Your ideas/thoughts on what should to be done to return to healthy economy grow.

[LOL!]

I think it is not uncommon for college-educated folks to move a little bit even though they have a preference for being near family and friends.

But less educated folks really do not just pick and move for jobs as much. They just cannot afford it for the most part.

There was that exodus in the 1980s from Michigan to Texas though.

 

[samclem]

ie I get frustrated looking for jobs by trying to figure out where jobs may or may not be posted.. once you apply for job is it really actually open or already filled or opened just to get an H1B visa (ok I know a few tech companies that clearly do this)... and you have no idea how much they even think to pay, what level of job it really is, if re-location is even an option... etc.. ie your not getting the best candidates when no one can find the job in the first place.

Do people know how much incredible information exists now about employment opportunities compared to 15 years ago? The night-and-day difference compared to a generation ago? Heck, as late as the 70s, people seldom knew what jobs were available outside their local area--they'd often have to relocate to a place where they'd heard the opportunities were good and then start working the local networks.

I'm sure there are still gaps out there in the information availability, and making the search tools more efficient would help a lot of people (job seekers and companies alike). But finding a job is never going to be like buying a toaster on Amazon,

 

[Gone4Good]

One thing I always think about is that in Europe, labor is fluid, people take other jobs in other countries and move with ease place to place wherever a good job can be found.. here in the US, that just doesn't happen.

There's so many more barriers to migration in Europe than in the U.S. . . . language, culture, even xenophobia or, more politely, nationalism. Someone moving to Florida from Georgia won't face the same job discrimination that someone moving from Spain might experience in Germany.

The creation of the E.U. has removed a bunch of official barriers and improved things there. And it's also true that people in the U.S. are moving around less than they once did, but we're still by far the most mobile population.

 

[Winemaker]

We may be no better than France, but we're still no better than where we were.


In 36 States, Unemployment Rates Still Linger Above Prerecession Levels - Real Time Economics - WSJ

 

[Gone4Good]

We may be no better than France, but we're still no better than where we were.


In 36 States, Unemployment Rates Still Linger Above Prerecession Levels - Real Time Economics - WSJ

We're actually a lot better than we were when national unemployment was 10%.

Not sure it's fare to compare the unemployment rate of a recovery that's still in process with the lowest rate achieved during the last cycle.

 

[VFK57]

We're actually a lot better than we were when national unemployment was 10%.

Not sure it's fare to compare the unemployment rate of a recovery that's still in process with the lowest rate achieved during the last cycle.

It is not quantities of jobs openings but quality of jobs/wages. Many middle class paid jobs were replaced with low paying service jobs. Such wage frequently requires Government assistance for a family with one and, in some cases, two incomes. I have a friend whose job in IT department (Mega-corp) is going to be outsourced this year. He was warned about it in Jan 2015. An outsourcing company has offered him about 50% of his pay with far worst benefits. He declined the offer but has a hard time to find anything for over 1 year. One of my former co-worker (HVAC - Facility Tech) who is younger than me was also outsourced and took 40% cut with almost no benefits in comparison to what he had. That is type of jobs recovery we have currently.

 

[Gone4Good]

It is not quantities of jobs openings but quality of jobs/wages. Many middle class paid jobs were replaced with low paying service jobs.

To the extent this is true, it has been true for a very long time. I'm not certain it's really a point of distinction between "this recovery" and the past several recoveries.

 

[VFK57]

To the extent this is true, it has been true for a very long time. I'm not certain it's really a point of distinction between "this recovery" and the past several recoveries.

I think the loss of manufacturing jobs to overseas much cheaper labor is in direct relation with lack of middle class paying jobs here. In 1992 recession a company I worked for cut 10% pay of every employee making more than $35K and I had 3 offers with much higher pay to choose from. Try to do it currently and you are going to face similar to my friend "opportunities". During my carrier I worked for 3 major manufacturing companies and 3 contractors companies. Two semiconductor companies moved large portion of the production over seas (China, Indonesia), closing plants here and a 3rd company (hard drive disks) completely closed production here moving all facilities to Malaysia. It is not just automation - robotics what reduces middle class jobs in US but relocation of manufacturing plants to countries with cheaper labor, less taxes, less regulations etc. The process was going on for at least 20 years (may be more) and no politician / President did anything to stop it.

