Jobs – What is Going on in America?

by PF WAGNER April 2, 2016

Recently we have been hearing a lot of rhetoric on the political circuit about, "jobs, jobs, jobs."  A recent (April 1st) article1 by Lucia Mutikani in Reuters, shouts "U.S. job market flexes muscle!" and touts that "Nonfarm payrolls rose by 215,000 last month and the unemployment rate edged up to 5.0 percent from an eight-year low of 4.9 percent...The jobless rate increased as more people continued to enter or re-enter the labor market, a sign of confidence in the job market."  Yet on the same day, an article2 by Terence P. Jeffrey on CNS says U.S. LOST 29,000 MANUFACTURING JOBS IN MARCH-BUT GAINED IN RETAIL, FOOD SERVICES AND DRINKING PLACES. 

What in the world is going on?

Between the two reports, here's a graph from the second one that I believe best illustrates what is happening:

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While the above graph clearly illustrates a notable trend in the loss of manufacturing jobs, some political candidates have claimed that there is a mass exodus of jobs leaving America, because of all the "stupid deals" the "idiot" politicians have been making and the ever increasing job-killing trade deficits with China, Mexico, Japan, and, I suppose, even Grand Fenwick.  (For those of you old enough to remember, that's the little country in The Mouse That Roared, the 1955 Cold War satirical novel by Irish American writer Leonard Wibberley1.)

Whatever the cause, high paying manufacturing jobs are in a free fall and they are being replaced by low paying retail jobs.  Is this an issue that we should we be concerned about?

Over at the "Gray Lady," Neil Irwin recently wrote a piece entitled, "The Trade Deficit Isn't a Scorecard, and Cutting It Won't Make America Great Again,"2 where he says, "Trade deficits are not inherently good or bad; they can be either, depending on circumstances." He ties the trade deficit to "global reserve currency, economic diplomacy and something called the Triffin dilemma."  You'd have to read the article for that last one.

He concludes by saying, "The debate over the trade deficit is about more than Mexico and China, cars and bananas, or winning and losing. It's about what makes America great, and which of the country's priorities should come first."

All that economic gobbledygook might make sense except for the fact that the US Dollar has been the world's reserve currency since a little while after the Brenton-Woods Agreement3 back in 1944. The USA's massive trade deficit, along with its burgeoning national debt, is a more recent phenomenon. "Priorities" are a rather relative thing, depending upon whose ox isn't a priority.


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BTW, that big spike upwards in 2009-2010, showing a notable but temporary reduction in the trade deficit, was because the USA's imports fell dramatically more than the exports did, after the September 16, 2008, financial market crash and subsequent recession.

Over at the FED, they take a different position than Mr. Irwin's, where they say, "Sustained trade deficits, however, do have the potential to depress national savings as capital flows overseas, and cause job losses. This terrible repercussion results if demand for foreign-produced goods is higher, then companies may move their operations overseas."4 (Emphasis added)

Without knowing anything about Mr. Irwin or his economic acumen, I think I'll go with the FED on this one, however jobs really only become a problem for most people when it is YOUR JOB that is going to be shipped overseas.  Maybe if the NY Times moves to China and replaces all its highly compensated reporting staff with barely paid Chinese folks Mr. Irwin might have a rather different perspective.

Like many Americans, I actually wasn't too interested in all this job stuff, because MY JOB isn't threatened - at least not yet - and I live in the mountains of Colorado, a very low unemployment state, where I work from home so hardly know or even come in contact with too many folks who have lost their jobs, for whatever reason. Basically, all this "jobs talk" and "trade deficit stuff" didn't really resonate until one day a few weeks ago when I just happened to stumble across:

Watch 1,400 Outraged Workers Learn Their Jobs Are Going to Mexico

Denver Nicks, Feb. 12, 2016, Time-Money

WTHR City Beat Reporter, Mary Milz, reported5

"United Steelworkers 1999 employs about 1,300 members at the Morris Street Carrier plant. Chuck Jones, president of Local 1999, tells WTHR that employees were notified Wednesday morning about the jobs moving to Mexico.....the move ultimately means the loss of 1,300 union jobs that average $20 to $21 per hour..

"This facility is not losing money. If it was losing money, I think these things would be understood better. This company just wants to make more," said employee Robert James."

Ms Milz also interviewed Anna Burrus who said "With my age, it's going to be hard to find another job, because I'm 60 and in three more years, who will hire me?"

She further reported "...Carrier says some employees may be eligible for its scholar program, which would help pay tuition, books and fees for college education."

