The somewhat declined unemployment rate masks the true situation. Ever more people have stopped searching and many people who are landing jobs are forced to accept lower-paying positions or work that is more odious. How many people do you know who say it's getting easier to land a good job?
This article supports what I've been sensing for a long time: that there are no significant areas of U.S. job growth. The usually cited growth areas--health care, computer science, engineering, and Green--have become saturated, the result of offshoring, automation, and structural problems in the U.S. economy.
I'm well aware that heretofore, new fields have always emerged to replace declining areas of employment, but I cannot think of one. I hope that merely reflects my lack of vision but if I'm right, I fear that in the coming decade or two, the U.S. will suffer a dramatic drop in standard of living to closer to the world average.
For the world, that actually may be, net, a good thing: True, most Americans will have to live on $20,000 a year plus taxpayer handouts but the billion people on Earth who live without basic food, water, housing, and health care would have lives improved far more than the decrement to Americans'.
Ironically, the U.S. government's growing impulse to be kinder to the poor is accelerating America's descent. It is redistributing additional resources from the wealthy and from corporations to the poor. For example, it does so with the employer-funded ObamaCare (which will pay for comprehensive health care for indigents) and with "comprehensive immigration reform." The poor will get more resources but redistributing resources from job creators to those less likely to create jobs will cause a decrease in U.S. employment and probably GDP.
What do you think?
12 comments:
I guess the question is: is this decline inevitable -- or are we simply chasing the jobs away?
Couldn't we reverse the trend we're seeing of bigger government, higher taxes, and more entitlements? That way perhaps people could continue to move onwards and upwards.
I simply don't accept the fact that living on government handouts should be the norm for any share of the population greater than 20%. And I can't believe that we're peaking "naturally." I really feel that our current "vision" of what government should and shouldn't do is dramatically turned around.
We are not Europe.
John, I believe that demographic trends and the media are very powerful forces that will continue the government''s growth, especially with regard to efforts to redistribute resources from the job creators to the poor. I do believe that efforts to try to shrink government or reverse its redistributive efforts will be wasted. We would be wiser to devote our efforts to initiatives more likely to make a difference in our current ethos: e.g., new technology, for example, the Dream-Team Courses I've been touting.
Like Dr. Nemko, I believe that demographic trends are crucial factors in the future of employment. However much we might dislike (for instance) Obamacare, the facts are that (a) most of the Western world has something very similar to Obamacare right now, and (b) the demographic groups which are going to flourish in the next few decades within the U.S.A. would have demanded something analogous to Obamacare in any event, even if (a) hadn't been already obvious. These groups do not comprise people who are likely to go out on a limb for Austrian-School-type economic libertarianism.
One of the things that is accelerating America's decline is the commitment made to the poor outside US borders -- like the futile attempt to build modern democracy in countries with pre-modern civil societies. US decline is inevitable, which is why more of the nation's money and precious human capital should be kept inside its borders.
To some extent subsidizing the poor might work as they spend a greater percentage of their income than the rich.
I do think some effort to shrink SSI and defense might work to free money and effort going to government projects.
I also think that if people spent more time watching congress they could cut into boondoggle spending. While I like congress spending money where I live, it may not be the best thing for the country.
Finally, while I think the dream team idea is unfeasible since I doubt two people working in a studio setting can capture the essence of excellent instruction, no matter how good they are at teaching, I do think it would be worth while to use the strengths of computers to produce individualized electronic worksheets.
To do this you would collect data on what improves student performance at every level and then have the computer assess where the each student is and create worksheets accordingly. The idea is that if a student has passed quiz A and quiz B, but scored poorly on quiz C then create a worksheet that is most likely to benefit them.
To do something like this might require a massive data mining effort but seems more likely to work than having two people, even two very good people, create a course in a vacuum when they don't even have experience with video courses.
Maria,
I am aware that the standard liberal narrative is "the poor spend a higher proportion of income, which will create more jobs, so let's redistribute more to them." But a dollar in the pocket of the rich is far more likely to have greater ripple effect. If the rich doesn't buy a product or service with the dollar, they invest it in one of three places: They invest in a stock, which collectively, eventually allows companies to issue more stock when the price gets higher, and as a result allows the company more money for research, development, distribution, etc., which creates improved or more-available products. That improves quality of life and creates jobs. A similar analysis holds true if they put their money in a bank--the bank can then lend to a business, yielding the same benefit as a stock. Or if the rich person invests the money in his own business/corporation, the aforementioned benefit is even more direct.
