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For jobs requiring little education and few skills, there is always going to be tremendous downward pressure on wages. A high school drop out in the US is much more expensive to employ than someone with equivalent skills in the third world because the cost of living here is just much more expensive. This is one of the biggest reasons that the unemployment rate falls with increasing educational attainment.
In the third world, there are just much fewer people who have skills and education, so there are much fewer of them to compete against.
The big reason that tasks like optics research, and genome sequencing is done in the US is that their aren't people in abroad with the requisite skill set to do that type of work.
Specialized skills create niches that allow high value work to be done in the US with jobs that pay high US wages. While a large part of the consumer electronics industry fled to Asia as early as the late 1960's/early 1970's. The specialized graphics that are used in NFL games to show you were the first down marker and the specialized graphics used on your local tv weather forecast are produced in Grass Valley and this work never got outsourced to Asia. While the Grass Valley Group itself got bought and sold, the work remained in Grass Valley and at several companies that spun off from the Grass Valley Group. The reason this type of equipment is being sold world wide out of Grass Valley is no where else in the world is there a group of people talented with the requisite skills to advance the state of the art. This is how US firms compete with countries where the cost of living is 1/8 of our own.
You might have assumed that this work had been outsourced 30 years ago. But it stayed here because they had knowledgeable employees who kept pushing the state of the art. While there are engineers from third world countries capable of backward engineering commodity products, the skills to drive and push forward the state of the art tends to favor US firms and US production. US universities are better and the research done at US universities tends to help US educated grads do and advance cutting edge technology.
The majority of the population in most places has only been suitable for low-skill jobs. Those are the people answering telephones, working at Target, selling mattresses and so on. 50 years ago a good shoe salesman could buy a house and raise a family on ONE income. It was tough, but many could do it. That is how much the low-end of the job market has changed.
Now, your theory that the jobs available reflect the education levels of a region doesn't fit the explanation of why companies laid off people in favor of workers in other parts of the world. This has occurred in Sacrament, the Bay Area, and almost everywhere except those locales which have made special tax exemptions for companies to relocate to these locations.
The people overseas aren't smarter than the people here. Using India as an example, most of them don't have a college education. The reason why they have as many computer programmers that they have is due to the pure numbers of people. India has a population of 1.15 billion people. The United States., 305 million. If they have a 30% literacy rate, they still have more literate people than the total population of the United States. Furthermore, their government is pro-education and pro-citizen. This is quite the opposite of what we have here where the government can't seem to scrape together enough change to fund higher education, but has no problem going into debt to buy junk from China and stay involved in that mess we call the Middle East. The citizens in this country also fight global competitiveness. I don't know how many posts I've read where some ignorant redneck thinks higher education is a waste of time, and the government shouldn't "be stealing" his money for people to go to college, and, if they want to go to college they should get a job and pay for all of it themselves, which would cost upwards of probably $35,000 and more a year after tuition and living expenses are added.
The problem with Sacramento, and California in general, is over-population. It is purely a numbers game and because of it there will always be unemployment, homeless, and people going hungry.
Supposidly, for the first time in history, California's population is declining, but I dunno, Sacramento's population has grown substantially over the last decade.
So, you have all of these people moving in and job creation is at a minimal. Actually, when you see a growth in population, you see a growth in menial labor jobs such as the service industry. Yes, technically new jobs have been created, but do they pay a livable wage? No, unless you work three of them.
The upper eschelon of blue collar jobs and white collar jobs are going to go to the lowest bidder. When you have a line of people banging on your door all who have the degrees, experience, and other necessary credentials and are willing to work for $10,000, $15,000, less a year, well, what do you think the employer is going to do? All they care about is their bottom line.
Look at Minnesota. That state has many of America's top companies and many that are world players. Minnesota residents can enjoy a comfortable lifestyle and good wages because very people are moving to state. There is little competetion. The economy of the state is set up different, too, which also helps.
Oh, and as everyone and their grandmother moves to the Southwest, an arid desert, guess who is going to make billions selling these fools their water? Not the states of Arizona, New Mexico, Nevada, Texas, or California that's for sure and as these states raise taxes in order to pay for the water shipments, they are going to sink deeper into the hole.
For jobs requiring little education and few skills, there is always going to be tremendous downward pressure on wages. A high school drop out in the US is much more expensive to employ than someone with equivalent skills in the third world because the cost of living here is just much more expensive. This is one of the biggest reasons that the unemployment rate falls with increasing educational attainment.
