Where the Jobs Aren’t: the Growth of the Craigslist/Moonshine Economy

Recent data released by the Labor Dept. purports to paint a rosy jobs picture. An estimated 200,000 jobs were added in December, preliminary results. Unemployment is down to 8.5%, though that reflects a lot simply dropping out of the job market. There are still 13 million jobless, and Blackrock and other Hedge firms predict decades of de-leveraging for the US consumer, still heavily in debt with little job and just as importantly, wage growth. Indeed inflation in 2011 was 3.4%, while growth rate for the US was only 1.8%, barely on the plus side. All the rhetoric from Obama on the rosy jobs picture, intended to sway the critical swing voters (White professional women) can’t conceal the fact that the US is heavily in debt in the consumer area, along with state and federal debt, has little job growth and even less wage growth, while facing inflation fed by the Fed printing money to cover the debt, and rising Chinese demand.

In short, even White professional women pay more every month for food, clothing, gas, and other expenses, while their paycheck does not increase. There is a reason for that. Just as mass immigration from Mexico has led to below living cost wages in most entry level and even skilled labor for the White (and Black) working class, so too has outsourcing and foreign investment by US companies led to the decline of the Knowledge Worker. As usual, the Wall Street Journal has shown itself to be a fantastic source of news, but not overtly. One has to read the back pages of the Marketplace and Business and Finance sections to find the real news.

For example, did you know that most Apple Juice in the US comes from China?

Like many other products sold in the U.S., apple-juice concentrate is usually made in China. Producers in that nation provide an estimated 70% of the concentrate used in the U.S. annually.

Indeed the Minneapolis Grain Exchange is gearing up to create a market in trade-able Apple Juice futures. Just like the Orange Juice futures (featured in the movie Trading Places). You’d think “Most Apple Juice Sold in US Comes From China” would be front page news. But again the news media is in the news suppression business not news business. However the Wall Street Journal, and to a lesser extent the Financial Times, must provide business news and thus real information, not lifestyle affirmation, to its readers.

Again the Wall Street Journal, in an aside, provides the real reason Americans at all levels (save the ultra-rich and connected and famous) will not find job growth: foreign competition. The story about Mu Sigma landing big investment money is a perfect example. Mu Sigma is a data analytics company that raised $108 million in venture capital, led by Sequoia Capital (raising its current stakes). Mu Sigma provides analysis of the enormous amounts of data large companies collect. Its first customer, Microsoft, hired Mu Sigma to model the combined search marketplace for Microsoft and Yahoo (the two are partners in online advertising).

This should be excellent news for smart people in the US, correct? WRONG! Mu Sigma is an … Indian Company.

Mu Sigma helps some of the world’s biggest corporations make sense of the vast amounts of data being produced online. The company, which is headquartered in Chicago with most of its analysts in Bangalore, employs about 1,500 people, up from about 1,200 in June.

The company specializes in problems involving marketing, supply chain and risk analytics across nine industries.
“We believe we are painting on a very large canvas,” Mr. Rajaram said. “There cannot be any business that will not be impacted by analytics and decision science.”
The company hires people who have attended the best schools in India or the U.S. and puts them through a three-month training program called Mu Sigma University that teaches the basics of consulting, applied math, data modeling and statistics.
These employees then help Mu Sigma’s corporate clients learn to use the data their companies are generating to run their businesses more effectively.
Mu Sigma claims more than 50 Fortune 500 clients—it has helped a pharmaceutical company identify the best price points for drugs, and a cable company identify the best ways to retain customers and still make money, it said.

Income recovery and income growth are not going to happen in the US in the formal labor market. Places like Mu Sigma don’t hire Americans, they hire cheap Indians and put them to work in a pro-forma (three months!) training course in Bangalore. But hey … they are CHEAP!

[Microsoft kick started Mu Sigma into business. Along with the Gates Foundation scholarships being open only to “people of color”, i.e. ONLY: Black, Hispanic, American Indian/Alaska Native, Asian/Pacific Islander, more informed people might want to consider using a Linux distribution of your choice rather than Windows. Given that Windows as it stands is mostly the work of H1-B Visa holding Indian/Chinese emigres with little stake in the company or their work product.]

Eventually even high-income jobs like nursing (experienced nurses can earn over $130 a year with overtime), doctors, and other professions will find the same pain as information technology, engineering, and professions. The influx of Pakistani doctors into Britain, under the National Health, to create cheaper labor and thus more opportunities for political graft/featherbedding, is responsible for those same doctors ramming their on-fire car into Glasgow’s airport terminal. After blowing up cars outside London nightclubs. They were brought in to be cheap labor. Even if ObamaCare were abolished, for-profit hospital groups and taxpayer funded hospitals and charities would all press for, and get, mass importation of cheap third-world nurses (already happening) AND doctors.

Globalization inevitably means that all but the most connected elites have income falling towards (if not at) the level of a Pakistani bricklayer.

ANY, and I do mean ANY broad income growth in the US labor market will be through the Craigslist Economy. Off the books. All cash. Dependent on off-hours labor, done quickly and cheaply and without reporting. If you wanted to deliberately make most of Working White America innately hostile to the government, and with the attitudes of hillbilly moonshiners, you could not do a better job.