Oh great, instead of looking forward to retirement in a few more years, Ms Burrus gets some help for college and starting over. At 64!  Maybe a WalMart greeter? And she doesn't need to go to college for that, even if she could get one of those great, low paying job with so many others unemployed in the same area after the factory shuts down.

Ms Milz concluded her reporting with "Chris Nelson, President, HVAC Systems and Services North America, said, "This move is intended to address the challenges we continue to face in a rapidly changing HVAC industry, with the continued migration of the HVAC industry to Mexico, including our suppliers and competitors, and ongoing cost and pricing pressures driven, in part, by new regulatory requirements."

So the whole industry is moving to Mexico?

Maybe this incident struck a chord with me because I'm over 60, been with my company going on twenty years, and am also looking forward to retiring in a few more years. 

What would I do if my job got shipped to Mexico?  I sure don't want to be going back to college to learn video game programming or some other emerging new millennium job for the last few years of my working career. And besides, I highly doubt those companies will be hiring 60 somethings near retirement.

It also got me to thinking...if there are "bad deals" and the "trade deficits" with various countries do impact jobs, what is going on?  How many more Carriers are there, and how many jobs do those "bad deals" and the "trade deficits" impact?  I don't want abstract rhetoric but real numbers, so I started digging.  Thank God for the internet because it's a long drive to the library and information is now so easily attainable.

So who else is moving to Mexico? It didn't take long to find 8 Auto Factories Moved to Mexico for Lower Wages Due to NAFTA6 where the author Paola Casale reports: 

"The North American Free Trade Agreement has been nothing but a disaster for the U.S....In 1993, former president Bill Clinton, a strong supporter of NAFTA told us: "I believe that NAFTA will create 200,000 American jobs in the first 2 years of its effect. I believe that NAFTA will create 1 million jobs in the first 5 years of it's impact....It wasn't just president Clinton who made those claims. The very conservative Heritage Foundation told us that "virtually all economists agree that NAFTA will produce a net increase of U.S. jobs over the next decade...NAFTA was supported by every major corporation in America and Wall Street."

"Looking at 20 years later, we see that all of these predictions were dead wrong. The Economic Policy Institute estimates a loss of 682,900 jobs to Mexico. That is the complete opposite of Bill Clinton's prediction of the creation of 1 million jobs."

Along with auto companies moving to Mexico, the auto parts suppliers are following along where Cardone, a brake manufacturer, is moving 1,300 jobs from Philadelphia to Mexico7.

But at least the new Mexican workers will have real fresh cookies at break time, assuming they even get break times, as Nabisco is starting to move its factories to Mexico too8.

The NAFTA predictions were "dead wrong" and now we hear that the Trans Pacific Partnership (TPP) is going to be "so good" for America?  Given that it is written by high-priced lawyers who parse words, exactly "so good" for who in America? Maybe we would get more truthful answers if could ship the lawyer jobs to Mexico.

Of course if one has been paying attention in the presidential debates we all heard that Ford was moving one of its large plants to Mexico.

Ford to build plant in Mexico, ramp up output from the country: WSJ

Javier E. David, 7 Feb 2016, CNBC

 "Citing people familiar with the matter, The Journal reported that Ford will add half a million units of annual capacity from Mexico starting in 2018, which is double the amount it built in 2015. The new assembly complex will be based in San Luis Potosi, and Ford will expand an existing facility near Mexico City, the publication added."

Why?  The article goes on to report "According to the Bureau of Labor Statistics, Manufacturing labor costs in Mexico are approximately 1/5 of those in the United States."

Interestingly, having taken a lot of heat, especially from one particular candidate for POTUS, evidently Ford changed its mind, at least for now:

COINCIDENCE? Ford Cancels U.S. Plant Move To Mexico After Trump Declares THIS HUGE Threat To Outsourcing

by Bob Amoroso, February 17, 2016, US Herald

As the headline states "Coincidence?"  I'll let you make that call.  At least I can still buy a new Ford pickup truck made in America.  I would not buy one made in Mexico...

Returning to job losses, what about the impact on a state?  The primary in Wisconsin is coming up so I decided to start looking at the specific job-loss impact on that state first.  As it turns out, Wisconsin is actually doing reasonably well economically and has a low unemployment rate of only 4.6%, according to the US Dept. of Labor9.

Surely, I thought, Wisconsin can't be losing jobs with so low of unemployment.  But I was wrong; this is a much bigger problem than I ever imagined, and it impacts all of America.

