Life in the middle of the road

Nice, cheery reading.

I suspect that this is heavily colored by my experience, but I can't help but shake my head at workers who think the world owes them a nice living when they have done absolutely nothing to improve or even maintain the skills they are marketing to employers. You work at a widget factory for 15 years and do nothing else, why would you be surprised that you can't get a well-paying job when the widget factory closes?
 
Well, the article did have some good news. Doctors and lawyers are still in high demand, so all those high-school grads have to do is retrain....

I also liked the optimistic economists view. They can take the jobs being vacated by all of the retiring boomers. Assuming, of course, they can wait 5-10 more years for the first boomers to retire, and the boomers can actually afford to retire at 65.
 
I suspect that this is heavily colored by my experience, but I can't help but shake my head at workers who think the world owes them a nice living when they have done absolutely nothing to improve or even maintain the skills they are marketing to employers.  You work at a widget factory for 15 years and do nothing else, why would you be surprised that you can't get a well-paying job when the widget factory closes?
Click to expand...

I suspect that this is colored by your apparent lack of any empathy, or even an intellectual understanding of what is going on.

The man profiled in this article, Clark, obviously is not expecting anyone let alone the world to give him a living. He is working harder than probably most of us have ever worked in our lives, at least for an extended time. And he is 51 years old.

Think on this the next time you display your lack of concern. Do you think everyone has an engineer's IQ? A salesman's guile? The sense of risk and reward and markets of an entrepreneur? Or the health and energy of a teenager? Or even the simple docility that takes to survive in many office environments?

I believe this job problem is huge, and it isn't going away. It's pretty hard to run a mass consumption economy if the only people capable of generating cash above life's basic necessities are various elites. Henry Ford figured this out 80 years ago. It is still true.

Or maybe America can sell financial services to the Chinese, who will be doing the jobs Americans used to do.

Mikey
 
I was pretty impressed by Clark too. When the floor fell out from under him, he did whatever he could to bring in the paycheck. I cant imagine spending every day driving in the dark delivering boxes of interoffice mail.

This is in line with our old "middle class is disappearing" discussion.

While an upper class can continue to be mass purchasers of expensive goods and services, and there are plenty of service jobs created as a result of that, it falls on the middle class to either try to elevate their skills and knowledge into a higher end job, or bite the bullet and take less money doing menial work.

As mentioned, not everyone can make that leap. And its an unfortunate trend that Joe and Josephine cant aspire to do well, raise a family, and retire comfortably if they arent smart enough or well off enough to obtain higher education.

How well does a two-tier economy work? Didnt a number of european and middle eastern countries over time move to such a model just before they experienced a revolution or fell apart? "Let them eat cake" anyone?
:-/
 
I am no economist but it has seemed to me for some
time that the US needs to concentrate on the few
things we really do well. Leading edge technology
has been the engine that put us on top. We need
to do everything possible to keep our edge. This has
always produced new and unimagined jobs before and
should continue to do so.

My other thought is that the US could be the world's
food basket if trade barriers and transportation issues
could be solved. We know how to grow and process
food better than anybody and we are blessed with the
land to do so. That could be one source of jobs for the
Clark's of our time that could not be outsourced. After
all, China and India can barely feed themselves, let alone Africa.

That's my fuzzy thinking for today.

ZZZZZZZzzzzzz

Charlie
 
Many economists, though, say offshoring is more opportunity than threat because it allows companies to make and sell goods for less, and offer even better jobs than those that are lost. "Offshoring can't explain job loss. It can only explain job switch," said David R. Henderson, a Hoover Institution economist.
Click to expand...
How is offshoring an "opportunity" if you don't have a job - if you don't have a job - it won't matter how cheap something costs, you still can't afford to buy it. And I'd love to hear just what "even better jobs" are being created...I don't think the greeter at Wal-Mart qualifies. :mad:

Well, this article has just further inspired me to stick to my budget this month and make my monthly investment contribution.
 
Truly. Many of the "new jobs" supposedly created are phantoms. A lot of companies are leveraging "productivity improvements" to maintain or even reduce headcount while increasing profits. I remember "productivity improvements" well. Thats where my company took the 15 new headcount I asked for to maintain a reasonable pace and dropped it to zero and asked me to "suck it up", "work smarter" or "prioritize the work".

