First I wouldn't worry about the number of jobs, most of the media/political talk is the usual doomsday scenarios that sell newspapers. Like the jobs thing.. "we lost 2 MILLION!! jobs.." but then they fail to mention that we are employing a higher percentage of people than our average the last 30 years. It is just they are comparing to the bubble years around 1999.
Just imagine if you compared your investment performance in the same way: "well in 1999 QQQ was up about 90% or so, and it is 2003 today and I am only up 50%! That is practically a loss of 40%, I should quit! This is horrible!" It's just a matter of where to pick your start and end dates.. same in stocks.. same in employment # / % same flawed analysis. But it does sell papers and get votes to some degree so in that sense it has some use I guess
That said, the *quality* of jobs is another matter. It is true that real wages, especially for the poorest 25% of the US population have not done well at all the last 30 years or so. The higher end on average is doing quite well despite some sectors such as programmers who have taken losses. But again people like to focus on the bad 20 cases and ignore the good 200 cases
If you look at the trend in wages for the top 25% highest paid US families the last 30 years it is pretty nice.
But back to the quality, where there is some squeeze in certain sectors. The main problem here is education (in my opinion our low-performance public schools are the center of the problem-- privatization and/or vouchers would help). China + India are getting more educated and we are getting less educated. We still on average are more educated and have better infrustructure + property rights that is why we still make on average over 10 x their salary.
As the gap narrows (ie as we get more socialist and they get more capitalist) then the wage gap will continue to narrow as well. This is not a bad thing as long as both of our wages are moving up and theirs is simply moving up faster-- which should be expected considering how poor they are now.
The other fallacy I'd like to point out is the common knowledge that in China they make less money then us, therefore companies want to hire them more. This is only partially true; you have to compare *productivity* as well. So if Chinese programmers on average are 10 x cheaper than US, and they are half as productive, then it makes sense to hire them more. On the other hand, in many industires, the Chinese are paid 20 times less than us, but they are 100 times less productive. In other words a company who employs Chinese in those industries would have to increase their wage expensive by 5x. And if you study economics you will know it is proven beyond any doubt that even if a single country has uniformly *lower* wages across everything, and they are also *more* productive in everything, they still will *not* take all the jobs, they only will take the jobs that they have the biggest relative advantage in and they will lose a roughly comparable dollar/salary amount of jobs that they have the worst advantage in.
China + India have pretty good advantages in programming, so we are trading them some jobs in that area, and we have some great advantages in things like entertainment and microprocessor + aerospace design so we are taking jobs away from them in those areas if you want to put it that way. People seem so sensative to the China/India jobs issue, but the same thing has gone on for a long time both between countries and within states / cities. If these people get scared about a few 100,000 programmer jobs going from one country to another, they will *really* be scared if they look at the millions of jobs that are constantly in transition between US cities and within them! But people ignore those mostly, I guess because if the process happens within our own country it is ok! Even though it is the same exact thing, and it is *good* in exactly the same way. Just imagine a bill that passed that said California companies can no longer move jobs to Nevada. This is bad economics locally, and it is *just* as bad if we did that between the US and China.
The bottom line, I'm not too worried about the # of jobs per say, and to increase the quality/pay will require improving our education system or other things that directly lead to higher productivity. If tarrifs and trade barriers were the solution, they would of made the world a rich place in the 1930s! Instead they helped fuel the Great Depression. So that isn't the route to go (not to mention the countries with the highest standards of living like Hong Kong generally have *unilaterrally* lowered trade barriers even when other countries have kept them higher).
In addition, our savings rate of 2% (the lowest in US history!) is reducing the quality of jobs. Hopefully people will one day save and invest more and live within their means. It's all tied in with long-term standard of living. The Chinese save 40%. No wonder their economy has been on fire the last 2 decades!
-Taric
Something is definitely wrong with this picture....