What makes you confident that reallocating money from SSI and defense to other government projects is a net good for society? I do feel confident that returning dollars from the relentlessly and wildly inefficient government to individual taxpayers and to businesses would likely lead to more jobs and better quality of life, net.
Of course, I agree Congressional spending should be more visibly monitored by the average American---e.g., a website that supersimply states each spending bill. Of course, we're all aware that ObamaCare will cost a fortune, be incomprehensibly labyrinthine, and in having employers pay for the 42 million uninsured Americans, with the consumer having little or no skin in the game, we will destroy countless jobs, and endanger all our health---you have millions more people getting care (for free) with the same # of doctors and nurses who already kill over 100,000 patients a year because of medical errors.
The Dream Team classes can be videoed in front of a live classroom. No problem. The research you propose would be much too expensive relative to the amount of benefit that would likely derive. It's an example of the cost-ineffectiveness of ideas rampant in government.
Marty, for the words "job creators" in your response above it would be better to substitute the words "job killers" or "job exporters". The megawealthy will eliminate jobs in a heartbeat if it means bigger and better bonuses for them, and the system is profoundly rigged to encourage this.
When the top income tax bracket was 70% or above, there was little or no incentive for the rich to kill jobs to enrich themselves. During the high-tax years from the late 1930s to the early 1980s, most average families were better off and workers enjoyed more job security than now. I don't think that's coincidence.
I actually made a mistake, I meant SDI not SSI. Anyway social security and defense are the biggest chunks of government spending. Reducing government spending in a meaningful way means reducing these. I think SDI is more touchable than SSI and less popular. Also, while SDI is necessary for many people, it is also clearly abused by some.
I'm actually not sure it should be reduced as families I know depend on it but I also do know people who are on it and don't need to be.
What do I think?
Hmmm....well I agree with everything you said except, "For the world, that actually may be, net, a good thing..."
I don't think the destruction of wealth creation in America will make the poorer parts of the world better off.
I think true wealth creation (not the artificial wealth creation such as the Fed induced bubble that popped in 2008) in any country (especially one as large as the US) benefits all countries, even the poorest.
True wealth creation leads to more international commerce and that benefits everyone.
Cornelius Cakely
Just focusing on the statement that there are no jobs in the computer science area, my talented software engineer husband gets recruiting calls all the time for jobs - from employers all over the West Coast. Not all skills can be outsourced or offshored for a variety of reasons. But you need to stay current on trends and new technology to keep up and remain an attractive job candidate - my husband works hard to do that. And these are not cushy jobs, where people sit around all day and play computer games sitting in Scandinavian style furniture. In the Pacific Northwest, where we live, we are fortunate that there is no shortage of higher paid, high skilled computer science jobs.
Science and engineering jobs have always been a relatively small part of the entire job market. I'm not too surprised by the lack of growth argument - things change so rapidly in the software industry, for example. One language or platform is "in" for a couple of years before another takes its place. Business models change and the number and type of employees needed to execute them change.
I appreciate you sharing the ContraConsta Times article - it was thought-provoking and a different perspective from all the cheerleading that goes on for certain "hot careers." It's good for people considering careers to understand how political and shallow some of these government and media recommendations may be - and that it's up to people to do their own homework and legwork for researching career options.
I'm sorry, Marty. I don't understand why no matter how bad things get and how much more freedom business gets, the narrative continues to be that business still has it too hard.
I would love to be more in favor of free market principles, but people with so much influence and power are only in for themselves. Thomas Jefferson once pointed out that merchants are only loyal to their sources of income.
This has nothing to do with liberal or conservative ideology. These people (yes, not everyone) have shown that they cannot be trusted. Power has corrupted them and for all their talk about how 'restricted' they feel, they still manage to find ways to create ever greater profits for themselves. Nothing short of complete submission it seems is ever going to make them happy.
These people don't want employees. They want pre-qualified serfs with no personal lives who eat, sleep, and breathe the bottom line. What kind of society is that going to create?
In conclusion, I'll vote for greater free-market when these powerful business owners think of someone else besides themselves.
Marty,
Part of the problem is that off-shoring jobs and HB1 visas are too easy to do now. It's like part of the standard business management tool kit.
The other issue that I see is that there is too much business in government through tax deductions, write-off's, committees headed by business leaders (think GE's Jeff Imelt as chairman of his Council on Jobs and Competitiveness, who paid almost zero net taxes in 2010).
Business create jobs as a necessity and only if the demand is there. They're not in the business of creating jobs. They have no ethical obligation to create jobs just create wealth for shareholders.
My two cents.
LMC
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