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I'd be really interested to hear opinions about this. I found some of the statistics in it close to unbelievable, but I trust the writer.

It's about poverty in Ohio.




Nov. 3rd, 2003 01:39 pm (UTC)
Stats I've heard is that for every work dollar we lose over seas we gain back $1.86 in cheaper goods.

And poor people buy more cheap goods than they do expensive ones, making poor people especially harder hit when prices rise. Or, in this case, don't fall.

The problem is that we are becoming a world economy, and we live in a nation with a very expensive labor pool. Not as expensive as Europe, but still, far above that of the rest of the world. How can we keep our labor in demand?

Well, we can't compete strictly pricewise - we'll have to compete value wise. Which means having more skilled labor. (I think, I'm not entirely sure on this.)

And incidentally, both sides of the coin have "easy answers" which are complete bullshit.

Oh, yeah. The hard part is that economy is something the government can't help, can hurt, gets blamed for but cannot take the credit for.

And nobody really wants to hear the hard answers - which are: "You live in a country with a high standard of living, in a world that has a low standard of living, and things are starting to even out."

- hg
Nov. 3rd, 2003 02:51 pm (UTC)
And nobody really wants to hear the hard answers - which are: "You live in a country with a high standard of living, in a world that has a low standard of living, and things are starting to even out."

Actually, the thing that's really saved the US prior to this is innovation. We tend to invent things at a much greater rate than any other nation. However, in the past 20 or so years investment in basic research outside of the lucrative healthcare industry has been on the decline. So we aren't creating new industries to employ our workers (or anybody else's workers).

We DO have to move away from unskilled labor to skilled labor, but with countries like India, Taiwan and China competing with highly skilled low-cost workers, it's getting really hard to compete.

However, neither the Clinton Administration (though they, being Democrats, did more for retraining) nor the Bush Administration has done much of anything about this problem. And the market isn't equipped to solve this issue because it is designed to create things cheaply and sell them dear and that's it. They won't invest in RESEACH to create new products, let alone workers fi the stockholders demand profit and profit alone. If it is just left alone, it WILL get worse.

It requires investment that can't be shown to have an immediate profit, actually. It requires visionary leadership willing to put money into something that doesn't exist yet. Entreprenurial spirit and venture capital and those things are hard to come by right now when we have a robber baron spirit prevailing from the top down.

What we need to do is create a product or service that ONLY WE with our skilled labor pool can provide. And we need to keep on doing that every ten years or so. We've pretty much done it in the past, but we're investing less in the creative process. That's where we're screwing up. Or, its at least part of it.

And none of this has touched the problem of urban and rural unskilled labor poverty. The only thing that can do that is education, and again, it's something our country is NOT willing to invest in.
Nov. 7th, 2003 02:49 pm (UTC)
I work in the software industry. That labor is moving overseas as well. Not because it's unskilled, but because the standard of living in India is a lot lower and their workers speak English.

I work on a product that is sophisticated, up-to-date, from a market-leading multinational corporation. We're greatly expanding our India software development; my manager gave a speech to 100 employees saying "India is a reality and it's not going away." For the first time, New development on our project is being done in India; before it was only maintenance and testing.

I comforted myself over the last ten years by saying "Well, that's unskilled labor, it's not the sort of work I do, that's what globalization gets you." To be ethically consistent, I have to tell myself what I told all those North Carolinian furniture workers. "If somebody will do your job for half the salary, you're screwed."

I have no idea what job is sophisticated and skilled enough that it makes economic sense to do it in the U.S. instead of Ireland or Russia or India. Certainly not mine.
Nov. 7th, 2003 04:25 pm (UTC)
This is the rub, really. We're going to have to reinvent constantly to find jobs that ONLY WE can do. Because other people are as good as we are at things and are as educated as we are.

I think our future really IS in R&D. And right now Japan is kicking our butt a lot of the time because we won't invest in it.

Or else we enter into the world of protectionism and tariffs and that gets scary and ugly.

But I do like what some folks have been saying about not having "free trade" agreements with countries that don't give up child labor, have living wages for workers and other standards. It's unfair to as people in the US to compete against that kind of exploitation.

That doesn't get around Ireland, India and other highly skilled places, though.

We just outsourced our customer service to Canada, so I know what you mean.
Nov. 4th, 2003 06:26 am (UTC)
And nobody really wants to hear the hard answers - which are: "You live in a country with a high standard of living, in a world that has a low standard of living, and things are starting to even out."

And that hits the nail on the head, *exactly*. The question then becomes "how do we tackle that?"

I favour the use of taxes to provide healthcare and food payments to even it out but those fall disproportionately on middle income families (and me, dammit) and are hard to sell electorally. Given that the better-off vote more often than the very poor, that's a very hard sell indeed.

However, I think you go too easy on the government with regard to the economy. It's true that they cannot do anything about the large-scale cycles of the world economy, but they have huge latitude to effect changes within those cycles, using taxes, regulation, money supply and interest rates to name but a few. Blunt weapons to be sure, but weapons none the less.

The government *does* take the credit for economic improvements and you can bet that President Bush is going to be trumpeting the 7.2% growth rate in the US economy in the last quarter.