In the third world, there are just much fewer people who have skills and education, so there are much fewer of them to compete against.
The big reason that tasks like optics research, and genome sequencing is done in the US is that their aren't people in abroad with the requisite skill set to do that type of work.
Specialized skills create niches that allow high value work to be done in the US with jobs that pay high US wages. While a large part of the consumer electronics industry fled to Asia as early as the late 1960's/early 1970's. The specialized graphics that are used in NFL games to show you were the first down marker and the specialized graphics used on your local tv weather forecast are produced in Grass Valley and this work never got outsourced to Asia. While the Grass Valley Group itself got bought and sold, the work remained in Grass Valley and at several companies that spun off from the Grass Valley Group. The reason this type of equipment is being sold world wide out of Grass Valley is no where else in the world is there a group of people talented with the requisite skills to advance the state of the art. This is how US firms compete with countries where the cost of living is 1/8 of our own.
You might have assumed that this work had been outsourced 30 years ago. But it stayed here because they had knowledgeable employees who kept pushing the state of the art. While there are engineers from third world countries capable of backward engineering commodity products, the skills to drive and push forward the state of the art tends to favor US firms and US production. US universities are better and the research done at US universities tends to help US educated grads do and advance cutting edge technology.
I agree with everything you said, but the amount of work that will stay in the U.S. as a result of the factors you mention is a spit in the bucket compared to what would be required to maintain a stable middle-class.
You know what you are talking about. Many industries have come in gone in the US and we can't keep assuming some "High-Tech" industry is going to save the US. Unfortunatley, the high-tech jobs are the easiest to outsource. If it can go over a wire it can be outsourced quickly and easily. Correct me if I'm wrong but I think this was the order:
-US was once a big exporter of textiles- gone.
-US was once a big steel exporter- very little of that goes on in the US anymore compared to what it once was.
-US was once a big manufacturing industry- it certainly took a big hit after NAFTA and looks to be on life support in many states like CA.
-IT/ High-Tech industry- certainly a lot of out of work IT guys and doesn't look to be getting better anytime soon.
I myself do not see some new high-tech industry to come along and save us. We need to get back to manufacturing ASAP and encourage growth in that area. CA's last automotive plants in Freeport are going to close soon. You would have to be certifiably nuts to start or expand a business here. And the problem is certainly that there is not enough educated and experienced people in any of the above industries. Any time there is a job opening now HR departments get buried with resumes and portfolios.
I don't think it's going to be one industry that comes along that will save us, whether it be high tech or manufacturing. The problem with manufacturing is that we can't do it with the amount of money we need to make as Americans. Manufacturing will always pay very little due to the competition in low wages around the world. The cost of living in America has simply grown too much to think that we can once again emerge as a manufacturing power house, unless of course, we do something to lower our cost of living. Any ideas how we do that? Anyone really see that happening?
I don't think high tech alone will save us either, and sure, some of that industry can certainly be outsourced. But so much of the high tech industry is extremely diverse. Software development, for example, can obviously be outsourced. But much of the time, from what I've found, the custom projects are not always easy to outsource. Data entry can be easy, but even that can have issues when outsourced. Outsourcing doesn't always work well for everything and everyone, which will mean that a decent portion of the industry will always remain here.
Not to mention the fact that a lot of new technology tends to start out here, with engineers here who understand it. There's always a chance that it can end up being outsourced later in the development cycle, but chances are, engineers can jump into a new technology. It's about adapting to change and keeping your skills updated. Technology changes daily, and the high tech professional needs to change with it and keep their services priced competitively. However, the wages people expect to make in the industry will probably be driven down some due to competition in other states or abroad. That's why you have to keep updating skills and learning new skills.
When I mentioned high tech services, I had a friend of mine in mind. He just opened a computer/video repair business that is booming. Small businesses and individual consumers will always depend on local services and repairs, and many of those services can't always be outsourced. It's difficult to get someone from a call center in India to come into your small business office and fix your Outlook Exchange server or help you when you have a network problem, or help you extract data from a laptop that crashed. Web design and development is a cut throat business these days, but people like me are still getting contract work. It's gone down some sure, but that's why you diversify.
I still believe that the future of our nation relies on innovation, entrepreneurs, and small business more than it does big business. Again, I don't see one industry saving the state or the country, employing half the citizens like in the past. It's going to be a combination of big business and small business, with a heavy focus on the small business and those who recognize and focus on emerging markets and opportunities, no matter how big or small they are. Too many are thinking about the next big industry that will employ a huge percentage of Americans, when there are countless smaller industries and sub-industries that still show plenty of promise that many look past.
