Paul Craig Roberts (see bio below) is someone who knows how to read Bureau of Labor Statistics reports. He also has a sharp nose for hype – from corporations, the Bush regime and universities – on the job prospects for American youth.
Here in Merced, we have been subjected to nauseating quantities of Bobcat flak from UC Merced. Some of it is adult stuff and that’s OK. Well, not really, but Americans expect flak from all public institutions and corporations. But what ought to make us mad as hell is the exploitation of Valley youth. Ever since UC, the Smith Trusts and their lawyers, Mr. UC Merced the local businessman, the various Mr. UC Merceds who have served UC in public offices from this district, numerous Ms. UC Merceds, the UC Merced Boosters and their more recent organizational incarnations (One Voice for One UC Merced Campus Parkway), local, national and international development corporations – ever since the Big Merced Land Deal took off around UC Merced, every kid in this town without the interest and vocation for university academic work has been made to feel like a failure. Big landowners, developers, lenders, commercial business, and realtors have been running a speculative housing bubble around the university. Special interests behave that way, and we know it.
It is not OK to pimp minority youth or to promise kids careers when the real intent is just to hustle a speculative real estate bubble. But, what else could we expect out of our Valley “leaders”?
We all want education for ourselves and for our children. We all need it all our lives. One of the sadder sights in America is an unemployed, educated middle-aged American who is bitter and has lost faith in the whole enterprise of learning anything. We especially want our children to have both an education that will give them broad, deep minds fitted for social and political survival, and hopefully some civilized enjoyment in their adult lives, and the practical training based on a realistic assessment of where jobs and careers will exist so that they can flourish economically.
Social, political and economic survival is hard in the Valley. It’s no joke and we don’t appreciate arrogant UC administrators’ condescension and exploitation of our ethnic complexity. We don’t need nanotechnologists or biotechnologists. A few good, homegrown scientists would be great, people with true concern for Valley scientific problems. Environmental health scientists would be useful, if they didn't turn into developers' consultants. We especially need talented social scientists to create an accurate portrait of who we are – not what our various exploiters portray us to be for their own interests. We need a new generation of union leaders with courage and principles. We need a whole new attitude toward farming and a radical change in direction of agriculture. We need environmentalists who will stand up against the special interests that have turned this into the worst air pollution basin in the country. We need a generation of politicians who aren’t corrupt whores of special interests.
Partly because we have not – until recently – been overly molested by our great public research university, it’s possible we still possess the combination of energy and common sense that, combined with the right kind of reading and some encouragement, could produce realistic analysis of problems and solutions. What we get from UC Merced is increasing doses of hysterically arrogant, defensive flak as the truth slowly dawns on its crew: the Valley is somehow real; it isn’t what the Great Valley Center, the politicians and confidence men and women in business said it was. The Valley isn’t the California Dream. The Valley provided the work and the produce that fed the Dream. Now it is providing cheaper housing for the dwindling, commuting American high-tech labor force.
What is university technical training worth to Valley youth? What does the Bureau of Labor Statistics say on the subject? What real relevance does UC Merced have to the Valley, in the midst of a national jobless economic “recovery”? We’re from agriculture. We know about hard work, low wages, union busting, low commodity prices, booms, busts, phony economic recoveries and massive environmental destruction. From everything one reads about UC Merced, it would seem it isn’t set up to be of any help at all to Valley reality. It seems likely it will remain an irrelevant island of privilege and anchor tenant for huge urban growth on prime farm and ranch land.
It is extremely politically correct for hip leaders and value-free facilitators to mimic Cesar Chavez, saying, “Si, se puede” (Yes, it can be done) without the least clue about what that phrase meant in its day.
But there is another old California phrase almost like it: “Sal si puedes!” (Get out if you can.)
In other words: Get out – don’t let your child become a statistic of the Tomlinson-Keasey-Cardoza-UC Merced Memorial Respiratory Research Institute, find a job at a living wage, decent shelter, water and air quality – if you can.
March 6, 2006
A Nation Polarized Between Rich and Poor
America's Bleak Jobs Future
By PAUL CRAIG ROBERTS
On February 20 Forbes.com told its readers with a straight face that "the American job-generation machine rolls on. The economy will create 19 million new payroll jobs in the decade to 2014." Forbes took its information from the 10-year jobs projections from the Bureau of Labor Statistics, US Department of Labor, released last December.
If the job growth of the past half-decade is a guide, the forecast of 19 million new jobs is optimistic, to say the least. According to the Bureau of Labor Statistics payroll jobs data, from January 2001 - January 2006 the US economy created 1,054,000 net new private sector jobs and 1,039,000 net new government jobs for a total five-year figure of 2,093,000. How does the US Department of Labor get from 2 million jobs in five years to 19 million in ten years?
I cannot answer that question.
