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Loss of Jobs in America Paul Craig Roberts Wednesday, Nov. 12, 2003 How Secure Is Your Job? Laura Barcella Friday, April 7, 2006 American Jobs: Going, Going... Jane Birnbaum 2005 Companies in India celebrate "loss of American jobs" Mike Crane December 2004 Costly Trade With China Millions of U.S. jobs displaced Robert E. Scott October 9, 2007 Immigration Is Hurting The U.S. Worker Steven A. Camarota Spring 2007 Outsourcing Not the Culprit in Manufacturing Job Loss Wes Iversen December 9th, 2003 |
Veretekk Policy We built Sohomatic Testimonials Veretekk Live up to the minute. Your job is secure if you are your boss Bill Repp October 14, 2007 Learn What The Wealthy Already Know! Tim Sales Back Office Demonstration What you buy on payday? Tim Sales Back Office Demonstration The New Economy Robert McGarvey Entrepreneur, May, 1996 Small Hi Tech Business Small Business Technology Council March, 2007 SOHO Small Office Home Office June, 2000 CEO's note I am a SOHO November, 2007 |
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18. InstantBuzz/TrafficSwarm
I have been experimenting with Instant Buzz
and TrafficSwarm for over a week now. For those of you who are
unfamiliar with these programs they are both designed to drive
additional "Free" traffic to your marketing website.
Instant Buzz installs a toolbar in your browser (available for both
firefox and IE) that displays one line text only ads from other Instant
Buzz users. Each time a new ad is displayed you earn credits. For each
credit you earn one of your ads will be displayed on the tool bar of
another Instant Buzz user. The bonus to this program is clearly that it
is free. The big downside is that it doesn't really drive any traffic.
Though your ad will have thousands of "views" within a week the click
ration is very low. In my first week of use my ads have been displayed
over 5000 times and I haven't had a single click yet. But hey, its free
I guess.
Traffic Swarm provides you with your own user page where 5-6 ads of
other Traffic Swarm users are displayed. Unlike Instant Buzz the only
real way to generate significant credits is to click on the ads of
other users. The obvious plus side is that you might actually have some
people clicking on your ads in order to earn their own credits and just
maybe if your site is compelling enough they might spend more than the
required 20 seconds on it before moving on. The downside is that it
takes some time and work to build up your own credits as you browse
through the ads of others. Once again the program is free so if you
want to play with it in your spare time and build up a bunch of credits
you might see a result. So far in one week my ad has been clicked on
aout 40 times but I haven't seen any sales from it.
I've found there are bazillions of other "free" traffic driving
services out there, of which most are being advertized on the two
services above. As far as I can tell these are the two more popular
services and because they offer a free account it could hurt to try,
but don't hope for big money!
Jacob Paulsen
www.ageljacob.com
wwweb.vereconference.com
skype: jacob.paulsen
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It may sound implausible, but it is not impossible. Follow this Digital Nomad and you know that just feeding the blogs is not going to cut it anymore. Blogging should be part of your online marketing network, but not a diversion.Jane Birnbaum
2005
Reprinted from: AFLCIO.org
Corporations are escalating efforts to ship out jobs that pay well and build the middle class—and now they are aiming their axes at workers in the nation’s fast-growing white-collar sector.
The U.S. recession that began in March 2001 officially ended in November 2001, say the National Bureau of Economic Research and other analysts.
So why are so many workers still out of jobs?
“We’ve declared victory over the recession, and we’re still laying off a couple hundred thousand workers a month,” says Rep. Pete Stark (D-Calif.). “If it weren’t so painful for so many people who are out of work, it would be hilarious. But it isn’t.”
The U.S. economy has 3.2 million fewer jobs today than it did when President George W. Bush took office, including 2.5 million fewer manufacturing jobs. Bush appears headed for the dubious distinction of being the first president since Herbert Hoover to preside over a decline in total employment during his term in office.
In the past three years, nearly one in five U.S. workers was laid off from the job, according to The Disposable Worker: Living in a Job-Loss Economy, a Rutgers University¡V University of Connecticut report released in late July. Among workers laid off from full-time work, roughly one-fourth were earning less than $40,000 annually, the report finds.
In July, a total of 15 million U.S. workers were either unemployed, underemployed or too discouraged to job hunt, according to the Labor Department.
In contrast, within a year after the official end of the last recession in March 1991, the nation had embarked on six straight months of solid job growth.
This time, say economists, there are crucial differences: Companies are sending well-paying manufacturing and service jobs to countries with few, if any, protections for workers and the environment. And these jobs are probably not coming back.
“The movement of jobs and production overseas is handcuffing the recovery,” according to Mark Xandi, chief economist at Economy.com, as quoted in the New York Times.
“With NAFTA, the World Trade Organization and other trade deals of the last decade, American corporations are now tapping into a global supply of workers who can be trained to do everything from design to production, maintenance to marketing,” says Jeff Faux, economist and founding president of the Economic Policy Institute. “And while these workers become more productive, their pay doesn’t rise, because in many of these countries, to be a labor organizer means you risk winding up in a ditch with a bullet in your head.”
American jobs sent out of the country aren’t likely to return anytime soon. “As long as employers can take advantage of much lower labor costs in other countries, there’s no compelling reason to bring back many of these well-paying jobs,” says Ron Hira, an engineer and assistant professor of public policy at Rochester Institute of Technology. “Policymakers seem to be at a loss as to what to do about this problem.”
Meanwhile, the Bush administration directs multimillion-dollar tax cuts to the wealthy while supporting trade laws that encourage offshore outsourcing. And even as Bush opposes unemployment insurance extensions for some 1 million Americans who have exhausted their benefits, his administration refuses to embrace job-creating programs that would repair the nation’s infrastructure and help balance devastated state budgets.
“The Bush administration doesn’t seem to care about jobs,” says Center for Economic and Policy Research co-founder Dean Baker. “To retain and create jobs, there have to be policy changes, and I don’t think this administration is willing to make them.”
