Structural stupidity

Posted in Decline and Fall, Made in China at 12:20 pm by George Smith

About once a week DD spies a story in the mainstream on how the jobs are out there, it’s just that Americans are too stupid to do them.

These are all part of a a structural unemployment argument, one based on the idea that most of the mass unemployment is due to jobs and skills mismatches. It’s all working Americans fault because they simply aren’t highly trained enough.

It’s been refuted again and again by many respected economists who look at the plight of the US and call the current morass a demand side problem.

Krugman and in England, the Financial Times — deal with it today. “Spending equals income,” says the former. And replacing it with austerity has been disastrous.

To create jobs, people must have money to buy things. They must spend to create demand.

“U.S. manufacturers are failing to fill thousands of vacant jobs, surprising when 14 million people are searching for work,” reads a Reuters story from earlier in the week.

To come up with this argument it has essentially one data point, the say-so of Siemens in America.


Technology giant Siemens Corp., the U.S. arm of Germany’s Siemens AG , has over 3,000 jobs open all over the country. More than half require science, technology, engineering and math-related skills.

Current unemployment, according to the BLS is 14 million. Another 2.5 million were only marginally attached to the workforce and so were not counted. And 9.3 million people were underemployed.

So about 25 million people, according to her, need decent jobs.

Three thousand unfilled jobs at Siemens in the USA, if filled, would make up 0.00012 of the shortfall.

If Siemens had 100 times the openings, it would still only be 1.2 percent of the entire unemployment picture.

“Caterpillar and Motorola … has at any given time about 200 open positions,” reads the Reuters piece.

The numbers are fly specks, dribs and drabs, statistically unimportant
in terms of the magnitude of the unemployment crisis.

To continually air the complaint from US manufacturers re these small numbers and the unsuitability of American workers is odious.

“These companies’ inability to fill open jobs suggests that part of the unemployment problem confronting the nation could be more of a structural nature rather than a downturn in the business cycle,” asserts the Reuters article.

The numbers in the agency’s own story do not slightly support this argument. But reporters have never been good with arithmetic.

Americans are not suitable for the new manufacturing positions because they are deficient in “math-related skills” as well as other things, it is said.

Politically, part of this seems to be some high-end private sector manufacturing initiative to get more engineers into the workplace. And since they cannot be quickly furnished by universities, this ties in with Jeff Immelt and the presidential jobs council recommendation earlier in the week to expand hiring for foreign scientists.

Which, of course, has nothing to do with easing unemployment.

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