How will Globalization affect my standard of living?

From what I’ve heard, & read on this Board, many Americans are going to see their standards of living fall in the next few years, due to Globalization.

Right wing pundits yammer about a “culture of entitlement”, when I see families all around me hard-pressed to pay for health care.

More than one Doper has either been Homeless, or will be.

And I’m scared!

I sit here, worried, and my stomach hurts. I’m afraid of becoming Homeless. I couldn’t survive it. My health is shakey; has been since that Histoplasmosis problem.

Just how bad are things going to get?
Does anybody know?
Economics Dopers?

Not as bad as you fear, and not as good as you hope, for society as a whole.

Your own situation may suck incredibly if you end up being in a field which tanks, and no one knows what that’s gonna be.

You have more to worry about from the current state of US fiscal policy than you do from “globalization.”

Do you have any marketable skills?

Your standard of living will go up, not down. Globalization is a good thing - it opens up more resources, and it enables production to move where it’s most efficient.

Now, I’m speaking of the generic ‘you’. Your personal situation may improve or get worse, depending on the career you have and how willing and able you are to adjust to a changing economy.

The flawed assumption of the anti-globalization types is that they think our high standard of living is the result of us living in some sort of a protectionist bubble, insulating us from the lower standards of living that exist in the poorer countries. They think the only thing preventing us from dropping to the world average standard of living is a barrier we’ve erected to keep the big bad world out. This is nonsense. The reason our standard of living is high is because we are more productive than other countries because we have stable governments, very valuable infrastructures, an educated population, a work ethic, and most importantly, an economic system that lets capital move and flow to where it does the most good, making us very efficient. None of that will change with globalization. In fact, globalization makes it better, because it allows us to offload the things we don’t do as well as others, while benefitting from being able to purchase those things that other countries can make better than we can.

Comparative Advantage

It’s not as cut and dried as that though. You can’t measure standard of living just in raw dollars, sometimes, relative income is just as important as absolute income. In vicotorian england, a middle upper class household was expected to have a retinue of servants and could afford it due to the relative disparaties in income. Nowadays, you have to be fairly rich to have even 1, full time servant. The same might happen with China and India compared to the US. Say a Kyoto style carbon tax does get put in place, the more wealthy the developing nations get, the less carbon the US can buy affordably and one day, people might view the current trend of having at least one car per household as an enviable luxury.

Given Downsizing & Outsourcing, what the fresh hell constitutes a marketable skill?
:confused: :frowning:

I used to think, computer skills, & started taking courses.
You know what happened to tech jobs… :frowning: :frowning: :frowning:

Essentially, marketable skills are whatever an employer is looking for, or whatever you can get people to pay you money for. They’re not always as concrete as “computer skills.” Teaching, communicating, problem-solving, coordinating, planning and analyzing can all be marketable skills.

Are you under the impression that tech jobs are going away because of globalization? If so, you’re wrong. What happened to the tech industry is that during the dot-com boom zillions of tech schools opened up and cranked out graduates at a huge rate. Then the boom busted, and we wound up with a glut of ‘tech people’ with marginal educations and expectations of $70,000/yr jobs. Many of them had to go back to school or seek jobs in other fields, and ‘globalization’ is an easy bogeyman to blame. Point to a few offshore programming shops, a few jobs moving to India, and you’ve got your scapegoat.

The fact is, tech people in the U.S. were greatly overpaid due to the supply/demand situation during the dot-com boom. There’s no way in hell someone with a six-month MCSE diploma should be getting $70,000 per year, but that’s what they were getting for a while. And of course, in that environment a programmer in India who makes $12,000/yr looks pretty good. But now the pendulum is swinging back the other way - salaries have risen in India and returned to more normal levels in the U.S., and the tech industry is expanding again, and demand is starting to pick up.

There will be jobs for programmers. Just make sure you’re a good one. I’ve been working in the software development field my entire adult life, and where I am we’re currently hiring people at a rapid clip.

It would help if you changed your mindset - instead of getting all depressed about having to compete with the entire world instead of just the guys you graduated with, think of it this way - there’s an entire world of opportunity out there now. Great things will come of that. We all benefit from increased world wealth. A rich South Korea builds ships and good cars that we can buy and use. A poor South Korea makes crappy clothes and puts together crappy transistor radios. A rich South Korea spends some of its resources on developing new manufacturing techniques, doing scientific research, medical research, and other things that contribute to the good of the entire planet. A poor South Korea receives foreign aid and is a net drain on the world economy.

As India, China, and other developing countries join the first world, global GDP will increase. There will be more money for space research, for medicine, for art, and for spending on the environment. It’s all a good thing.

I’m 42.

It’s hard to be chipper.

No one’s saying the economy will be static. There will be winners and losers, and what makes up our increasing standard of living will change. Sure, people can’t afford servants the way they used to. Here’s an even better example: Go look at any reasonably nice house from 100 years ago, and you’ll see a lot of custom work. Hand-carved balustrades, coffered ceilings, built-in woodwork, etc. Carpenters were cheap. I saw one episode of ‘this old house’ where they pointed out that just the railings for the staircase occupied a carpenter for almost a year. Now only the fabulously wealthy can afford that kind of detailing.

But no one would claim that this means our standard of living has gone down. What we gave up in labor we more than got back in automation. Doctors don’t make house calls anymore - we lost that - but now we have MRIs and the Internet.

The world will change. Maybe we’ll all make due with one car on average - but then maybe we’ll all be telecommuting so we won’t need two cars.

I’m also 42. I’ve even been thinking of leaving my job and starting out in something new, since I’m burning out on the software development biz.

