Robert Reich Confirms Permanent Destruction of Jobs in America

Former Labor Secretary Robert Reich writes today:

The basic assumption that jobs will eventually return when the economy recovers is probably wrong. Some jobs will come back, of course. But the reality that no one wants to talk about is a structural change in the economy that’s been going on for years but which the Great Recession has dramatically accelerated.

Under the pressure of this awful recession, many companies have found ways to cut their payrolls for good. They’ve discovered that new software and computer technologies have made workers in Asia and Latin America just about as productive as Americans, and that the Internet allows far more work to be efficiently outsourced abroad.

This means many Americans won’t be rehired unless they’re willing to settle for much lower wages and benefits. Today’s official unemployment numbers hide the extent to which Americans are already on this path. Among those with jobs, a large and growing number have had to accept lower pay as a condition for keeping them. Or they’ve lost higher-paying jobs and are now in a new ones that pays less.

Yet reducing unemployment by cutting wages merely exchanges one problem for another. We’ll get jobs back but have more people working for pay they consider inadequate, more working families at or near poverty, and widening inequality. The nation will also have a harder time restarting the economy because so many more Americans lack the money they need to buy all the goods and services the economy can produce.

Reich is only confirming what many others have said:

  • JPMorgan Chase’s Chief Economist Bruce Kasman told Bloomberg:
[We've had a] permanent destruction of hundreds of thousands of jobs in industries from housing to finance.

  • The chief economists for Wells Fargo Securities, John Silvia, says:

Companies “really have diminished their willingness to hire labor for any production level,” Silvia said. “It’s really a strategic change,” where companies will be keeping fewer employees for any particular level of sales, in good times and bad, he said.

  • And former Merrill Lynch chief economist David Rosenberg writes:
The number of people not on temporary layoff surged 220,000 in August and the level continues to reach new highs, now at 8.1 million. This accounts for 53.9% of the unemployed — again a record high — and this is a proxy for permanent job loss, in other words, these jobs are not coming back. Against that backdrop, the number of people who have been looking for a job for at least six months with no success rose a further half-percent in August, to stand at 5 million — the long-term unemployed now represent a record 33% of the total pool of joblessness.

And see this.

Heck of a job, Larry, Tim and Ben.

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  • http://Anonymousnoreply@blogger.com Anonymous

    From the linked MSM article- "Things will come back. But it's going to take a long time. I think we will likely see elevated unemployment at least until 2014."Well then, let in another 20 million illegals!The growth all these politicians are talking up is a cancerous growth.And "Heck of a job, Larry, Tim and Ben."Do not forget Honest Hank Paulson when the nooses are being measured and tied up.

  • http://web.cecs.pdx.edu/~rc/index.html#econ RC

    For a graph, see web.cecs.pdx.edu/~rc/index.html#Manufacturing

  • http://Anonymousnoreply@blogger.com Anonymous

    Great work as always. Thank youabitare

  • http://www.blogger.com/profile/09443857766263185665 Ralph

    This is overly pessimistic. When demand eventually picks up (and that will be a long time yet if the Obama adminstration has anything to do with it) a whole range of new jobs will be created from skilled highly paid to unskilled low paid ones.Entirely separate from this, there ARE other factors at work exporting some of the best paid jobs. But this would be happening anyway: this is market forces at work. If less developed countries gain skills, they will nick some of America's well paid skilled jobs.

  • http://Anonymousnoreply@blogger.com Anonymous

    OK, so we know the situation is bad and getting worse. Now, what is the plan of action to regain control over the maniacs who have been driving the country into the toilet.Is anyone/group planning that or willing to take ownership of it?

  • http://Anonymousnoreply@blogger.com Anonymous

    I think the noose mentioned above is really the only viable action plan.

  • http://Anonymousnoreply@blogger.com Anonymous

    The worse things become, the more people look to the government god to save them, which gradually increases dependency, which is exactly what the powers in Washington (and other places) desire. People gradually condition themselves to give up liberty for morsels from the master's table.In answer to the previous Anonymous comment: Have you considered the concept of voting all of the bastards out of office?

