Sunday, September 16, 2012

Service sector Jobs are fast becoming what Americas do for LABOR !!

Fewer Americans are doing real work, and more are getting paid to do non-work or pseudo-work.

Actual goods-producers are now around 18 million workers in a total private labor force of 119 million, meaning a 6-to-1 goods-to-services ratio (it was 2.2-to-1 in 1970).  The number of government workers is around 22 million (and make double the average salary of their private sector counterparts). This political class is not only predatory on they producers, but they actually tax them, regulate them, and essentially harass them.



The ever-growing list of nations facing severe budget, debt, and unemployment problems headlined by Greece, Spain, and the United States has two factors common to all its members.  They are all either confirmed to be or determined to turn into socialist democracies, and they have evolved into overwhelmingly consumption-based societies, while greatly diminishing their goods-producing sector, thus eroding their job-creation ability as well as the nation's wealth and tax base.
Nearly 80% of the economic infrastructure of the United States is in the service sector.  In addition, over 71% of the Gross Domestic Product is made up of consumer spending; thus, the annual GDP growth is highly sensitive to personal wealth and after-tax income which the president is determined to reduce.
Any economy so dependent on a service sector (which notoriously pays lower wages) and consumer spending will, in due course, begin to feed upon itself in an unsustainable manner particularly as government absorbs more capital and revenue to maintain its social promises.  As the goods-producing sector, which generates the real wealth of a nation, continues to decline, the consequences are there for all Americans and Europeans to see: job-creation, per capita income, and personal wealth begin a long-term downward spiral along with the inevitable and attendant reality of many governments facing insolvency.
In the United States this trend has been accelerating for many years and has greatly affected the composition of the labor force, incomes, and growth in the economy.  While still a large producer of goods, due to its size of the population and economy, the nation has experienced a precipitous drop in its onetime world dominance.  The proof is in the ongoing dilemma of job-creation and unemployment.
As recently as 1995 the goods-producing sector of the economy accounted for nearly 20% of the jobs in the United States (36% in 1965).  In 2000 that percentage had fallen to 19%; as of June 2011 it was at 12.9%.  
In June of 2011, 18 million people were employed in the goods-producing sector; when Obama assumed office in January 2009 19.6 million were employed in this arena.  There has been a loss of 1.6 million high-paying jobs in the past 30 months alone.
Therefore by necessity there has been a noticeable shift in employment patterns into much lower-paying jobs in the private sector.  While the overall economy has lost 2.7 million jobs since January of 2009, employment in the service sector has increased by 675 thousand.  However the growth has been in the hotel and food service sector (380 thousand) and health care and social assistance (750 thousand).  Since 2000, employment in the hotel and food service sector has increased by 1.3 million, and in health care and social assistance, 6.5 million, while 7.6 million value-added jobs in the goods-producing sector have been lost.
Many economists proffer the argument that the move to an overwhelmingly service-based economy is the natural course of events in a highly industrialized and technologically advanced society.  However, this fails to take into account the factors of world economic development and the rapid advancement in technology that allow many services, which have no intrinsic uniqueness, to be performed by fewer employees and in many cases, in other countries with lower labor costs.  Further, as a nation's work force expands due to natural population growth, the competition for these lower-paying jobs in the service sector becomes more intense, further eroding the earnings potential of the individual and in many cases fomenting class envy and violence.
The United States, if it is to continue as a world economic and military force, must begin immediately to restructure its economy and education system.  The nation cannot persist in creating low-paying non-skilled jobs if it wishes to overcome its current financial problems and avoid a societal upheaval.
On its present course, the country cannot begin to generate the tax revenue necessary to reduce its debt and meet its societal obligations, even if the entitlement programs are significantly modified.  Unless the growth rate of the Gross Domestic Product and personal income remains at a consistently high level for a long period of time, there will never be enough monies available for both the government and the private sector.  The economy as presently ordered cannot maintain significant growth with the government at all levels, but particularly Washington D.C., pursuing a centrally planned economic model.
There is only one viable solution: a program to re-industrialize the nation and become energy-independent, developing into a net energy exporter.  America should have as its goal to increase the manufacturing and energy sector to 40% of the economy instead of the current 20%.  
The first step in reconstituting the manufacturing sector must be the elimination of tens of thousands pages of redundant and costly regulations at the federal, state, and local level.  The facility construction approval process must be streamlined and environmental blocking tactics greatly diminished.  Taxes on business (particularly manufacturing and energy) have to be dramatically reduced or eliminated.  Research and development should be given the highest priority using tax credits as necessary.  Tort reform, while protecting those truly injured and incorporating a modified form of "loser pays," has to be among the top items on a growth agenda.
Lastly, all areas of the United States, except those most sensitive, must be opened to oil and gas exploration, as well as other judicious raw material exploitation.  Technology has advanced to the point where environmental safeguards are a tenfold improvement over those 25 years ago; there is no need, except for radical ideology, to maintain a "boot on the neck" approach to environmental concerns.
The United States is sitting on the world's largest untapped oil reserves -- a natural resource that would not only mitigate the over $400 billion sent to other countries to buy their oil but could be the catalyst to create untold millions of jobs not only in the oil fields, but in hundreds of peripheral industries.  The untapped reserves are estimated to be up to 2.1 trillion barrels, which is equivalent to a 300-year supply, and would allow the U.S. to become the single largest exporter of oil and oil-related products in the world, thus eliminating the trade deficit and making a massive dent in the national debt.
A summary of the potential untapped oil reserves valued at $100 per barrel is as follows:

       Billions of Barrels         $  Value in Trillions
Bakken Fields  (Dakotas)                   200                      20.0
Outer Continental Shelf                     90                        9.0
ANWR   (Alaska)                     10                        1.0
Tar Sands                     75                        7.5
Oil Shale                1,750                    150.0
               TOTAL        2,125  Billion Barrels              $ 187.5 Trillion
Current Total National Debt
                  14.5 Trillion
Given the opportunity, the American worker is still the most productive in the world.  He or she can compete with any other country and turn out a superior product, but only if the federal and state governments live within their bounds both financially and constitutionally and are not dominated by socialist ideologues and their crony capitalist and union leadership allies.
Regardless of how much the current governing class claims to be reducing spending and planning for the future, those promises are hollow and cannot be kept unless and until the American economy pivots and becomes a producing and exporting nation as it was on its path to being the most powerful economic and military power the world has ever known. 
The United States must return to being the foremost haven for investment capital and business activity in the world.  Unless policies are put in place that will create the next tidal wave of long-term, high economic growth, the bleak future so many fear will become a reality and none of the lies, obfuscations, and scapegoating by the cast of characters presently on stage in the ongoing theater of the absurd in Washington D.C. will change that outcome.

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