The Public Citizen recently reported10 that "Wisconsin lost 68,693 manufacturing jobs (or 13 percent) during the NAFTA-WTO period (1994-2015), according to the Bureau of Labor Statistics. This figure is for total manufacturing employment, so it takes into account both jobs created by exports and jobs displaced by imports, among other causes of net job change. The percentage of all private sector jobs that are manufacturing jobs in Wisconsin declined from 25.9 percent to 19.2 percent during the NAFTA-WTO period."

Even the Milwaukee-Wisconsin Journal Sentinel weighed in.  An article11 by Phil Neuenfeldt,

noted "The Trans-Pacific Partnership (TPP) is a NAFTA-style trade deal that would lead to the outsourcing of good, family-supporting jobs in Wisconsin by creating an uneven playing field for American workers. The TPP doesn't give Wisconsin workers a fighting chance. It was created by and for corporations and gives incentives for companies to lower wages and ship our jobs to foreign countries in a never-ending race to the bottom in terms of worker rights, wages and working conditions." (Emphasis added.)

Mr. Neuenfeldt further noted "We've seen it again and again in Wisconsin. Plant closures that disrupt lives, scatter families, empty schools and bankrupt communities. As good jobs flee our state, wages are depressed across the board and our middle class shrivels up."

It is also worth noting that the people most impacted by job losses tend to be minorities. An article12 in March of last year by John Schmid of the Milwaukee-Wisconsin Journal Sentinel reported "At 19.9% - or 1 in 5 working-age people - the African unemployment rate in Wisconsin is nearly three times higher than the highest state white unemployment rate (7% in Nevada) and significantly higher than the national African unemployment rate of 11%... Wisconsin's African unemployment rate is twice the overall national unemployment rate at the peak of the recession - 9.9% in the fourth quarter of 2009...The findings are consistent with more than a decade of statistics and studies that show that African-Americans in Wisconsin and its largest city, Milwaukee, often find themselves at the economic and social extremes compared with the rest of the nation."

My guess is that the deplorable job opportunities for African Americans have recovered some from when the article was written a year ago but that the joblessness for African Americans is still rather high.  I'd also bet the loss of jobs has disproportionately impacted Hispanic Americans as well, but I'll let someone else research that.

However, Wisconsin's relatively low unemployment rate got me can the unemployment rate be so low if so many jobs have left the state?  That's when I discovered that there are "rates" and then there are "rates."  Basically, when all those laid off workers can't find a job and stop looking for work, they are no longer counted in the "official unemployment rate" that the GOVT and the main stream media likes to brandish around as proof that things aren't really so bad. That is the "U3" rate and it doesn't include all the missing non-workers which the "U6" rate does but that "rate" is not widely reported.  All those wonderful new "retail and service" jobs also help the U3 rate.

However, there are others who say that the GOVT is cooking the books, fudging13 the numbers, and basically lying through their teeth and that the "real" unemployment rate is higher, MUCH higher13:

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                                  Courtesy of

Young African Americans, especially those living in the inner cities would hardly disagree. A report by Alyssa Davis in June of 2015 states, "Underemployment is one of the major problems that young workers currently face. Approximately 19.5 percent of young high school graduates (those ages 17-20) are unemployed and about 37.0 percent are underemployed. For young college graduates (those ages 21-24) the unemployment rate is 7.2 percent and the underemployment rate is 14.9 percent." 15

To a lesser extent, Latinos are also disproportionately impacted but the overall data for both groups, as Ms Davis reports on, is startling:

  wagner 4 


Moving to New York, the next state in the upcoming primaries, The Public Citizen reports16 that "New York has lost more than 377,000 manufacturing jobs - nearly half - since the 1994 NAFTA and the World Trade Organization agreements took effect."  (Emphasis added)

The report goes on to say:

"The TPP and TTIP would empower foreign corporations to bypass domestic courts and challenge U.S. and New York health, environmental and other public interest policies that

they claim undermine new foreign investor rights not available to domestic firms under U.S. law. This controversial "investor-state dispute settlement" (ISDS) system would authorize foreign tribunals of three private attorneys unaccountable to any electorate to rule against

policies and order unlimited taxpayer compensation for foreign firms' "expected future profits." Tribunals have ordered governments to pay foreign investors $3.6 billion under existing U.S. pacts in ISDS attacks on environmental protections, health and safety measures and more, while more than $34 billion is pending. The TPP and TTIP would expose New York and U.S. policies to an unprecedented increase in ISDS liability, given the 3,067 firms in New

York owned by corporations in EU or TPP countries, any one of which could launch an ISDS claim."

I had no clue that this kind of crap was even happening.

