DISASTROUS US EMPLOYMENT REPORT FOR FEBRUARY

Posted on March 5, 2004 by Dave Pollard
US employment
Even the pessimists didn’t expect the horrendous February employment report issued by the labour department today. Employment grew by an insignificant 21,000 people, compared to the increase in the labour force of 150,000, and the forecast just last month from Bush’s office that between 2.6 million and 5.0 million net new jobs would be created this year. As I promised, I’ll be tracking this each month.

But it’s even worse if you read the whole report. The entire increase in February was a result of hiring by federal and state governments. Private sector employment actually declined. And the labour department also admitted they had overstated January’s and December’s employment growth numbers by 15,000 and 8,000 respectively. So total US employment at the end of February was actually 2,000 people less than last month’s reported number.

In light of record profits by many large corporations in recent months, no one should have any illusions that Bush’s tax cuts for the rich will ever somehow ‘trickle down’ to the rest of the people. This data shows that profit growth is now occurring entirely on the backs of American workers, and from ‘productivity’ improvements due to downsizing, outsourcing and offshoring. Big corporations are already gouging as much revenue from struggling American consumers for their overpriced, increasingly imported products as they can, so future ‘growth’ must come by cutting and exporting jobs.

Not surprisingly, the stock market shrugged off this horrible news, since although it doesn’t bode well for consumer buying power, it allows the Fed the excuse to keep interest rates low for another month, keeping the cost of massive corporate borrowing (and the interest cost on the astronomical and still-soaring Bush debt) manageably low. But like everything else in our economy, these stock market levels and interest rate levels are unsustainable. Big bubble ahead.

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4 Responses to DISASTROUS US EMPLOYMENT REPORT FOR FEBRUARY

  1. David says:
    March 5, 2004 at 20:11

    Kind of ironic that the only jobs the Bush administration could produce were government jobs.But perhaps a lot of people are starting their own businesses. Bush loves to help out entrepeneurs. He’s just giving them a gentle push.

  2. James Drogan says:
    March 6, 2004 at 12:39

    Being critical is the easy part; being constructive is a bit more difficult.What suggestions do you have for generating jobs?From my perspective any short term solution (e.g., thou shalt not move jobs out of America) is unstainable. We do not need a solution aimed at winning the next election, but rather a solution for the longer term.I think the solution rests on innovation which, in turn rests upon education. From that base one then intelligently invests in the development of new businesses and new jobs. Alternatively one could investigate the (gulp!) transformation of existing value chains to generate outcomes in a way not easily replicable, at the moment, elsewhere in the world.

  3. Dave Pollard says:
    March 6, 2004 at 14:32

    James: As I’ve said in these pages, I don’t believe in the extreme solution of untrameled ‘free’ trade. I believe that trade should be regulated to produce the greatest good for the greatest number. That means encouraging local and national self-sufficiency wherever and whenever it makes sense, and that in turn means imposing duties and taxes on imported goods and services (and by implication, offshored labour), and using the proceeds to support domestic producers. I’m not saying that that makes sense for all goods and services. Where goods and services cannot reasonably be produced domestically (e.g. coffee in non-tropical climates, and some raw materials that simply aren’t available domestically), THEN I believe in ‘free’ trade. I also don’t believe in export subsidies, such as the huge subsidies in North America and Europe on agricultural goods, which totally distort the price of goods and disrupt and even destroy many countries’ economies, and lead to uneconomic production decisions. If any government were to adopt these principles, they would quickly find that domestic employment would soar (in both developed and developing nations, for different reasons) and many of the labour abuses in the third world would disappear because the operations that sustain them would become uneconomic. The only losers would be the multi-national corporations who have bribed, conned and defrauded the people and governments of rich and poor countries alike out of greedy self-interest, totally in opposition to the domestic self-interest of the people of these nations.That’s not to say that more innovation and better education aren’t needed — they are, and desperately. But they’re the solution to waste, inefficiency, environmental degradation, and a host of other problems, not unemployment. The majority of Americans are already overskilled for the jobs available (the proportion who say they are ‘underemployed’ relative to their skill set is upwards of 50%) — they need more and better job opportunities, not more skills.

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