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Manufacturing jobs traditionally have provided high wages and good benefits that allow workers to care for their families. But 2.5 million manufacturing jobs have disappeared since President Bush took office in early 2001.
Multinational corporations are transferring jobs to countries where workers earn low wages and have few or no protections. And small U.S. businesses are laying off workers or shutting their doors because they can’t meet foreign competitors’ prices.
African American workers have been hit particularly hard. Because of manufacturing job losses, the unemployment rate among African Americans is rising twice as fast as it is for whites and faster than in any downturn since the mid-1970s. “The number of jobs and the types of jobs that have been lost has severely diminished the standing of many blacks in the middle class,” says William Lucy, president of the Coalition of Black Trade Unionists and AFSCME secretary-treasurer.
The loss of good manufacturing jobs has ripped apart communities and permanently lowered living standards for families throughout the United States, including in Rockford, Ill., 70 miles from Chicago. The northern Illinois city is historically second only to Cleveland as a center for machine tooling, the making of tools used in machine manufacturing.
Machine tooling, which traditionally employs the most highly skilled manufacturing workers including members of the Machinists and UAW, is the bedrock of America’s manufacturing industry.
But the bedrock is crumbling. The Rockford area lost more than 20
percent of its manufacturing jobs—about 10,000—between May 2000 and
2003, according to MBG Information Services President and Economist
Charles McMillion’s analysis of Department of Labor data.
General
manufacturing jobs have been among those lost in Rockford, including
jobs held by Steelworkers Local 745 members at the Goodyear tire
plant. USWA members at Goodyear now number 750, down from 1,650 in
1999, before the corporation shipped the jobs to Asia and South
America.
But most manufacturing jobs lost in Rockford have been in machine tooling. At Greenlee/Textron, which makes drill bits and tools for electrical contractors, about 180 Machinists now represented by IAM Local 1553 are employed today, down from about 900 in the late 1980s. The 112-year-old crown jewel of Rockford machine tooling—Ingersoll International—declared bankruptcy this spring and laid off 300 employees in Rockford and 70 in Michigan, leaving only skeleton crews of managers and a few contract workers.
“The lesson of Rockford,” says Faux, “is it disproves the free traders’ argument that America could afford to lose manufacturing jobs in areas like textiles and steel because we would ultimately triumph in global competition by making the things hardest to make. In fact, those things are machine tools—and we’re losing them.”
A loss of manufacturing jobs reverberates throughout the community—and ultimately the nation. When manufacturing factories aren’t being built, maintained or expanded, jobs disappear in areas such as construction.
“Our union has about 30 percent unemployment,” says Mark Bramble, business agent for Electrical Workers Local 364 in Rockford. “Guys burn through their unemployment, lose all their benefits, get divorced and then go where the grass looks greener or settle for working as a greeter at Wal-Mart.”
There’s a sense of betrayal in Rockford these days. “Free trade was sold to America with the line that it helps us export more goods,” says Eric Anderberg, who manages his family’s 37-year-old machine tool company, Dial Machines Inc. “But what’s happened is the exportation of our jobs and means of production so multinational corporations can exploit foreign labor and sell their goods back to us.”
Today Dial employs 40 workers, down from 75 in the late 1990s. It recently lost work to a lower-bidding Czech Republic manufacturer that nabbed a contract making parts for a supplier of General Electric Wind Energy Corp.
Anderberg and other Rockford employers worry that a Chinese government-owned machine tooling company, which already has bought two divisions of Ingersoll International, may now be poised to buy another—one containing intellectual property, including high-level research and design and military technology. “I cannot understand how our government can justify not only the debasement of our manufacturing industries but also our national security in a time of war,” he says.
The Rockford community and U.S. national security would get a boost from Buy America provisions House Armed Services Committee Chair Rep. Duncan Hunter (R-Calif.) added to legislation authorizing the 2004 Pentagon budget.
Rep. Donald Manzullo (R-Ill.), who represents the Rockford area and helped write the bill, says, “The Pentagon wouldn’t care if everything it buys is made in China.” Joined by armsmakers such as Boeing and Lockheed Martin, the White House says the Buy America provisions are “burdensome, counterproductive and have the potential to degrade U.S. military capabilities.” But the administration does not mention jobs.
“American steelworkers are also American taxpayers, and they do not want their tax dollars subsidizing the export of their jobs,” says USWA President Leo Gerard.
Ask anyone which sector of the U.S. economy comes to mind as the most likely to be shipped overseas, and chances are he or she will say manufacturing.
But though the United States lost 2.5 million manufacturing jobs since the Bush presidency beginning in 2001, U.S. corporations now are racing to outsource white-collar jobs—including work in computer sciences, engineering, entertainment, financial and medical services—to countries where workers earn far less.
Terry Antisdel was a Chicago-area engineering associate for Lucent Technologies Inc. and its predecessor AT&T for 35 years until his entire 42-member International Federation of Professional and Technical Engineers Local 81 was laid off in July. He figures his job will end up in India or China. “The words management used were a 'less-expensive offshore site,’ ” recalls Antisdel, who estimates Lucent will send a total of about 5,000 U.S. jobs offshore this year. “I feel let down,” he says. “Companies used to provide jobs for people, but now they’re just there to give money to executives, board members and shareholders.”
In late July, the Washington Alliance of Technology Workers (WashTech), a Communications Workers of America affiliated group that helps high-tech workers win a voice at work, released a tape of a conference call in which IBM’s top human relations executives discussed transferring 3 million U.S. service jobs to countries such as China and India by 2015.
Testifying in June before a House Committee on Small Business investigating the globalization of white-collar jobs, AFL-CIO Department for Professional Employees President Paul Almeida said, “If these cost-saving jobs shifts are taken to their logical extreme, even American corporations should be wondering where their future consumers will be located and how they will buy the goods and services.”
A Forrester Research study predicts U.S. employers will move about 3.3 million white-collar service jobs and $136 billion in wages overseas in the next 15 years, up from $4 billion in 2000.
