Has the recession created a "lost generation" of permanently unemployed?

Great Debates
201

[QUOTE=Voyager]
Not at all similar. With Japan, we worried about how they could do things better than we could, how the “made in Japan” slogan which used to mean cheap junk now meant quality. If they sold some stuff more cheaply then we did, it was because they manufactured them more efficiently. It was a quality challenge that US companies actually met pretty well. How to compete against companies which can pay workers a tenth of what you can is a totally different challenge.
We are hardly in awe of the quality of goods manufactured in China.
[/QUOTE]

When I was growing up ‘Made in Japan’ was synonymous with ‘cheap crap’. That changed over time, obviously, but the roots are exactly the same. American workers were running in fear of how Japan was going to take all their jobs away from them, and the pro-tariff anti-trade nutters were singing the exact same song they are singing today. To get a few bars of this song simply read through one of gonzomax’s posts on this subject.

The way we compete against companies who pay their workers a tenth of what we do is pretty much how we ARE competing…we either don’t bother to make those products anymore, since it’s not cost effective for us to do so, or we automate heavily, so that you have just a few workers who’s productivity is equal to many low paid low skill workers due to the increased automation.

In the end, you are going to have fewer manufacturing jobs. That’s the bottom line, no matter how you slice it. Why this is so hard for some to grasp is beyond me. The days of a large manufacturing work force who has high pay and good benefits are over in the US and will never come back. Even if we stopped buying stuff from China and everyone else tomorrow those jobs wouldn’t come back to the US. What would happen is that local US companies would built highly automated plants to manufacture goods and services that would end up costing all of us more, and there wouldn’t even be a noticeable blip on our employment radar.
Just to digress for a moment, I was watching a show on one of the learning type channels (Discovery I think) about manufacturing the new Camaro sports car. The car is produced entirely in 2 plants in Canada (ironic for those who drive Chevy and think they are getting an ‘American’ classic sports car, while not wanting to touch a Toyota, even though many are built in the south :p). The work force to build the car is pretty minimal…from the show I doubt there are more than a couple hundred folks involved in the actual production. And these two plants produce this car in huge quantities and at (according to the show) superior quality (I have no idea…I never liked the Camaro, so don’t plan to buy one).

The point is, that this is the future. Eventually, I can see even those couple hundred folks being replaced by automation, since even their jobs COULD be done by machines, if you are willing to make the investment in hardware and programming. So, we go from thousands of workers to build cars, to a few hundred workers, to maybe a few 10’s of workers to…well, maybe none, or maybe just a few to maintain the machines.

-XT

202

But this is wrong as stated upthread - American has a fantastically healthy manufacturing sector. And “high pay and good benefits” manufacturing jobs exist all over the country. The issue is that the current manufacturing jobs are not jobs that you can apply for right out of high school; they need intense training and often college or other trade degrees.

The issue is that we need to figure what role the low-educated/low-ability person can play in the current American work force. I live near the NWI steel mills, and for my parents and grandparents, it was a place where you could go, right out of high school or as a high school dropout, and get a line job. After 10 years or so, you’d have a good union job, with a nice steady paycheck and good benefits. That is gone now.

I don’t know what the solution is. It seems like the low-educated/low-ability person is now limited to service sector jobs, and those jobs are not enough to support a family. This is the new “lost generation” - those who cannot or will not get the education they need to qualify for the new standard of manufacturing in America.

203

[QUOTE=Sateryn76]
But this is wrong as stated upthread - American has a fantastically healthy manufacturing sector.
[/QUOTE]

I never said otherwise. We have a fantastically healthy AUTOMATED manufacturing sector.

Again, I never said we didn’t. We don’t have a lot of ‘high pay and good benefits’ type jobs in traditional mass production line manufacturing type jobs, however…which is what I was getting at.

No, the real issue is that, due to automation there are fewer of those kinds of jobs available today, and those jobs, as you note, take more skill and training.

-XT

204

In that context taking jobs away meant that Toyota was taking market share from GM. In this context taking jobs away means that instead of hiring an engineer here in Silicon Valley you hire five in India. I have personal experience with this - not as a victim, fortunately.

But this has spread far beyond manufacturing workers. All high tech companies I know of have design centers in India. My local paper sends its daily copy-editing to India (and it shows - did you know Oregon was in the mid-West?) We know about call centers. The only really safe jobs are ones which require personal contact, or are held by those making the decision.

As for manufacturing and automation, I heard a very interesting talk by someone from Cisco talking about how in many cases when you are manufacturing in the far East automation projects that make sense here no longer pay off. The collective hourly wages of the workers are less than the depreciation of the machines that would replace them. He was talking about how engineering decisions around automation have to take this into account. In the long run the workers may demand enough more money to make it profitable to automate them out of a job, especially if we run out of low wage countries. But automation is not always the right answer.

205

Automation makes a better product.
Offshoring is not just about wages, it is to escape environmental regulation and industrial rules too.
The Chevy Vega was made at a completely automated plant a long time ago. Automation is not new. All the plant required was maintenance workers for robots. It wasn’t the construction that doomed the Vega but poor management and planning. Maybe we can automate the execs?

206

So much to say on this subject, so little time.

There aren’t enough jobs paying enough money to support the people in this country in the manner in which they are accustomed. The solution is simple. Some people have to give up something. Why hasn’t this been done? People are greedy. And stupid. And amoral. Listen to the mantra: ‘The rich getting richer is more important than the poor eating’. We have returned to the feudal state.

