4 different views on our "jobless" ecomony
4 different views on our "jobless" ecomony
Date: Monday, November 03, 2003 6:26 PM
JOB DESTRUCTION NEWSLETTER
www.ZaZona.com
I threw in some optimistic articles for good measure, but the first one
by Warren Buffett should get your closest attention.
http://www.madison.com/captimes/opinion/editorial/60257.php
Deficit fouls economy - The corporate free trade agenda, says Buffett,
has created a mess so serious that he is losing confidence in the
stability of the U.S. dollar, and the economy it underpins.
http://www.kingcountyjournal.com/sited/story/html/147268
Jobs going overseas in recovery - Two days from now, you'll be hearing
economic news that won't seem right.
http://apnews.myway.com/article/20031030/D7UGHGD02.html
Economy Grows at Fastest Pace Since 1984
http://news.mysanantonio.com/story.cfm?xla=saen&xlb=110&xlc=1074301
Coming soon: America's next labor shortage
http://www.madison.com/captimes/opinion/editorial/60257.php
Deficit fouls economy
An editorial
November 1, 2003
It is not our intent to alarm anyone, but we do hope that readers are
aware of the latest pronouncement from Warren Buffett, the
second-richest man in the world who is frequently referred to as "the
most successful investor ever."
"I am crying wolf again and this time backing it with Berkshire
Hathaway money," Buffett says of the assets of the investment
conglomerate he created and controls. "Through the spring of 2002, I
had lived nearly 72 years without purchasing a foreign currency. Since
then Berkshire has made significant investments in -- and today holds
-- several currencies."
Buffett says he is losing faith in the soundness of U.S. currency as an
investment vehicle because the United States is running a huge trade
deficit -- close to $500 billion, and rising rapidly -- that is causing
income to flow out of the country at such a rapid rate that it will
soon become unsustainable. In the November edition of Fortune magazine,
Buffett warns that the rapidly mounting U.S. trade deficit could lead
to a dramatic plunge in the value of the dollar and a host of
additional economic consequences that could add up to disaster for
American families.
In the post-Cold War era, U.S. leaders embraced the corporate free
trade agenda embodied in pacts such as the North American Free Trade
Agreement and the granting of permanent most-favored nation trading
status to China. These deals and others like them encourage U.S.
businesses to engage in a race-to-the-bottom, relocating on a regular
basis to countries that permit them to pay the lowest possible wages,
to despoil the environment and to dismiss human rights concerns. U.S.
businesses have shuttered factories, laid off unionized workers and
shifted millions of jobs overseas.
In Wisconsin, more than 50,000 manufacturing jobs have been lost since
George W. Bush assumed the presidency, as whole sectors of our economy
shut down here and move overseas, mostly to China.
Now the abandonment of American communities and families has extended
to the service sector. The shifting of manufacturing and service work
out of the United States is great for the huge corporations that
contribute mightily to the campaigns of politicians who back their free
trade agenda. These corporations can lower their costs by moving
production to countries where wages are low, and basic safety
regulations and environmental protections have been eliminated. But it
is terrible for workers here and abroad, who are pitted against each
other in a battle to see who will work for the least. And it is
horrific for the U.S. economy.
By allowing for policies that have transformed the United States, which
used to export far more than it imported, into a nation that imports
far more than it exports, President Bush and the bipartisan
congressional coalition that backs the corporate free trade agenda are
building up a trade deficit that could ultimately take down the U.S.
economy. Unwise economic policies, Buffett says, are literally "selling
the nation out from under us."
Buffett's warning needs to be taken seriously, not just by citizens who
have already witnessed the devastation caused by the corporate free
trade agenda, but by elected officials. When U.S. Sen. Herb Kohl,
D-Wis., and U.S. Reps. Ron Kind, D-La Crosse; Paul Ryan, R-Janesville;
Tom Petri, R-Fond du Lac; Mark Green, R-Green Bay; and Jim
Sensenbrenner, R-Menomonee Falls, vote for free trade legislation, they
are doing serious damage to Wisconsin and to the U.S. economy.
Published: 1:54 PM 10/31/03
http://www.kingcountyjournal.com/sited/story/html/147268
Jobs going overseas in recovery
2003-10-28
by Tom Wolfe
Editor
Two days from now, you'll be hearing economic news that won't seem
right.
On Thursday, when the government releases its official economic review
of the third quarter, you'll be told once again that the recession is
over and that the economy is in full recovery. Not only that. For the
first time in several years, you might also hear words such as
``blistering'' or ``roaring'' to describe the rate of expansion.
So where are the jobs?
Journal business reporter Cydney Gillis can tell you that:
* Woodinville's largest employer, Loud Technologies Inc., sent 201 jobs
to Asia.