I don't think it's going to be one industry that comes along that will save us, whether it be high tech or manufacturing. The problem with manufacturing is that we can't do it with the amount of money we need to make as Americans. Manufacturing will always pay very little due to the competition in low wages around the world. The cost of living in America has simply grown too much to think that we can once again emerge as a manufacturing power house, unless of course, we do something to lower our cost of living. Any ideas how we do that? Anyone really see that happening?
I don't think high tech alone will save us either, and sure, some of that industry can certainly be outsourced. But so much of the high tech industry is extremely diverse. Software development, for example, can obviously be outsourced. But much of the time, from what I've found, the custom projects are not always easy to outsource. Data entry can be easy, but even that can have issues when outsourced. Outsourcing doesn't always work well for everything and everyone, which will mean that a decent portion of the industry will always remain here.
Not to mention the fact that a lot of new technology tends to start out here, with engineers here who understand it. There's always a chance that it can end up being outsourced later in the development cycle, but chances are, engineers can jump into a new technology. It's about adapting to change and keeping your skills updated. Technology changes daily, and the high tech professional needs to change with it and keep their services priced competitively. However, the wages people expect to make in the industry will probably be driven down some due to competition in other states or abroad. That's why you have to keep updating skills and learning new skills.
When I mentioned high tech services, I had a friend of mine in mind. He just opened a computer/video repair business that is booming. Small businesses and individual consumers will always depend on local services and repairs, and many of those services can't always be outsourced. It's difficult to get someone from a call center in India to come into your small business office and fix your Outlook Exchange server or help you when you have a network problem, or help you extract data from a laptop that crashed. Web design and development is a cut throat business these days, but people like me are still getting contract work. It's gone down some sure, but that's why you diversify.
I still believe that the future of our nation relies on innovation, entrepreneurs, and small business more than it does big business. Again, I don't see one industry saving the state or the country, employing half the citizens like in the past. It's going to be a combination of big business and small business, with a heavy focus on the small business and those who recognize and focus on emerging markets and opportunities, no matter how big or small they are. Too many are thinking about the next big industry that will employ a huge percentage of Americans, when there are countless smaller industries and sub-industries that still show plenty of promise that many look past.
The question that remains unanswered is what do with the people who are not able to get the skills to work in the new emerging industries that the entrepreneurs will be developing?
There are many people who cannot even acquire the technical skills to be able to, for example, build prototype circuit boards for the engineer/entrepreneur. This is the type of position that requires some skills, math, etc, but not rising to the level of an engineer. It is incredible the number of people in this country who are unable to do even do math at the algebra level and who would never be able to do it, no matter how much you "held their hands". In the past, these types of people ably filled factory positions, made a reasonably good living and would not be considered the "working poor".
I believe that the working poor today (which is not nearly as large of a group as it will become) are a good example of how some people simply can't acquire the skills necessary to compete. No one (or very few people) likes to be poor. If these people had the mental ability to get the necessary skills, they would already have done so.
If you remove manufacturing from the equation, you are left with a tremendous number of people who will subsist (even under today's conditions) in nothing more than menial jobs that do not allow them even a little prosperity.
This is why the country then moves to a two-tier system of the very rich and a large number of the working poor. This also results in a very dangerous situation for the U.S. and will eventually lead to civil unrest and worse.
Before the advent of globalization, the U.S. did not allow this one-way street of China and other countries importing anything they wanted into the U.S. without limitation. You have to ask yourself, is this a better situation for the U.S. than existed before we gave away the store? Is it worth it to endanger our domestic security and tranquility to destroy our manufacturing base and create a huge class of the working poor?
The wealth of mainstream America was not built on free-trade. The masses never voted on it, never agreed to it and don't know how to adapt, because there is no way to adapt for many people.
So, yes I say start reversing the clock and bring back reasonable tariffs and protectionism so that we can rebuild a manufacturing base in this country. It may be hearsay, but it worked at one time and will work again. The alternative is to go down a path of social unrest and continuing decline in the U.S. standard of living.
I think tariffs and protectionism is necessary if we're going to try and bring back manufacturing, but I also think we need to do more to educate ourselves and focus on skills that make us more competitive globally with the changing economy at the same time. It all starts with education. If some people aren't able to acquire new skills, then they likely will be stuck doing menial jobs for lower pay. I don't have an answer to that problem. We simply can't just pay people to do jobs that don't require much skill or education. Not when jobs that require a great deal of skill are being shipped overseas to people who will do it cheaper.
