Job Disinformation From The New York Times
Print Friendly and PDF

[See Edwin S. Rubenstein on January's job numbers A Blowout Month…For Hispanics  and here on December's job numbers.]

On Friday Feb. 3 the Bureau of Labor Statistics released the nonfarm payroll jobs report for January. New York Times reporter Vikas Bajaj wrote an upbeat news story, obviously based on a Labor Department press release rather than any study of the BLS report. If the rosy view of Ethan Harris, chief economist for Lehman Brothers is typical, Wall Street has no more idea than Bajaj of what the jobs report really says. [Jobless Rate Falls to Lowest Level in More Than 4 Years]

The export and import-competitive sectors of the US economy have been tanking for a long time. To keep the story manageable, let's just go back to January 2001. The latest BLS payroll jobs report says that January 2006 is now the 61st month that the US economy has been unable to create any jobs except jobs in domestic nontradable services, most of which are low paid. Of the 194,000 private sector jobs created in January, 46,000 were in construction (and most likely went to Mexican immigrants, both legal and illegal) and 136,000 were in domestic services: Financial Activities (essentially credit agencies) account for 21,000. Administrative & Waste Services account for 17,600. Health Care & Social Assistance account for 37,500. Waiters, Waitresses and Bartenders account for 31,000. Wholesalers account for 15,100.

There were 7,000 new jobs in manufacturing in January, but the total number of manufacturing jobs in January 2006 is 48,000 less than in January 2005. Over the past five years, millions of manufacturing jobs have been lost. At the rate of 7,000 new manufacturing jobs per month, the lost manufacturing jobs over the past five years would not be regained for 34 years.

Does anyone remember when reporters were curious? In his rosy jobs report, Vikas Bajaj does let it out of the bag that "economists estimate that the nation needs to add roughly 150,000 jobs a month just to keep up with population growth." That translates into 1,800,000 new jobs per year to stay even with population. Over the past 61 months 9,150,000 new jobs were necessary in order to prevent population growth from pushing up the unemployment rate.

How many new jobs have been created over the past five years and one month? According to the Bureau of Labor Statistics' latest revisions, a total of 1,054,000 net new private sector jobs were created over the past 61 months (January 2001 through January 2006). Add the total net government jobs created over the period for a total net job creation of 2,093,000 jobs over the past 61 months.

That figure is 7,057,000 jobs short of keeping up with population growth!

What, then, does it mean for Bajaj to tell the Times' readers that the unemployment rate has fallen to 4.7%, a rate that economists consider to be essentially full employment?

How can the economy possibly be at full employment if the economy is 7 million jobs short of keeping up with population growth!

The unemployment rate does not measure the millions of Americans who have lost their jobs to offshore outsourcing and to foreign workers brought into the US on work visas. These millions of Americans have exhausted their unemployment benefits and severance benefits and have been unable to find jobs to return to the work force. Economists refer to these millions of unemployed people as discouraged workers who have dropped out of the work force. As they have given up searching for jobs, they are not considered to be in the work force and, therefore, do not count as unemployed.

If you are an American engineer whose job has been outsourced to India, China, or Eastern Europe, where the cost of living and salaries are far below US standards, or you are an engineer who has been forced to train as your replacement an Indian engineer imported on a H-1B or L-1 work visa, where do you go to find a new engineering job? All the companies are doing the same thing.

It is amazing to hear politicians and corporate executives blabber on about a shortage of engineers and scientists when there are now several hundred thousand unemployed American engineers. The corporate executives, whose own bonuses grow fat from replacing their American employees with foreigners who work for less, spread disinformation about "shortages" so that Congress will give them more H-1B visas. This is one of the greatest frauds ever perpetuated on the American people.

If the unemployment rate is now at essentially full employment, why only a few days ago did 25,000 Americans apply for 325 jobs at a new Chicago Wal-Mart?

Americans are not being told the truth about anything, not about Iraq, not about Iran, not about terrorism, and not about the disastrous state of their economy. The information is available, but the people have no way of finding out about the economy if they are not trained economists with some knowledge of the data (except by watching Lou Dobbs on TV). Few economists themselves will tell them, because if they do they will lose their corporate and government grants.

It is not in the corporations' interest or the Bush administration's interest for Americans to know what is happening to them.

Washington based economist Charles McMillion of MBG Information Services tells it the same way (and he has been doing so longer than I have). Here is his summation of the January payroll jobs report: "the familiar pattern continued with almost all job growth occurring in industries that face little or no outsourcing or import competition: construction, health care and social services, restaurants and bars, credit agencies and wholesalers."

Gentle reader, the politicians, the media, and the corporations are all lying to you.


Paul Craig Roberts [email him] is the author with Lawrence M. Stratton of The Tyranny of Good Intentions : How Prosecutors and Bureaucrats Are Trampling the Constitution in the Name of Justice. Click here for Peter Brimelow's Forbes Magazine interview with Roberts about the recent epidemic of prosecutorial misconduct.

Print Friendly and PDF