* Kent-based Raleigh America Inc., sent 150 jobs to Asia.
* The Tally Printer Corp. of Kent announced two months ago that its 75
to 100 jobs were headed to Mexico.
It's called a jobless recovery.
Since early 2001, more than 2.6 millions jobs have disappeared from the
U.S. economy, and one in 15 American workers is unemployed. Under
pressure to stay competitive, American companies are shifting jobs
overseas, and it's not just the big guys, the Boeings, the Microsofts
and the Weyerhaeusers.
In a front-page report in Sunday's Journal, Gillis reported that all
U.S. manufacturing jobs are vulnerable, along with jobs in computer
programming, accounting, call centers and various professional
services.
In fact, Gillis reported, ``One by one, any American job that can be
boxed and shipped to Mexico, China or India will be.''
What jobs are the most secure? Gillis found that jobs in health care,
sales and marketing are the most likely to stay. ``Otherwise,'' she
warned, ``no one is safe.''
Jobs of tomorrow
Health care is the hot industry of the moment.
But remember the 1980s? The hot ticket then was the MBAs, the masters
of business administration, later parodied as masters of the universe.
Now, after the corporate scandals of the past several years, MBAs are
toning it down and learning something useful.
Remember the 1990s? The hot ticket then was any form of Internet
technology. Today, thousands of unemployed Web programmers are finding
they need to round out their business and people skills -- either that
or go on living in their parents' basements and playing Everquest.
In other words, lifelong employability is a function of versatility,
and versatility is a function of lifelong learning.
Job insurance
For young people thinking about a career, the best advice can be found
on a bumper sticker: ``You think education is expensive? Try not having
one.''
Unemployment figures from the Bureau of Labor Statistics bear this out.
Nationwide last month, 7.9 percent of high school dropouts were
unemployed. That compares with 4.8 percent of high school graduates and
just 3.3 percent of college graduates.
Bottom line?
The most important thing we can do to ensure economic vitality in this
state isn't to land the next generation of Boeing airplanes. It's to
educate the next generation of taxpayers.
Tom Wolfe is editor of the King County Journal. His column runs every
Tuesday. Readers can reach him by phone 425-453-4230, 253-872-6670
e-mail tom.wolfe@king countyjournal.com or fax 425-635-0603.
http://apnews.myway.com/article/20031030/D7UGHGD02.html
Economy Grows at Fastest Pace Since 1984
Email this Story
Oct 30, 8:54 AM (ET)
By JEANNINE AVERSA
(AP) After posting a decline in September, the Conference Board's
Consumer Confidence Index jumped to...
Full Image
WASHINGTON (AP) - The economy grew at a scorching 7.2 percent annual
rate in the third quarter in the strongest pace in nearly two decades.
Consumers spent with abandon and businesses ramped up investment,
compelling new evidence of an economic resurgence.
The increase in gross domestic product, the broadest measure of the
economy's performance, in the July-September quarter was more than
double the 3.3 percent rate registered in the second quarter, the
Commerce Department reported Thursday.
The 7.2 percent pace marked the best showing since the first quarter of
1984. It exceeded analysts' forecasts for a 6 percent growth rate for
third-quarter GDP, which measures the value of all goods and services
produced within the United States.
The economy's recovery from the 2001 recession has resembled the side
of a jagged cliff; a quarter of strength often has been followed by a
quarter of weakness. But analysts are saying that pattern could be
broken, considering increasing signs the economy finally has shaken its
lethargy and is perking up.
(AP) New-home sales edged down in September but nevertheless registered
their third-highest level on...
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Near rock-bottom short-term interest rates, along with President Bush's
third round of tax cuts, have helped the economy shift into a higher
gear during the summer, economists say. The next challenge is making
sure the rebound is self-sustaining, they say.
Democrats, however, argue that the tax cuts contributed to a record
budget deficit in the recently ended 2003 fiscal year and have done
little to spur significant job growth.
Although the nation's payrolls grew by 57,000 in September - the first
increase in eight months - the economy needs to add a lot more jobs
than that each month to drive down the 6.1 percent unemployment rate,
analysts have said.
The administration has argued that as economic growth improves,
meaningful job creation will follow. Bush will be counting on that as
he heads into the 2004 presidential election season.
In other encouraging economic news from the Labor Department, new
claims for unemployment benefits last week dropped by 5,000 to 386,000,
a sign that layoffs are slowing. U.S. workers' wages and benefits went
up by 1 percent in the third quarter, up slightly from a 0.9 percent
increase in the previous quarter.
(AP) New-home sales edged down in September but nevertheless registered
their third-highest level on...
Full Image
Amid signs that the recovery is regaining traction, the Federal Reserve
on Tuesday decided to hold a key short-term interest rate at a 45-year
low of 1 percent. Super-low short-term rates may give consumers and
businesses an incentive to spend and invest more, boosting economic
growth.
