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In the US, people with less than average skill/diligence/IQ could still live a comfortable life and more or less fulfill the "American dream".
However, now they are forced to compete with Chinese who had studied 12 hours a day in school, and Indians who are happy with $200/mo customer service jobs. Do you think mediocre people will be increasingly unemployed and falling in poverty?
Yes, as the rest of the world becomes like the US, the US will become more like the rest of the world, i.e. we will have large "3rd world" slums that were formally middle-class neighborhoods.
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Maybe socialism is the only solution?
Socialism is not a viable solution. For socialism to work, you need a financially homogeneous population. It doesn't work when you have extremes of wealth. Socialism needs everyone to contribute equally and receive equally. When a large portion of the population can not give and also demand a lot of support, socialism crumbles.
The solution, as I see it, is too bring back the low-skill-low-intelligence jobs back to our country by imposing a tariff on foreign imports.
Being mediocre is a choice. If that is what people are happy with, that is what they will get.
Even people with learning disabilities, slow IQ's, and handicaps can learn what is taught in school if they apply themselves. People who are interested in getting ahead can do so if they put forth the effort.
The average person might not have the quickness of brain to invent the latest greatest computer or electronics, but even the average person can learn most of the skills that pay a living wage. Nurse or truck driver might not get you a mansion on the Riviera, but it pays enough to keep a roof over your head and food on the table.
I've heard plenty of people say they don't need an education. Surprisingly, none of them are highly paid, but that was their choice to cut school, not learn what was presented, and drop out of high school.
In the US, people with less than average skill/diligence/IQ could still live a comfortable life and more or less fulfill the "American dream".
However, now they are forced to compete with Chinese who had studied 12 hours a day in school, and Indians who are happy with $200/mo customer service jobs. Do you think mediocre people will be increasingly unemployed and falling in poverty? Maybe socialism is the only solution?
Socialism makes everyone mediocre. That isn't better.
For globalization to work there must be free trade everywhere.
And while globalization may stagnate or even decline the average wage for the short run in well developed countries like the US and Europe, in the end everybody in the world will be wealthier as every countries GDP per capita will rise.
I recently saw on Yahoo where a man subcontracted his computer job out to china for 1/6 of the wage. What I took from that is that if there are Chinese who are willing and able to do the same quality work for that wage, more power to them. Just because a person is an American does not mean that they are entitled to the best jobs with the best wage.
Globalization is the fairest and most prosperous method of trade.
And while globalization may stagnate or even decline the average wage for the short run in well developed countries like the US and Europe...
The ONLY thing that will improve the average wage is having FEWER wage earners
available for each of the declining dollars that will make up total payrolls.
$10,000,000 / 300,000 = $33/hr vs $10,000,000 / 250,000 = $40/hr
Are you getting it yet?
Artificially high wages provided both through the manufacturing boom in America caused by WWII coupled with aggressive FED policies created a situation where today's baby boomers earned wages and could live lifestyles far beyond what a stable market could support. We are in a process of stabilizing back to a point where a mediocre worker can support a mediocre lifestyle. Adjusting back to a sustainable lifestyle from what we have been used to over the last half a century or so is not fun, but is something that inevitably has to happen.
Artificially high? Please explain that one... It was simply a matter of supply and demand. There was more work than there was workers, so employers had to pay more to attract the workers. Remember, 25% of the working population in this country was working in manufacturing during the 60's, as we were the largest manufacturer on the planet. And they weren't getting rich doing it, they were merely getting by. Starting wages were still low. Wages for faster, more experienced workers were higher because they could produce more.
Also remember, much of that work was time consuming and done through much slower manual methods. Machines has to be manipulated by hand in many cases, and assembly lines were packed full of workers screwing in bolts and such. Many intelligent people did go to work on the assembly line for the same reason many intelligent people pursue occupations today... There was a need for labor and the wages were attractive. These people were not deadbeats or a drain on society. They were productive Americans filling a need for labor. There is no shame in contributing to the country's success by doing your part, putting food on the table for your family and paying your fair share of taxes.
What happened was nations with considerably lower COL began competing for the work. We were priced out of the market. Faster, more efficient methods of producing goods were also developed. This helped America retain it's competitive edge, but also eliminated millions of jobs along the way. Wages stagnated for many skilled workers, and most unskilled workers saw their wage earning potential greatly reduced. This was no fault of the worker.