  • http://Anonymousnoreply@blogger.com Anonymous

    Protectionism is looking better every day. Bring our manufacturing base back. America can be self sufficient if we keep all the illegals OUT stop bringing in foreign workers. Globalism and diversity is KILLING the economies of the world!

  • http://Anonymousnoreply@blogger.com Anonymous

    When our arrogant, narcissistic, self-serving CEO's exported the manufacturing jobs they also exported the manufacturing equipment which American ingenuity created. It's not likely anyone who now possesses that wealth will give it up without a fight.If we create manufacturing jobs, it will have to be with equipment that does not use much gray metal as we used up all the known sources here (the biggest known deposit is in Israel).As I see it, the most logical way to recreate our economic viability is on the local level where communities use their can-do to take care of their own needs via owner-operated businesses. Corporate is in bed with Uncle Sugar to deindustrialize the U.S. to reduce us to serfs and share croppers, with that fascist marriage controlling those who are beneath their fantantical self-image. One of those genii described the non-elite as eating macaroni and cheese while watching elite-created mindless TV trash. How would any of them know what it is like not to be one of them? They are so busy admiring themselves it is impossible for them to appreciate what we have to offer. They forget what we did to make them rich, what they have taken off our backs and from the sweat of our brows.Think locally. Act locally.

  • http://Anonymousnoreply@blogger.com Anonymous

    Globalism works perfectly for the ultra rich elite. The end goal is a small (500 million people) group of slaves remaining to service the needs of the super rich/elite.It really is as simple as that…everthing else is distraction and smoke screens so you don't see the endgame.Nothing has really changed for humans over the course of history. The elite still want to rule the world at the expense of everyone else, who they consider disposable.What is different NOW vs the past several thousand years is that NOW they have the technology to actually do it.Everytime they eliminate a job by replacing a human with technology, they get 1 step closer to their goal."Game over" is coming faster than you think.

  • http://Anonymousnoreply@blogger.com Anonymous

    We are now witnessing what I will call, "post industrialization serfdom." Those who are wealthy now, will become even wealthier in the future. Everybody else will toil for the crumbs, (that is nine dollar an hour jobs; whether in service sector or manufacturing). I only wish had had the genetics of the wealthy. Oh well, back to the patriarchal system, this time it may or may not be known as Oligarchy!

  • http://www.blogger.com/profile/14556209891757768646 Zeke

    Couple of things I read in the mid 1990s re economic changes to come: 1. America may have one car company. 2. Americans have priced themselves out of the international labor market which means a reduction in American labor costs. This can be accomplished by a dramatic increase in productivity or lower wages/ benefits. It has been most interesting to watch it happen. I am retired now but in my occupation, wages did not increase from about 1980 on. Since I took what I had read seriously, I adjusted my life style accordingly. The nasty bottom line is we can cuss, yell, scream, rant, blame or whatever, there is no stopping this change. Do I like or approve, NO. It's called reality. I watched a program on Chinese workers the other night. They were making these cheap plastic bead necklaces. Other than work noises, the factory was silent. No talking, no standing around BSing, no calls from home, no spending an hour or two surfing on the net, etc, etc. That's the competition folks. Fair, right, just, NO!! But IT'S THE COMPETITION!! Efficiency experts estimate the average American spends about five hours a day working. Many years ago, as an electrician's apprentice, I spent a morning listening to two plumbers, two carpenters and an electrician complaining about welfare people. During that four hours, we did absolutely NOTHING!! I'm not talking about right or wrong, just or unjust, I'm talking about the way it is and was for me. I'm one of those that did not get a nickel raise in my social security but my health care alone is costing me $40 a month more than last year. I did not get a nickel in bail out money. Happy? NO!! It's the way it is!!

  • http://Anonymousnoreply@blogger.com Anonymous

    Love never fails, it rises in life and death, feasting and fasting.Enjoy Love EternaL ( LE EL)

  • http://Robertonoreply@blogger.com Roberto

    http://www.thezeitgeistmovement.com/The%20Zeitgeist%20Movement.pdfSkilled jobs will continue to disappear, not only from the USA to other countries, but from the human sphere altogether. Technology will eliminate human jobs at an increasing exponential rate, as long as technology continues to progress. No getting around that.So, get used to it. Either embrace TechnoSalvation or else become an Amish Mennonite and read your scriptures by candlelight.

