Capital Destroying Jobs

It was predicted by Business Week in the 90s and assumed by disability groups that in the Information Age disabled workers would get a shot at improving their employment lot. Technology makes it possible for significantly disabled persons to use computers and Information Technology (IT) promised plenty of office deskwork.

One spin Business Week put on the ADA in its early days was that disabled people would “become a strategy for profitability – a new competitive advantage in the search for capable workers.” Business Week stated, “one of the hidden keys to profitability may be a large and growing bloc of Americans-people with disabilities … in a decade in which willing and able workers will be increasingly hard to find, the nearly nine million working age Americans with disabilities now outside the job market may be one of the best sources of new employees – period.”

What happened instead is that government and the corporations abandoned American workers, including disabled workers, leaving them in the dust in search of cheaper labor made possible by that very technology. Privatization of government jobs and IT outsourcing — sending jobs overseas — have become a popular means to lower the cost of labor committed to perform computer-related functions.

The corps with the approval of the Bushevics are shipping prospective jobs overseas to India, Malaysia, Eastern Europe, and soon, to China where workers can be hired for about 10% the salary of an American worker. Banks, corporations, Wall Street, and governments have all jumped on the outsourcing bandwagon.

The White House Council of Economic Advisors released its Economic Report of the President in February stating “When a good or service is produced more cheaply abroad, it makes more sense to import it than to make it or provide it domestically.”

Economist Gregory Mankiw, who chairs the Council, called outsourcing which usually comes hand in hand with firing Americans and sending their jobs overseas “a good thing.”

To the Bushevics it makes good economic sense to outsource jobs that could be going to unemployed American workers. This administration has no allegiance to the nation’s unemployed. Rather Bush’s people take Calvin Coolidge’s statement as a given “The business of America is business.” What’s good for the corporations is not to be tied down by pesky regulations that would place a premium on hiring Americans. It’s profit maximization they are after.

In praising the merits of outsourcing, Bush’s administration is following the lead of CEOs such as General Electric’s Jack Welsh who shifted software development and back office jobs to India years ago. Today firms such as McKinsey & Co. and A. T. Kearney have shifted the bulk of their research divisions to places such as Bombay and Chennai, India. J.P. Morgan Chase & Co. has hired junior stock analysts and other research staffers in its Bombay office. US Banks such as Citibank, brokerages such as Merrill Lynch, mutual companies and other financial services companies are planning to relocate 500,000 jobs offshore, or 8 percent of their work force over the next few years. Deloitte Research forecast in April last year that about 15% of financial jobs worldwide would be moved to countries sporting cheap labor.

If it can be done sitting in front of a desk it is game for outsourcing.

The trend is not limited to corporations. Bush’s White House plans to subject at many as 850,000 federal jobs to competition from the private sector including desk jobs that can find their way overseas to politically well-connected contractors with offices in India, Malaysia, the Philippines, and perhaps Russia.

Forty States have already hired foreign workers in other countries to perform such jobs as answering questions about food stamps or welfare programs. India is a favorite contracting country because people there speak English. Public and private call centers are being off-shored en masse. India now has a booming industry of telemarketers, phone banks, taking information economy jobs from the US.

Technology has backfired on disabled job seekers. Capital has taken off with the IT Technology to make as large a profit as possible.

There are other factors involved in the poor labor market. Massive layoffs, a de-skilling of the American labor force into low-paying service sector jobs, downsizing, factory shutdowns, outsourcing of jobs overseas, and NAFTA have all contributed to the 65%-70% disabled unemployment rate.

Of course this is serious trouble for all U.S. workers 14.7 million of whom have no job. The administration likes to point to the fact that there was a recent decline of the official unemployment rate but it fell two tenths of a percentage point not because more people got jobs but because 538,000.workers left the labor market and are “not in the labor force.” Discouraged, they gave up looking for a job and aren’t counted as unemployed anymore.

The nation’s official jobless rate is 5.9% but that figure tells only a part of the story of the labor market.

To begin with, there are the 8.7 million unemployed, defined as those without a job who are actively looking for work. However, 4.9 million part-time workers say they would rather be working full time — the highest number in a decade.

There are also the 1.5 million people who want a job but didn’t look for one in the last month. Nearly a third of this group say they stopped the search because they were too depressed about the prospect of finding anything. Officially termed “discouraged,” their number has surged 20% in a year.

Add these groups together and the jobless total for the U.S. hits 9.7%, up from 9.4% a year ago.

In fact payroll jobs are down well over two million since George W. Bush moved into the White House. Bush’s economic policies have not added enough jobs to compensate for the loss. Despite Bush’s State of the Union Address citing need for focus on jobs, in January the economy only added one thousand jobs, making this a jobless recovery.

The jobless recovery may well be a permanent job loss “recovery.” According to Doug Henwood a Federal Reserve Bank study confirms that job losses over the last few years were “structural and not merely cyclical.”

Usually a recovery is accompanied by the return of jobs. Layoffs were temporary and workers recalled when the economy performed. Henwood notes “in the current cycle, almost all of the job losses have been the result of positions being eliminated.” (see Left Business Observer No. 106, January 2004)

Structural changes bode ill winds ahead for would be disabled workers. If the American labor force is shrinking, it is hard to see any room for gain. The rule of thumb for disabled workers is last one hired and first one fired.

With Presidential comments praising the merits of offshore manufacturing and hiring practices we are a long way from bringing government round to take some social responsibility for the loss of jobs in our country.

Still our directive should be clear. There will be a greater need for unemployment benefit extensions, job creation in the public sector, and above poverty level income support to avoid conditions of greater homelessness and poverty in the nation.

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