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Sorry, Jobs Are Not Coming Back
This is from Stone Street Advisors
Unless we, as a Country, decide to "go Luddite."
Contrary to claims by Unions and other pro-labor groups, "offshoring"
is not the obvious and primary cause of job loss in the U.S;
productivity improvements and shifting business dynamics are (among
other things). This chart, from the Atlanta Fed proves the Unions/labor wrong, rather conclusively:
In
the 10-year period from 1998-2008, we saw 1.9 million manufacturing job
"losses" domestically, while only 242,800 such jobs were "created"
abroad by U.S. multinational firms (i.e. this ignores multinational
firms based in other countries). Many groups - and let's be honest, all
of us at one point or another - have blamed services companies for
off-shoring the majority of their customer service and
administrative/operations, but again, the above chart shows this is
largely a myth. Of 335,000 jobs "lost" in financial institutions (many
of them operations/administration/service jobs), only 13,400 were
"created" in other countries.
Some skeptics may look at the "Other
Industries" line and question why only 234,200 jobs were "created" in
the U.S. while over 1.6 million were "created" abroad. Unfortunately
for such skeptics, this is easily explained (emphasis mine):
Sixty-nine
percent of the foreign employment growth by U.S. multinationals from
1999 to 2008 was in the "other industries" category, and 87 percent of
that growth was in three types of industries: retail trade;
administration, support, and waste management; and accommodation of food
services. Some fraction of these jobs, no doubt, reflect "offshoring"
in the usual sense. But it is also true that these are types of
industries that are more likely than many others to represent production
for local (or domestic) demand as opposed to production for export to
the United States.We certainly don't present this
information as a definitive answer to the question about the role of
offshoring in the slow U.S. jobs recovery. But if you forced us
to choose between global or domestic factors as the place to look for
solutions as we struggle with persistent underperformance in U.S. labor
markets, we'd choose the latter.
In other
words, all the American companies that've expanded into Asia and South
America have hired ALOT of local workers, they have not, at least not
anywhere close to the degree alleged by labor groups, took our jobs...
- advertisements -
JOBS! I thank God everyday that I have one.
The biggest warning sign of this baloney equities, commodities and metals rally has been the fact that unemployment hasn't budged while housing prices continue to new lows.
It's abnormal to think that we are going to have hyperinflation when no one wants to let go of their dollars (Banks by not lending the dollars, consumers by paying down debt and not wanting more debt or not elligible, employers who don't wan to use their precious dollars to hire and pay salaries, etc.)
We are in a deflationary cycle and Sept 2010 to present has been a temporary reflation. When deflation onset comes again, the jobs will get worse and houseing plunge more but stocks and commodities and metals all crash too.
If this is true, the it will be called: "The Great Depression II"
Unlike Japan, the Bernanke thinks he can inflate our way out of our debt and this financial recession.
We are Japan Now. Lost decades regardless of what the Bernanke does. Because of Zombie banks and Zimbabwe Dollars.
A growth industry in the repair of vehicles and equipment has started. If you are a electrician, mechanic, machinist, or a welder you have a future repairing or rebuilding stuff that just a few years ago would have been discarded for new stuff. Think Cuba.
Agree with that Long John. The ones you refer to can actually perform a needed service as opposed to a gov. regulator sitting in his cubicle thinking up new regs.
keep your eyes on recycling.
yup ....... no good jobs for us ! Americans have been so degraded we are now fighting each other for $8.50/hr. Target & Panera jobs ! Old vs. Young ........ it doesn't matter, we'll scrap it out with each other. ......... just remember, it was all done deliberately. Every lousy thing that's been happening has been pre-planned, deliberate & purposeful; a collaboration between Wall St. & Washington. fuckers ........ yes, I said it, & I normally do not swear. What really grinds on my soul is that fact that it was all DELIBERATE policy. The race to the bottom is here, I see the ground.
Youth is the only hope lynnybee.
The millennial generation to possible age 40. Those are the ones who should be pissed enough to change it. Most over 40 are clueless or don't care.
I hope I am still around to help, if the millennials start to demand their American dream.
Whoa there NewWorld,
Watch the toes yer steppin on. I'm way over 40 and I give a big shit about the fleecing of America. In my own limited experience most people are clueless no matter what the age.
