Russell / Capital Destroying Jobs / Mar 04

[ whispers in the basement... ]

ZNet Commentary
Capital Destroying Jobs March 04, 2004
By Marta Russell

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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