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There is one basic Huge problem with any of this. Who is willing to pay $3000 for a computer, $1500 for a color TV set, $3 for a pair of socks, or $250 for a basic tire?
Imports not only cost less, they force the prices of domestic products down as well.
Ask someone who remembers $50 used BW TVs (in 1965 $ >a weeks salary on minimum wage!) car tires for a weeks labor each, or cheap blue jeans that cost a days pay.
@DanoTex -
If we get to the point (who knows how many years from now - 25, 50?) where wages are equalized globally, would that mean that prices at some point, will also equalize globally?
At THAT point it would no longer be advantageous to import things.
But also at that point, we might have to work for a week to pay for the real cost of a tire.
I have no idea what I would do if I were just graduating from high school. What would you do if you could not afford a college education?
Since I work in education and really see helping young people as a big part of my role or life's mission, I've been pondering this question too.
My answer so far is that first, kids need a primer on globalization and socioeconomic stratification. They need to grasp what's happening, at least basically, so they can make good decisions. They also need to understand how bad some workplace abuses are, and to learn how to avoid them.
Next, my advice would be to locate oneself where there's some money or affluence. I realize these types of locales aren't everyone's favorite (even mine), but the chances are better that you'll be able to have a job, or, have a paying clientele, if you're in, lets say, downtown Chicago or Naperville, rather than in a rural area or in Sandusky, Ohio. The pet store, fashion clothing store, decent pay for babysitting, and discretionary spending will continue there, longer than it will continue in the places that are off the beaten path or are no longer thriving.
Next, I would say that everyone needs to have a backup plan (or six), even if that backup plan is working for a ski resort every winter and a summer camp every July. Or making your next vehicle a 4x4 just because that would allow you to put a snow plow on it and make some cash plowing driveways.
And I really think the best route might be entrepreneurship. Create your own opportunities, learn how to take advantage of any potential earnings. Learn how to identify opportunities. Personally I would want to do so ethically. But if one learns this and gets some practice at it, they would at least have some self-confidence for when times get tough and everyone else is failing. If you can use the internet or the global marketplace, you're even better positioned to see and take advantage of opportunities.
In this economy I would rather be an owner than a worker.
Well, I guess we just start to become like Haiti, Ethipoia, or some other desperately poor thrid world country.
Until the labor cost gets lower or the level of technical or scientific innovation get higher and more Americans get educated you will see a continued decline in living standards for wage earning Americans and a shrinking middle class.
The investor and speculator class and shrewd business people will do just fine.
Jobs going obsolete is the story of the last 300 years really. Nearly every obsolete job that goes saves somebody money or time somewhere, which they'll want to spend on something, creating new jobs somewhere else. Just think of computers making stenographers obsolete yet how many new jobs in IT have been created? Automation is pretty soulless and nobody likes to see their job made redundant, but it's still the way forward.
This is the same argument they use when the industrial revolution arrived in the US.
However, this time maybe different. Because government is using all the credits that prevent private sectors from hiring. Go big brothers.
If we get to the point (who knows how many years from now - 25, 50?) where wages are equalized globally, would that mean that prices at some point, will also equalize globally?
At THAT point it would no longer be advantageous to import things.
But also at that point, we might have to work for a week to pay for the real cost of a tire.
I don't believe that wages will ever equalize globally. Simply look at the US or EU; Wages are all over the place within a political union. How could one assume that the wages in China and Yemen would ever reach parity? As long as demographics have some areas with more (or less) population and more (or less) industry wages will never equalize. In addition the rural and agricultural nature of some countries/regions is unlikely to change in the foreseeable future- even looking out multiple generations.
As for the cost of goods, real prices have been falling for years because of international trade. My point would be that changing the marketplace in the manner suggested would lead to (much) higher prices that most Americans would be unable or unwilling to pay.
If $20 - 30 is good why not $200-300? Create a new wealthy class?
No it would not but $20~$30/hr is a well thought out solution to the housing bubble as it will tend to support higher housing costs that will let the economy grow again.
Quote:
Originally Posted by DanoTex
There will always be a bottom; To move beyond and above the bottom is an individual responsibility.
Yes it is and I’m not trying to take that responsibility away from them. But what we have now in the economy is deflation. Until we get inflation (In housing prices) then we won’t get economic growth and there will be no jobs. So how you get higher housing prices is to push wages higher to support housing prices going up.
First we need to realize we are following a fictional economic concept called "Free Trade" in a world full of pragmatic Mercantilists protecting their home markets with innumerable financial and cultural trade barriers. We need to level the playing ground by returning the favor. We really do not need to import, except for oil, electricity and a few strategic minerals, anything from China or anywhere else. We can grow our own food, grow our own fiber, produce our own metals and make our own cloths. ALL of these should be operating behind protective tariffs in state of the art factories staffed by unionized employees.
We will still be able to export our tractors, excavators, electronics and weapons. We will always be able to sell weapons as we do make the best.
Unfortunately the powers that control our economy as well as our politicians do not have our best interests in mind. They are only concerned with their ability to hollow out economy and destroy American prosperity for their own profit and exclusivity. These people, some of them American citizens, are not patriots; they only answer to their world’s god of greed.
We could free ourselves from the post political enslavement to these people but it will take a very strong willed politician that can campaign without taking the bribes and who places the prosperity of the American people ahead of international profiteers. Let me know when one becomes available.
+1
I agree with just about everything you said in this post. I am all for free markets and capitalism, but not in the global sense, because our labor market cannot compete globally without significantly reducing America's standard of living.
If companies want to benefit from our laws/economy and sell their products here, they need to be based here, provide jobs for our citizens, or pay tariffs for importing their goods to provide a disincentive for outsourcing/offshoring jobs.
Both political parties aren't operating in our best interests, yet for different reasons. Republicans in the name of "less regulation", and Democrats in the name of allowing opportunities for poorer countries.
I have no idea what I would do if I were just graduating from high school. What would you do if you could not afford a college education?
If one is truly low income and cannot afford college, one option is to use Pell grants and Stafford / Perkins loans, which pay above the cost of tuition and books for low income people. I know many low-income people who "profit" from going to school each semester. The key is to go to an in-state public school.
Another option is to attend the few accredited universities that allow people to test out of the majority or all of a degree. Many military members use these colleges while deployed overseas to obtain a bachelors/masters in the U.S. so they can move up in the military or find employment once they are discharged.
excelsior.edu
tesc.edu
cosc.edu
These are three examples. You can test out of most/all of a regionally accredited bachelors' degree for under $6,000 total ($4,000 in CLEP/DSST exams and about $2,000 to graduate). These schools are accredited by the same agencies as the Ivies.
One could work a low paying job with low expenses, take a few CLEPs/DSSTs each month and have a bachelors in under a year.
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