One of the best parts of my professional career was the moment in time when something completely self destructed, I got called on the carpet for it, put up the powerpoint slide where i asked for the headcount and dollars to avoid the problem (and was turned down), and ACTUALLY had one member of the executive committee say "Yeah, I remember when he asked for that and we zeroed it saying we thought we could live without it...".

At least somebody remembered...

Actually the best moment of my professional career was being called in to yet another executive staff meeting to explain a major #$%@$-up and being asked to "start from the beginning as to what happened".

My response: "First...the earth cooled...then the dinosaurs came...somewhere in the middle of that time period we developed the products and processes we're still using today that created this problem". When everybody stopped laughing, we actually went from "pin the fault on the donkey" to "how do we really fix this?"

This is good, I started a thread and then took it completely off track as well.

Do NOT try this at home, I am a professional...;)
 
Well, *I* can get with the topic. What a heartbreaking story! My roommate recently had to place a call to AOL's help line, and ended up talking with 4 or 5 different people in India. Those tech jobs had so many people flying during the 90's - and today they are getting laid off. This guy Clark sure has hustle. You have to hand it to him. And both he and his wife worked there! What a blow.

Bummer,
Anne
 
Okay folks. As you know my ego and confidence
know no bounds, but a lot of this story/thread
smacks of whining to me. First, re. the guy working
15 hours a day dodging deer at 3 a.m. There are billions
(that's right BILLIONS) who would take any job. Why?
They don't have one, and no prospects either. Used to
be that people pulled themselves up by their bootstraps
(they had no choice). Rugged individualism built this
country. We need more of that and a little less
"Oh poor me!" End of rant!

JOhn Galt
 
I suspect that this is colored by your apparent lack of any empathy, or even an intellectual understanding of what is going on.

The man profiled in this article, Clark, obviously is not expecting anyone let alone the world to give him a living. He is working harder than probably most of us have ever worked in our lives, at least for an extended time. And he is 51 years old.

Think on this the next time you display your lack of concern. Do you think everyone has an engineer's IQ? A salesman's guile? The sense of risk and reward and markets of an entrepreneur? Or the health and energy of a teenager? Or even the simple docility that takes to survive in many office environments?

I believe this job problem is huge, and it isn't going away. It's pretty hard to run a mass consumption economy if the only people capable of generating cash above life's basic necessities are various elites. Henry Ford figured this out 80 years ago. It is still true.

Or maybe America can sell financial services to the Chinese, who will be doing the jobs Americans used to do.

Mikey
Click to expand...


Touchy, touchy, aren't we? I hate to break it to you, but the world does NOT owe the average American a standard of living far above that of 95+% of the world's population. Either you remain economically competitive enough to earn it, you take advantage of your position to get it, or you lose it. Its that simple.

My hat is off to Clark. He jumped into the breach and showed good old fashioned American entrepreneurial gumption. He will make it, one way or the other. I do have to wonder why he wasn't a tad bit better prepared, considering that he clearly foresaw the closing of the plant, but nobody's perfect.

The US has been fortunate enough to build on a virtuous cycle of reinvestment to get on top and stay on top. Personally, I believe this will continue to be the case. Outsourcing has alos been a positive force for the US as a whole, too. The crappy, low-paying jobs that nobody wants to do anyway get sent overseas, and the more challenging and better-paying ones get sent here. The downside is turmoil for workers that get caugfht up in the maelstrom. The upside is that the population as a whole benefits. I do actually have empathy for those caught in the transition, but I have a hard time understanding how anyone who sees all of this going on could fail to prepare themselves accordingly.
 
Johnny -

You're right and I'm with ya. I often say the worst day I ever had was better than one of the better days many people around the world experience.

But you're missing the point.

These folks were working hard BEFORE, and even harder NOW, but now they're making a fraction of what they could make before.

You can only work so hard, improve yourself so much, and pull up so many feet of bootstrap before you run into the limit of what you can make, moneywise.

The point of this story is the limit and opportunity for those who arent brainy or well educated is less than it was and getting lesser every day.

Anne - the good news (I guess) is that indian call center isnt creating any cost savings for AOL. I did some analyses on those before I packed up my stuff and left my old job. The costs are indeed 60-75% lower to run a call center outside the US, but the productivity is less than half of what a US run call center is. Lots of reasons: different culture, language problems, etc. In addition, you create customer satisfaction and frustration problems that simply cant be measured. An angry customer takes away their business, or at a minimum complains about things that would otherwise not have bothered them, and frequently complains to their friends. These companies identify themselves as ones whose management prefers cost over effectiveness. Unfortunately, many companies simply want someone to answer the phone when a customer calls, and at the end of the call to check off a box that says "resolved". When the two measurements are cost and speed to close the call, you get cheap ineffective support that closes problems because the customer gave up or decided to take their business elsewhere.

