Important News You Need to Know, Today's Issue: Job Market

by Craig Harrington on July 18, 2010 - 10:05am

When Americans talk today about the jobs this economy has lost, they are speaking specifically with regard to layoffs and cutbacks that add to unemployment. The economy is expected to begin adding more jobs than it loses within the next several months.

Unfortunately, even after we begin adding jobs once again, we will still talk about “lost jobs” in a different sense. Instead of discussing actual growth in unemployment, we will look back nostalgically on the job market that once existed. When workers begin re-entering the workforce, they are going to find that in many cases the positions they once held are simply not around anymore.

According to The Wall Street Journal, some jobs that existed in large numbers before the recession will be as rare as typewriter repairmen and streetcar operators when all is said and done.

It is still debatable whether or not this economy will actually see a “recovery” on the job market. As of yet there has been little progress. We are no longer crashing at a rate of 600,000 lost jobs per month; but in an economy that needs to create 100,000 jobs each month to match population growth the mere “stabilization” isn’t good enough.

The construction industry used to create hundreds of thousands of jobs around the country. Home construction in particular was perhaps the largest single segment of that economic sector,. The vast majority of its pre-recession boom will likely never return. The construction sector has lost 1.6 million jobs since the beginning of the recession – one-fifth of the total recessionary job losses.

Putting all our eggs in the home construction “basket” was unhealthy and led to instability, but it was the only option for a huge proportion of the labor market.

On the higher end of the employment spectrum, there were once thousands of well-paying middle positions at financial institutions, brokerages, mortgage agencies, banks, and other similar companies. The finance sector was over-inflated by a combination of Reagan era leftovers and new introductions during the Bush administration.

In the best circumstances, we would not want it to return the old business model. In the most realistic circumstances, the industry could not return to previous levels even if it wanted to.

Technological advances have also likely wiped out large pieces of employment. Just as robotic assistants greatly reduced the number of laborers needed to manufacture a car or piece of machinery, new advances in the Digital Age have made many niche positions obsolete. For example, millions of Americans now buy imported digital printers and produce photo shop quality prints in seconds, erasing the need for the once customary trip to a local developer. The fact that the product is likely imported takes away the need to employ an American to assemble it.

It is hard to believe that the American labor market was over-inflated during the height of our economic boom, particularly when we consider that even at our peak employment growth was unable to match population growth. However, that is the case.

The world’s largest economy subsists largely on imported goods, boosting employment overseas and sapping employment at home. In an economy where a huge amount of shoes, clothes, cars and electronics are made overseas we have alleviated the need for millions of jobs. The most profitable sector in the economy, finance, has proven able to reach record profits despite operating with “skeleton crews” staffing its offices.

In essence, decades of economic mismanagement, coupled with the continuation of bad policies and heavy doses of recession-induced cutbacks have permanently altered the American labor market. For most American workers, these changes will not be beneficial.

Submitted by Anonymous on July 19, 2010 - 11:33am. #

Where are the I.T. Jobs supposed to come back to when the Corporate Leaders feel that all American programmers/DBA's/Admins/QA's et all are expendable...or just replaceable?

Joe I.T.

Submitted by Anonymous on July 19, 2010 - 10:29pm. #

Those I.T. jobs are in Bangalore, right between the AMEX Tower and the MicroSoft Tower. For details, check out Thomas Friedman's book, "The World is Flat."

The wage rate for call center workers in India is 85 cents per hour, compared to $8.50 per hour here.

For programmers, it's $70,000 in Seattle; $12,000 in Bangalore.

Bruce Bishop

Submitted by BIGuru on July 19, 2010 - 2:08pm. #

There will be IT jobs galore soon that can not be outsourced. It is all Tax Payer's money. Read:

http://projects.washingtonpost.com/top-secret-america/articles/a-hidden-...

Submitted by BIGuru on July 18, 2010 - 10:44pm. #

Until we have leaders who care about John and Jane Doe - and not about me...me...me...; we will go nowhere. About 50% do not care and other 50% are afraid or dumb to find solutions for all.

Submitted by Gail on June 19, 2010 - 1:55pm. #

Fixing The U.S. Economy --

With so much attention being focused on the oil disaster in the Gulf, there is another disaster that we still continue to face: our economy. While the economic outlook is improving, the fact still remains, millions of people -- especially African-Americans -- are jobless and struggling. What can be done, and what should be done, to fix this problem?

Dr. Peter Morici, economics professor at the Robert H. Smith School of Business at the University of Maryland and Michael Ettlinger vice president for economic policy at the Center for American Progress, a progressive think-tank, have some answers.

Video 1 - 6/13/10 - What Can Be Done To Fix The U.S. Economy:
http://www.youtube.com/watch?v=cv8gx2d7jvg

Video 2 - 6/13/10 - What Can Be Done To Fix The U.S. Economy:
http://www.youtube.com/watch?v=fBht8Dg_w4U

Submitted by BIGuru on June 19, 2010 - 8:02pm. #

The key from the video is "Buy American Products". Have you been to Wal-Mart or target or Home Depot lately?

The other one is "National Industrial Policy" that I have been harping for the last two years.

Submitted by Anonymous on March 24, 2010 - 9:47pm. #

Good article. I see no hope for any sustained recovery in our economy without taking back jobs from Communist China. Although conservative think tanks and the conservative corporate media have done a great job of hiding the "Great China Job Ripoff" I do believe things will get so bad that there will be no hiding it. The most unimformed person will see it. There is already a growing chorus in Washington to push China into revaluing. We need to continue to call our congressmen and not let up. It is not over.

Submitted by Anonymous on March 15, 2010 - 3:26am. #

I truly doubt that the U.S. economy will add jobs in the near future. Once again, of course, economists (who should know better) will be "surprised" by the economy's failure to add jobs. Of course, as Harrington pointed out, anything less than at least 100,000 new jobs added each month is actually a loss relative to population growth.

I hope Harrington can find a broader audience on talk radio or as part of the mainstream media, but I suspect he would face resistance from stations' and newspapers' corporate backers. The mainstream media has done a great job of squelching the voices of people who are concerned about Global Labor Arbitrage. Global Labor Arbitrage is like a herd of elephants in the nation's room that no one wants to acknowledge.

Frank the Underemployed Professional
Blog: http://FlusterCucked.blogspot.com

Submitted by bbishop725 on March 12, 2010 - 10:54pm. #

I would like to commend Craig Harrington on the quality of his writing as well as on his video productions. I have been reading his articles and watching his videos for a few weeks now. In my humble opinion, he is a brilliant young man who is doing very important work in pointing out the trouble our country is in. I am grateful to him and to the other folks who have put this web site together. I have been searching for something like this for the past several years.

I will predict that Mr. Harrington will have his own show on a major network within a few years, assuming that is something he would aspire to.

Submitted by bbishop725 on March 12, 2010 - 10:35pm. #

When Henry Ford, in 1916, decided to double his worker's wages and to cut the price of his cars in half, he launched millions of jobs in steel, rubber, glass, electrical wiring, machine tools, machinery, factory construction, highway construction, petroleum refining, infrastructure, home construction, lumber, hammers, nails and well, you get it: the American Middle Class.

When we started doing business with Communist China, with their millions of dirt-poor, but hard-working peasants, who thought that fifty cents an hour was a king's ransom, that was the beginning of the end of the American Middle Class. Folks, it's all over but the shouting*.

If I believed that those poor Chinese will have a better life, even as our children will be poorer, I could accept it, but, I fear that the Chinese government has a different agenda than prosperity for its citizens. I hope I am wrong.

(*Southern expression meaning we're screwed.)