Former Labor Secretary Robert Reich writes today:
“The basic assumption that jobs will eventually return when the economy recovers is probably wrong. Some jobs will come back, of course. But the reality that no one wants to talk about is a structural change in the economy that’s been going on for years but which the Great Recession has dramatically accelerated.
Under the pressure of this awful recession, many companies have found ways to cut their payrolls for good. They’ve discovered that new software and computer technologies have made workers in Asia and Latin America just about as productive as Americans, and that the Internet allows far more work to be efficiently outsourced abroad.
This means many Americans won’t be rehired unless they’re willing to settle for much lower wages and benefits. Today’s official unemployment numbers hide the extent to which Americans are already on this path. Among those with jobs, a large and growing number have had to accept lower pay as a condition for keeping them. Or they’ve lost higher-paying jobs and are now in a new ones that pays less.
Yet reducing unemployment by cutting wages merely exchanges one problem for another. We’ll get jobs back but have more people working for pay they consider inadequate, more working families at or near poverty, and widening inequality. The nation will also have a harder time restarting the economy because so many more Americans lack the money they need to buy all the goods and services the economy can produce.”
Reich is only confirming what many others have said:
- JPMorgan Chase’s Chief Economist Bruce Kasman told Bloomberg:
[We've had a] permanent destruction of hundreds of thousands of jobs in industries from housing to finance.
- The chief economists for Wells Fargo Securities, John Silvia, says:
Companies “really have diminished their willingness to hire labor for any production level,” Silvia said. “It’s really a strategic change,” where companies will be keeping fewer employees for any particular level of sales, in good times and bad, he said.
- And former Merrill Lynch chief economist David Rosenberg writes:
The number of people not on temporary layoff surged 220,000 in August and the level continues to reach new highs, now at 8.1 million. This accounts for 53.9% of the unemployed — again a record high — and this is a proxy for permanent job loss, in other words, these jobs are not coming back. Against that backdrop, the number of people who have been looking for a job for at least six months with no success rose a further half-percent in August, to stand at 5 million — the long-term unemployed now represent a record 33% of the total pool of joblessness.
And see this.
Heck of a job, Larry, Tim and Ben.
Read more at the Washington’s Blog
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The government permitted the erosion of jobs over the past 20 years with nothing to replace them. Their attitude of “let them eat cake” and let some other administration worry about it, has left us where we are today. The global economy is great for China and India, Big Business and Wall street but decimated main street with its incompetence, lack of foresight, greed and corruption If this country and the economy continues on it’s present course…all heck can break loose. It’s not impossible to think that your life could be at risk from someone in want of a can of soup and few crackers.
Awhile back I stated that we would be in for a real shock when many many lost jobs just don’t come back. Once a job is lost, companies find out
that they are still in business and their lessened
payroll is a real “gift”.
Finding a new job when you are employed is hard
enough, finding one when you don’t have one is many times more difficult. Very sad.
Mike C., Sr., NY.
The economic anarchist/treasonous bast*rds have won their war against the American worker.
where are the American economic patriots?
I once believed that globalization stopped wars but history seem to be saying that it is war upon The U.S. of A.
correction…history seem to be saying that it is war upon The American People, (black, white and brown alike.)
Americans have been “Duped” by our iligetimate government working out of “Wall Street” instead of Washington D.C……….I guess maybe that’s why the “Clinton Royalty” is now marrying into the “Goldman Sachs Royalty”? For 50 years we have been misled into believing that “America is evolving into a service economy.”
Really?….Where’s the service?….I remember when I sat in my car during a rain, and a teenager pumped my gas, checked my air preasure, checked under my hood for fluid levels, and cleaned my windsheild…….I remember when the milkman brought milk to the house….I remember when fast food was actualy fast!….I remember when the TV repairman came to the home…………..Where’s the service?…..We were duped into losing our large manufacturing base, so that the investers on wall street could make more money with either moving the factories to China, or bringing the illegal allien to America!
Robert Reich now laughs at America with an arrogant attitude.
It’s assumed that the massive offshoring of American jobs is due to lower labor costs in Asia. But that’s only part of the story. Capital, not labor, is the largest expense of most businesses. Rising taxes, complicated regulation, and government meddling also wreak havoc on companies, especially small business, which account for 75% of all job creation. We have ignored the fact that as our economy has imploded, the “solution” is somehow more taxes, complicated regulation, and bigger government. We are trying to use the cause as the cure, and it will never work. Ask yourselves why, during this entire crisis, there has not been a single proposal to make immediate, massive emergency cuts to the federal budget? For the government to hand a single dollar to an unemployed man, they must first take it from another still working. And there are less of the latter every day.
since when does “double r” still matter? gosh. as for losing jobs, what’s new? Joe
PJB has always been wrong on UNIONS. Not necessarily on the wage end, but the absurd input that industrial UNION has on work rules, equipment updates, etc. Bust every industrial UNION in the USA then American industry will have a fighting chance. Big earners can support the Big 3, for example. But low earners are nuts not to buy Asian vehicles. The precision in the manufacturing process is light years ahead of the Big 3. I plan on keeping the Nissan and Acura for years to come.
PJB arguments on tariffs has merit. Though PJB should acknowledge the tremendous material benefits Asain products have brought to the mass of moderate and low income Americans. For instance, Walmart had the 46 inch Sony LCD for $798. If Pat had his way the product wouldn’t even exist cuz Americans are capable of making the thing.
I recommend Pat review Milton Friedman’s ‘Capitalism and Freedom’.