This coming Friday, the U.S. Labor Department will report April non-farm payroll growth. Economists are expecting about 150,000 new jobs created in April, about half the number created in March.
With all the stimulus created by the Fed (easy money and the lowest interest rates in 46 years), you would expect job growth to come in over 200,000 for April. Will the Labor Department surprise on the upside or the downside? No one really knows. And even after the figures are released, they are usually revised the following month anyway. Hence, we’ll have to wait and see what the April job growth number will come in as on Friday. Hopefully, it’s growth.
While I will be monitoring the Labor Department report, my concern is more with the “quality” of jobs being created. In a recent commentary, I noted that the majority of jobs created in the U.S. in March were low-end, blue collar jobs. White collar jobs are not being created… they continue to be exported.
According to a recent survey by Ernst & Young, U.S. business will step up the amount of work they send to India next year by 50%. This estimate mirrors that of the National Association of Software and Service Companies, which predicts India’s information technology employment will surpass 50% by next March… for the third consecutive year.
Much of the call centers operated by big U.S. companies are now housed in India. And who would have ever thought U.S. tax returns would be prepared in India en masse?
The IT jobs are the ones that have really disappeared. Our own IT manager came from a large U.S.-owned computer company-they laid-off 60 engineers and IT professionals because they were outsourcing the work to a “lower priced” labor country.
Employment in the U.S. is going the wrong way. I don’t think parents want to pay big bucks to send their kids to school so they can get a job at Wal-Mart. (Incidentally, because of the big turnover at large retailers, Wal-Mart alone will need to hire about 400,000 people this year… and unfortunately that’s where the real job growth is in America.)
The real big question is, how are the young people who are finishing college or university today supposed to afford the high priced housing we have in the U.S. if their possible job opportunities are going offshore? Are we going the route of Europe?
Companies are responsible to their shareholders to maximize profits. And if that means cutting American jobs and sending them overseas to cut costs, well then that’s exactly what the large companies will do. After all, it’s all about money, isn’t it?
Unfortunately, we will have to endure the long-term social costs of such actions, and the greater disparity between the rich and the poor, which the exporting of our jobs will create.