News Release

Politics of Economics: * Outsourcing * Jobs and Unemployment


Author of After the New Economy, Henwood said today: “It seems the default explanation for the weak state of the job market more than two years after the official end of the recession is outsourcing. Or, in the crude form, foreigners are stealing our jobs. Reality is a lot more complicated than that. In manufacturing, most countries — including, to almost everyone’s surprise, China — are losing jobs. And in services, jobs lost to outsourcing would be made up by two or three months of normal job growth. But we’re not getting normal job growth, and the reasons for that are mostly of domestic origin — mainly the lingering hangover from the late-1990s bubble. But few people want to talk about that — or the almost nonexistent public support given to unemployed workers. Instead of the sterile back and forth between ‘free traders’ and ‘protectionists,’ let’s recast the debate: protect the worker, not the job.”
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An economist with the Center for Economic and Policy Research, Boushey said today: “Compare the current job-loss recovery to the job-less recovery of the early 1990s, and you’ll find that in the first 25 months of the recovery of the early 1990s, the economy gained 1,681,000 jobs. Now, 25 months since the 2001 recession ended, the economy has lost 776,000 jobs and wages are actually falling, in spite of booming productivity growth…. This week, the administration has acknowledged that their policies over the past three years have not met their own projections for job growth [which] had assumed that the economy would add about 300,000 jobs per month. Although economic growth picked up last year, as did productivity, 2003 ended with fewer jobs than it had when it began, and over the past four months we’ve added an average of only 75,000 jobs per month. President Bush said that he would provide more funds for job training…. However, over the past three years, he has proposed at least $1 billion in cuts to job training and vocational programs.”
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Tufekci, an adjunct professor at the University of Texas, has studied job-training programs. She said today: “The White House is already trying to backpedal from the annual Economic Report of the President which predicted 2.6 million jobs added for this year. We know that it will add far less; moreover, many of the new jobs will not be paying a living wage. Developments in technology and corporate globalization have greatly reduced the leverage of workers everywhere to obtain decent wages and working conditions — until that changes, we are likely to continue to see divergent results: productivity is up but wages are lagging, profits are up but jobs are lackluster, stock market is up, so is the number of people without health insurance. Locally adjusted global minimum wage and universal corporate codes of conduct could be a first step.”
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Co-director of publications for the National Jobs for All Coalition and professor emeritus of economics at Brooklyn College, Ginsberg said today: “The number of people who were counted as unemployed in January is 8.3 million, but there are 4.7 million people working part-time even though they wanted full-time jobs and couldn’t get them and another 4.7 million people who currently want a job but are not counted as unemployed because they weren’t looking for a job in the prior four reference weeks. Further, we estimate that roughly one in four women and one in seven men who had full-time jobs the year round earned less than the poverty level for a family of four.”
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For more information, contact at the Institute for Public Accuracy:
Sam Husseini, (202) 347-0020; or David Zupan, (541) 484-9167