However, the jobs record for the past five years tells a clear story. The BLS payroll jobs data contradict the hype from business organizations, such as the US Chamber of Commerce, and from "studies" financed by outsourcing corporations that offshore jobs outsourcing is good for America. Large corporations, which have individually dismissed thousands of their US employees and replaced them with foreigners, claim that jobs outsourcing allows them to save money that can be used to hire more Americans. The corporations and the business organizations are very successful in placing this disinformation in the media. The lie is repeated everywhere and has become a mantra among no-think economists and politicians. However, no sign of these jobs can be found in the payroll jobs data. But there is abundant evidence of the lost American jobs.
Information technology workers and computer software engineers have been especially heavily hit by offshore jobs outsourcing. During the past five years (Jan 01 - Jan 06), the information sector of the US economy lost 645,000 jobs or 17.4% of its work force. Computer systems design and related lost 116,000 jobs or 8.7% of its work force. Clearly, jobs outsourcing is not creating jobs in computer engineering and information technology. Indeed, jobs outsourcing is not even creating jobs in related fields.
For the past five years US job growth was limited to these four areas: education and health services, state and local government, leisure and hospitality, financial services. There was no US job growth outside these four areas of domestic nontradable services.
Oracle, for example, which has been handing out thousands of pink slips, has recently announced two thousand more jobs being moved to India. How is Oracle's move of US jobs to India creating jobs in the US for waitresses and bartenders, hospital orderlies, state and local government and credit agencies, the only areas of job growth?
Engineering jobs in general are in decline, because the manufacturing sectors that employ engineers are in decline. During the last five years, the US work force lost 1.2 million jobs in the manufacture of machinery, computers, electronics, semiconductors, communication equipment, electrical equipment, motor vehicles and transportation equipment. The BLS payroll job numbers show a total of 70,000 jobs created in all fields of architecture and engineering, including clerical personal, over the past five years. That comes to a mere 14,000 jobs per year (including clerical workers). What is the annual graduating class in engineering and architecture? How is there a shortage of engineers when more graduate than can be employed?
Of course, many new graduates take jobs opened by retirements. We would have to know the retirement rates to get a solid handle on the fate of new graduates. But it cannot be very pleasant, with declining employment in the manufacturing sectors that employ engineers and a minimum of 65,000 H-1B visas annually for foreigners plus an indeterminate number of L-1 visas.
It is not only the Bush regime that bases its policies on lies. Not content with outsourcing Americans' jobs, corporations want to fill the remaining jobs in America with foreigners on work visas. Business organizations lie about a shortage of engineers, scientists and even nurses. Business organizations have successfully used pubic relations firms and bought-and-paid-for "economic studies" to convince policymakers that American business cannot function without H-1B visas that permit the importation of indentured employees from abroad who are paid less than the going US salaries. The so-called shortage is, in fact, a replacement of American employees with foreign employees, with the soon-to-be-discharged American employee first required to train his replacement.
It is amazing to see free-market economists rush to the defense of H-1B visas. The visas are nothing but a subsidy to US companies at the expense of US citizens.
Keep in mind this subsidy to US corporations for employing foreign workers in place of Americans as we examine the Labor Department's projections of the ten fastest growing US occupations over the 2004-2014 decade.
All of the occupations with the largest projected employment growth (in terms of the number of jobs) over the next decade are in nontradable domestic services. The top ten sources of the most jobs in "superpower" America are: retail salespersons, registered nurses, postsecondary teachers, customer service representatives, janitors and cleaners, waiters and waitresses, food preparation (includes fast food), home health aides, nursing aides, orderlies and attendants, general and operations managers. Note than none of this projected employment growth will contribute one nickel toward producing goods and services that could be exported to help close the massive US trade deficit. Note, also, that few of these jobs classifications require a college education.
Among the fastest growing occupations (in terms of rate of growth), seven of the ten are in health care and social assistance. The three remaining fields are: network systems and data analysis with 126,000 jobs projected or 12,600 per year; computer software engineering applications with 222,000 jobs projected or 22,200 per year, and computer software engineering systems software with 146,000 jobs projected or 14,600 per year.
Assuming these projections are realized, how many of the computer engineering and network systems jobs will go to Americans? Not many, considering the 65,000 H-1B visas each year (650,000 over the decade) and the loss during the past five years of 761,000 jobs in the information sector and computer systems design and related.
Judging from its ten-year jobs projections, the US Department of Labor does not expect to see any significant high-tech job growth in the US. The knowledge jobs are being outsourced even more rapidly than the manufacturing jobs were. The so-called "new economy" was just another hoax perpetrated on the American people.
