Laid Off? Either Move to China or Get Used to Working Part Time or From Home.

Posted on September 8, 2009

A colleague greeted us this morning on with “Good morning everyone! I hope you all had a good labor day holiday. I wonder how the jobless celebrated their non labor day. (Tellitlikeitis)  Here are the sad figures for August:

Private non-farm employers cut 298,000 jobs in August, according to estimates by payroll company ADP, a figure that disappointed analysts’ expectations but still showed a gradual easing of job losses.

Businesses with fewer than 50 employees lost 122,000 jobs in August, the smallest decline since September 2008, according to the report. Mid-size businesses (with between 50 and 500 employees) lost 116,000 jobs, and large companies lost 60,000. While that sounds like small businesses bear the brunt of job losses, it’s less severe when you consider that they account for a larger share of employment, says Joel Prakken, chairman of Macroeconomic Advisers, which developed the report.

Where did the jobless go? David Rosenberg explains

[M]ore people working at home. Salaried workers, on the other hand, dropped 637,000, the largest decline since March. The household survey actually shows employment fell by 1 million, writes Rosenberg, if you dig into the details, “which is unprecedented,’ he notes.nine million people are now “working part-time because they have to, not want to,” adds Rosenberg. The adult male employment rate — males lost jobs at a faster rate than women in the August numbers — is already above 10% in the U.S.

Lastly, those looking for a job for more than six months without success are now a record one third of the total jobless, at 5 million, which Rosenberg argues portends a long-term trend in jobless — longer than the current downturn, in other words.

But wait.  There are other places to look for work that Anywhere USA.  Permanent job losses to overseas markets has begun:

The new attention in the media to the export of jobs did not develop until white-collar jobs began to evaporate along with manufacturing jobs and no replacement jobs appeared. The export of jobs is no longer just a question of factory jobs. Forrester Research reports that 3.5 million U.S. white-collar jobs will move offshore by 2015 – about 200,000 jobs a year – to low-wage countries such as India, China and Mexico.

A U.S. company can hire a software developer in the U.S. for $60 an hour, or one in India for $6 an hour, according to the McKinsey Global Institute. A data entry clerk costs $20 an hour in the U.S., but $2 an hour in India.

McKinsey expects offshoring to grow at a rate of 30 to 40 percent a year over the next five years. In addition to the labor cost savings, offshoring can drive revenue growth because it allows companies to offer services and create new value that would not have been possible with domestic production. McKinsey calculates that for every $1.00 of U.S. labor costs offshored, $1.45 to $1.47 is created globally.

Production workers in Shanghai make $153 to $261 a month; mid-level engineers make $312 to $661, according to a new report from Deloitte & Touche. Although most of the U.S. companies now operating in China produce for export purposes, China’s domestic market is growing at record-breaking rates and production will increasingly focus on that new customer base.

Despite talk in Congress about new tax incentives for corporations that keep jobs in the U.S., companies are not going to walk away from enormous labor cost savings and greater access to what will become the largest consumer markets in the world.

Offshoring is now an integral part of the global economy. Although U.S. companies account for an estimated 70 percent of all global offshoring, corporations around the globe are constantly moving jobs to lower-cost locations.  This has been going on going on long before the current fiscal crisis.,+2003%29

So don’ t get your hopes up that manufacturing  jobs will come home anytime soon or that white collar jobs will follow them. It is not just the US that is experiencing this phenomenon. Countries in such diverse locations as Asia and Europe are sending their jobs and manufacturing overseas as well – many to China and India.  As long as these two countries have reasonable labor costs and a growing population of consumers, this will be the order of the day.  Get used to part time jobs, working from home and unemployment.  It’s here to stay for the foreseeable future.  Life in the US will not be the same after the “depression” ends.