How about a state, like South Carolina?  In the GOP primary, Trump handily emerged victorious even though the very large evangelical population was "supposed" to carry the state for Cruz.  Maybe this is why?


by Julia Hahn, 19 Feb 2016, Breitbart

"South Carolina lost 115,700 manufacturing jobs during that time - or one third of its jobs....Yet the loss of manufacturing jobs impacts not only the factory workers and their families, but also workers across the state's economy...the displacement of manufacturing workers has a rippling effect across a broad spectrum of the economy and can have a compressing effect upon the wages of entire American communities."

It is getting to be Spring Time in the Rockies so last weekend I went to WalMart to get a few things.  I noted the garden implement that I was about to buy was made in China.  On a whim, I walked through the store and randomly checked various and sundry articles just to see where they were made.  After close to fifty examinations, I did not find one that was "Made in America."  I remember that back when Sam Walton was alive, he used to have a banner in all WalMarts that said something like "25% of our products are proudly Made in America."  I'll bet he wasn't even cold in his grave before the bean counters got rid of that policy.  And he's probably rolling over in his grave now to see what WalMart has become: a job destroyer.

If Mr Trump doesn't become POTUS, maybe he can create a new game show where teams of contestants compete on being the fastest to buy just ten things in WalMart that are "Made in America." 

Anyway, the whole process got me to thinking....isn't WalMart one of the largest corporations in the world...have acres of foreign-made goods in each of their thousands of stores...what could be just their impact on jobs? 

Then I found an article17 by Chris Isidore in CNN Money where he states "The flood of Chinese imports purchased by Walmart shoppers has cost the U.S. economy about 400,000 jobs since 2001, according to a liberal think tank..."

Small businesses are actually the backbone of America and the US Census Bureau reports18 that the vast number of small business, companies that make things like garden hoses, have less than 500 employees, and of those the overwhelming majority actually have less than 20 employees.  Without really getting into it, let's say the average is 100 employees. That means WalMart all by its itsy bitty little self is responsible for the elimination of 40,000 US companies along with those 400,000 jobs.  Quite a feat.

BTW, about four years ago I took a garden hose back to WalMart immediately after buying it and uncoiling it for the first time as it was a piece of Chinese junk.  I then found and bought an American made one, albeit at about 50% more cost.  And when it finally deteriorates in Colorado's low humidity and high UV light, I'll gladly pay more and buy the American made one again - if WalMart hasn't driven them out of business too - as it has worked perfectly as garden hoses are supposed to.

So what about China and our trade deficit that some candidates talk so much about? Just a little research found a December 2014 report19 by Will Kimball and Robert E. Scott from the Economic Policy Institute that states "Growing U.S. trade deficit with China cost 3.2 million jobs between 2001 and 2013, with job losses in every state."

3,200,000 jobs?  Just because of our balance of trade deficit with China?  That's almost as many people as in the entire state of Connecticut and with the ever growing job loss over the ensuing years after the study, the "China job loss" number may now be as large as the entire population of Oregon.  But at least WalMart is hiring some of those laid off factory workers. The question is, can they even afford to buy much of the foreign made junk at their wages?

"Wal-Mart previously said it planned to boost its minimum wage in February to $10 an hour. But the giant retailer said Wednesday that hourly workers employed in its stores as of Dec. 31 would get at least a 2% pay bump."

Wal-Mart to Boost Wages for Most U.S. Store Workers

By Sarah Nassauer, Jan. 20, 2016, Wall Street Journal

And as it turns out, the jobs that many of us have are also being adversely affected. Terence Stewart reports20 "The vast majority of Americans have seen little if any real income growth over the last several decades....earnings in private nonagricultural industries...the average weekly earnings in 1982-84 dollars were $341.73 in 1972 and just $305.91 in 2015.  Thus while earnings in current dollars have gone up (from $143.87 to $709.13), adjusted for inflation earnings have actually declined 10.5%."

This loss of wage growth was quantified by Josh Bivens, in March, 2013 where he reports21  "...growing trade with less-developed countries lowered wages in 2011 by 5.5 percent-or by roughly $1,800-for a full-time, full-year worker earning the average wage for workers without a four-year college degree.."