The jobs already are leaving. By the end of this year, General Electric will have sent a total of 20,000 aircraft and medical research and design jobs to India and China, according to Business Week. And the Accenture consulting firm, which incorporated in Bermuda after splitting from Enron accountant Arthur Andersen, plans to send 5,000 accounting and software jobs to the Philippines in 2004, the magazine says.
According to WashTech, Microsoft plans to eliminate at least 800 full-time call-center jobs near Dallas and shift the work to India and Canada in the next fiscal year. It would be the largest one-time firing of full-time Microsoft employees in the company’s history. WashTech says a Microsoft senior vice president recently urged company managers to “pick something to move offshore today,” though Microsoft publicly has repeated it will not lay off U.S. workers and send the jobs offshore.
While the Bush administration remains silent about offshore outsourcing, states such as New Jersey are considering corrective measures. New Jersey legislators acted after the state outsourced the electronic administration of welfare and food stamp benefits to a company that then sent the jobs to India. When New Jersey citizens called to ask about benefits, they were connected with Indian workers who gave Americanized names.
A bill authored by state Assembly member Linda Greenstein (D)
would have required such offshore subcontractors to disclose to New
Jersey residents their employers’ true names and locations. But even
this common- sense measure had no chance in the face
of massive
opposition launched by Indian and American corporate interests, such
as Verizon.
“We got a copy of an e-mail Verizon sent managers in New Jersey, thanking them for sending 1,800 e-mails opposing the bill,” says Don Rice, CWA’s New Jersey legislative coordinator. Activists and legislators hope to bring the bill to a vote before the legislative session ends this year.
Offshore outsourcing of white-collar work also raises security concerns. U.S. firms are sending mapping and other such work to India, Pakistan, China, the Philippines and other countries with lower labor costs, says John Palatiello, administrator of the Council on Federal Procurement of Architectural and Engineering Services.
“This practice raises issues regarding access to data about the location of¡Kcritical infrastructure by individuals in foreign countries who have not been through any degree of security clearance and where control of access to data simply does not exist.”
Bush’s January 2002 State of the Union address made clear the danger of access to data by unfriendly foreign operatives: “Our discoveries in Afghanistan confirmed our worst fears....We have found diagrams of American nuclear power plants and public water facilities¡Ksurveillance maps of American cities and thorough descriptions of landmarks in America.”
Activists are demanding Congress review trade and tax policies that encourage white-collar offshore outsourcing. Without government intervention, warns Almeida, “short-sighted corporate policy focused on saving a few bucks in the short run will have an enormous deleterious impact on the entire U.S. economy.”

Laid-off U.S. workers thrust into a hostile job market are discovering another ugly part of the American economy: low-wage work that pays too little to keep even a small family out of poverty.
Nearly a quarter of all U.S. workers labor in jobs that pay little but are essential to society. Sixty percent of these workers are female, and many are people of color. They care for nursing home patients and clean offices at night. They prepare food, answer call-center phones and care for our children.
These jobs generally pay less than the $8.85 hourly wage the U.S. government says it takes to keep a family of four out of poverty. Even so, many low-wage jobs offer only part-time hours, with few or no benefits. And workers in low-paying but essential jobs often are treated as disposable, quickly fired if they get sick or stay home with a sick child.
As more good jobs leave the country, the percentage of low-wage jobs keeps growing. By 2010, about 30 percent of working Americans won’t be making even poverty wages, according to the U.S. Department of Labor. A Labor Department list of the 10 occupations likely to show the largest job growth this decade is dominated by jobs that typically pay poorly—food preparation, customer service, office clerking, security and food service.
This world of low-wage jobs and the workers who do them is illuminated in The Betrayal of Work: How Low-Wage Jobs Fail 35 Million Americans, published on Labor Day by the New Press. “Traditionally, there was a promise in this country that if you worked hard, you could take care of your family,” explains author Beth Shulman, an attorney and former United Food and Commercial Workers vice president. “That promise has been broken¡Kand we have built our national prosperity on their backs.”
Workers in low-wage jobs frequently are labeled as lacking skills
and in need of training to move into better-paying positions. But
while education is a traditional route to higher pay, Shulman
contends no job is inherently low wage.
“Take autoworkers, who
had horrible jobs that became good ones because of unions and social
legislation,” she says. “The same thing must happen with currently
low-paying service- sector jobs. In Las Vegas, for example, the
housekeeper represented by the Hotel Employees Restaurant Employees
has decent wages and benefits thanks to unionization.”
Low-wage jobs tend to imprison the workers who perform them because of what Shulman calls a “piling on” of hardships. Workers in low-wage jobs are unlikely to have sick leave or health insurance or make enough money to afford reliable transportation or child day care. At the same time, they are likely to be in inflexible situations in which being late or missing work can result in a quick firing.
“It’s not just that you make less money in these jobs, but you have none of the basic things many of us take for granted, such as health insurance, time to care for a family member, adequate child care, some kind of retirement security, even a telephone,” Shulman says. “And this applies to one in four U.S. workers.”
As low-wage work continues to replace jobs that pay well, the U.S. economy increasingly resembles that of a less-developed nation, with a wide gulf between rich and poor. Among all western industrialized nations, the United States has the greatest income and wage inequalities, with the best-paid 10 percent of workers making 16.6 times the amount made by the lowest-paid 10 percent, according to a 2003 analysis by the United Nations Development Program. “That’s the way we’ve been moving for some time now and continue to move,” says Heather Boushey, a Center for Economic and Policy Research economist.
To reverse this trend, the United States needs to change the rules of the game, according to Shulman. “For starters, we should immediately raise the minimum hourly wage to the poverty guideline for a family of four—$8.85 an hour versus the current $5.15 hourly federal minimum wage—and then have automatic increases so there’s not a big political battle every time it needs raising. Then, all Americans should have access to affordable health care. There are a variety of ways to do this, and we should just get it done.
“Finally, all American workers should be able to care for their children—to have access to affordable child care, and to stay with them when they’re sick or go to a PTA meeting without getting fired. The consequences for the children of today’s low-wage workers are enormous—they’re following their parents into this low-wage world.”