  • http://Anonymousnoreply@blogger.com Anonymous

    why don't Americans stop buying all these products we don't really need and put these high flying industry finance people out of the work. You know the ones that need those multi million dollar bonuses while exporting our "overpaid" jobs to China!! I think this country seriously needs a revolution from the bottom up. If we ban together and only spend our money on American products made by Americans…we will show these charletons who the real bosses are in this country!

  • http://Anonymousnoreply@blogger.com Anonymous

    The plan is to rid the world of the Economy of Scarcity which fosters Militarism, Materialism and Racism (Dr Martin Luther King's Giant Triplets from his Riverside speech) and replace it with an Economy of Abundance fostering Collaboration, Sustainability and Equality. To effect this we must first get off of all of the grids that have been set up to ciphon off what wealth remains such as the food grid, the electric grid, the fossil fuel grid, etc . . . Yes, there is the gift of abundance in the world. A good example is geothermal heating and cooling. It's derived from the earth’s natural rotation on its axis and its natural revolution around our sun. No burning or chemicals or radioactive waste involved at all. Couple this with a solar collector; your utility bills will be cut by 75%! I know mine were. Everyone is entitled to the comfort of clean and sustainable heat from the sun and earth among other things. For the amount of money we spent on all of the bailouts and these unending wars we could have done this two times over for every home in America!!! But I guess reclaiming our natural resources that the almighty mistakenly placed under someone else’s land was more important. But the reptile-brained self-proclaimed Masters of the Universe wouldn't be able to get obscenely rich without Militarism, Materialism and Racism. So, we're stuck with scarcity for as long as we choose to waste our time waiting for a facist government to do something right by its people. And that means bailouts, pollution and resource wars forever. Or for as long as the earth tolerates it. Whichever comes first.

  • http://Anonymousnoreply@blogger.com Anonymous

    Whenever I visit sites such as these there is inevitably a post (or two, or twelve) lambasting the government policies of the "liberals," Obama, etc. It's long overdue that reasonable people stop seeing the problems in terms of the two party system. Our manufacturing base has been on the decline for a LONG time, since the oil shocks of the 1970s, and we've gone through many administrations of both parties since then. A simpler way of putting it is, no one will ever be president who isn't selected for the job by the corporate elite, and they do not care about anyone but themselves. What you will get: war, war, and more war. What you won't get: affordable health care, decent paying jobs, or anyone protecting your interests. Count on this, and things will be a lot easier to understand.

  • http://Anonymousnoreply@blogger.com Anonymous

    Our American "democracy" has been a functioning illusion since the day JFK had his head shot-off from the 3-way ambush in Dallas. Since then, for 45+ years, America's self-perpetuating religion of being the "Land of the free and the home of the brave" has served as a wealthy elite's tool to keep the world in line via America's military might as the master class consolidates its holdings on all that is profitable by means of corporate usurption of legitemate government, resource control, and placement of vetted insiders in key positions in the corporate and political world disguised as free elections.No world problems will ever be solved unless those problems stand in the way of globalism's profit-taking oligopoly. It should be no surprise to anyone that as the majority of America's working people struggle to tread water in this climate of permanent job loss, creeping inflation, reduction of opportunity, increased foreign competition, union self-destruction etc., that the only ones ever getting ahead (if you don't include entertainers who provide the anasthetic that lulls America into servitude)are the "Skull 'n Bones" class, their foreign equivalent, and their mentors.After things eventually go to hell in a hand basket (which they will),localism will be the only saving grace for America's disposable middle class who bought the lie that democracy actually works. Localized businesses, manufacturing, food production, law enforcement, labor organizations, public health and sanitation initiatives etc. will keep pockets of America alive as we recognize it today; at least for awhile…..that is until they become profitable enough to show-up on the elite's radar screen.But such traditional small-town and rural localism has been purposefully and permanently crippled by big-corporate big-box retailers systematically shutting down locally owned businesses and systems of commerce via outright competition so that within a generation, the local business owners who "led" small town America are shuttered-up for good. Add the millions of undoccumented workers who receive more aid than citizens, the millions of drug addicts and drug dealers that are overrunning small-town and big-city America alike, our disintegrating health-care system, our crumbling infrastructure etc.It's as if the rich and the political system that they control have guaranteed the rest of us to servitude or failure since the money required to keep this ship afloat has been siphoned off to the top as the infrastructure from the past era begins to fall to pieces. This way we have to go begging to the "masters" for funds to repair that which has been neglected while they use our tax dollars and investments to hire private security to keep us at arm's length.

