Thread: US Labor Force: One Foot in the Third World

VDARE.COM - http://vdare.com/roberts/050603_labor.htm

June 03, 2005

US Labor Force: One Foot in the Third World
By Paul Craig Roberts

In May the Bush economy eked out a paltry 73,000 private sector jobs: 20,000 jobs in construction (primarily for Mexican immigrants), 21,000 jobs in wholesale and retail trade, and 32,500 jobs in health care and social assistance. Local government added 5,000 for a grand total of 78,000.

Not a single one of these jobs produces an exportable good or service. With Americans increasingly divorced from the production of the goods and services that they consume, Americans have no way to pay for their consumption except by handing over to foreigners more of their accumulated stock of wealth. The country continues to eat its seed corn.

Only 10 million Americans are classified as "production workers" in the Bureau of Labor Statistics nonfarm payroll tables. Think about that.

The US with a population approaching 300 million has only 10 million production workers. That means Americans are consuming the products of other countries' labor.

In the 21st century the US economy has been unable to create jobs in export and import-competitive industries. US job growth is confined to nontradable domestic services.

This movement of the American labor force toward third world occupations in domestic services has dire implications both for US living standards and for America’s status as a superpower.

Economists and policymakers are in denial while the US economy implodes in front of their noses. The US-China Commission is making a great effort to bring reality to policymakers by holding a series of hearings to explore the depths of American decline.

The commissioners got an earful at the May 19 hearings in New York at the Council on Foreign Relations. Ralph Gomory explained that America’s naïve belief that offshore outsourcing and globalism are working for America is based on a 200 year old trade theory, the premises of which do not reflect the modern world.

Clyde Prestowitz, author of the just published Three Billion New Capitalists: The Great Shift of Wealth and Power to the East, explained that America’s prosperity is an illusion. Americans feel prosperous because they are consuming $700 billion annually more than they are producing. Foreigners, principally Asians, are financing US over-consumption, because we are paying them by handing over our markets, our jobs, and our wealth.

My former Business Week colleague, Bill Wolman, explained the consequences for US workers of suddenly facing direct labor market competition from hundreds of millions of Chinese and Indian workers.

Toward the end of the 20th century three developments came together that are rapidly moving high productivity, high value-added jobs that pay well away from the US to Asia: the collapse of world socialism which vastly increased the supply of labor available to US capital; the rise of the high speed Internet; the extraordinary international mobility of US capital and technology.

First world capital is rapidly deserting first world labor in favor of third world labor, which is much cheaper because of its abundance and low cost of living. Formerly, America’s high real incomes were protected from cheap foreign labor, because US labor worked with more capital and better technology, which made it more productive. Today, however, US capital and technology move to cheap labor, or cheap labor moves via the Internet to US employment.

The reason economic development in China and some Indian cities is so rapid is because it is fueled by the offshore location of first world corporations.

Prestowitz is correct that the form that globalism has taken is shifting income and wealth from the first world to the third world. The rise of Asia is coming at the expense of the American worker.

Global competition could have developed differently. US capital and technology could have remained at home, protecting US incomes with high productivity. Asia would have had to raise itself up without the inside track of first world offshore producers.

Asia’s economic development would have been slow and laborious and would have been characterized by a gradual rise of Asian incomes toward US incomes, not by a jarring loss of American jobs and incomes to Asians.

Instead, US corporations, driven by the short-sighted and ultimately destructive focus on quarterly profits, chose to drive earnings and managerial bonuses by substituting cheap Asian labor for American labor.

American businesses’ short-run profit maximization plays directly into the hands of thoughtful Asian governments with long-run strategies. As Prestowitz informed the commissioners, China now has more semiconductor plants than the US. Short-run goals are reducing US corporations to brand names with sales forces marketing foreign made goods and services.

By substituting foreign for American workers, US corporations are destroying their American markets. As American jobs in the higher paying manufacturing and professional services are given to Asians, and as American schoolteachers and nurses lose their occupations to foreigners imported under work visa programs, American purchasing power dries up, especially once all the home equity is spent, credit cards are maxed out and the dollar loses value to the Asian currencies.

The dollar is receiving a short-term respite as a result of the rejection of the European Union by France and Holland. The fate of the Euro, which rose so rapidly in value against the dollar in recent years, is uncertain, thus possibly cutting off one avenue of escape from the over-produced US dollar.

However, nothing is in the works to halt America’s decline and to put the economy on a path of true prosperity. In January 2004, I told a televised conference of the Brookings Institution in Washington, DC, that the US would be a third world economy in 20 years. I was projecting the economic outcome of the US labor force being denied first world employment and forced into the low productivity occupations of domestic services.

Considering the vast excess supplies of labor in India and China, Asian wages are unlikely to rapidly approach existing US levels. Therefore, the substitution of Asian for US labor in tradable goods and services is likely to continue.

As US students seek employments immune from outsourcing, engineering enrollments are declining.

The exit of so much manufacturing is destroying the supply chains that make manufacturing possible.

The Asians will not give us back our economy once we have lost it. They will not play the "free trade" game and let their labor force be displaced by cheap American labor.

Offshore outsourcing is dismantling the ladders of America’s fabled upward mobility. The US labor force already has one foot in the third world. By 2024 the US will be a has-been country.

SIXX--There you have it, proof beyond any reasonable doubt of any reasonable mind.

DON'T SPEND, SAVE!!