Mike Crane
December 2004
Reprinted from: Southern Party of Georgia website
In our previous article we reported how various companies in India were employed by the Republican National Committee and the Bush Re-election campaign (see: India claims big election victory and laughs at Americans).
As Vivek Paul, Wipro VC, said after the Presidential poll, “The elections are over and so is the rhetoric; it will be easier for American corporations to step out with their outsourcing plans.”
Well a little research has found some estimates from within India about what that meant. First and foremost, it means that India is celebrating the "loss of American jobs." Folks, that is the jobs of friends, family or perhaps even your own.Specifically on November 4, with time zone changes, roughly a day after the polls close the following was published in the India Times:
The industry is quietly celebrating that outsourcing and loss of American jobs will not be the hot-button issues any more.
And that is why they believe that "it will be easier for American corporations to step out with their outsourcing plans." Does this mean that American companies put their plans on "hold" to minimize the impact on a close election?
Of the documented jobs that left the US for other countries in January through March 2004, 23,396 went to Mexico, 8,283 to China, 3,895 to India, 4,419 to other Asian countries, 5,511 to Latin American countries other than Mexico and 2,933 to other countries.
A brief look at these numbers show what they call a documented American job loss of 48,237 for the first quarter of 2004. On an annual basis this would be 192,968 American jobs. And they expect American companies to now - step out - with their outsourcing plans.
Some will say that 192,968 jobs is not very many. But as you will see in coming articles that is just what is called BPO and is not the whole picture.
Ladies and gentlemen, you are paying the salaries of the elected and appointed officials who are doing this to you. Is this what you want to pay for? If so, why are you reading material on this web site?
If not, you are being ignored!
It should be obvious to all that this trend can not continue forever. Are there any signs that it is getting better:
A recent study of A T Kearney shows that nine out of 10 chief executives wanted to outsource to India. 25 % of the respondents wanted IT and auto component work to be given to India, 15 % favoured China and 13 % Mexico.
That should answer that question beyond a reasonable doubt. Interesting that 15% of the outsourcing chief executives favor Red China! Remember these are the folks that make the big campaign contributions that have so much influence on many of your elected officials. How will you feel when YOUR job is sent to Red China?
If you do not agree with these policies you are being ignored and your elected officials are representing special interests more than you! If you believe that this is a serious problem it is time to get involved now. The longer you wait, the harder it will be stop these destructive trends.
The BPO and your elected officials are doing offshore calculus, are you?
India’s silicon valley is delighted to move out of the
limelight. The industry is quietly celebrating that
outsourcing and loss of American jobs will not be the
hot-button issues any more.
BPO bigwigs are already
computing the gains from mega-offshoring plans on hold waiting
for US presidential race to be over.
Though most of
the industry majors refuse to comment on who will safeguard
their interests better, they feel that economic benefits of
transfer of jobs to low cost destinations will now overshadow
the political rhetoric against outsourcing in the run up to
the US poll.
The US presidential election was fueling
the protests against job losses due to transfer of jobs.
“American law will remain the same and the outsourcing
will go up irrespective of who wins. Already, we see our
clients getting ready for bigger offshoring plans,’’ says head
of a leading Delhi-based BPO firm. Insiders also feel the
American clients might be more open to talk about their
outsourcing plans to low-cost destinations like India now.
Though Kerry’s tax proposals that seek to end tax
breaks for companies that ship jobs overseas could deter
fence-sitter, analysts feel they are no more than short-term
sentiment dampeners. After initially branding the shipping of
jobs to countries like India and China as a threat to the US
economy, Kerry has gone on record saying he can’t stop
outsourcing.
Clearly, what is of greater concern is
that a clear decision comes soon, irrespective of whether it
favours Bush or Kerry. Though Bush is more popular, the $ 2.6
billion BPO industry is convinced that “it will soon be
difficult to differentiate between Democrats and Republicans.
Obviously sector’s fate is closely tied up with the US
elections, with US accounting for over 70 % of India’s IT
exports. A recent study of A T Kearney shows that nine out of
10 chief executives wanted to outsource to India. 25 % of the
respondents wanted IT and auto component work to be given to
India, 15 % favoured China and 13 % Mexico.
Of the
documented jobs that left the US for other countries in
January through March 2004, 23,396 went to Mexico, 8,283 to
China, 3,895 to India, 4,419 to other Asian countries, 5,511
to Latin American countries other than Mexico and 2,933 to
other countries.
Robert E. Scott
October 9, 2007
Reprinted from: Economic Policy Institute
Contrary to the predictions of its supporters, China's entry into the World Trade Organization (WTO) has failed to reduce its trade surplus with the United States or increase overall U.S. employment. The rise in the U.S. trade deficit with China between 1997 and 2006 has displaced production that could have supported 2,166,000 U.S. jobs. Most of these jobs (1.8 million) have been lost since China entered the WTO in 2001. Between 1997 and 2001, growing trade deficits displaced an average of 101,000 jobs per year, or slightly more than the total employment in Manchester, New Hampshire. Since China entered the WTO in 2001, job losses increased to an average of 353,000 per year—more than the total employment in greater Akron, Ohio. Between 2001 and 2006, jobs were displaced in every state and the District of Columbia. Nearly three-quarters of the jobs displaced were in manufacturing industries. Simply put, the promised benefits of trade liberalization with China have been unfulfilled.
As a matter of policy, China tightly pegs its currency's value to that of the dollar at a rate that encourages a large bilateral surplus with the United States. Maintaining this peg required the purchase of about $200 billion in U.S. Treasury Bills and other securities in 2006 alone.1 This intervention makes the yuan artificially cheap and provides an effective subsidy on Chinese exports; best estimates are that the rate of this effective subsidy is roughly 40%. China also engages in extensive suppression of labor rights; it has been estimated that wages in China would be 47% to 85% higher in the absence of labor repression. China has also been accused of massive direct subsidization of export production. Finally, it maintains strict, non-tariff barriers to imports. As a result, China's exports to the United States of $288 billion in 2006 were six times greater than U.S. exports to China, which were only $52 billion (Table 1). China's trade surplus was responsible for 42.6% of the United States' total, non-oil trade deficit. This is by far the United States' most imbalanced trading relationship. Unless and until China revalues (raises) the yuan and eliminates these other trade distortions, the U.S. trade deficit and job losses will continue to grow rapidly in the future.
