American Jobs and Economy still
on decline
by Mike Crane
There are some troubling signs about our so-called economic
recovery. Now that the election rhetoric is out of the way, it may
be time for a closer look at how well some of our economic policies are
performing - or how some of our economic policies may be failing.
Lets start with what would a definition of success (from
"Outsourcing is good for us" - also known as "good land in
Florida - cheap!).
The weaker-than-expected employment report could fuel
concerns that the labor market recovery is stalling. Economists
say employers should be adding more than 200,000 new jobs or
more each month. Just to keep pace
with population growth, about 150,000 new jobs are needed each
month.
Now lets look at the performance (from report below):
The economy added 402,000 jobs in the third
quarter of this year.
That equates to 134,000 jobs per month and
it takes 150,000 to maintain the status quo due to population
increase (which includes legal and estimates of illegal immigration
and H1-B visas).
 So not only are we falling short of true
economic recovery, it is questionable if we are even keeping pace
with population increases. Now you have to remember that our country
is pumping over $400,000,000,000.00 in borrowed money into the
economy in the form of annual deficits to spur the economy.
In addition our trade balance is running at
an annual deficit approaching $600,000,000,000.00 per year and on an
increasing trend, very steep increasing trend.
We are in effect borrowing close to 1
trillion dollars a year to spur the economy. Geeze it should be
soaring, never before has any country pumped so much borrowed money
into an economy.
Now we have the contest between modern day
rocket scientists - called economists and some plain ole common
sense. The so called rocket scientists, including the current
Administration (yes - that is President Bush) say everything is OK.
But any plain ole citizen who tries to manage a household budget
could tell you that something is amiss.
Money borrowed has to be paid back someday!
An unemployed citizen does not have a job regardless of productivity
increases, Greenspan interest rates or statements of how well the
economy is doing! A citizen without a job can not support a
family, pay taxes and to some extent increases the taxes (or debt)
of those who do have jobs.
If you agree with the economic rocket
scientists you should be very happy with the state of the economy!
If not, you are being ignored by your elected and appointed
officials!
Lets look at where some of the jobs have
gone:
Outsourcing - The outsourcing companies
in India gloat and laugh at Americans as they claim that they can
document at least 192,000 jobs a year being transferred to India.
They also claim that due to the election of President Bush this
will greatly increase. That is 16,000 jobs a month and increasing.
Free Trade -
The rash of free trade agreements have proven Perot correct -
"that giant sucking sound of jobs leaving!" Factory after factory,
plant after plant, close and move to foreign countries.
Contrary to Administration claims, empty plants do not employ as
many people as active ones. Layoffs are running at a monthly level
of 100,000 jobs. In following the layoffs it appears that about
half are permanent facility closings or roughly 50,000 jobs to
foreign countries.
Immigration - Immigration, both legal and
illegal is just out of control. Both are increasing our population
at rates that can not be absorbed by the economy, not to mention
our society. With the combined total of legal and illegal
immigration at an estimated 4,000,000 per year rate, this is an
extra 333,000 people a month added to the population. Lets say 40%
are working age, this would mean a job creation rate of 133,000 per
month required for these people. Remember, according to Bush they
do not take American jobs, only the unfilled jobs!
Now adding the impact of these three
policies results in a requirement of :
133,000
new jobs required to meet immigration population increase. A loss
of 16,000 jobs a month due to outsourcing (and expected to
increase). And a loss of 50,000 due to relocation of plants and
factories to foreign countries. This is a net effect of 199,000
jobs per month.
That is more than the shortfall of jobs that the
new rocket scientists say are needed to really have a growing
economy! What conclusion can us non rocket scientists draw from
these facts? Apparently this is too mush for the economic rocket
scientists to figure out.
These government policies are an anchor on our
economy.
As long as they remain in place the
deficits will be high, the trade
balance will be negative and
performance will be sluggish.
The increasing debt will only add to the
problem, as someday it has to be paid back. Folks it will not be the
employees in the relocated factories, or the outsourcing companies
in India or illegal immigrants who have to pay it back.
Read this carefully, they will not give a hoot
- that you have run up so much debt! It will be you, your children
or their children who pay the price!
Both political parties support these
policies. But it is you, the average citizen (and your
grandkids) who will pay the price. At what point is it time to say
"enough is enough!"
Some may find it of interest that even Alan
Greenspan has voiced some similar concerns -
Trade Deficit - even Greenspan recognizes the failed policies ...
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3Q productivity growth slows to
1.8%
November layoffs cap worst three
months for cutbacks since 2002
The productivity of America's workers grew at a 1.8
percent annual rate in the third quarter, the slowest
pace in nearly two years, the government reported
Tuesday.
The deceleration in this vital economic indicator,
however, raised some hope that employers who have
squeezed so much efficiencies out of their existing work
forces may seek to boost hiring as a way to meet
customer demand.
The Labor Department's latest snapshot of
productivity -- the amount an employee produces for
every hour of work -- showed that efficiency gains were
slightly weaker than the 1.9 percent growth rate first
estimated for the July-to-September quarter.
The new figure -- based on more complete data --
marked a slowing from the 3.9 percent productivity pace
logged in the second quarter.
"I think we are setting ourselves up for much better,
firmer hiring," said Anthony Chan, senior economist at
JPMorgan Fleming Asset Management.
However, that optimism seemed to be dampened by a
report released Tuesday from a major employment
outplacement firm, Challenger, Gray & Christmas.
The Chicago-based firm said the number of job cuts
announced by U.S. corporations surpassed 100,000 for the
third consecutive month in November, coming in at
104,530, or 2.6 percent above the number reported in
October.
This brings the year-to-date total to 930,690, 19
percent lower than the amount reported in the same
11-month period a year ago.
The firm also noted that this is the first time
that the monthly tally of job cuts has topped 100,000
for three or more consecutive months since the
January-April period in 2002.
On Wall Street, stocks were mixed after release of
the productivity report. The Dow Jones industrials were
off 4 points, while the Nasdaq was up 6 points in
morning trading.
Some analysts were expecting productivity to rise
slightly to a 2 percent growth rate for the third
quarter. Still, the long-term productivity trend remains
healthy, economists say.
For the year ending in September, productivity
increased by a solid 3.1 percent.
Efficiency gains are important to the economy's
long-term vitality. They allow the economy to grow
faster without propelling inflation. Companies can pay
workers more without raising prices, which would eat up
those wage gains.
During the economic slump, however, gains in
productivity came at the expense of workers. Companies
produced more with fewer employees.
But in the third quarter, output rose at a solid 4.2
percent rate and the hours of all workers increased at a
2.4 percent pace, the biggest advance since the third
quarter of 1999. The economy added 402,000 jobs in the
third quarter of this year.
With productivity slowing, though, unit labor costs
rose at a 1.8 percent rate in the third quarter. Unit
labor costs is a measure of how much companies pay
workers for every unit of output they produce. The
recent rise in these costs, should they continue, could
put pressure on companies' profit margins, analysts say.
Amid signs that inflation is creeping higher, the
Federal Reserve is expected to boost short-term interest
rates for a fifth time this year when it meets next on
Dec. 14. |
Source:
http://www.ajc.com/business/content/business/1204/07economy.html
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