  • http://www.sailready.com SailDog

    Most of the commentary has included the theme "When recovery comes". Recover what exactly? The boom economy of the 90's and early 2000's was based on Ponzi economics. Now the reality of the oil production ceiling (and from now on decline) is going to be the limiting factor on global growth. As China and India will grow economically (their citizens are willing to work harder for less money) the US will effectively be in a contracting economy for the lifetime of most US citizens today.

  • http://Anonymousnoreply@blogger.com Anonymous

    The Cloward/Piven/Reich plan is moving along nicely.http://www.youtube.com/watch?v=opxuUj6vFa4

  • http://Anonymousnoreply@blogger.com Anonymous

    It seems that the government is taking more and more care of those of us who seem to feel it's the govenments' duty to support those who are finding that the companys they used to work for functions quite well without them… and do not feel the need to creatively fend for themselves. Oh well ….who is John Galt?

  • http://Anonymousnoreply@blogger.com Anonymous

    Somewhere, over the years we have let our employees take on the role of master, I Believe this happened, because they told us that they were smarter than we were and we felt comfortable haveing hired such smart people.well it is almost out of control, we had better let them know who is the BOSS, and they CAN and will be voted out of office very soon

  • http://Anonymousnoreply@blogger.com Anonymous

    The way I see it, the rich don't like this country, they are only here to use us, and to enjoy themselves more often than not, at our expense. Maybe we should show them , that we Really don't need them . who says we can't get along without them. couldn't we set up some sort ofa combination of money/barter system, and tell them where to go.

  • http://www.blogger.com/profile/06637323898993913969 Madame Karnak

    Dear Mr. Rubin and the rest of you pompous asses in Washington,You won't make it to your cash stash in Israel, because the world is going to hunt you down and take back all the money that you stole. Why do you think yourselves so superior? Because you can lie and steal without remorse? Because you can ruin other peoples' lives without a thought?That is not sophistication, leadership or wisdom, it is just plain stupid rationalization. You and your ilk ruined a peaceful prosperous country that was the envy of the world. You did this by pouring all the money that should have been spread out through the world into your own pockets. You think that the Indian people are going to remain docile? You think that they are going to let their children be made stupid and ignorant sex toys for your group? Well, you would be wrong.They understand that a healthy middle class and adequate dispersion of money coupled with a hard-asset backed currency is the way to stability. They also know that they need to have a good domestic market to weather the storms of international trade. You and the rest of the empire builders don't seem to understand that GLOBALISM IS WHAT IS NOT SUSTAINABLE and that true leadership is that which makes the world better for the next generation. I realize that you all think that you are going to leave the earth and go to your new home in the stars. Do you honestly think that the rest of the galaxy wants you?You are fools. There is a God and she doesn't like you.MK

  • http://www.businessbuyeradvocate.com Frank Fitton

    Companies have learned a lot from their strategies about how to cut payroll during these difficult times. Some of those lessons have been winners and will be strategies they keep.The companies got creative when they need too. Now the balls in the other court and people are going to have to get more creative to keep their cash flow coming in. The amount of small businesses I think will continue to grow and new niches will be developed. We're going to see a very creative time period emerging in the upcoming years and I for one believe it will be an exciting time.I think it's the perfect opportunity to buy a proven winner business and give it the comb over similar to what companies did with these job losses. You can take a business that is already successful go through it and trim some of the fat and turn it into an even bigger winner. For people willing to put in the effort, the opportunities are immense.Anyone interested in the buying of a business should check out The Business Buyer Advocate blog at http://www.businessbuyeradvocate.com/ . It is a great blog full of must have knowledge for anyone thinking about taking the plunge. It’s frequented by quite a few experts in various aspects of the field that can help you with any questions you might have or perspective you might need.Buying a business very well could be the most important decision you ever make in your life. You have to make sure you buy the right business the right way.

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