The following edited excerpts come from an article* by Paul Craig Roberts, Dave Kranzler, and John Titus as posted on globalresearch.ca under the title The De-industrialization of America: “The True U.S. Rate of Unemployment is 23.2%.
The U.S. had entered a new economic era in which American workers face direct global competition at almost every job level–from the machinist to the software engineer to the Wall Street analyst. Any worker whose job does not require daily face-to-face interaction is now in jeopardy of being replaced by a lower-paid equally skilled worker thousands of miles away. American jobs are being lost not to competition from foreign companies, but to multinational corporations that are cutting costs by shifting operations to low-wage countries…
The U.S. already looks more and more like a Third World country.
- America’s great cities, such as Detroit, Cleveland and St. Louis have lost 20-25% of their populations.
- Real median family income has been declining for years, an indication that the ladders of upward mobility that made America the “opportunity society” have been dismantled. Last April, the National Employment Law Project reported that real median household income fell 10% between 2007 and 2012.
- 67% of American households are unable to raise $400 cash without selling possessions or borrowing from family and friends.
- Although you would never know it from the reports from the U.S. financial press, the poor job prospects that Americans face now rival those of India 30 years ago.
- American university graduates are employed, if they are employed, not as software engineers and managers but as waitresses and bartenders. They do not make enough to have an independent existence and live at home with their parents.
- 50% of those with student loans cannot service them and 18% are either in collection or behind in their payments. Another 34% have student loans in deferment or forbearance. Clearly, education was not the answer.
Jobs off-shoring, by lowering labor costs and increasing corporate profits, has:
- enriched corporate executives and large shareholders, but the loss of millions of well-paying jobs has made millions of Americans downwardly mobile…[and]
- destroyed the growth in consumer demand on which the U.S. economy depends with the result that the economy cannot create enough jobs to keep up with the growth of the labor force.
The U.S. Unemployment Rate
Between October 2008 and July 2014 the working age population grew by 13.4 million persons, but the U.S. labor force grew by only 1.1 million. In other words, the unemployment rate among the increase in the working age population during the past six years is 91.8%.
The U.S. Labor Force Participation Rate
Since the year 2000, the lack of jobs has caused the labor force participation rate to fall, and since quantitative easing began in 2008, the decline in the labor force participation rate has accelerated. Clearly there is no economic recovery when participation in the labor force collapses.
Right-wing ideologues will say that the labor force participation rate is down because abundant welfare makes it possible for people not to work. This is nonsensical. During this period:
- food stamps have twice been reduced,
- unemployed benefits were cut back
- a variety of other social services were also cut back. Moreover, there are no jobs going begging.
Being on welfare in America today is an extreme hardship.
The graph below shows the collapse in the labor force participation rate.
- The few small peaks above the 65% participation rate line show the few periods when the economy produced enough jobs to keep up with the working age population.
- The massive peaks below the line indicate the periods in which the dearth of jobs resulted in Americans giving up looking for non-existent jobs and thus ceased being counted in the labor force.
- The 6.2% U.S. unemployment rate is misleading as it excludes discouraged workers who have given up and left the labor force because there are no jobs to be found.
John Williams of Shadowstats.com calculates the true U.S. unemployment rate to be 23.2%, a number consistent with the collapse of the U.S. labor force participation rate.
In the last 10 years the U.S. has become a country in which:
- the norm for new jobs has become lowly paid part-time employment in domestic non-tradable services.
- Two-thirds of the population is living on the edge unable to raise $400 cash.
- The savings of the population are being drawn down to support life.
- Corporations are borrowing money not to invest for the future but to buy back their own stocks, thus pushing up
- share prices,
- CEO bonuses, and
- corporate debt.
- The growth in the income and wealth of the 1% comes from looting, not from productive economic activity.
This is the profile of a Third World country.
Editor’s Note: The author’s views and conclusions in the above article are unaltered and no personal comments have been included to maintain the integrity of the original post. Furthermore, the views, conclusions and any recommendations offered in this article are not to be construed as an endorsement of such by the editor.
*http://www.globalresearch.ca/the-de-industrialization-of-america/5395635 (Copyright © 2005-2014 GlobalResearch.ca)
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