With the exception of a few specific industry verticals, this productivity/disconnection/language barrier/cultural barrier/distance-time barrier has proven to level the playing field somewhat. Unfortunately many business execs wont look past the short term balance sheet to see that.

But to be fair, the outsourcing companies are working to improve shortfalls, and of course, hoping the other guy screws up is not a good competitive strategy.

But I think the good news is once these outsourcing countries DO fix the problems and close the gap, and the people doing the work get exposed to our lifestyle, they're going to want to be paid more, and they'll spend that money. Thats really the differentiator right now is their lifestyle is so much more like ours of 100 years ago than of today that they can afford to work for less.

I think that'll change. But it might take 10-20 years. And life for the middle class here during that time frame it wont be pretty.
 
No TH, I didn't "miss the point". Man, I could write an essay on this topic as I have very strong opinions about
it (and almost everything else). Alas, I am working
on DIY stuff today (which I hate) and thus am too tired.
Maybe later on ...................

John Galt
 
I work on a large National account and our customer rewrote their contract that we MUST include a specific percent of Global employees, knowing that their salaries are less than 50% of American salaries on this account.
And yes, it did cause layoffs. 

Of course the rate that they are charged probably changed as well.  So it's not only the employers that want to go Global, it's the customers as well.  
 
I work on a large National account and our customer rewrote their contract that we MUST include a specific percent of Global employees, knowing that their salaries are less than 50% of American salaries on this account.
And yes, it did cause layoffs. 

Of course the rate that they are charged probably changed as well.  So it's not only the employers that want to go Global, it's the customers as well.  
Click to expand...

IIRC, E-loan was offering customers a choice between overseas or on-shore mortgage refi processing during the last boom. Off-shore was a few hundred bucks cheaper and a week or two faster. I seem to remember that the vast majority chose to go off shore.

We can wring our hands all we like, but it doesn't change the basic facts of economics.
 
They'll find out that this is no different: you get what you pay for.

Unfortunately some suit with an accounting degree will get promoted and a fat raise for this accomplishment, while the poor sods who have to deal with the service problems will be buried out of sight under 5 layers of bureacracy.

God I love being retired.
 
the good news (I guess) is that indian call center isnt creating any cost savings for AOL. I did some analyses on those before I packed up my stuff and left my old job. The costs are indeed 60-75% lower to run a call center outside the US, but the productivity is less than half of what a US run call center is. Lots of reasons: different culture, language problems, etc. In addition, you create customer satisfaction and frustration problems that simply cant be measured. An angry customer takes away their business, or at a minimum complains about things that would otherwise not have bothered them, and frequently complains to their friends.
Click to expand...

HAH! Actually, that's exactly what my friend did, cancelled with AOL and found a different service, and complained loudly to everyone who would listen about what had happened. (He really got an amazing runaround.)

I agree, though, that this is not a long-term cost-saving process. I am sure you are right that these workers are going to want a raise. Some of the outsourcing involves highly skilled work, and how you gonna keep them down on the farm after they get internet savvy?
 
Look, I have sympathy for people who suffer any sort
of misfortune (except for liberals :) ).

Anyway, I firmly believe that unfettered free enterprise
(including going offshore) will produce the best results
overall/long term. History shows that there really is no
substitute for cutting loose the entreprenurial spirit.
Free enterprise (as I define it) is dead, or at least
comatose. Business is in a stranglehold of government
oversight/overregulation. One of the reasons I opted out when I did. Honestly, for a lot of my career I had fun working. Dealing with bloated intrusive government
eventually took the fun out of it.

John Galt
 
I couldn't help picking up on a slightly different aspect of the article, namely that the jobs that got lost tended to have 'good benefits', which meant retirement and medical plans. The jobs that are replacing them might pay the bills after a fashion, but they aren't putting these folks in shape for the long run.

Of course, like everyone here grappling with our own 'long run' retirement finances-- nest egg, SWR etc etc. I am sympathetic with the employers' sense of despair, too. Properly funding a pension plan and long term medical benefits looks like a herculean task. So the private sector's solution seems to be to restructure, eliminate, outsource, offshore, downsize the pension benefit or anything to make ends meet and dodge the bullet of providing for retirees in perpetuity.