If offshore jobs outsourcing is good for US employment, why won't the US Department of Commerce release the 200-page, $335,000 study of the impact of the offshoring of US high-tech jobs? Republican political appointees reduced the 200-page report to 12 pages of public relations hype and refuse to allow the Technology Administration experts who wrote the report to testify before Congress. Democrats on the House Science Committee are unable to pry the study out of the hands of Commerce Secretary Carlos Gutierrez. Obviously, the facts don't fit the Bush regime's globalization hype.
The only thing America has left is finance, and now that is moving abroad. On February 22 CNNMoney.com reported that America's large financial institutions are moving "large portions of their investment banking operations abroad." No longer limited to back-office work, offshoring is now killing American jobs in research and analytic operations, foreign exchange trades and highly complicated credit derivatives contracts. Deal-making responsibility itself may eventually move abroad. Deloitte Touche says that the financial services industry will move 20 percent of its total costs base offshore by the end of 2010. As the costs are lower in India, that will represent more than 20 percent of the business. A job on Wall St is a declining option for bright young persons with high stress tolerance.
The BLS payroll data that we have been examining tracks employment by industry classification. This is not the same thing as occupational classification. For example, companies in almost every industry and area of business employ people in computer-related occupations. A recent study from the Association for Computing Machinery claims:
"Despite all the publicity in the United States about jobs being lost to India and China, the size of the IT employment market in the United States today is higher than it was at the height of the dot.com boom. Information technology appears as though it will be a growth area at least for the coming decade."
We can check this claim by turning to the BLS Occupational Employment Statistics. We will look at "computer and mathematical employment" and "architecture and engineering employment."
Computer and mathematical employment includes such fields as "software engineers applications," "software engineers systems software," "computer programers," "network systems and data communications," and "mathematicians." Has this occupation been a source of job growth?
In November of 2000 this occupation employed 2,932,810 people. In November of 2004 (the latest data available), this occupation employed 2,932,790, or 20 people fewer. Employment in this field has been stagnant for the past four years.
During these four years, there have been employment shifts within the various fields of this occupation. For example, employment of computer programmers declined by 134,630, while employment of software engineers applications rose by 65,080, and employment of software engineers systems software rose by 59,600. (These shifts might merely reflect change in job or occupation title from programmer to software engineer.)
These figures do not tell us whether any gain in software engineering jobs went to Americans. According to Professor Norm Matloff, in 2002 there were 463,000 computer-related H-1B visa holders in the US.
Similarly, the 134,630 lost computer programming jobs (if not merely a job title change) may have been outsourced offshore to foreign affiliates.
Architecture and engineering employment includes all the architecture and engineering fields except software engineering. The total employment of architects and engineers in the US declined by 120,700 between November 1999 and November 2004. Employment declined by 189,940 between November 2000 and November 2004, and by 103,390 between November 2001 and November 2004.
There are variations among fields. Between November 2000 and November 2004, for example, US employment of electrical engineers fell by 15,280. Employment of computer hardware engineers rose by 15,990 (possibly these are job title reclassifications). Overall, however, over 100,000 engineering jobs were lost. We do not know how many of the lost jobs were outsourced offshore to foreign affiliates or how many of any increase in computer hardware jobs went to foreign holders of H-1B or L-1 visas.
Clearly, engineering and computer-related employment in the US has not been growing, whether measured by industry or by occupation.
Moreover, with a half million or more foreigners in the US on work visas, the overall employment numbers do not represent employment of Americans. Perhaps what corporations and "studies" mean when they claim offshore outsourcing increases US employment is that the contacts companies make abroad allow them to bring in more foreigners on work visas to displace their American employees.
American employees have been abandoned by American corporations and by their representatives in Congress. America remains a land of opportunity--but for foreigners--not for the native born. A country whose work force is concentrated in domestic nontradable services has no need for scientists and engineers and no need for universities.
Even the projected jobs in nursing and school teachers can be filled by foreigners on H-1B visas.
In the US the myth has been firmly established that the jobs that the US is outsourcing offshore are being replaced with better jobs.
There is no sign of these jobs in the payroll jobs data or in the occupational statistics. Myself and others have pointed out that when a country loses entry level jobs, it has no one to promote to senior level jobs. We have also pointed out that when manufacturing leaves, so does engineering, design, research and development, and innovation itself.
On February 16 the New York Times reported on a new study presented to the National Academies that concludes that outsourcing is climbing the skills ladder. A survey of 200 multinational corporations representing 15 industries in the US and Europe found that 38 percent planned to change substantially the worldwide distribution of their research and development work, sending it to India and China. According to the New York Times, "More companies in the survey said they planned to decrease research and development employment in the United States and Europe than planned to increase employment."
The study and discussion it provoked came to untenable remedies. Many believe that a primary reason for the shift of R&D to India and China is the erosion of scientific prowess in the US due to lack of math and science proficiency of American students and their reluctance to pursue careers in science and engineering. This belief begs the question why students would chase after careers that are being outsourced abroad.