China's entry into the WTO was supposed to bring it into compliance with an enforceable, rules-based regime, which would require that it open its markets to imports from the United States and other nations. The United States also negotiated a series of special safeguard measures designed to limit the disruptive effects of surging Chinese imports on domestic producers. However, the core of the agreement failed to include any protections to maintain or improve labor or environmental standards. As a result, China's entry into the WTO has further tilted the international economic playing field against domestic workers and firms, and in favor of multinational companies (MNCs) from the United States and other countries, and state- and privately-owned exporters in China. This has increased the global "race to the bottom" in wages and environmental quality and caused the closing of thousands of U.S. factories, decimating employment in a wide range of communities, states, and entire regions of the United States.
Let's be clear as to why a trade deficit might decrease in the short term. China exports far more to the U.S. than it imports [from] the U.S….It will not grow as much as it would have grown without this agreement and over time clearly it will shrink with this agreement.2
Promises about jobs and exports misrepresented the real effects of trade on the U.S. economy: trade both creates and destroys jobs. Increases in U.S. exports tend to create jobs in the United States, but increases in imports tend to destroy jobs as imports displace goods that otherwise would have been made in the United States by domestic workers.
The impact of changes in trade on employment is estimated here by calculating the labor content of changes in the trade balance—the difference between exports and imports. Each $1 billion in computer exports to China from the United States supports American jobs. However, each $1 billion in computer imports from China displaces those American workers, who would have been employed making them in the United States. On balance, the net employment effect of trade flows depends on the growth in the trade deficit; not just exports. Another critically important promise made by the promoters of liberalized U.S.-China trade was that the United States would benefit because of increased exports to a large and growing consumer market in China. This market, in turn, was to be based on an expansion of the middle class that, it was claimed, would grow rapidly due to the wealth created in China by its entry into the WTO. However, the increase in U.S. exports to China has been overwhelmed by the growth of U.S. imports, as shown below.
While it is true that exports support jobs in the United States, it is equally true that imports displace them. The net effect of trade flows on employment must look at the trade balance. The employment impacts of growing trade deficits are estimated in this paper using an input-output model that estimates the direct and indirect labor requirements of producing output in a given domestic industry. The model includes 200 U.S. industries, 86 of which are in the manufacturing sector (see this paper's methodology appendix for further details).3
The model estimates the labor that would be required to produce a given volume of exports, and the labor that is displaced when a given volume of imports is substituted for domestic output.4 The job losses presented here represent an estimate of what sectoral employment levels would have been in the absence of growing trade deficits.5
U.S. exports to China in 1997 supported 138,000 jobs, but U.S. imports displaced production that would have supported 736,000 jobs, as shown in the bottom half of Table 1. Therefore, the $49 billion trade deficit in 1997 displaced 736,300 jobs in that year. Job displacement rose to 1,000,000 jobs in 2001 and 2,763,000 in 2006. Prior to China's entry into the WTO, an average of 101,000 jobs per year were displaced by growing trade deficits between 1997 and 2001. After 2001, an average of 353,000 jobs per year were lost.
Growth in trade deficits with China has reduced demand for goods produced in every region of the United States and has led to job displacement in all 50 states and the District of Columbia, as shown in Table 2A and Figure A.6 More than 100,000 jobs were lost in California, Texas, and New York each. Jobs displaced due to growing deficits with China equaled or exceeded 2.0% of total employment in states such as North Carolina and New Hampshire, as shown in Table 2B. An alphabetical list of job losses by state is shown in Table 2C.


Growing trade deficits with China have clearly reduced domestic employment in traded goods industries, especially in the manufacturing sector, which has been hard hit by plant closings and job losses. Workers displaced by trade from the manufacturing sector have been shown to have particular difficulty in securing comparable employment elsewhere in the economy. More than one-third of workers displaced from manufacturing drop out of the labor force (Kletzer 2001, 101, Table D2). Average wages of those who secured re-employment fell 11% to 13%. Trade-related job displacement pushes many workers out of good jobs in manufacturing and other trade-related industries, often into lower-paying industries and frequently out of the labor market.
Some economists have quibbled with job-loss numbers extrapolated from trade flows, based on the presumption that aggregate employment levels in the United States are set by a broad range of macroeconomic influences, not just by trade flows. There is a grain of truth to this—the trade balance is but one of many variables affecting aggregate job creation in the United States.
That said, the employment impacts of trade identified in this paper can be interpreted as the "all else equal" effect of trade on domestic employment. The Federal Reserve, for example, may decide to cut interest rates to make up for job loss stemming from deteriorating trade balances (or any other economic influence), leaving net employment unchanged. This, however, does not change the fact that trade deficits by themselves are a net drain on employment.
Administration officials and other economists have argued that the capital inflow that is the mirror-image of trade deficits supports jobs in the United States by keeping interest rates lower than they would be absent this inflow. During the late 1990s, for example, these capital inflows fought rising trade deficits to a draw in terms of aggregate employment effects, and, through much of the 2000s recovery, interest-sensitive industries (housing and construction, for example) have surely expanded more than they would have absent foreign capital inflows. While these claims may be correct from a simple accounting standpoint, they do not support assertions that trade flows are a useless indicator of job loss.
First, and most simply, it is just not true that foreign capital inflows always make up trade-induced employment losses one-for-one. In the 2001 recession and the jobless recovery following, growing trade deficits accompanied aggregate job loss, even as interest rates scraped historical bottoms. Clearly, low interest rates do not always translate into enough growth in investment and consumption in interest-sensitive sectors to always sterilize the impact of growing trade deficits.