Hillbillies made shine, because it was the only way to put dollars in their pockets. Their labor was viewed as value-less, no one paid much money for it. Work was intermittent, and holding onto a small piece of land meant subsistence farming, intermittent labor for hire, and moonshining. Since there was no margin for taxes. The same sort of pressures, in most of working White America, are now repeating themselves. It was the political genius of FDR (the man had the economic instinct of a turnip, but political genius) to make Hillbillies his voting block edge by throwing patronage around. Massive development projects that used local labor, and electrified areas that private investment would not touch (because it would be a money losing proposition). Using government built dams generating lots of electricity to subsidize manufacturing (repeated in the Pacific Northwest) that used all that power, creating jobs and ending much of moonshining because it was far more trouble than simply getting a factory job.

A few seasonal jobs in December does not a recovery make. Consumers don’t have suddenly a lot of money in their pocket. There is no big hiring spree. No massive ship building program as in Reagan’s early defense budget. No cheap oil promoting economic activity. No gas price and electricity price drops putting more money in consumer’s pockets. Indeed the EPA’s rules on coal plants promise to raise electricity rates dramatically over the next few months. Restrictions in fracking over “earthquake concerns” (the Greens have sold the next bill of goods, that fracking causes Earthquakes: Charleston suffered a 7.3 earthquake in 1886, presumably because someone took a time-machine back there and did fracking-drilling for natural gas) promise to make Natural Gas (and US drilled oil) far more limited and expensive.

Any recovery at all will be done through Craigslist. Selling expertise, one bit a time, and pocketing the cash money. Business expansion will be in places like Bangalore (of dubious quality but hey, they’re CHEAP). Not the US.

About whiskeysplace

Conservative blogger focusing on culture, business, technology, and how they intersect.
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5 Responses to Where the Jobs Aren’t: the Growth of the Craigslist/Moonshine Economy

  1. Anonymous says:

    One can buy some pretty nice distilling equipment online these days…

  2. DR says:

    Actually outsourcing, especially to India has slowed down dramatically. http://seekingalpha.com/article/209919-it-outsourcing-growth-to-slow-down-aheadSpeaking from a software perspective many companies found that it ultimately cost more due to a combination of low quality work, needed micromanagement, and culture/timezone issues.Besides for maybe a handful of companies, "high-level" work will always be done outside India. The culture is simply just not that creative or innovative. Also the smartest Indians are mostly overseas anyway. A company like Mu Sigma's an exception, but it has at least a dozen more well-funded competitors in Silicon Valley. In fact domestic software spending is experiencing a major growth boom:http://www.blogger.com/comment.g?blogID=3893665144141962944&postID=1748802153343635215Which gets to the root of the problem. Companies are more interested in maximizing profit, while keeping headcount low. Regulations on labor have become so onerous, that they are highly biased towards capital investments that substitute for labor.From the Obamacare health insurance mandate, to insane affirmative action and sexual harassment liability laws, to a NLRB that's out of control. It doesn't make sense to hire American workers, because the American government has suffocated the once great free labor markets that we had.Completely obliterate the out current laws, and replace them with free market Hong Kong or Singapore. Watch unemployment fall to 4% overnight.

  3. Anonymous says:

    "One can buy some pretty nice distilling equipment online these days…"I heard it's pretty easy when you got grape juice and just ferment that.

  4. ray says:

    "Unemployment is down to 8.5%, though that reflects a lot simply dropping out of the job market."agitprop statsthe actual unemployment rate in, e.g., the pacific northwest, is about 30 percent for males, and perhaps 10 or 12 percent for femaleswomen have the vast majority of govt jobs, leaveing men with "careers" in illegal activity, which is also v bene for the criminal justsis sistem, which stays healthy living off their destroyed livesthe Gates Foundation that you mention is one of the planet's top purveyors of feminism, in addition to "diversity" — prime funders of mass circumcision in africa, for examplemelinda gates is a monster, and bill is just another mega-rich emasculate"In short, even White professional women pay more every month for food, clothing, gas, and other expenses, while their paycheck does not increase"this is the keywhite females, the "winner" demographic after fifty years of matriarchy, have not felt the real pain of the depression, and are protected from its consequences in myriad waysalready, females age 50 and above own over three quarters of the nation's wealth, and that will only increaseuntil this group, and the females coming into that category, feel the pain, there can and will be no change in the u.s. economy or broader u.s. policy — and they'll put males in work camps (in addition to cages) before white women are allowed to suffer for their sins

  5. Anonymous says:

    Analytics/market segmentation has long been the purview of Indians. My MBA statistics and data mining professors are Indian. The ones from my class who went on to work in the industry are also Indian nationals. Personally, I've been interviewed by many Indians for analytics positions at big banks and marketing companies. Maybe I'm just cynical, but "big data" is less about deep-level analysis and more about the ability to BS clients and spin facts. Indians are pretty good at this. I finally landed a computer programming job with decent pay off Craigslist, so don't knock it.

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