Economists believe the economy will grow at a slower - but still
healthy - 4 percent rate in the final quarter.
In the third quarter, consumers ratcheted up their spending at a brisk
6.6 percent annual rate. That was the biggest increase since the first
quarter of 1988 and was up from a 3.8 percent pace in the second
quarter.
Consumers in the third quarter spent lavishly on big-ticket items, such
as cars, boosting such spending by a whopping 26.9 percent rate. And,
they also spent briskly on "nondurables" such as food and clothes,
which grew at a 7.9 percent pace, the strongest showing since the first
quarter of 1976.
While consumers have been the main force keeping the economy going,
there are more signs that businesses are starting to do their part.
(AP) The nation's economy continued to rebound in September, but
appeared to slow after rapid growth...
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Especially encouraging was the 15.4 percent growth rate in spending by
businesses on equipment and software in the third quarter. That marked
the largest increase since the first quarter of 2000 and was up from a
8.3 percent growth rate in the second quarter.
Sustained turnarounds in capital spending and in hiring are crucial to
the economy's return to full throttle. Economists said business wants
profits to improve and wants to be sure of the recovery's vigor before
it goes on a spending and hiring spree.
The red-hot housing market, powered by low mortgage rates, also
contributed to the strong showing on third quarter GDP. Investment on
residential projects grew at a 20.4 percent rate, the biggest increase
since the second quarter of 1996, and more than three times the 6.6
percent growth rate seen in the second quarter.
Federal government spending, which grew at a 1.4 percent rate, was only
a minor contributor to GDP in the third quarter. Spending on national
defense was flat. But in the second quarter, military spending on the
Iraq war - which grew at a whopping 45.8 percent rate - helped to
catapult economic growth.
A better trade picture in the third quarter also contributed to GDP
growth.
But inventory reduction by businesses continued to be a drag on the
economy and reduced third-quarter GDP by 0.67 percentage point. And a
continuing reluctance by businesses to build up stocks suggest that
executives remain wary of the rebound's staying power
http://news.mysanantonio.com/story.cfm?xla=saen&xlb=110&xlc=1074301
Coming soon: America's next labor shortage
By Analisa Nazareno
Express-News Business Writer
Web Posted : 10/25/2003 12:00 AM
It seems implausible - a labor shortage, some time in the near future.
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Coming soon: America's next labor shortage
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Picture it anyway: Employers offering higher wages to skilled laborers
across the middle and upper economic spectrum, flexible work
arrangements for parents with skills in high demand, employers
exporting jobs overseas to keep labor costs down.
These things could happen, because they did - during the 1990s, when
demand for technologically skilled workers was so high that a
20-year-old could snag a $60,000 computer programmer job with little
training and no experience.
And now, in the midst of one of the longest employment slumps in U.S.
history, economists are saying the tight labor market of the '90s was
perhaps a foreshadowing of bigger things to come.
That's because sometime between 2011 and 2030, the nation's 75 million
baby boomers will reach retirement age and the subsequent generation -
55 million so-called "Generation X" - will be fewer in number to
replace them.
"The future can be foretold today just by looking at the numbers," said
David Ellwood, a Harvard University political economist. "Look at how
many 25-year-olds there are today. Since people are preoccupied with
the recession, they're not paying attention to longer-term issues. But
this is a real issue."
Ellwood headed an Aspen Institute study group that analyzed the labor
needs of the 21st century. The group determined that there will be a
gap in the number of workers needed in the knowledge and service-based
economy of the future and the number of skilled and educated workers
available to fill those needs.
Nurses and other health care workers are in critical need today and
will be in greater demand as baby boomers age. Jobs in trucking,
mining, shipping and manufacturing that once were considered
semi-skilled are already becoming more technologically advanced, and
trained workers in these areas are already needed.
"An inadequate, ill-equipped work force could lead wages to stagnate
and make businesses less competitive," the group concluded in its 2002
report, called "Grow Faster Together. Or Grow Slowly Apart."
"If immigrants increasingly occupy the lowest tier of service work,
they will become an increasingly isolated segment of society," the
report continued. "And firms will increasingly locate abroad to find
skilled and unskilled workers they need to compete effectively on the
world stage. That's why ignoring these problems could put us in a
situation of economic stagnation with our nation growing slowly apart."
Though immigrants will fill some employer needs for skilled and
educated workers, many more will be coming to the United States to take
low-skill labor positions, according to a report by economists from the
Federal Reserve Bank of Boston.
"Immigrants tend to be highly concentrated in certain occupations, and
they've come with specialized skills or they fill particular niches at
the high end and the low end," said James Smith, a senior economist
with the nonprofit Rand group.