Second, the job-loss numbers identified in this report are a good measure of just how unbalanced the U.S. economy has become due to rising trade deficits. Tradable goods industries have hemorrhaged jobs, while interest-sensitive, often non-tradable, industries have seen rapid growth. At that point in the future when trade deficits begin to close (and this will happen—it is only a question of when and how), the U.S. economy will need to return many of the jobs displaced by rising trade deficits out of non-tradable and into tradable industries. Moving millions of workers back and forth between sectors is no mean trick, and accomplishing it without a recession in between will be hard; trying to do it after another couple of years of deficit growth—and an even more lopsided U.S. economy—will be even harder.
In short, while aggregate employment in the United States may well not respond job-for-job with the numbers reported in this paper on trade deficits with China, these numbers provide insight into how much harder other macroeconomic influences have to work to eliminate the employment drag from these deficits, and they provide a good (and ominous) measure of how lopsided employment growth in the U.S. economy has become owing to the unbalanced U.S.-China trade relationship.
April 2007
The author thanks Lauren
Marra for her research assistance
and Josh Bivens and Ross
Eisenbrey for comments.
This research was made
possible by generous support
from the Alliance for American
Manufacturing.
This study uses the model developed in Rothstein and Scott (1997a and 1997b). This approach solves four problems that are prevalent in previous research on the employment effects of trade. Some studies look only at the effects of exports and ignore imports. Some studies include re-exports (transshipments)—goods produced outside the United States and shipped through this country to other nations—as U.S. exports. The trade data used in many studies is usually not adjusted for inflation. Finally, a single employment multiplier is often applied to all industries, despite differences in labor productivity and utilization.7
The model used here is based on the Bureau of Labor Statistics' employment requirements tables, which were derived from the U.S. input-output tables that are published by the Bureau of Economic Analysis. These tables are adjusted to 2000 price and productivity levels (BLS 2007b), in real, chain-weighted 2000 dollars. A base year with 2000 employment requirements was used to estimate the employment content of trade in all years covered in this study. This assumption was needed to control for the effects of technology. This technique isolates the effects of trade on employment from pure technology effects. This model is used to estimate the direct and indirect effects of changes in goods trade flows in each of 200 industries. This study updates the 1987 input employment requirements table used in earlier reports in this series (Rothstein and Scott 1997a, 1997b).
This analysis requires four-digit, trade data based on the North American Industry Classification System (NAICS) (U.S. International Trade Commission 2007), deflated with industry-specific, chain-weighted price indices (BLS 2007a), which were updated using industry-specific producer price indexes (BLS 2007b).8 Trade data were downloaded from the U.S. International Trade Commission (2007) Web site in NAICS format. The data for 2006 are preliminary estimates; this report will be updated and expanded when the final 2006 trade data are released in June 2007. State-level employment effects are calculated by allocating imports and exports to the states on the basis of their share of four-digit, industry-level employment for 2000 (U.S. Census Bureau 2001).
The trade data were converted into chain-weighted 2000 dollars. A domestic employment requirements table for a particular base year was used to estimate the employment effects of trade in each year of the analysis, holding technology constant. The domestic employment requirement calculates the labor required to produce all of a given product within the United States. Thus, it reflects the complete labor content of output, including jobs indirectly supported in service industries. The base year of 2000 was chosen for this study because it was an approximate mid-point in the data covered in this study.
CPS data on employment by industry by was collected for each of the detailed sectors in the model. These data were used to calculate each state's share of national employment.
Bureau of Labor Statistics, Office of Employment
Projections. 2007a. Special Purpose
Files—Industry Output and Employment. Washington, D.C.:
U.S. Department of Labor.
http://www.bls.gov/emp/empind2.htm.
Bureau of Labor Statistics, Office of Employment
Projections. 2007b. Special Purpose Files—
Employment Requirements. Washington, D.C.: U.S.
Department of Labor.
http://stats.bls.gov/emp/empind4.htm.
Bureau of Labor Statistics. 2005. Access to
historical data for the "B" tables of the Employment Situation
News Release.
http://stats.bls.gov/ces/cesbtabs.htm.
Clinton, William J. 2000. Expanding trade,
protecting values: Why I'll fight to make China's trade status
permanent. New Democrat, Vol. 12,
No. 1, pp. 9-11.
http://www.ndol.org/ndol_ci.cfm?contentid=965&kaid=108&subid=127
Faux, Jeff. 2007. Globalization That Works for Working Americans. Briefing Paper #179. Washington, D.C.: Economic Policy Institute. http://www.sharedprosperity.org/bp179.html.
Kletzer, Lori G. 2001. Job
Loss From Imports: Measuring the Costs. Institute for
International Economics. Washington, D.C.: IIE.
http://bookstore.petersoninstitute.org/book-store/110.html
Ratner, David. 2006. "Appendix: Methodology and
Data Sources", in Faux, Jeff, Bruce Campbell, Carlos Salas,
and Robert Scott. 2006. Revisiting NAFTA:
Still Not Working for North America's Workers. Briefing
Paper. Washington, D.C.: Economic Policy Institute.
http://www.epi.org/content.cfm/bp173
Rothstein, Jesse and Robert E. Scott. 1997a.
NAFTA's Casualties: Employment Effects on
Men, Women, and Minorities. Issue Brief. Washington,
D.C.: Economic Policy Institute.
http://www.epi.org/content.cfm/issuebriefs_ib120
Rothstein, Jesse and Robert E. Scott. 1997b.
NAFTA and the States: Job Destruction is
Widespread. Issue Brief. Washington, D.C.: Economic
Policy Institute.
http://www.epi.org/content.cfm/issuebriefs_ib119
Scott, Robert E. 2005.
U.S.—China Trade, 1989-2003: Impact on Jobs and
Industries, Nationally and State-by-State. Working
Paper # 270. Washington, D.C.: Economic Policy Institute.
January.
http://www.epi.org/content.cfm/wp270
U.S. Census Bureau. 2001. 2000 Basic Monthly
Survey of the Current Population Survey. U.S. Department of
Commerce, U.S. Census Bureau. Washington, D.C.: U.S.
