Who buys your products then if only low wage service jobs are available ?
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Middle class revolt
- Thread starter dddooo
- Start date
Who buys your products then if only low wage service jobs are available ?
We're going to be shining each other's shoes, selling insurance to each other, suing each other and driving each other in taxicabs.Quote from prt_systems:
Who buys your products then if only low wage service jobs are available ?
We're not going to manufacture anything - cheaper overseas, we're not going to invent anything - cheaper overseas, Moscow scientists are just as good and 30 times cheaper. If an american does invent anything, the production will still go overseas.
I find this a fascinating thread. Several comments made an impression on me. One poster observed that change is ocurring at a faster pace, making it tough for the traditional middle class to cope. I think that is spot on. It is kind of like the savings and loan crisis from 1990. S&L's had always made 30 year fixed rate mortgages and financed them wiht passbook savings deposits, ie they had a huge duration gap. When the environment changed, they faced enormous problems and many went kaput. Similarly, the middle class takes on long duration obligations, eg mortgages, raising families, education expenses. But they are financing them with increasingly short duration assets, eg assembly line work, other unionized jobs. Tough situation and I don't have an easy solution for it.
Another poster asks, who benefits from globalization? Obviously they never shop at Walmart. We've traded tens of thousands of textile jobs for cheap chinese clothes,etc. In esence, we have traded a vertically integrated economy, where we both produced and distributed, for one in which we offshored the production and kept the "clean" work of marketing and distribution. The wage arbitrage is so compelling it is hard not to do this, but historically manufacturing jobs not only provided good incomes but were also the source of technological advancement. Since much of our economic power derives from innovation and productivity, it is fair to ask if we are trading our seed corn for baubles.
Another form of wage arbitrage is occurring within our borders. Construction work used to provide a large segment of the population a good lower middle class income. Now it provides a lower middle class income to millions of immigrants from the south. If you doubt me, go by any large construction project and take a look.
Other than the professions, the one area of employment that is growing and provides good working conditions and excellent benefits is government work. As a bonus, it requires little in the way of skills or talent. Several posters noted the contrast in benefits and retirement plans between comparable private sector and government jobs. The government jobs are increasingly unionized as well, only the traditional management/labor competition is absent. In government, management, eg school boards, are aligned with labor and want to increase both the number of employees and their compensation. At some point, the taxpayers will be forced to rebel, but if more than half the voters are either government employees or transfer payment recipients, which is nearly the case now, the taxpayers' pleas will fall on deaf ears. Indeed, they will be demonized as selfish and uncaring.
I wonder how difficult it is to emigrate to Australia? If I'm going to have a suffocating government and make nothing, at least I can go to the beach.
Another poster asks, who benefits from globalization? Obviously they never shop at Walmart. We've traded tens of thousands of textile jobs for cheap chinese clothes,etc. In esence, we have traded a vertically integrated economy, where we both produced and distributed, for one in which we offshored the production and kept the "clean" work of marketing and distribution. The wage arbitrage is so compelling it is hard not to do this, but historically manufacturing jobs not only provided good incomes but were also the source of technological advancement. Since much of our economic power derives from innovation and productivity, it is fair to ask if we are trading our seed corn for baubles.
Another form of wage arbitrage is occurring within our borders. Construction work used to provide a large segment of the population a good lower middle class income. Now it provides a lower middle class income to millions of immigrants from the south. If you doubt me, go by any large construction project and take a look.
Other than the professions, the one area of employment that is growing and provides good working conditions and excellent benefits is government work. As a bonus, it requires little in the way of skills or talent. Several posters noted the contrast in benefits and retirement plans between comparable private sector and government jobs. The government jobs are increasingly unionized as well, only the traditional management/labor competition is absent. In government, management, eg school boards, are aligned with labor and want to increase both the number of employees and their compensation. At some point, the taxpayers will be forced to rebel, but if more than half the voters are either government employees or transfer payment recipients, which is nearly the case now, the taxpayers' pleas will fall on deaf ears. Indeed, they will be demonized as selfish and uncaring.
I wonder how difficult it is to emigrate to Australia? If I'm going to have a suffocating government and make nothing, at least I can go to the beach.
Quote from dddooo:
We're going to be shining each other's shoes, selling insurance to each other, suing each other and driving each other in taxicabs.
We're not going to manufacture anything - cheaper overseas, we're not going to invent anything - cheaper overseas, Moscow scientists are just as good and 30 times cheaper. If an american does invent anything, the production will still go overseas.
The stuff about invention is not true. Russian scientists can't invent their way out of a paper bag. All they can do is reverse engineer things. Their culture is not set up for it. American culture is perfectly suited for coming up with new things that others will want to build and use. I am working on something BIG as we speak.
Household wealth rose in first quarter: Fed
Reuters
Wednesday, September 21, 2005; 12:23 PM
WASHINGTON (Reuters) - The net wealth of American households rose in the second quarter of 2005 as real estate, pension and mutual fund assets gained value, the Federal Reserve said on Wednesday.
In its quarterly "Flow of Funds" report, the central bank said household balance sheet values rose to $49.83 trillion in the quarter, up from a revised $48.89 trillion in the first quarter of the year.
The 2005 first quarter net worth was originally reported at $48.79 trillion. The data is not seasonally adjusted.
Reuters
Wednesday, September 21, 2005; 12:23 PM
WASHINGTON (Reuters) - The net wealth of American households rose in the second quarter of 2005 as real estate, pension and mutual fund assets gained value, the Federal Reserve said on Wednesday.
In its quarterly "Flow of Funds" report, the central bank said household balance sheet values rose to $49.83 trillion in the quarter, up from a revised $48.89 trillion in the first quarter of the year.
The 2005 first quarter net worth was originally reported at $48.79 trillion. The data is not seasonally adjusted.
Quote from Diamondtrim:
Russian scientists can't invent their way out of a paper bag...Their culture is not set up for it. American culture is perfectly suited for coming up with new things that others will want to build and use.
I am sure your theory can somehow explain this IBM decision:
09.21.2005, 12:24 PM
IBM to open R&D centre in Poland
IBM said it is to open a research and development centre in Krakow in southern Poland following the signing today of an agreement with the Polish minister for the economy Jacek Piechota.
'This is above all an investment in human potential and new technologies,' said Piechota.
The centre, the first of its kind in central and eastern Europe, is expected to be operational in two years and will employ 200 workers.
http://www.forbes.com/markets/feeds/afx/2005/09/21/afx2236576.html
Prices are even cheaper in Honduras, do you want to live there? If for example prices go down 5% and salaries go down 10% do you really think it's a good deal for this country? Cause that's pretty much what's happening.Quote from AAAintheBeltway:
Another poster asks, who benefits from globalization? Obviously they never shop at Walmart.
American middle class is worse off than it was before, that's according to government statistics and Alan Greenspan and that already takes Walmart prices into account.