What I have observed is many people with less formal education in school, understand what is happening. The plumbers, carpenters, electricians, truck drivers with their own small business get it while the college grads and PHDs don't. I think it is because the MS educational system has had less time to drive instinct and critical thinking from your abilities. You should see what a local fuel oil distributor is up against and there is always more paper work and regulations. I think the ones pulling the puppet strings should have a one year manditory service emptying septic tanks or laying black top. Think of it as a kind of required public service or military conscription. Call them randomly. Yeah.
Right on, LincolnSteffens.
Some folks around here could use some lessons in empathy.
I agree with you. This crap is no accident. It's like the Wall Street Masters made a deal with the 1960's radicals. "We'll put you in power if you let us plunder the wealth of an entire nation. When we're finished, you can do as you please to the dumb masses and create your Utopia."
I know (knew) a few candiates who fell for this shit.
The 'liberal' college kid who helped burn down the BoFA branch in Berkley in '71 (I think) now makes a living negotiating deals to build lux condos and Targets in the California desert.
Anybody with eyes and half brain can see the truth. Stop by any office building and see who is coming or leaving, especially at lunch hour. It will be mostly (young) Indian workers.
Been saying this since day one: "industrial recoveries are great for government"--won't make any jobs but will make dolares beyond el beliefo---therefore... SEND THE BUFF TO THE PAKI'S! (and before i'm saturated with yet another local hottie reporting from The Bazaar with all those women and children around her. Sheeez. What's next? Baby seals?)
Thought the mimeograph was dead. Really miss sniffing fresh prints off them.
i recently saw a OECD study showing the manufacturing jobs declined ever since the year 2000, despite growing population. jobs in the service sector are just slightly below the all time peak.
Those images are horrible. Its hard to read. repost them!
Sorry about that, the problem should be fixed now.
Glad you said it. I was almost planning on putting the bottle of scotch back in the cabinet :)
Don't do it! Keep that scotch close by...you're going to need it!
When I first read the headline, I thought Steve Jobs was not coming back.
When I looked at the 'evidence' to justify the hypothesis, my first thought was "looks like bullshit to me."
The evidence presented completely ignores the likely possibility that the jobs were simply outsourced to Chinese manufacturers and contractors.
Steve is not coming back. That is not the headline, though, you are right about that.
But I thought he was the Messiah?
As a former space center worker (not rocket scientist) laid off 3 years past, and having been represented by a collective bargaining agreement, being over 50 during a contract change was an excuse to realign a much less entitled workforce. Why?
Buying rides and not building it here is pretty much the standard answer. Cheaper, faster, better? Can't have all three.
Bottom line... transfer of technology and submission to a service economy. Bullshite.
I am sorry, but this is an illegible half assed presentation of a much more complicated issue.
You seem to advocate that working people should all roll over and get fucked by an establishment that knows nothing or more likely cares little about retooling the work force, unless it somehow involves student loans.
Simply, calling organized labor luddites also shows little depth in relation to the big picture.
The old jobs are not coming back, but you have done nothing to explain why.
We lost jobs because the products we would have made would have costed more, regardless of the level of productivity of the workers. The United States embraced lack of protectionism aka free trade, and competition will see to it that lower prices win out.
Completely flawed analysis! Did someone to forget that many of the manufacturing jobs were offshored to subcontractors and not to an Company division? Flextronics and other electronics assemblers offshored tons of jobs to subcontractor in Asia.
No, my friend, its economics 101, which if you're familiar with the production function would be completely obvious to you. As technology advances the less we need people to do repetitive tasks, and thus jobs in areas like manufacturing and clerical, back office work are being replaced by technology and improved processes.
Nowhere do I, nor the Atlanta Fed advocate doing anything, especially rolling over. On the contrary, several times I have advocated that labor avoid getting complacent and commit to not just staying up to date on current technologies/processes, but improve skills/knowledge to stay relevent.
This is not rocket science, as a matter of fact its quite intuitive, not sure why you're having such a hard time understanding this...
Yes I am familiar with Economics 101. It's the first step in the corporate programming process.
I see precious little being done about redirecting the labor force, besides holding an annual White House job seance and glorifying Jeff Immelt.
