Jobs that aren't

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The jobs front is like the Iraqi front. The worse the situation, the better the news. As jobs for college graduates disappear from the U.S. economy, pundits tell us how great the jobs outlook is.

The 248,000 new jobs in May looks good as an aggregate number, which is the only number the public got. The components of the figure reveal a scary situation.

American job growth is concentrated in low-paid domestic services, such as restaurants and bars, temporary help, and health care and social assistance. Of the 248,000 new jobs, 213,000 are in domestic services and construction. These are not jobs that can help reduce the massive U.S. trade deficit by producing tradable goods and services.

The good news is 32,000 manufacturing jobs were created in May. If this manufacturing jobs growth continues for the next 84 months, by June 2011 the U.S. economy will have regained the June 2001 level of manufacturing employment.

The bad news about the new manufacturing jobs is that only 13,000 are in products of the global high tech economy -- computer and electronic products, semiconductors, and electronic instruments. The rest are scattered among food manufactured products, wood products, and roofing metal for the domestic housing boom.

Something is wrong. We are told we live in a global economy, but the jobs growing in the United States are not part of the global economy. Advanced technology products are touted as America's manufacturing advantage. However, the U.S. suffered its first-ever trade deficit in advanced technology products in 2002. The deficit grew significantly in 2003 and is growing this year. Charles McMillion at MBG Information Services in Washington D.C. forecasts the U.S. 2004 deficit in advanced technology products to be $35 billion.

U.S. manufacturing employment peaked in June 1979 at 19,553,000. In May 2004 U.S. manufacturing employment stands at 14,405,000, a decline of 26 percent.

We are told not to worry, that this only means U.S. manufacturing has become more productive. A large percentage of the population once worked in agriculture, but today, thanks to productivity, a tiny percentage of the work force provides our food.

It is true manufacturing has become more productive. But it is also true U.S. manufacturers are increasingly assemblers of foreign-made parts. More and more U.S. brands are made abroad. Unlike manufacturing, U.S. agricultural employment did not decline historically because of outsourced food production.

Our export future was to be in services. We would be the world's supplier of high-tech services and earn foreign exchange from service exports to pay for our imports of manufactured goods.