Department of Commerce.
http://www.census.gov/cps/
U.S. International Trade Commission. 2007. USITC
Interactive Tariff and Trade Data Web.
http://dataweb.usitc.gov/scripts/user_set.asp.
1. These purchases financed about one-quarter of the U.S. $857 billion current account deficit in 2006 (the broadest measure of all U.S. trade and income flows). But for these purchases, the reduced demand would have put significant downward pressure on the U.S. dollar. A substantial depreciation in the dollar would begin to improve the U.S. trade deficit within a few years.
2. NewsHour with Jim
Lehrer transcript. 1999. "Online NewsHour: Opening
Trade—November 15, 1999."
http://www.pbs.org/newshour/bb/asia/july-dec99/wto_11-15.html.
3. See Ratner (2006) for a more complete, technical description of this model.
4. For the purposes of this report, it is necessary to distinguish between exports produced domestically and re-exports—which are goods produced in other countries, imported into the United States, and then re-exported to other countries, in this case to China. Since re-exports are not produced domestically, their production does not support domestic employment and they are excluded from the model used here. See Table 1 for information about the levels of U.S. re-exports to China in this period.
5. This model assumes that everything else is held constant and the results are counterfactual estimates.
6. See the methodology appendix for computational details.
7. Other studies—see California State World Trade Commission (1996), which finds 47,600 jobs created in California from increased trade with Canada alone—have allocated all employment effects to the home state of the exporting company. This is problematic, because the production—along with any attendant job effects—need not have taken place in the exporter's state. If a California dealer buys cars from Chrysler and sells them to China, these studies will find job creation in California. However, the cars are not made in California; so the employment effects should instead be attributed to Michigan and other state with high levels of auto industry production. Likewise, if the same firm buys auto parts from China, the loss of employment will occur in auto-industry states, not in California.
8. Industry-specific producer price indices are unavailable for certain industries between 2005 and 2006. In order to construct price deflators for all 200 BLS industries, we used a combination of commodity PPIs and industry PPIs. For instance, NAICS-based industry 3331 (which maps to BLS industry 72) is composed of agricultural, manufacturing, and mining machinery manufacturing. To compute a price index for this industry, a trade-weighted average of the commodity indices for agricultural machinery and construction machinery was used as a proxy for the industry PPI. Industry PPIs were used wherever available.
Wes Iversen
December 9th, 2003
Reprinted from:Automation World
For many Americans, the word “outsourcing” conjures up images of manufacturing job decline. But the United States is far from alone in losing manufacturing employment, points out Dan Miklovic (shown above), vice president and research director at GartnerG2, the business research arm of Stamford, Conn.-based Gartner Inc. “Recent studies show that manufacturing jobs are declining everywhere,” said Miklovic, during a Nov. 17 panel discussion on outsourcing, part of a Global Media Summit sponsored by Rockwell Automation, Milwaukee.
Over the past decade, U.S. manufacturing jobs have declined by more than 11 percent, Miklovic noted. But at the same time, Japan’s manufacturing employment base has dropped by 16 percent, while the number of manufacturing jobs in countries including Brazil have declined by some 20 percent, he pointed out. “And one of the largest losers of manufacturing jobs has been China,” Miklovic added. “We like to pick on China and say that all of these jobs are going to China, but they’re losing jobs in manufacturing as well.”
The reason for the job losses? Miklovic summed it up in one word: automation. Through automation, he said, “we are really doing a good job of improving the productivity of people.”
Miklovic reminded media attendees at the panel session that 25 percent to 30 percent of the U.S. population was at one time involved in agricultural jobs. But today, only 3 percent of Americans work in agriculture, yet they have turned the United States into a net agricultural exporter, he noted. “The same thing is now happening in manufacturing,” Miklovic said. “Through automation, through improved productivity, we’re driving the number of jobs down on a global basis.”
Confirmation came from another panel participant, K. Muralidharan, senior general manager for Sundram Fasteners Ltd., a major Indian automotive parts manufacturer. In India, he said, growing use of automation is holding down manufacturing job growth despite the large amount of outsourcing work that is flowing to the country. “I find that outsourcing in India has actually cost jobs in Indian industry, though in the long term, it will probably have a positive effect on employment,” Muralidharan said.
Manufacturing employment remains at about the same level in India today as it was during the recession of the late 1990s, according to Muralidharan. “The Indian economy is booming now, and it is predicted that in the next five years, the curve will only be upward. But still, the jobs and employment are not really growing at the same pace,” said Muralidharan. “The economies of scale that have been created due to outsourcing from developed countries have forced Indian industry to take on automation heavily, which was not the case about 10 years back,” he said.
GartnerG2’s Miklovic noted that the use of automation contributes to a cyclical situation in many industries. When a U.S. manufacturer develops a new product, for example, the company has first-mover advantage for a time. But in the next phase, when other manufacturers enter the market, competition often shifts to price. In response, some U.S. producers may move manufacturing offshore to developing nations, to take advantage of lower labor costs. However, said Miklovic, they frequently find that the level of automation and technology available in developing nations is less than that of the United States.
This means that U.S. manufacturers who then invest in sophisticated automation technology at home can gain the upper hand for a time over lower-priced imports, thanks to the higher quality product allowed by the automation, said Miklovic. But the automation technology used in the developing nations eventually catches up, giving products produced there the advantage, he added.
“We see this in semiconductors all the time,” Miklovic said. “Semiconductors typically have been produced in Japan and Taiwan. But now there is a booming semiconductor market that’s starting in China.” While the density and sophistication of semiconductor chips produced in China cannot yet match that of Japan and Taiwan, said Miklovic, China’s technology is moving in that direction.
“Automation only works for a period of time,” said Miklovic. The lesson for manufacturers is that they must continually reinvest in automation and innovation, he said. “If you stand still, ultimately you lose.”
Thomas Prendergast
Fall 2007
Corporate Site: Inetekk.com, Inc.