Unfortunately, it gets worse.  However, rather than bore you with all the grisly details, here are a few more articles and links on what the hell is going on in America for you to peruse:


U.S. trade deficit with the TPP countries cost 2 million jobs in 2015, with job losses in every state

By Robert E. Scott and Elizabeth Glass, March 3, 2016, Economic Policy Institute

Tufts Researchers Say TPP Will Destroy U.S. Jobs

By Investopedia, March 02, 2016

Independent economists: TPP will kill 450,000 US jobs

By Cory Doctorow, JAN 20, 2016, BoingBoing 


By Robert Scott, 5/18/15, Newsweek

Trading Down: Unemployment, Inequality and Other Risks of the Trans-Pacific Partnership Agreement

GDAE Working Paper 16-01, January 2016, GDAE

EXPERTS: ObamaTrade Likely to Devastate American Workers' Employment Prospects if Congress Passes It

by Alex Swoyer, 17 Jun 2015, Briebart

KORUS - Another NAFTA-Like Trade Dealâ??-another-nafta-like-trade-deal-is-pending

Betty Sutton says that on average, 15 U.S. factories close each day

By Sabrina Eaton on Monday, November 7th, 2011, Poltifact

Fast Track to Lost Jobs and Lower Wages

By Robert Scott, 04/12/2015, Huffington Post 

Despite seemingly stable U.S. trade balance, rapidly growing trade deficits in non-oil goods could lead to American job losses 

February 5, 2016 at 4:33 pm by Robert E. Scott, Economic Policy Institute

For the full impact of NAFTA and the TPP on your state, and potentially your job, see:

50 Reasons We Cannot Afford the TPP's Expansion of the NAFTA Model

State-by-State Outcomes of "Free Trade" Deals: Lost Jobs, Lower Middle-Class Wages, Surging Trade Deficits and Disappearing Family Farms

In closing, if a picture is worth a thousand words, I'm not too sure what this is worth from an MIT report by Brendan Price, in August 2014, entitled Import Competition and the Great U.S. Employment Sag of the 2000s22

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but here are the graphs that go along with it:

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And as can be clearly seen from the trends, we are in trouble and this problem must be addressed. 


1. U.S. job market flexes muscle; Fed still seen on hold

By Lucia Mutikani, April 1, 2016, Reuters

2. U.S. Lost 29,000 Manufacturing Jobs in March-But Gained in Retail, Food Services and Drinking Places

By Terence P. Jeffrey, April 1, 2016, CNS

3. The Mouse That Roared, Wikipedia

4. The Trade Deficit Isn't a Scorecard, and Cutting It Won't Make America Great Again

Neil Irwin, MARCH 27, 2016, NY Times

5. Establishment of the Bretton Woods System

by Sandra Kollen Ghizoni, Federal Reserve Bank of Atlanta


Penn Wharton, U. of Pennsylvania, June 10, 2015

7. Carrier to relocate Indianapolis manufacturing operations to Mexico, 1,400 jobs affected

By Mary Milz, CityBeat Reporter, Feb 10, 2016, WTHR Indiana

8.  Auto Factories Moved to Mexico for Lower Wages Due to NAFTA

By Paola Casale, November 03, 2015, Economy in Crisis


By Joseph N. DiStefano , FEB 15, 2016, Phily.Com

10. Nabisco Has Begun Moving Its Factories to Mexico

Does this mean we'll be getting Oreos made with real cane sugar?


11. Dept of Labor, Bureau of Labor Statistics

Local Area Unemployment Statistics

12. Wisconsin Job Loss During the NAFTA-WTO Period

Wisconsin lost 68,693 manufacturing jobs (or 13 percent) during the NAFTA-WTO period (1994-2015), according to the Bureau of Labor Statistics.

3/22/2016, Public Citizen

13. Bad trade deals cost Wisconsin good jobs

By Phil Neuenfeldt, Milwaukee-Wisconsin Journal Sentinel

14. Wisconsin tops nation in African joblessness, study finds

By John Schmid, March 26, 2015, Milwaukee-Wisconsin Journal Sentinel

15. Is the Government Fudging Unemployment Numbers?

March 4, 2016 BY TIM MCMAHON

16. Shadow Stats

Alternate Unemployment Charts


by Alyssa Davis, June 8, 2015, EPI Org.

18. New York: Lost Jobs, Lagging Exports, Rising Inequality under "Free Trade" Deals

 Public citizen


by Chris Isidore, December 9, 2015, CNN Money

20. Statistics of U.S. Businesses (SUSB) Main

Latest SUSB Annual Data by Establishment Industry


Growing U.S. trade deficit with China cost 3.2 million jobs between 2001 and 2013, with job losses in every state

By Will Kimball and Robert E. Scott | December 11, 2014, Economic Policy Institute 


Terence Stewart, March 14, 2016, Stewart Law 

23. Using standard models to benchmark the costs of globalization for American workers without a college degree

By Josh Bivens, March 22, 2013

24. Import Competition and the Great U.S. Employment Sag of the 2000s

Brendan Price, August 2014, MIT

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