor the United States is likely to be the fastest-growing region in the world in the decades ahead, in the view of Jim O’Neill, the chairman of Goldman Sachs Asset Management, whom I interview in my column in Sunday Business. He says Brazil, Russia, India and China — plus Indonesia, Mexico, Turkey and South Korea — are likely to be global growth engines in the decades ahead."

  3. "Exports are expected to weaken in the coming months as a result of the deepening problems in the European economy and continuing weakness in the U.S."

    I suppose Chinese consumers can't sustain their growth, but with the U.S. and Europe unemployed or paid low wages, we can't consume Chinse products like we once did.

  4. Looking Beyond Europe
    Jim O’Neill, the chairman of Goldman Sachs Asset Management, says they aren’t really the most important prospects on the horizon. In his view of the world, developments in Brazil, Russia, India and China — enormous and rapidly growing economies, which he labeled as the BRIC’s 10 years ago — will prove “far more important to investors” than the issues now weighing down the United States and the 17 countries of the euro zone.

    Even if no more jobs were sent beyond our borders starting today, this country can't turn around fast enough in our lifetimes.