All programming done by Americans
Sure it cost us more to build the Inetekk technology by ourselves and outsourcing to US programmers and US software developers. The prospect of sending our work abroad was never a consideration. Primarily doing so we lose the security of proprietary development to another country were we have little if any legal control regardless of how cheap that option could be. Then quality and communications is another factor, but we are also sensitive to doing business within our culture because of the process of getting what we are looking for and having the ability to have laws in effect that protect our interest in getting just what we are paying for.
Customer support by Americans
We are constantly getting offers to do our work at deep discounts by these foreign nationals, primarily India, but we are not cheap price motivated. Even our support service is run by Americans in America. We may ad to our support from Australia, but that is because they can offer the needed time frame for that region, not a cost consideration, so we can offer 24/7 seamless support for our clientele. Plus we have many Australian and New Zealander subscribers using our services and we love their accents.
Collocation in San Jose, CA USA
When we first started building the Inetekk systems, we went from a shared server in Florida to needing our own servers. We could have co located our servers in a foreign company for 1/3rd the cost but we realized by doing so our proprietary technology and secured databases would be at risk. Not a good idea. So we contracted with a well know company in San Jose. This was expensive but a very good decision. As the Internet has grown, the necessity to keep your data well secured is of the utmost importance and again, keeping this service local has proved to be a very good decision.
Servers built in USA
As we started building our server farm, again quality and service were the key issue. We went to a local shop in San Diego and hired them to build them. The first server, unaware to us, was built from foreign parts and within weeks the server started having failure issues. From then on we have demanded that all parts be US made as best we could and we have never had issues since. Our farm now runs with US made servers like NetAps, Intel, etc.
IT services by Americans
As with any server farm and web systems, having good IT professional's is imperative, and again, we hired US IT database engineers and server engineers. Same reason as our security is key and far more important than cost. For example, to use foreign IT services cost around $10 per hour. US costs are around $150 per hour. In my humble opinion, you get what you pay for.
The bottom line is future forecasting. I subscribe to the belief that our customers deserve the very best. Not only in the quality of the service, or the best customer support, but also security and the dedication to keep Inetekk around for the long run delivering the very best.
It seems the the big corporations in the US have lost sight to this fact and are all heading for serious issues as they continue down this road to losing control of their companies to the quest for seeking the lowest prices regardless. Take the Mattel toy company for example. Not long ago all their toys were US built. Today, they have lost major market share because the toys the sell now coming from Red China are toxic and low quality. It is scandalous that our children are getting toys painted with lead paint.
The future is at risk.
Thomas Prendergast
CEO
Inetekk.com, Inc.
Bill Repp
October 14, 2007
Reprinted from: commercialappeal.com
Q: I've been out of work for nearly five months, and the prospect of getting a job in my field (mechanical engineering) doesn't look good -- unless I want to move my family across the country. I've always wanted to have my own business, but I'm worried about the comparative lack of job security that goes with it. What's your opinion? I'm over 50 and in good health. -- Deidre N.
A: You have a lot going for you: you've always wanted to have your own business, you're over 50, and you have good health. Security? You don't have it now, and you didn't have it when you got laid off. I don't think there's anything more secure today than working for yourself. Companies will cut any costs they have to just to stay in business, and the popular trend for the past several years has been to cut staff -- fast. And consider this: when you work for someone else -- big company or small -- only a few people -- your boss and one or two more managers -- control your future security. But with your own business, if you lose a few customers, you still have others to back you up. I've always thought that having my own business gives me more security, not less, than I'd have if I worked for someone else.
Another stunning fact of life: at 50, you're more likely to be more successful at hiring yourself than trying to convince someone else to do it. Fortune magazine once ran a cover story: "Finished at Forty," detailing the corporate trend of hiring younger people. As one CEO put it: "Why should I hang on to someone who's over 50? He's tired of the long hours and wants to spend more time with his family. He probably hasn't kept up with the newest technology. I have to pay him $75,000 a year or more, and he argues with me. I can hire someone in his 30's and pay him $35 to $40,000. He'll work 60 to 70 hours a week without complaining, and he won't argue with me. This is a no-brainer."
What Do YOU Want?
My best advice: do what feels right for YOU. When you're motivated and committed to a career you really like, the money and security usually take care of themselves. There's a big difference in putting in 50-60 hours a week into a job you love, and one you just feel so-so about. If you don't look forward to going to work when you get up in the morning, you're in the wrong job. Life is too short to work at a job you don't like.
Think carefully about how you want to spend one-third to half of the rest of your life (your waking hours). It you really think it's time to have your own business, then write your answers to these questions. They'll also form the foundation for a good business plan -- an absolute must if you want to succeed.
How would you describe your business (name, location, product/service?)
How would you describe your total target market -- the customers who will be willing to pay you for your products/services?
What industry, local, or consumer trends or needs will you react to?
How would you analyze, and then describe your competition (how many; current prices; their strengths/weaknesses)?
What are your marketing and business goals?
What are your first-year growth problems -- and how will you solve them?
What finances will you need to start the business and keep it going until it can stand on its own? How will you get them?
What's your operating plan for the next five years? (At least half of the new businesses started each year fail within the first 12 months. You must plan for a long-term business.)
What's your management plan to control and develop your basic operation/service?
What equipment, inventory, labor, space, overhead do you need?
Talk to Your Banker
Once your business plan is ready, prepare your personal financial statement (all your assets and liabilities). Next. prepare a projected balance sheet and profit and loss statement for your business -- at least for the first year. Then it's time to meet with your banker.
A good banker can advise you on the likelihood of your succeeding in getting a loan. He or she can point you in the right direction to get additional information. An excellent source for learning about starting your own business is on-line: Search for "sba.gov" and you'll discover a site that has all you need to know to write your business plan and finance your business. You'll even have models of nearly 100 business plans to study and benefit from. The rest is up to you -- and your energy and commitment.
Bill Repp is president of Organization Development Group, and has extensive experience in creating and delivering programs in marketing, communication, team building and business writing. E-mail Bill Repp at billrepp@rochester.rr.com
Inetekk Systems
November 09, 2007
Hear them live:
Sohomatic Back Office
Butch Hamilton
Thanks Again,
Maria Angelozzi
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Ron-Smalley
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