The main author of the study, Georgia Tech professor Marie Thursby, believes that American science and engineering depend on having "an environment that fosters the development of a high-quality work force and productive collaboration between corporations and universities."
The Dean of Engineering at the University of California, Berkeley, thinks the answer is to recruit the top people in China and India and bring them to Berkeley. No one seems to understand that research, development, design, and innovation take place in countries where things are made. The loss of manufacturing means ultimately the loss of engineering and science. The newest plants embody the latest technology. If these plants are abroad, that is where the cutting edge resides.
The United States is the first country in history to destroy the prospects and living standards of its labor force. It is amazing to watch freedom-loving libertarians and free-market economists serve as full time apologists for the dismantling of the ladders of upward mobility that made the America of old an opportunity society.
America has begun a polarization into rich and poor. The resulting political instability and social strife will be terrible.
PAUL CRAIG ROBERTS
Hon. Paul Craig Roberts is the John M. Olin Fellow at the Institute for Political Economy, Senior Research Fellow at the Hoover Institution, Stanford University, and Research Fellow at the Independent Institute. A former editor and columnist for The Wall Street Journal and columnist for Business Week and the Scripps Howard News Service, he is a nationally syndicated columnist for Creators Syndicate in Los Angeles and a columnist for Investor’s Business Daily. In 1992 he received the Warren Brookes Award for Excellence in Journalism. In 1993 the Forbes Media Guide ranked him as one of the top seven journalists.
He was Distinguished Fellow at the Cato Institute from 1993 to 1996. From 1982 through 1993, he held the William E. Simon Chair in Political Economy at the Center for Strategic and International Studies. During 1981-82 he served as Assistant Secretary of the Treasury for Economic Policy. President Reagan and Treasury Secretary Regan credited him with a major role in the Economic Recovery Tax Act of 1981, and he was awarded the Treasury Department’s Meritorious Service Award for "his outstanding contributions to the formulation of United States economic policy." From 1975 to 1978, Dr. Roberts served on the congressional staff where he drafted the Kemp-Roth bill and played a leading role in developing bipartisan support for a supply-side economic policy.
In 1987 the French government recognized him as "the artisan of a renewal in economic science and policy after half a century of state interventionism" and inducted him into the Legion of Honor.
Dr. Roberts’ latest books are The Tyranny of Good Intentions, co-authored with IPE Fellow Lawrence Stratton, and published by Prima Publishing in May 2000, and Chile: Two Visions—The Allende-Pinochet Era, co-authored with IPE Fellow Karen Araujo, and published in Spanish by Universidad Nacional Andres Bello in Santiago, Chile, in November 2000. The Capitalist Revolution in Latin America, co-authored with IPE Fellow Karen LaFollette Araujo, was published by Oxford University Press in 1997. A Spanish language edition was published by Oxford in 1999. The New Colorline: How Quotas and Privilege Destroy Democracy, co-authored with Lawrence Stratton, was published by Regnery in 1995. A paperback edition was published in 1997. Meltdown: Inside the Soviet Economy, co-authored with Karen LaFollette, was published by the Cato Institute in 1990. Harvard University Press published his book, The Supply-Side Revolution, in 1984. Widely reviewed and favorably received, the book was praised by Forbes as "a timely masterpiece that will have real impact on economic thinking in the years ahead." Dr. Roberts is the author of Alienation and the Soviet Economy, published in 1971 and republished in 1990. He is the author of Marx’s Theory of Exchange, Alienation and Crisis, published in 1973 and republished in 1983. A Spanish language edition was published in 1974.
Dr. Roberts has held numerous academic appointments. He has contributed chapters to numerous books and has published many articles in journals of scholarship, including the Journal of Political Economy, Oxford Economic Papers, Journal of Law and Economics, Studies in Banking and Finance, Journal of Monetary Economics, Public Finance Quarterly, Public Choice, Classica et Mediaevalia, Ethics, Slavic Review, Soviet Studies, Rivista de Political Economica, and Zeitschrift fur Wirtschafspolitik. He has entries in the McGraw-Hill Encyclopedia of Economics and the New Palgrave Dictionary of Money and Finance. He has contributed to Commentary, The Public Interest, The National Interest, Harper’s, the New York Times, The Washington Post, The Los Angeles Times, Fortune, London Times, The Financial Times, TLS, The Spectator, Il Sole 24 Ore, Le Figaro, Liberation, and the Nihon Keizai Shimbun. He has testified before committees of Congress on 30 occasions.
Dr. Roberts was educated at the Georgia Institute of Technology (B.S.), the University of Virginia (Ph.D.), the University of California at Berkeley and Oxford University where he was a member of Merton College.
He is listed in Who’s Who in America, Who’s Who in the World, The Dictionary of International Biography, Outstanding People of the Twentieth Century, and 1000 Leaders of World Influence.