Life is what you make of it. My suggestion is, don’t go down the path of blaming your woes on outside forces like ‘globalization’. Sit down, figure out what you want to do (and what people want to pay for), then go about learning how to do it the best way you can.

So, this means that the people who used to make T-Shirts in West Virginia will find employment as…?

Americans have usually had their comparative advantage around innovation and risk taking activities. But we are busy dumbing down our schools, and I worry about how much comparative advantage we will have around innovation. As for risk taking, many people need to be uncomfortable before they are willing to take risks to get reward (though there have always been people who enjoy risk for risks sake). I anticipate many people are going to have to get a lot less comfortable in the U.S.

It isn’t all bad, for one thing, the standard of living in much of the second world has gotten better. That doesn’t do a lot for you short term, but long term that means those people create a market for new innovations - hopefully those innovations will come out of the United States and provide income opportunities for you. Even better if you are the risk taker or innovator.

If I were 42 and going to make a sure bet about having a job, I’d start working on an RN. Our population is aging, its hard (though not impossible) to outsource health care. That’s one reason why we are becoming a “service economy” most services are hard to offshore. I can get a non-American to clean my house for me, but she’ll (or he’ll) live here, it isn’t too efficient to have someone in China mop my floors.

And only the fairly well off could afford hand made hand crafted woodwork 100 years ago. My 100 year old house was a “Sears Catalog” house. Lots of woodwork, lots of oak, but most of it made in a factory. Keep in mind that the carpenters who then put the house together didn’t have a great lifestyle by the standards of someone doing the job today. My uncle is one of those carpenters today - he spent a year putting in a cherry library in the home of a Neurologist. Still happens.

Something else. Just like blacksmiths, carriage-makers, livery workers, U.S. TV makers, etc.

100 years ago, a large percentage of the population was engaged in making, preparing, distributing, and selling food. Now it’s down to a few percentage points. All those people had to find new ways of making a living. Did our standard of living go down? No. It went UP, because the reason those jobs were lost is because we got better at making our food, which freed up labor to do even more things. That’s how new wealth is created.

And so it is with globalization. If T-Shirt making goes overseas, it’s for one reason only - because it’s more efficient. This benefits all the people who buy T-shirts, and frees up more of their capital increasing our overall wealth.

They will find employment in the same way that telephone operators, railroad porters, deliverers of telegraphs, cow milkers, and typewriter salesmen did. They will try to figure out what skills they already have transfer to other industries, and they will train for the ones they don’t have.

There is this assumption that ‘a good thing’ like globalization has to be good for everyone. It certainly isn’t, but by increasing global efficiency the net standard of living goes up. It is just much easier to identify the individuals who are hurt by the process than it is to identify the many who gain.

What could we do about the T-shirt makers in West Virginia anyway? We could subsidize their industry and make protecting their jobs a centerpiece of trade policy. We then have overpriced T-shirts, trade wars affecting many disparate commodities and higher taxes. We couldn’t possibly protect all struggling industries, so how do you pick and choose which ones to protect and which ones not to? Bad things happen to people, or groups of people. Aside from offering assistance in retraining there isn’t always something a government can, or should, do to fix things. Law of unintended consequences and all that.

I find that so much hand-waving, Sam. You sound like a Marxist claiming that because it’s good for most people the individual human cost should be discounted and therefore we’re collectivizing agriculture.

I’m no protectionist, God knows. But this constant ‘it’s going to be better for the world’ is ignorant of the fact that human beings aren’t, by and large, rational animals. You say that people who ‘lose’ (a curiously bloodless word that means poverty, anxiety, and depression) in terms of the marketplace of wealth should retrain. That’s all well and good. I agree.

But humans don’t do that largely. Once people fall out of highly paid jobs (or even steady jobs are a living wage) they find it difficult to absorb the blow and move forward again. They fall from middle to lower to poor class and don’t recover. And that’s a real human cost that shouldn’t be ignored.

The long-term effects of globalization are real. Eventually the overall wealth-factor for humanity will improve. But in the short term it means the populations that were above average take hits to security and standard of living. This hit comes about through the competition from those populations willing to performs tasks and services for less through lower expectations or standard of living.

Or, if one has programming skills (not my field, but I’ll run with it) and one has to compete with someone in Sri Lanka making five dollars and hour one may either lower one’s wage expectation to five dollars an hour and not be able to live in the US or move to some other field…one for which one requires extensive extra work to regain lost ground.

But I have empirical evidence on my side. The evidence of thousands of major labor dislocations in the past. Or more importantly, the evidence that the process of globalization has been going on in earnest now for several decades, and we’re just not seeing the disaster you predict. For example, despite the fact that huge market share has been lost to overseas operations in textiles, auto manufacturing, electronics, food creation, light manufacturing, ship building, and many other industries, the U.S. currently has an unemployment rate of 5.1%. Twenty years ago, it was almost twice that. And the U.S. standard of living has increased dramatically, not just in absolute terms but in comparison to other countries. How can that be?

We had an anti-globalization debate in GD a while back, and I posted an anti-globalization message making exactly the same arguments as others were making in the thread. It could have been written today. Only it was part of another anti-globalization debate that was held on usenet 20 years ago. And I’ll bet if they had the internet 100 years ago I could have found dozens of messages about the horrors of manufacturing, and how machines were taking everyone’s jobs and soon we’d be able to make all kinds of things but no one would be able to afford them. And of course, farmers have been complaining about the destruction of the farming industry for about 100 years now.

So if the predictions of the anti-globalization doomsayers have been consistently wrong for as long as they’ve been making them, just who is engaging in hand-waving here?

Don’t you guys listen to NPR? :slight_smile:
The T Shirt factory goes and there are a thousand people in a tiny town looking for work.

Moving this from IMHO to Great Debates.