I have plenty of experience watching how Central European and Asian governments work hard to attract businesses, build the right legal and physical infrastructure and redirect their labor force.
Our feeble competitive position in this regard speaks volumes of the crap taught in business school; Pitch Book 101 (how to sell an abstruse formula to a pension fund lackey) .
The Luddite reference succinctly explains where you head is on this subject. I think you should reconsider who is responsible for the sorry ass position we find ourselves in: McTopia USA.
Yes there are increases in productivity due to technology just as there are many new jobs created by new technologies that now-a-days are sent overseas before even being allowed to germinate over here. You just forgot the other half of the equation. As investment in people , R&D and manufacturing facilities falls here and increases overseas that it's a natural creation of a demand for slave labor to fill the positions. If in fact things were changing as you suggested then prices would be going way down.
Nothing could be further from the truth. The facts are the jobs are being shifted no matter whether it's a reporter for a local newspaper, an attorney, a manufacturing worker or a Doctor to facilities that corporations are investing in that are subsidized by US Consumers and US tax Dollars for the benefit of those who own the least shares in the company which would be the executive suite. End Users here see no advantages in pricing. They see no wage increases. They see price increases, as the corporations seek to pillage what's left with the help of their sock puppet politicians with their lobbyist written toxic trade and domestic policies.
If a Govt worker gets COLA and gets the same level of benefits despite the debasing of the dollar then they have established a buffer zone at the federal level where such policy is made. If no one can see it or it feel it ain't happening, which also comes from paid bloggers like yourself. You see we have already been through the retraining routine a number of times only to be told they "got this one too" and we 'll just have to get used to the idea of pushing those damn illegals out of the fruit picking jobs and living 9 to a room.
One Karma like effect of all this short-term wall-street inspired thinking is that the US market has traditionally subsidized the excursions overseas. Once they have emasculated the bottom 90% of the US economy, most of the economies of the world will suffer since they targeted their economies to export to us, which will cause the corporations to close in rapid order fashion as they no longer have 45-55% of their sales subsidized by Americans going into debt to pay for their large corporate bonuses and the profits generated to pay them by the use of slave labor and toxic trade policies.
Learn to think past next month. It sometimes helps you stop! before exposing yourself and your thinking to mass public humiliation and derision. Although some would define that as contrarian thinking, I wouldn't be so quick to label yourself as a thinker much less a contrarian one.
Hey Stone Blind Advisors,
Maybe Bill Banzai7 is having a hard time understanding your crap because EVERY TIME he goes into a store and picks up an item, it doesn't say "Made In Skokie, Illinois by one guy running five high-productivity assembly systems". Instead, it says "Made In China".
Go back to work for Deutsche Bank. Corporate shill.
i tried to be nice in an earlier post. but this response really hacks me off. the fact is that the usa could have an entire population of rocket scientists with the highest iq on the planet and you're not gonna be able to compete with slave labor in a 3rd world country where the epa, an army of attorneys and all the other mandated requirements of the west are breathing down your neck.
btw, david ricardo did not believe in free trade between developed and undeveloped countries.
actually, i've read a lot of articles and propaganda by knuckleheads like you and the fed. you're totally unconvincing.
may you be outsourced and jobless in a fair world.
"you're not gonna be able to compete with slave labor in a 3rd world country"
My neighbor teaches TIG welding at a CC here in SoCal...he was telling me how Honeywell outsourced about 250 welding jobs to mejixco (leaving about 20 in SoCal). ($3 hr. vs. about $20)
He said a lot of the parts had to come back up to SoCal to be "fixed" by the amerikans but that it still "worked out" for H'well because the Narxican completion rate was just high enough at that slave wage to make it worthwhile.
I thought about how many tax dollars H'well receives to "defend" amerika in the GWOT. lol
And the computoor was supposed to eliminate paper usage.
I liked that last line lieutenant.
Nope, it's you that's either clueless or lying.
Both the manufacturing and the customer service jobs have been subcontracted to foreign companies. The practice your figures reflect is a US company hiring an Indian call center _company_ to do its customer service. The Indian company hires 400 people, the US company fires 400 people and hires 10 people in India to deal with the contractor. The jobs are not gone, they were shipped to India.
For manufacturing the only difference is that the jobs went to China.