So to get back to the OP, why aren’t people willing to work for money anymore? Because it is a losing game. Work harder, earn less. The rich don’t work at all and earn more. I’ve been lucky enough to make plenty of money through my life, and even now during hard times. If we roll back the Bush tax increase on the middle class, I will be affected. I will not complain about paying more taxes to pay the debts of my parents if it gives my children a chance to thrive themselves.

Anticipated arguments:

It’s not a zero sum game. - Correct, its not a game. It is life and death for many
Free markets are the magic solution - Not worthy of comment. How’s that no reg-y no tax-y thing been working out so far?
Bush didn’t increase taxes - I guess I didn’t increase my credit card bill by charging things and not paying the bill then.
Paying more taxes won’t fix the problem, the politicans will waste the money - Absolutely right. No solution to that I can figure. But every murderer says the same thing: ‘Putting me in jail or executing me isn’t going bring that guy back to life’.
People who don’t work are just parasites - Exactly who are the blood swollen parasites here? The poor, the middle class, or the rich?

207

I don’t think the people who care most about who’s working for their money and who’s not are concerned with any genuine, compelling morality. They’re more likely operating under a more primitive kind of indignation: “Everyone should have to do what I had to do.” It’s self-righteousness that can feel like egalitarian fairness: you assert the right for yourself and people like you to set the moral standard.

208

[QUOTE=xtisme]
In the end, you are going to have fewer manufacturing jobs. That’s the bottom line, no matter how you slice it. Why this is so hard for some to grasp is beyond me. The days of a large manufacturing work force who has high pay and good benefits are over in the US and will never come back.

[/QUOTE]

Then you are admitting the USA will have from now on tens of millions of people earning substandard wages, forever? Do people really believe a nation can sustain this, eventually there will be riots in the streets. I don’t believe for one millisecond it has to be this way, cheap labor oversees made huge profits that went mostly to the top.

209

I think the problem that some people are having with your statement is that they don’t see human beings as mere economic units of labor. Some people even think that the study of economics is to improve the welfare of these economic units of labor. While some people believe that whatever creates the greatest amount of wealth will result on the greatest utility, others believe that the distribution of wealth is just as important as the gross amount of it.

Yes but it does undercut the notion that you originally presented doesn’t it? I mean doesn’t your original statement sort of depend on static comparative advantages?

I think that a large country can have comparative advantages in more than one area but in smaller economies it does tend to lead to specialization for smaller countries.

[QUOTE=LonesomePolecat]
It boggles my mind that anyone would seriously believe that immigrants aren’t taking work away from citizens.
[/QUOTE]

Where do you think jobs come from? I’m asking that question with absolute sincerity; what creates jobs?
[/QUOTE]

You mean that economies can actually grow as more economic units of production are added to the population?

210

Either that or they drive gains in shareholder value or executive compensation/bonuses.

211

I know we could all go point by point to critique your rant but this one stuck out as not only ridiculous, but hilarious. Unless you’re talking about maple syrup. It’s quite true that I’ve not seen much Vermont maple syrup stocked in Canadian grocery stores. If that’s not it, I have no earthly idea what you’re talking about.

212

We are ripe for some strong unionization. The jobs of today are paying less ,which pleases the ownership class but diminishes the purchasing power and subsequently demand. A recovery requires demand which will result in hiring. We need more money in the hands of workers instead of the pockets of the rich.
Nursing, service workers, restaurant workers and many other underpaid jobs need substantial raises. It would help the country.

213

The big winners are the government employees-they now make twice as much as private sector employees. Add excellent pensions and healthcare, and there is no way any private sector job can come close. The losers are those who acrually make products-we have found that we can import stuff from China and India, and hence these people are out of work.
I believe the solution is to expand the government, so as to hire all the people laid off in the private sector-that will solve the problem!
As for how to pay for this? Borrow money from China! And, we can start a rip-roaring inflation-bring the dollar down to 1 cent value-tha’l wipe out the debts!

214

Well put.

215

Cite please

216

Sorry, but I haven’t a damned clue what “original statement” you’re referring to. Are you sure you aren’t misremembering who said what?

I have certainly made no claims here dependent on the notion of “static comparative advantages.”

Well, of course. I honestly can’t tell if you’re asking this seriously, so if you meant this as a joke, I apologize for being whooshed.

217

Yeah right. Now tell me the one about how Alyson Hannigan loves to tour government offices buck ass naked.

Because both statements have about equal amounts of truth to them.

218

For many years government workers made considerably less than their non government counterparts. They got security and good benefits though. That kept some people there. Some people worked there because they thought they could do some good.
Those outside the government are facing wage cuts and slashed benefits nowadays. The government does not follow closely ,so for a while they may make comparatively good money. It wont last. There is lots of downward pressure on wages and benefits across the country, unless you work in banking or are in an elected position.

219

Thanks. And if you’re a politician or opinionmaker, tapping into emotions that people can’t fully articulate or question is a very good way to gain influence and power.

220

In an apples to apples comparison, government employees tend to make less than private sector employees with similar specialization and knowledge. This trend get more and more pronounced the more the government employee makes.

For example, a GS 6 administrative assistnat tops out at about 40K after 18 years. The private sector administrative assistant with the same qualifications and experience is about 45K.

A GS 15 trial lawyer at the department of justice makes about 130K after 20 years. The private sector guys representing the defendant might make ten times as much.

The reason government employees make more than the average population is because the federal government has a far more educated and highly qualified work force than the population generally.