Thursday, April 20, 2006
Macropocalypse, Rubber Meets Road Edition
"...US manufacturing lost 2.9 million jobs, almost 17% of the manufacturing work force. The wipeout is across the board. Not a single manufacturing payroll classification created a single new job.
The declines in some manufacturing sectors have more in common with a country undergoing saturation bombing during war than with a super-economy that is �the envy of the world.� Communications equipment lost 43% of its workforce. Semiconductors and electronic components lost 37% of its workforce. The workforce in computers and electronic products declined 30%. Electrical equipment and appliances lost 25% of its employees. The workforce in motor vehicles and parts declined 12%. Furniture and related products lost 17% of its jobs. Apparel manufacturers lost almost half of the work force. Employment in textile mills declined 43%. Paper and paper products lost one-fifth of its jobs. The work force in plastics and rubber products declined by 15%. Even manufacturers of beverages and tobacco products experienced a 7% shrinkage in jobs.
The knowledge jobs that were supposed to take the place of lost manufacturing jobs in the globalized �new economy� never appeared. The information sector lost 17% of its jobs, with the telecommunications work force declining by 25%. Even wholesale and retail trade lost jobs. Despite massive new accounting burdens imposed by Sarbanes-Oxley, accounting and bookkeeping employment shrank by 4%. Computer systems design and related lost 9% of its jobs. Today there are 209,000 fewer managerial and supervisory jobs than 5 years ago.
In five years the US economy only created 70,000 jobs in architecture and engineering, many of which are clerical. Little wonder engineering enrollments are shrinking. There are no jobs for graduates. The talk about engineering shortages is absolute ignorance. There are several hundred thousand American engineers who are unemployed and have been for years. No student wants a degree that is nothing but a ticket to a soup line. Many engineers have written to me that they cannot even get Wal-Mart jobs because their education makes them over-qualified.
Offshore outsourcing and offshore production have left the US awash with unemployment among the highly educated. The low measured rate of unemployment does not include discouraged workers. Labor arbitrage has made the unemployment rate less and less a meaningful indicator. In the past unemployment resulted mainly from turnover in the labor force and recession. Recoveries pulled people back into jobs."
The end of America? It's difficult to see a future for the middle and working classes.
Note that most of this is a classic case of saving capitalism from the capitalists. The gains in this case (as has been very nicely documented in the last year or so) are being appropriated not just by capital, but by the few at the very top of the capital food chain - most of whom see absolutely nothing wrong with this picture.
Umair - Very true that global white collar workforce arbitrage has kicked into high gear.
These sea changes set an interesting stage going forward:
improving peer production abilities
+ better virtual collaboration tools
+ increasing #s of knowledge workers with no ties to their previous employers
Just like your thoughts on media players needing to adopt strategies to leverage the edge, there will be opportunities for winners and losers in this area as well.