Economy News: Where are the Jobs?

According to the Texas Department of Workforce Solutions, the 34,677 jobless El Pasoans were the most the border city had seen in 11 years.

(LAS CRUCES, N.M.) - The shipping of goods across the US-Mexico border is back on a brisk track, but employment opportunities on both sides of the international line are still not keeping pace with the so-called economic recovery.

Cited in the El Paso Times, statistics compiled by Texas A&M International University show exports through Texas and New Mexico ports of entry grew from a little less than $3 billion during the first two months of 2009-the depths of the Great Recession-to more than $5 billion in the same two-month period this year.

Meanwhile, imports racked up through the same ports of entry shot up from $3.9 billion during January and February of 2009 to $6.1 billion in the same time frame of 2011.

Joe Wardy, former El Paso mayor and international trade consultant, credited the trade surge to “pent-up” demand and the recuperation of the key automotive sector, which manufactures many products in northern Mexico.

Yet the jobs picture is an entirely different story. In El Paso, for instance, 3,900 jobs vanished this past February alone. While the official US unemployment rate dipped slightly last year, it actually increased in El Paso from 9.5 percent of the workforce in January 2010 to 10.3 percent by January 2011.

According to the Texas Department of Workforce Solutions, the 34,677 jobless El Pasoans were the most the border city had seen in 11 years. The local retail sector, which relies heavily on shoppers from neighboring Ciudad Juarez, recently saw 400 jobs evaporate.

Grueling border-crossing lines, which have sometimes reached three hours or more for pedestrians, could have affected US businesses, as well as an extremely anemic consumer money flow afflicting working-class residents of Ciudad Juarez who make up a lot of the cross-border shoppers.

Bob Cook of the El Paso Regional Economic Development Corporation said that only 28,000 of the 83,000 maquiladora jobs lost in Ciudad Juarez during the early part of the Great Recession have returned to the production lines. Increasingly, jobs in Ciudad Juarez’s foreign-owned factories require fewer people and demand a higher degree of technical prowess.

Various explanations for the binational job hole include concentration of corporate ownership, company downsizing, automation, structural economic changes and cross-border commerce itself.

The Economic Policy Institute (EPI), a left-leaning, Washington, D.C.-based think tank, contends that accumulated US trade deficits with Mexico of $97.2 billion have displaced 682,900 US jobs since the onset of the North American Free Trade Agreement (NAFTA), including 116,400 positions lost during the bad years between 2007 and 2010.

Of the displaced jobs, 55,600 were located in Texas and 3,200 in New Mexico, according to the EPI. Mexico, meanwhile, watched its NAFTA trade surplus last year dissolve into large trade deficits with Europe and Asia, principally China, Japan and South Korea.

Peter Camacho, assistant professor of economics at Texas A&M International University, said deficit-inspired budget cuts to government programs could further cloud the jobs outlook in the border region. Camacho noted, for example, that government jobs account for 22 percent of all employment-and a huge amount of overall economic activity- in Laredo, Texas.

“You have to have a compromise,” Camacho was quoted on the budget cuts debate, “but you don’t want to have a cut in the government that will wash out all the benefits in the private sector.” Deep slashes to food stamp and other programs would likely set off a ripple effect in the economy and heavily impact cities like El Paso, where an estimated one in five residents receives some form of assistance.

Ironically enough, the border region could have long served as the proving ground for a broader international economy that one writer calls the “McEconomy.”

According to Andy Kroll, today’s economy is characterized by a high percentage of temporary jobs (one in four private sector jobs created in the US during 2010), non-union workplaces and high unemployment levels. Once thought of as a Third World economy, the economic model is gaining a reputation in places like Germany as a US-style one.

Some economists estimate the total number of underemployed and unemployed in the US, including people who have abandoned the job search, at 22 million persons. Although recent private sector job creations have been touted in Washington, the percentage of the US population with jobs this spring was actually down 0.1 percent over last year.

“Yes, 244,000 jobs were added in March, but that’s chicken feed,” wrote former Clinton Labor Secretary and commentator Robert Reich. “We need 350,000 a month, every month for the next three years, simply to get back to where we were before the Great Recession.”

In April, the official US unemployment rate nudged up to 9 percent from 8.8 percent. In Kroll’s analysis, the US (and other) economies are parlayed by a “bar-bell effect” in which a large number of stable, relatively well-paying jobs are replaced by high-paid jobs situated on one end of the employment spectrum and low-wage ones on the other.

A vivid example, Kroll recently wrote, is none other than McDonald’s. On April 19, the fast food chain held a US hiring day in which 938,000 people applied for 62,000 jobs flipping burgers and running registers for hurried diners. The jobs advertised averaged less than $10 per hour, according to Kroll.

“With a 6.2% acceptance rate in its spring hiring blitz, McDonald’s was more selective than the Princeton, Stanford or Yale University admission offices,” he wrote.