But because 1 million immigrants of different ages come annually -
making up just a fraction of the 292 million people in the United
States - their effect on the impending labor gap will be minimal.
"Immigration is not going to have an impact on the aging of the United
States," he said.
What will likely happen is highly skilled Gen X workers - native born
or immigrant - will earn more in real dollars in the future than their
baby boomer counterparts of today.
On the other end of the economic spectrum, unskilled Gen X workers will
likely earn less than baby boomers.
Fed economist Robert Triest believes that in many industries, increased
demand for skilled workers will encourage workers to become more
educated.
"For those born in the late 1960s and 1970s, you saw a real increase in
their relative wages. They've done really well in the labor market,"
said Trinity University labor economist Barry Hirsch. "You get hurt by
being part of big cohort, like the baby boomers, those born in the late
1940s and 1950s."
In other words, because there were so many baby boomers and women
joining the labor force, their relative lifetime earnings will be lower
than their parents and children.
In the labor market of the future, employers still will want to keep
labor costs down. So they will likely pay their unskilled workers less
in real wages, and on the other end will likely search for cheaper
high-skill labor overseas.
"Employers will find ways to accomplish getting their products
produced," said former J.C. Penney Co. Chairman James Oesterreicher.
"The big challenge for our country is there will be fewer native-born
workers that will be educated to fill these jobs, and immigration is
going to be a bigger factor."
Oesterreicher worked with Ellwood on the Aspen Institute study and
today is chairman for Texas Health Resources, a nonprofit hospital
system in the Dallas-Fort Worth area. He believes outsourcing work
overseas will be an even bigger factor in the 21st century.
"I know that in my days with J.C. Penney, we had to outsource a lot of
technological work," he said. "India is becoming one of the target
countries, not just for J.C. Penney, but already that's where a lot of
computer work is being done."
Domestically, he said, employers will become more involved in
education, offering scholarships to students training for high-tech
jobs. Hospitals will become even more aggressive, recruiting potential
workers in nontraditional settings and arranging for training.
Also in the labor market of the future, baby boomers who were expecting
to retire by 65 likely will work well into their late 60s and 70s.
"You'll see an increase in the number of older workers, and that's a
plus for the worker, and it also helps in the shortage that we are
talking about," Oesterreicher said. "Older folks will have to work
longer in order to fill this need."
Hirsch, the Trinity economist, said employers would have to make
adjustments to the work environment attractive to keep older workers.
But many of these baby boomers also will have to work out of necessity
because of the uncertainty surrounding Social Security and the hit
investors have taken on their retirement funds during the past three
years.
"There has been this long-run trend toward earlier retirement, but that
has bottomed out a year or two ago in part due to the stock market,"
Hirsch said. "Pensions have gone down and retirement ages have gone
up."
Smith, of the Rand group, said the lingering of the baby boomers in the
workplace would likely make it more difficult for their successors to
move up into the higher echelons of workplaces.
"There's a lot of older people still in their jobs and in the hierarchy
of firms; the number of positions at the top is relatively small," he
said. "People who have these positions in their 50s will still have
them in their 70s. At universities, for example, you have only so much
room for tenured professors and presidents and deans. And if they're
staying around until their 70s, then that's an issue for the subsequent
generation."
For the vast majority of workers and employers, though, the bigger
issue will be about ensuring that the work force of tomorrow will have
the skills to adapt to the needs of the economy.
Harvard's Ellwood said that because Americans aren't getting educated
as much today as in the past, there's a danger of losing more jobs
overseas.
"Because workers are in short supply, that will slow down
productivity," Ellwood said. "And because of the lack of adequate
education here, they will move abroad."
Ellwood's study group pointed to the need for a better-educated and
more adaptable work force and highlighted the success of programs that
moved low-income parents from federal subsidies into federal training
programs.
"This is clearly an important issue," said Sigurd Nilsen of the General
Accounting Office. "It's why we're moving ahead to see how our federal
programs are working to help raise the skill levels to meet expected
tight demand for labor in the coming years."
Locally, work force officials are talking about the coming worker gap,
but they know they're likely going to have to act without additional
federal funds.
"Funding is always an issue when you start creating programs and
expanding programs," said Alan Miller, director for Alamo Workforce
Development Inc.
Miller said the greatest local work force needs are for nurses and
aviation technicians. "There is a waiting list of individuals who want
to take these classes," he said. "It's a simple matter of not having
enough faculty and clinical space for supervision, classroom space.
We're lacking the infrastructure and the capacity to do the training,
and this is an issue that has to be addressed."
Because potential employees lack skills, Miller said, there are
hundreds of jobs locally that go unfilled - even before the baby
boomers have started to retire.
anazareno@express-news.net
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