It used to be that only our manufacturing jobs were being sent overseas. But now growing numbers of our white-collar jobs are being sent over as well. Tens of thousands of lawyering jobs, medical analysis and research jobs, as well as engineering jobs steadily flow out of this country, to be done by English-speaking professionals who in many cases have better educations than most Americans now have, given the ever rising cost of getting a decent college education in the USA -- now approaching $250,000 at some universities. And who gets the large majority of Ph.Ds in engineering at American universities? Asians. And then they go back to Asia and ultimately start businesses that eat our lunch.
Discovery, which used to be one of the classic things that young lawyers did, is now something that is increasingly being done by computer programs. If you are running a law firm and you can replace a $150,000/yr lawyer with a computer program, you'll do it in a heartbeat, because it's huge cost savings for you. So, even in professions like law, computers and technology are replacing people at an ever faster pace . (See "Jobs: Some Light at the End of the Tunnel.")
Back in 1979, General Motors provided 618,000 jobs in the United States. Today, in 2011, that number has shrunk to 77,000. Facebook, a $50 billion company, employs only 2,000 people. Computers, automation and technology are replacing workers as never before.
The new world economy, globalized in ways it never was before
There is now a single world market for both the production and consumption of many goods and services; they can be made or sold anywhere. Over the past 10 to 15 years, about 400 million people -- from China, India, South Africa, Indonesia and elsewhere -- have entered the global labor force, offering to make the same things Americans make, but for a tenth the price! That's why economic growth by itself won't create enough jobs. Explanation: The US economy increasingly has the capacity to grow nicely -- but without adding any significant number of workers . America's largest companies have over $2 trillion in cash on their balance sheets. Yet the average American, who has seen his or her wages decline over the past decade, simply cannot find a decent job. Six people now search for every available median-income job.
Growth and employment will likely continue to diverge, for these reasons, in this way, for the next few decades in the U.S. Over the past decade, the large majority of our job growth was in just two sectors -- government and health care -- but neither is likely to grow dramatically over the next decade. And without a massive new infrastructure building program, accompanied by the massive federal spending that it would take to finance it, neither is any other likely to grow to any significant extent.
Bottom line: forget about the debt ceiling, Pakistan and Afghanistan. The crisis of our times is the employment crisis. But there are solutions:
We need to focus on five things that will create jobs:
- helping small businesses,
- increased immigration of the most talented,
- retraining of the middle aged,
- something like the G.I. bill of the 1940s and 50s,
- a national bank that can greatly facilitate the rapid construction of the trillions of dollars worth of infrastructure that this country so badly needs.
The disconnect between economic recovery and employment growth is new
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