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Originally Posted by MrRational
The ONLY thing that will improve the average wage is having FEWER wage earners
available for each of the declining dollars that will make up total payrolls.
$10,000,000 / 300,000 = $33/hr vs $10,000,000 / 250,000 = $40/hr
Are you getting it yet?
Problem there is as wages grow, we loose competitive advantage over other nations. They have workers too, and that can put downward pressure on wages, or hold them steady. Tons of jobs can be done by workers in other nations. It's not just manufacturing anymore. If it can sent via internet connection, that can hold wages hostage.
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Originally Posted by Retroit
Socialism is not a viable solution. For socialism to work, you need a financially homogeneous population. It doesn't work when you have extremes of wealth. Socialism needs everyone to contribute equally and receive equally. When a large portion of the population can not give and also demand a lot of support, socialism crumbles.
Not to mention the old explanation my economics teacher brought up in HS. If you put all the money available in a room, lined everyone up and told them to take only what they need, how much money would be available for the last person in line?
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Originally Posted by Retroit
The solution, as I see it, is too bring back the low-skill-low-intelligence jobs back to our country by imposing a tariff on foreign imports.
There are a couple flaws in this potential solution. Our boarders are wide open and we have millions of illegals driving down the wage structure for the legal citizens. We also have a political system that appears to cater to this class. Even the republicans are beginning to pay lip service to them.
Companies are also doing everything possible to eliminate the need for labor. This means automating work, consolidating jobs, and expecting workers to work longer hours. If you were to bring back labor intensive work, there would be much more effort made to automate these tasks. The only reason making shirts for example isn't automated yet is because the current labor costs do not justify the expense incurred researching and developing the technology. If you employed Americans en mass to do the work, it would be automated within a decade easily. Much cheaper to pay a highly paid team of R&D engineers to develop the technology than it is to pay millions of Americans a livable wage to make shirts.
Capitalism is a system that provides insufficient golden rings and punishes those who do not grab one.
I like your thought but I would alter it to say "punishes those who do not OR CANNOT grab one".
Some of us are better equipped to grab a ring while others cannot and never will simply due to their birth all to often. Children from intact families do better. White children have more opportunity. Some people simply have more talent and brain power.
The bottom line truth is LIFE AIN'T FAIR. I personally see nothing wrong with extending a helping hand to others who are far down on the social scale and cannot get any traction in life. We read of success stories but the ugly truth is, most don't make it. Too much is going against them.
And I know I will likely get flamed for this opinion but in truth, our country writ large is better off with a strong middle class. There will always be the losers but we need to minimize that as much as possible. And I do mean WE. Our social construct can degenerate so far that it is unrecoverable and daily life then becomes more dangerous for everyone. The more desperate people you have running around, the worse for all.
However, I have no solutions to offer. Many programs and much money has been thrown at the problem with no decent return on investment. I think we are headed to the big brick wall.
Artificially high? Please explain that one... It was simply a matter of supply and demand. There was more work than there was workers, so employers had to pay more to attract the workers. Remember, 25% of the working population in this country was working in manufacturing during the 60's, as we were the largest manufacturer on the planet. And they weren't getting rich doing it, they were merely getting by. Starting wages were still low. Wages for faster, more experienced workers were higher because they could produce more.
Also remember, much of that work was time consuming and done through much slower manual methods. Machines has to be manipulated by hand in many cases, and assembly lines were packed full of workers screwing in bolts and such. Many intelligent people did go to work on the assembly line for the same reason many intelligent people pursue occupations today... There was a need for labor and the wages were attractive. These people were not deadbeats or a drain on society. They were productive Americans filling a need for labor. There is no shame in contributing to the country's success by doing your part, putting food on the table for your family and paying your fair share of taxes.
What happened was nations with considerably lower COL began competing for the work. We were priced out of the market. Faster, more efficient methods of producing goods were also developed. This helped America retain it's competitive edge, but also eliminated millions of jobs along the way. Wages stagnated for many skilled workers, and most unskilled workers saw their wage earning potential greatly reduced. This was no fault of the worker.