If that isn't treason, I don't know what is. The US Government, not the American People did this. These public employees with agendas contrary to their paid mission did this. The US Congress did it, the US Media did it, and the past three Presidents of the United States did it. All Three Graduates of Yale University and Members of the Skull and Bones Secrety Society, which doesn't end after you graduate from college. It is a LIFETIME membership in the Society.

Hillary Clinton graduated from Yale.

THAT'S IT FOR YALE.

NOT ANOTHER ONE of these YoYos....anywhere in the US Government. Maybe we'd let them do low level work, like clean the toilets. Oh no....THEY GAVE THAT JOB AWAY TO A FOREIGN NATIONAL!

Well....there's always one of those "production level" jobs in private industry, but get in line...there's about 20,000,000 Angry Americans in line ahead of you.

The Disease is:

Parasitia Verminia

GET RID OF IT....and Watch US Soar!!

DON'T SPEND, SAVE!!!

(All your dollars are going to China for Chinese Crap, GET IT??)

(All your jobs are going to foreign labor, GET IT??)

Right now the Chinese have stashed away $600,000,000 IN CASH $$$--OUR MONEY!

STOP SPENDING NOW!! AND pay off the credit cards as fast as you can, Whatever It Takes.

Listen UP folks....either you stop spending, or you will lose everything you've every worked for in your life. Even if we save our Nation, we'll be broke. You must trust me on this. I'm an ECON minor and this isn't even high level economics, its ECON 101!!

PLEASE!!

US Trade Policy Under These Traitors is a ONE WAY STREET--everything goes out and nothing comes in except DEBT.

WHY DO YOU THINK THEY CHANGED THE BANKRUPTCY LAW THIS YEAR?

Let's see: 250,000 jobs created. Meanwhile 180,000 illegal Aliens poured into the U.S. Another 100,000 jobs outsourced to India and China. Another 50,000 jobs moved to other Countries as plants just pick-up and leave. Gee, that's a net loss of 80,000 jobs to me.

Speculating about why President Bush's popularity and job performance are in the trash is 'play dumb' and cover-up talk (as seen on Fox's Brit Hume Special). The American People who voted for Mr. Bush and even most basic Conservatives are losing all credibility for this President. Mr. Bush knows why and so doesn't the Administration and whole bunch of folks. IT'S CALLED, THE UNITED STATES BORDER, STUPID!! It's the BORDER, STUPID. Hey, Stupid it's called the BORDER. The BORDER, Stupid President. It's called INVASION, STUPID. IMPEACH President Bush now. Time to get the Impeach harangue going. Get the garbage Democrats going too - whoever.

What doesn't President Bush get about his Country being raped and pillaged?? What's going to be done about mexico attacking this Nation?? What's going to be done about the riots against the American People in Los Angeles and the violent overrun of California by Mexico?? Heck it's just a little discomfort as the United States gets torn down.

Why it's all to Mr. Bush's liking of course so that he can impose a global control.

President Bush no longer has anything of value to offer Americans and the United States other than detriment and harm. From doing Nothing on the Border, pushing CAFTA, calling for National destruction by pushing the notion of INTEGRATION and CONVERGENCE. The wishful thinking that the U.S. should impose its will (for his Corporate greed)upon other Nations (who don't want it) and has some duty to install so called democracy everywhere at the destruction of the U.S.

President Bush is failing his basic duty and oath of office. That's President of the United States NOT President of the World. President Bush needs to be made an example of. Regardless of what malaise or this Country comes to a standstill.

Impeach President Bush. Americans should tear down this President (REGARDLESS of what is going on in Iraq - this crap is of the HIGHEST NATIONAL ORDER and not to be tolerated and this President is to be made a pitiful example 10 times worse than Clinton) and any Politician that will not secure the Border or work to stop illegal immigration should be torn down too.

I was projecting the economic outcome of the US labor force being denied first world employment and forced into the low productivity occupations of domestic services.

I think the article pretty much nails it with the exception of this point. Many of those jobs are getting taken by the illegals. We are literally getting squeezed at both ends in the labor market. It's not going to be pretty picture when it all comes home to roost within the next 10 to 20 years in the United States. What we are seeing is the death of the middle class in our country.

Brian503a--It won't take 15 to 20 years. It's happening NOW!! 2 years to 5 years. They want it done before the end of the Bush Presidency. It will affect most of us in one way or another by the end of this year. That's why we do not have until 2006 elections, we have to stop it NOW!!

I said 10 to 20 years. The article stated 20 years but I agree it will probably be sooner. How much sooner is a matter of opinion but you can see it coming. Unfortunately I don't see anyone trying to stop it. We have been giving our jobs and future away fo too long already.

Oh my mistake Brian!! Sorry. Actually, because of the national debt situation, personal debt situation, and low savings situation...which the labor group above didn't take into account or address, the downgrade in the economy has already happened but each will will affect more people exponentially as the spiral downward continues and the flood of people increases.

We can not wait until the 2006 elections.

We have to stop these bills in Congress this year and get troops to the borders now.

It's all possible. Don't be overwhelmed. "Overwhelmed" is what they are counting on. It is the very word David Horowitz used in his 80 page study of the Open Borders Lobby. Overwhelming the American Public was the method to undermine us and take us out by making our nation or what was our nation part of a Third World Poverty Bowl.

It's so insane I could knaw through my shoe!!