I think more people need to become a bit more entrepreneurial themselves, not just try and adapt to the entrepreneurs and their businesses, or wait for manufacturing jobs to become available. Stay up on all of the latest software and programs for the industry you're looking to be in, take classes to improve skills, read books, take some business management courses, etc. I don't think we can afford NOT to acquire new skills. I believe most people have the ability. It's just a matter of execution.
Last edited by Ludachris; 01-22-2010 at 05:04 PM..
This is one of the biggest reasons that the unemployment rate falls with increasing educational attainment.
Well yes and no. Increasing educational attainment also means that someone with higher education can take a lower skill (and lower paying) job. So you are really talking about employment options. The high number of underemployed people will reflect that.
Employment and income are two different things. You can be overeducated for the job and/or income you end up taking in any economy or industry.
There are many educated people competing for jobs and settling for lower postions than they trained for. I know of college grads in minimum wage jobs or people with graduate educations who chose to work at lower level jobs for different reasons, not just because of the economy.
Quote:
Originally Posted by Jimbo15
Specialized skills create niches that allow high value work to be done in the US with jobs that pay high US wages. While a large part of the consumer electronics industry fled to Asia as early as the late 1960's/early 1970's. The specialized graphics that are used in NFL games to show you were the first down marker and the specialized graphics used on your local tv weather forecast are produced in Grass Valley and this work never got outsourced to Asia. While the Grass Valley Group itself got bought and sold,
Bought and sold several times so far including to international owners. And if I remember right some of the work has been slowly shifted to other areas of both the US and overseas.
But things can change. One of the earliest and largest graphic computer game development hubs was located in the foothills north of Fresno in Oakhurst in the 1980s/1990s. Sierra On-Line (remember "Leisure Suit Larry") did some of the earliest adventure games, they were considered cutting edge and kept pushing the envelope. Sierra also led to the spin off of other game companies and independents. But after a series of sales and other corporate transactions under several owners Sierra slowly faded away and Oakhurst is no longer a game development hub.
What happens in Grass Valley today may not be what happens in the future. Things could go the other way too.
Quote:
Originally Posted by Jimbo15
The reason this type of equipment is being sold world wide out of Grass Valley is no where else in the world is there a group of people talented with the requisite skills to advance the state of the art. This is how US firms compete with countries where the cost of living is 1/8 of our own. But it stayed here because they had knowledgeable employees who kept pushing the state of the art.
But there are a couple of reasons in that statement. They have pushed to remain competitive in what is so far a small field. But if somewhere else decides to emphasize the field or makes a state of the art breakthrough, all bets would be off in my mind.
And so far everyone has been happy with the status quo. What if an owner decides to move the operation somewhere else say out of California to somewhere like Seattle or even out of the US.
Other countries have proven quite capable of taking the US on when they decide to pursue a market even just a niche. The Russians, Chinese, French, etc. are just a few of the countries that likely could focus on the same niche if they chose to and at a lower overseas cost.
Quote:
Originally Posted by Jimbo15
US universities are better and the research done at US universities tends to help US educated grads do and advance cutting edge technology.
I don't know, I think IIT grads in India are "pretty good" in engineering and technology. And I believe there has been a big expansion in India of IIT students in just the last 2 or 3 years.
You also have to look at the demographics in the US. Many of the engineering and tech grads from US schools are from overseas with many chosing to return to home countries. They maintain those same alumni networks and research connections wherever they are.
For example, Stanford reports 44% of its graduate engineering students are from overseas. Some will stay here but that is a large number who could return to another country and compete with the US. Yes they are here for the educational opportunity but that does not mean we (the US) benefit from the education.
Can the US compete, yes if we choose to do so. My concern is that as a society we seem to no longer have a respect for (or interest in) math, science, engineering and technology (well except for playthings) and other areas that take effort. Without another "Sputnik" type shock to our culture we may become too complacent and get left behind.
I think tariffs and protectionism is necessary if we're going to try and bring back manufacturing, but I also think we need to do more to educate ourselves and focus on skills that make us more competitive globally with the changing economy at the same time. It all starts with education. If some people aren't able to acquire new skills, then they likely will be stuck doing menial jobs for lower pay. I don't have an answer to that problem. We simply can't just pay people to do jobs that don't require much skill or education. Not when jobs that require a great deal of skill are being shipped overseas to people who will do it cheaper.