It was hardly a simple matter of supply and demand. The federal reserve (until halfway through the Carter administration) held it as a goal to put as many people to work as possible. The fed worked to put as many people in jobs as quickly as possible, and worked to increase wages as highly as possible. This led to years of extremely profitable times for the average worker, far beyond what a true free market system would allow. This was then corrected by the fed after Volcker took over the fed, jacked up interest rates to normalize inflation, causing a boom in the bond market later in the century, causing pension funds and investment funds to rise dramatically due to a realignment of the economy to correct for poor results of national economics attempting to incentivize household growth while ignoring the idea of companies inflating prices to counteract the increase in cost.
Boomers had an environment where the economy was very artificial, and benefited them greatly as a result.
Being mediocre is a choice. If that is what people are happy with, that is what they will get.
We will always have mediocre people by definition, since mediocre means average. If everyone gets a doctorate, then having a doctorate is mediocre. If everyone speaks 3 languages fluently, that's mediocre.
We've already seen this, as people get more and more higher education and compete for a dwindling number of quality jobs. There was a recent study that said that half of workers are overqualified for their jobs. If one person advances because they worked harder, they do so by taking an opportunity from someone else (as they should, they should do what's in their best interest).
The problem is that the opportunities for good-paying jobs have become more limited. If there are 50 million good-paying jobs, and 150 million in the work force, 100 million people are going to be left out. An individual working harder only changes who gets left out. The macro-economic picture stays the same, and the number of "mediocre" people stays the same.
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Originally Posted by oregonwoodsmoke
I've heard plenty of people say they don't need an education. Surprisingly, none of them are highly paid, but that was their choice to cut school, not learn what was presented, and drop out of high school.
More people than ever are getting college degrees, the problem is many of these degrees aren't worth much because too many people have them. And I'm not talking about liberal arts degrees, I'm talking about an oversupply of useful degrees. We have more college-educated people than we have jobs that need college education, and this is exacerbated by boomers delaying retirement due to increased longevity and health and/or poor retirement planning.
Let's say a hospital needs to hire 5 radiation techs. There are 10 applicants with degrees and 5+ years of experience, and another 5 fresh out of college with a degree but no experience. The hospital is going to interview the 10 applicants with experience and choose the best 5. The 5 fresh out of college won't even get an interview even though they did the right things, worked hard, and got a degree in a useful field. But the ones left out still need to pay their bills and their student loans are coming due, and Lowe's is hiring at $12 an hour.
You might say, maybe they should have gotten a degree in a field that's in short supply. There is some truth to that, there are inefficiencies in the job market, but that's only part of the problem.
Problem there is as wages grow, we loose competitive advantage over other nations. They have workers too, and that can put downward pressure on wages, or hold them steady. Tons of jobs can be done by workers in other nations. It's not just manufacturing anymore. If it can sent via internet connection, that can hold wages hostage.
The other side of this is that we get cheaper products made with cheaper labor. We could bring a lot of those jobs back, but you would be paying more for stuff, so I'm not convinced that the net benefit of bringing these jobs back would be an increased standard of living for Americans.
Also, as has been happening, as we buy stuff from China, their wages increase and the profitability of off-shoring decreases (further spurred on by high oil prices). So these companies can either try to continue to chase the lowest labor in places like Cambodia or Laos, or they can bring manufacturing back to the US. A lot of manufacturing has been returning to the US for this reason. A lot of customer service has been brought back because of increasing wages in India and people's dissatisfaction with Indian customer service.
In order to get higher wages we need to reduce unemployment, but maybe high unemployment is the new normal as machination of production increases productivity, decreases the demand for labor, and increases the supply of labor, suppressing wages.
In order to improve their lot in life poor people should stop over-consuming crap and stop spending like they're middle class, and instead buy income-generating assets. Just stand around inside a gas station for 10 minutes and it's easy to see why a lot of poor people stay poor. Lottery tickets, energy drinks, overpriced bags of chips and drinks, cigarettes, etc. Eating at over-priced chain restaurants. Buying convenience food from the grocery store. Running up the credit card bill, spending $100 a month on a cell phone, another $100 a month on the idiot box. These poor spending decisions are a voluntary wealth transfer to the rich who are trampling all over them.
Last edited by EugeneOnegin; 02-01-2013 at 10:46 AM..
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