Tags: U.S. | Heading | Toward | Third | World | Economy

U.S. Heading Toward Third World Economy

Saturday, 12 March 2005 12:00 AM

The United States has apparently lost the ability to create high productivity, high value-added jobs in tradable goods and services. The ladders of upward mobility are being dismantled by offshore production for home markets and outsourcing of knowledge jobs.

The Bureau of Labor Statistics reports that the number of employed U.S. technical workers has fallen by 221,000 in six major computer and engineering job classifications during 2000-2004. The largest drops were suffered by computer programmers, followed by electrical and electronics engineers, computer scientists and systems analysts.

So much for the new economy that economists promised would take the place of the lost manufacturing economy.

America's remaining job market is domestic nontradable services. While India and China develop First World job markets, the U.S. labor market takes on the characteristics of a Third World workforce. Only jobs that cannot be outsourced are growing.

The Bush economy has seen a loss of 2.8 million manufacturing jobs, a rise in the unemployment rate of 1.2 percentage points and a stagnation in real weekly earnings.

How bad will things have to get before economists realize that outsourced jobs are not being replaced? Indeed, many American companies are ceasing to have any presence in the United States except for a sales force.

Cisco's CEO, John Chambers, declared recently, "What we're trying to do is outline an entire strategy of becoming a Chinese company."

Cisco is establishing a new R&D center in Shanghai. The U.S. corporation manufactures $5 billion of products in China, where it employs 10,000 people.

That is just one company, and there are many doing the same thing. The result is abandonment of the American workforce by American corporations. Little wonder the Bush administration is the first administration in 70 years to have a net loss of private sector jobs.

If one U.S. company or a few move offshore, their profits improve and consumer prices are lower. However, when work in general moves offshore, American lose the incomes associated with the production of the goods they consume. Domestic production is turned into imports, with the result that America draws down its accumulated wealth in order to pay for the imports on which it is dependent.

The dollar's value and status as reserve currency cannot forever stand the trade and budget deficits that are now part and parcel of America's economic policy.

Unless there are major changes soon, America's economic future is a Third World workforce with a banana democracy's worthless currency.

COPYRIGHT 2005 CREATORS SYNDICATE, INC.

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The United States has apparently lost the ability to create high productivity, high value-added jobs in tradable goods and services. The ladders of upward mobility are being dismantled by offshore production for home markets and outsourcing of knowledge jobs. The Bureau...
U.S.,Heading,Toward,Third,World,Economy
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2005-00-12
Saturday, 12 March 2005 12:00 AM
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