The thing is that menial jobs used to pay decent wages. Of course, this was at a time in US history when the US had no real competitors. Up until the 1970s, if you went into a store and bought a product there was a 90% chance that it was made in America by American workers using materials that originated in America. The only people who bought imported goods where the wealthy, snobbish, or immigrants. The typical Joe did not by tea from England and back in those days the only place that you could buy English Tea would be from a speciality shop. Now you can buy that stuff at any grocery store. The idea of buying something made in China was laughable and only hippies drove Japanese cars and the rich European cars.
Nowadays you have to almost go out of your way to find something made in America. That includes jobs. American corporations have their products made overseas. Why? Because even with the shipping across the ocean on ships it is cheaper.
I was talking to a friend the other day who was saying that a good amount of people are leaving downtown because the rents are getting too high. He lived downtown until about six months ago. He now owns a house that he bought for $150,000. The house, ironically, is smaller than his old apartment while his mortgage is the same price as his monthly [old] monthly rent. A year ago the house was $200,000.
Anyways, he was also saying that many of the old mansions downtown that were converted into multiple unit housing are now being bought up and converted back to single-family units.
I think that there is going to be a lot of empty housing stock that are going to be bought up by wealthy individuals who are going to hold on to them until the economy gets back on track and housing prices rise. That is what happened during the Great Depression. The people who held onto their stocks and property and even bought new stocks and properties if they could afford to found themselves to be overnight millionaires when it was over with.
The thing is that menial jobs used to pay decent wages. Of course, this was at a time in US history when the US had no real competitors. Up until the 1970s, if you went into a store and bought a product there was a 90% chance that it was made in America by American workers using materials that originated in America. The only people who bought imported goods where the wealthy, snobbish, or immigrants. The typical Joe did not by tea from England and back in those days the only place that you could buy English Tea would be from a speciality shop. Now you can buy that stuff at any grocery store. The idea of buying something made in China was laughable and only hippies drove Japanese cars and the rich European cars.
Nowadays you have to almost go out of your way to find something made in America. That includes jobs. American corporations have their products made overseas. Why? Because even with the shipping across the ocean on ships it is cheaper.
I was talking to a friend the other day who was saying that a good amount of people are leaving downtown because the rents are getting too high. He lived downtown until about six months ago. He now owns a house that he bought for $150,000. The house, ironically, is smaller than his old apartment while his mortgage is the same price as his monthly [old] monthly rent. A year ago the house was $200,000.
Anyways, he was also saying that many of the old mansions downtown that were converted into multiple unit housing are now being bought up and converted back to single-family units.
I think that there is going to be a lot of empty housing stock that are going to be bought up by wealthy individuals who are going to hold on to them until the economy gets back on track and housing prices rise. That is what happened during the Great Depression. The people who held onto their stocks and property and even bought new stocks and properties if they could afford to found themselves to be overnight millionaires when it was over with.
I just don't see lower skilled jobs continuing to pay well when other countries are able make the same products or provide the same services for less. It might have worked in the past, but it doesn't seem sustainable and we simply have to adapt to the changing economy and find ways to stay ahead. It's almost as if the high cost of United States manufacturing was a bubble economy that was busted by global competition. And yes, we can do some things to help protect our manufacturing industry, but we can't rely on tariffs and protectionism exclusively. We simply need to manufacture products cheaper and better than we have in the past.
Menial jobs might have paid well in the past, but they won't in the future. I think that was luxury that too many Americans got used to and would like to go back to. But it won't get us anywhere trying to get paid higher wages for lower skilled work.
It seems to me the only way to compete with extremely low cost labor in other nations is innovation and education. I think FresnoFacts made a great statement - Americans can compete if we "choose" to. We need to put an emphasis on higher skilled jobs and accept that menial jobs will no longer pay as well as they used to. We can't just go back to manufacturing so that uneducated people can get paid more and live better lives. How is that going to help us get ahead? All it would do is allow us to live in a bubble while other nations pass us by. In the past, manufacturing helped us get ahead not just because menial jobs paid better, but because it brought about innovation. So I agree that we should look in the past to find ways to improve, but not just go back to the same economy we had back then. Try out some of the same principles, but not expect it to be the way it used to be. We need to make advancements or we'll be left behind.
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, guess who is going to make billions selling these fools their water? Not the states of Arizona, New Mexico, Nevada, Texas, or California that's for sure and as these states raise taxes in order to pay for the water shipments, they are going to sink deeper into the hole.
in engineering and technology. And I believe there has been a big expansion in India of IIT students in just the last 2 or 3 years.
