Where are all the good, middle-class jobs going? And why are they leaving? When will it all stop? Just connect the following dots and the answers become fairly obvious.
USA Today. September 15: Middle class barely treads water. A generation ago, a typical American middle-class family lived on the income of a single breadwinner. In recent years it has taken two working spouses to live the modern middle-class dream. Now it seems even that is not enough to survive the skyrocketing cost of housing, health care and college while saving for retirement and shouldering growing debt loads. -
USA Today. September 15: With personal bankruptcy at an all-time high, it's mostly the middle class that gets trapped: 92% of the record 1.6 million bankruptcy filers in the year ended June 30 were middle class, according to a Harvard University study.
International Herald Tribune. September 12: The (U.S.) Labor Department reported new claims for unemployment insurance filed last week rose by a seasonally adjusted 3,000 to 422,000, a two-month high.
USA Today. October 1: The Conference Board reported the percentage (of respondents) expecting fewer jobs to be available in the next six months rose to 21% from 18.6%. Further, the percentage calling jobs currently "hard to get" rose to 35.3% from 34.1% in August, while those calling jobs "plentiful" fell to 10% from 11.3%. USA Today. October 6: The Labor Department said Friday that business payrolls rose by 57,000 in September, seasonally adjusted, and that the unemployment rate held steady at 6.1%. (But analysts warn that the gain is less than population growth and that 150,000 new jobs on a sustained basis are needed to make a dent in the jobless rate.) The report included a number of troubling signs: More than 23% of the unemployed had been out of work six months or more – the highest level in 20 years. More people left the labor force in September and 5 million were working part-time because they couldn't find full-time jobs. Hourly earnings fell for the first time since May 1989. New York Times. November 21, 1996: U.S. Trade Deficit Widens as Gap Grows With China. The trade deficit with China was $4.73 billion in September, just fractionally from its August level but nearly $1 billion higher than the September deficit with Japan. As President Clinton prepares to press top Chinese officials to open their market more fully to American goods, the government reported that the trade deficit with China rose in September to another record.
International Herald Tribune. September 12: The U.S. trade deficit with China widened by 13.5% from June to July to a record $11.3 billion.
New York Times. November 21, 1996: Commerce Secretary Mickey Kantor said the September trade figures would "really have no effect" on negotiations with China. Those talks have proven almost unremittingly frustrating to the United States over the last few years despite China's professed commitment to agreements like one seeking to control Chinese piracy of videos, software and other intellectual property.
Seattle Times. September 16: Commerce Secretary Don Evans said, "No country raised more attention as a source of concern than China. (U.S.) manufacturers complained about rampant piracy of intellectual property, forced transfer of technology from firms launching joint ventures in China, trade barriers and capital markets that are largely insulated from free-market pressures." Buffalo Business First. September 9: The trade deficit between the U.S. and China last year (2002) was $103 billion. Next year it is projected to top $120 billion. VOA News. September 10: Members of Congress have introduced legislation aimed at punishing China for failing to increase the value of its currency and for what lawmakers call unfair trade practices. Congressman Phil English says the bill would create what he calls the strongest weapon yet in dealing with China on trade issues. "China's manipulation of the yuan is, in effect, a subsidy that gives their exporters a trade advantage of up to 40 percent," he said. "It also serves as a tariff on U.S. goods, making them 40 percent more expensive in the Chinese market." Wall Street Journal. September 15: The (U.S.) manufacturing sector has lost jobs for 37 months in a row, totaling about 2.7 million positions since July 2000, dragging down the entire labor market.
New York Times. August 17: More than half of the manufactured goods that Americans buy are made abroad, up from 31% in 1987.... The proportion of the workforce employed in manufacturing has fallen to 11% from 30 percent in the mid-1960s. Wall Street Journal. September 10: Trade Barriers. Poor nations typically impose higher tariffs than rich nations. Average unweighted applied tariff rates for selected countries for all goods in 2001. India 30.9%, China 15.3%, U.S. 4.0%. (This means it is harder for the U.S. to sell to China and India and easier for them to sell to us – which costs U.S. jobs).
Economist. August 23: The boom in "business process outsourcing" to India replicates the explosion a few years ago of the country's software industry. Employment in Indian IT sector involving call centers, software and multinational operations grew from less than 300,000 in 2000 to over 650,000 in 2003.
It doesn't show in world trade statistics, but jobs appears to be one of the U.S.'s leading exports, right up there with exports of manufactured and agricultural products. We are also exporting an enormous amount of debt. As trade deficits accelerate, the difference between what we import and what we export is made up in three ways:
We export large amounts of debt to China, Japan and other Asian countries in the form of U.S. Treasuries. These Asian countries now hold one-third of all U.S. debt. The proportion of U.S. debt held by Asian countries is projected to rise to over 60% by 2008. We export millions of middle-class jobs to Asian manufacturing companies. We export large numbers of middle-class jobs to American companies which have relocated some or all of their operations to China, India, Japan and other low-wage countries.
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