USA Employment Issues

Manufacturing Activity Contracts, Can Service Sector Pick Up The Slack?

April 1st, 2008

According to the Institute for Supply Management reports this morning, American manufacturing activity again contracted in March. Other economic news points to continued pricing pressure (driven by commodities, like oil) and a sharp reduction in construction activity.

These issues are naturally intertwined and do not bode well for the future. Combine this with the massive effort to ship manufacturing jobs abroad and we are facing harsher and harsher economic downturns.

I have economic trends and investing successfully for over 25 years, so these I view these more drastic trends with concern.

Can the service sector pick up the slack? Every week I still hear about how these new service jobs are savior, but let’s take a look at what a lot these jobs are really – real estate agents, lawyers, and people pouring coffee. In California alone we have nearly a million people with real estate licenses. I must know at least 20.

It is actually hard for a company to close a major factory. There is a huge cost in doing it, where service jobs can be let go in a day. If they are lucky, the service worker might get two weeks of pay as severance. That won’t cover the mortgage for long.

Yes, there are some great service jobs in software, marketing, and finance, but do you think that cannot be done in India? As the economy soft companies will take another serious look at outsourcing service jobs abroad.

Still there is some real growth in service, but not nearly enough to offset the decline manufacturing. Most of the service related jobs are lower pay and are frankly insecure.

I went into my usual Starbucks today and instead of three of them, there was two (college grads). Even that job is so fleeting.

There is still hope, but we need to sit up and take notice. We need to have a plan that puts America first. We need real leadership.

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Getting The Word Out

March 15th, 2008

One of our customers at did something very cool recently to help get the word out on supporting American manufacturing – He wrote a letter to the editor of his local paper expressing his views. This really does make a big difference in getting the word out and folks to discuss the issue. The more we can get them thinking about, the more we can make change for the better happen.

I actually know several people in the newspaper business and it is a lot easier than people realize to get letters printed. For the most part, editors are actually happy to hear from their readers, and printing these letters helps them to show their involvement with the community.

Their advice is to keep the letter short, about three or four brief paragraphs. Get to the point right away. Make a couple supporting comments and conclude the letter. Quick and easy to both write and read.

It is easy to find the address of your newspaper online. Just address it to the editor. Don’t worry if they want to edit for size or fix typos, as it is the main point that matters.

Why not take 20 minutes to help American manufacturing recover?

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Tragic Blow to American Manufacturing

March 5th, 2008

The recent announcement that the Airbus/Northrop team had beat Boeing in a USA Defense Department contract for refueling jet tankers with a contractual lifetime value of $40 billion is a massive blow to one of the few industries the USA has continued to lead.

This contract was originally given to Boeing, but ripped away under pressure to allow bidding from European contractors. France and Germany have massively subsidized Airbus (now called EADS), which already was a key factor in the demise of McDonnell Douglas’s commercial jet aircraft business. If this order goes through it is not only a blow to Boeing, but to their hundreds of U.S. suppliers. Yes, Northrop is an American company, but they are along for the ride with Airbus – providing mainly political know how in Washington. Make no mistake, this new deal is to purchase hundreds of French/German jet aircraft.

It gets worse. If even the pentagon is buying foreign jets, why should any of our allies buy American jets for military or commercial purposes? If this goes through, history will speak of this deal as one of the key blows to America’s waning industrial capability. Tens of thousands of good jobs and technical know-how will be lost.

I have never before asked you to contact your congressman, but this time it too important. We must take a stand. Please contact them at, which allows a quick search of congressmen by zip code. Tell them this deal must be stopped and that you will vote against them if it goes through.

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