An article titled ‘Recovery: Where Will the Jobs Come From?’ says “Health care and education will keep adding jobs. Manufacturing employment will rebound as the global economy revives, but a big cut in the jobless rate will take years”.  The article says the White House Council of Economic Advisors recently issued a report on sources of future jobs.  In a nutshell the article as I read it says:

•    health care and education are expected to account for a major share of job growth in coming years;

•    retail is thought likely to continue shrinking;

•    jobs in cyclical, export-oriented industries will increase as the global economy revives; and,

•    U.S. made goods are increasingly competitive with the dollar relatively weak compared with other major foreign currencies which implies a sharp rebound in manufacturing employment, where the long-term trend is bad but the cyclical trend will be positive because manufacturing jobs have been so sharply reduced.

That said, the article says “it could take years to work down a 10%-plus unemployment rate to more acceptable levels, say, in the 5% range”, that “Wages are likely to be anemic”, and “Income inequality could worsen”.  Joshua Rosenbaum, and economist at the Universit of Kansas is reported as saying “I’m reasonably confident about the state of employment.  I worry more about the income level we will have.”  The article then says innovation as a job creator is the ‘wild card’ but is unpredictable as to job creation opportunities and the timing of them.

I see a number of oxymoronic pushes and pulls in the foregoing:.

•    first, health care and education are ‘service type’ employment opportunities.  Readers of this blog will know I believe it is manufacturing jobs that create more lasting value and have a better job multiplier effect;

•    second, cyclical/export oriented industries tend to be capital intensive, not labour intensive – and so are unlikely in my view to be major job creators;

•    third, U.S. manufacturing wages simply can’t be made competitive with developing country manufacturing wages, and we should not delude ourselves that workers in developing countries can’t produce quality goods; and,

•    fourth, a lower U.S. $ and anemic wages will both contribute in their own ways to lower U.S. GDP and lower U.S. Government revenues at a time when U.S. Government spending has never been higher.

None of this in my view paints a pretty picture for the future of the average U.S. resident – or for that matter residents of other developed countries – perhaps save and except those countries with large resource bases.  From 20,000 feet this all seems obvious to me – yet I don’t see others linking these things so simply.  I continue to hope I am wrong in my assessment of things as we go forward.  I encourage readers to comment on this post and tell me in ‘plain words’ where I am going wrong if they believe I am.

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