The only sector that isn't doing this seems to be the public sector -- in most cases you can't outsource road work or sewer work or your own city hall. (though there might be a good business opportunity there for some enterprising soul!) As a result, playing futurist for a moment, I'd predict a meaningful (5-10%+?) expansion of the % share of GDP going to government over our lifetimes as we start to look more and more like a European economy. 'Eurosclerosis' will follow as night follows day. (Public Sector jobs simply don't 'create wealth' the way private sector companies do, though of course the public sector jobs do create/maintain the hospitable environment in which the private sector can create wealth). Even if the _number_ of public sector jobs doesn't increase, the relative costs of these jobs will skyrocket (paying for properly funded pensions and medical benefits) while the private sector continues to offer punier terms and benefits, creating this shift in overall size of public sector vis-a-vis private.

Not advocating we 'do' anything about this --I love my public sector as much as anyone, but just noting that this trend seems to have legs (momentum and sustainable, multiple causes) and won't turn around any time soon. Workers or Investors seeing this could presumably make adjustments that would help them benefit over the long run. Get a public sector job, for instance! (And, yes, for investors, I was going to advocate over-weighting emerging markets again, but I'll leave the 'what to do about this' to wiser heads!) ;)

ESRBob
 
Good observation, Bob.   Public sector wages, benefits, and spending won't go down until something implodes.   Which actually may happen pretty soon on a small scale, as many municipalities are close to bankrupcy.

Take a look at San Diego, for example.   During the dot-com bubble, they ratcheted-up their employee benefits to the max.    Employees are taking huge cash-outs, getting close to full salary and full medical at retirement, and retire early, often to take another public sector job!    Now that tax inflows have been reduced, they're in a nasty bind, but I suspect they'll find a way to keep the benefits.
 
I couldn't  help picking up on a slightly different aspect of the article, namely that the jobs that got lost tended to have 'good benefits', which meant retirement and medical plans.  The jobs that are replacing them might pay the bills after a fashion, but they aren't putting these folks in shape for the long run.
Click to expand...

I think that the root problem here is the medical system in this country. Medical inflation rates have been in the double digits for years. Clearly this cannot continue forever, and employers are crying uncle and doing what they have to to shed some of the burden. As long as mredical inflation rates are significantly above general inflation we have a problem. Unfortunately, this problem is exacerbated by the fact that medical insurance is largely tied either to employment or gummint programs (Medicare, etc.). I don't know what the solution is, but clearly we need to do something before the medical system implodes or the majority of Americans have little access to healthcare.
 
Take a look at San Diego, for example.   During the dot-com bubble, they ratcheted-up their employee benefits to the max.    Employees are taking huge cash-outs, getting close to full salary and full medical at retirement, and retire early, often to take another public sector job!    Now that tax inflows have been reduced, they're in a nasty bind, but I suspect they'll find a way to keep the benefits.
Click to expand...

Working in the public sector (WA state), I know this is not the norm. We haven't had a COLA in almost 5 years, don't have any sort of matching 401k, and the 'great pension' that everyone seems to think we have is only 1% * Service Years * Avg Final Salary. Our health benefits have mirrored everyone else's: reduced benefits, increased premiums. To make things better, classified staff are now able to be outsourced through a competitive bidding process in the new classified system...So EDS for example could go to a university or large city and put in a bid to take over the IT operations, putting those classified workers out of work...So what used to be the ONLY benefit of working in the public sector (relative job security) is now gone as well. So while this post may seem like a rant, it isn't, rather I just wanted to provide a reality check to the notion that public sector workers are somehow getting 15% raises each year and are immune from the current economic realities.
 
The 'free market' has no heart. These examples aren't new. What's different is that now more and more higher end jobs are being affected. As higher end jobs are lost, people start to wake up to the issue -- but it's definitely not new. There's been a large underclass in the US for generations.

My guess is that the most probable outcome will be that we enter a period of economic recovery, and that job growth and income begin rising again.

If this does not happen, then people will demand more and more services from the government as they lose benefits that were provided by the free-market system. In this case, as ESRBob predicts, more jobs will be available in the public sector.

This is basically what happened with the "New Deal' under FDR. Faced with similiar issues Germany turned to facism which was fueled by the fear of communism. Declining wages, unemployment, nationalism, and fear can be explosive in combination.
 
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