Why don't you take the Economics 101 theory, think really hard about the increase in population and pollution, add it to increasing technological efficiency and decreasing resources and extrapolate a new vision that ditches GDP and the need to have infinite growth.
+ 6,775,235,700 to johnnynaps and Budd
I do agree.You have to come out of the logic of infinite resources and GDP and growth as the only measures.
They are the cancer devouring the entire society. You are a Luddite as much as those unions...but they at least pursue the memory of a more equilibrated world. You pursue the interests of an ever and ever reduced number of individuals wanting more and more of finite resources and serving us lies to get them. It is a dangerous game, you may end up, with them, on the wrong end of a ballistic equation no one really wants to unleash.
It is jobs that deal with pretend money that aren't coming back.
I totally agree with you, this presentation and scanned documents look like somebodies half attempt at saying it's your fault unions, not the companies.
Do CEO's earn their pay or do they "occupy the chair"
http://finance.yahoo.com/blogs/daily-ticker/good-king-ceo-pay-big-2010-n...
I will not be giving Stone Street any of my money.
Oh yea maybe Indians and Chinamen are to dumb to "occupy the chair"? We will see about that.
The club consists of bankers, government officials, powerful lawyers and lobbyists, Media mucky mucks, Acedemia and CEOs/BoDs. The club supports the club and they ALL have devolved primarily into looters of other people's value adding activity.
It does not have to be so. They could contribute at a reasonable cost if the club did not encourage and rationalize looting. It is just one of the major signs of the decay.
... but China is not much better off. There is massive looting going on there as well.
I find the time period interesting that this went down. We had record tax cuts for corporations through added IRS accounting rules. Companies got tax bonuses for off shoring jobs. This is still going on, although at a lesser degree.
I know for fact that Tyco sends U.S. employees to Taiwan and Vietnam to build factories and train workers for goods that are sold mostly here. They even bring Sups. here for training. Nice.
The guy is basically a nutter. When a product which used to be made here by domestic workers has the production offshored and uses foreign labor where the finished goods are then sold back into the US he does not consider that a "loss."
Not to mention, he's only talking back from 1999? Long before the internet American manufacturing jobs were toast... this started in the 1970s.
Maybe the trend from the 70s was there for US manufacturing jobs to be toast, but it did not manifest itself until the mid 90s.
In the mid 80s there was an explosion of electronic and semiconductor manufacturing in the US. Do you recall IBM, Apple, HP, Compaq, Intel, DEC, Motorola, AT&T, GE, Sprague, Kemet, TI, Northern Telecom, Delco, Ford, Chrysler etc etc and the entire silicon valley crowd were ALL manufacturing here in the US.
First the PC Boom and then the telecom boom were virtually all manufactured in the US
- They expanded their operations into new markets (and many had already earlier to Europe)
- They expanded production to the 4 Tigers while they continued to automate
- Simultaneously the Japanese were building factories in the US
- Then when they reached the point where manufacturing no longer was seen as a competitive advantage/competency they started outsourcing to the the soon to be Mega-EMS companies
... and then in the very early 90s, after the GHW Bush downturn, China opened up. Instantaneously there was an infinite sea of labor that dwarfed consumption and it was so cheap, automation was not even required. I recall traveling there during the 90s and seeing automation equipment sitting idle while a sea of you dark haired girls assembled everything by hand.
Money flows to value creation. Value is only created through labor. Everything else is price manipulation and accounting games.
You may say jobs are not coming back and it might be true, but they can through a couple of different scenarios:
1. Legislation that dictates jobs be performed in the US and not overseas (but this is self defeating since it does not cure the underlying problems)
2. The cheap labor countries are brought up to US standards
3. The US is brought down to cheap labor standards (and this is the easiest for the policymakers to do) although IMO it cannot be done in a country such as the US where there is so much non-productive overhead that it bleeds the value adding production dry.
The US consumes enough to support value adding activities... and while labor costs are higher here in the US, it is the social and overhead costs that kill value adding activity here. Labor can make an iPhone cheap enough here, but the banks, government, lawyers and social parasites will not allow it. JMHO
I just thank God jobs will not be coming back till we reinstate bi-lateral trade agreements.
The natural state of sheeple is to suffer.
Bingo.
Winger porn....