 

[Gone4Good]

I think the loss of manufacturing jobs to overseas much cheaper labor is in direct relation with lack of middle class paying jobs here. In 1992 recession a company I worked for cut 10% pay of every employee making more than $35K and I had 3 offers with much higher pay to choose from. Try to do it currently and you are going to face similar to my friend "opportunities". During my carrier I worked for 3 major manufacturing companies and 3 contractors companies. Two semiconductor companies moved large portion of the production over seas (China, Indonesia), closing plants here and a 3rd company (hard drive disks) completely closed production here moving all facilities to Malaysia. It is not just automation - robotics what reduces middle class jobs in US but relocation of manufacturing plants to countries with cheaper labor, less taxes, less regulations etc. The process was going on for at least 20 years (may be more) and no politician / President did anything to stop it.

That all sounds right to me.

I think for a long while everyone accepted certain truths about the way the economy worked - free trade makes us richer; a rising tide lifts all boats; deregulation helps the economy grow; creative destruction creates more jobs than it destroys; etc.

Now with the benefit of hindsight, we can raise serious questions about those truths. The rising tide didn't lift as many boats as we thought it would. Free trade may be a contributing reason why and so too might increasing automation. Deregulation, particularly of banking, can cause more harm than good. Etc.

Just when we think we know how the world works, the world goes and changes on us. And so we have to rethink the conventional wisdom.

Towards that end, I saw this interesting response by Stephen Hawkings in a reddit forum this morning when he was asked whether he's worried all our jobs will be replaced by robots . . .

If machines produce everything we need, the outcome will depend on how things are distributed. Everyone can enjoy a life of luxurious leisure if the machine-produced wealth is shared, or most people can end up miserably poor if the machine-owners successfully lobby against wealth redistribution. So far, the trend seems to be toward the second option, with technology driving ever-increasing inequality.

His is a very old argument. One we thought was convincingly refuted. But perhaps we were too hasty in that conclusion.

 

[Meadbh]

Maybe it is different this time.

Is this as good as it gets? - The Globe and Mail

 

[samclem]

I think for a long while everyone accepted certain truths about the way the economy worked - free trade makes us richer; a rising tide lifts all boats; deregulation helps the economy grow; creative destruction creates more jobs than it destroys; etc.

When I see arguments against these points, which I'll admit are increasingly in vogue, they almost always focus on only one part of the total system--usually the perceived adverse impact on workers in the developed economies. That makes the case an easy one, but conveniently avoids the huge improvements in living standards for the majority of the world's population who don't live in the developed world. And when they (as is often the case) begin their case studies with a post-WWII US labor market which was at its economic zenith, the errors in the argument become more evident.

I would truly like to see a well-researched and intellectually rigorous study that shows that protectionism and mercantilism produce more overall wealth than free markets.

This is all distinct from the discussion of the increasing "power" of capital in producing wealth (relative to the ability of labor to do the same)--recently popularized by Piketty and his adherents. Even after accounting for major errors in his data and the need to re-look at his conclusions necessitated by the burst of the housing bubble, there may be something to his argument. For that, we need to look closely at that rising tide, and why more people have no boats. If they used their "boat money" to pay for cable TV, that would be something worth noting.

 

[VFK57]

Social unrest often happens of unbearable hardship of lower classes in poor economic conditions. In the East many countries use terror to control it. On the other hand Western Democracies have social security via welfare, housing assistance, food stamps etc. However in weak economic conditions (in our case, I think, it caused in big part by the Globalization), the lack of collected Taxes by the Government (low pay vs middle class pay) causes chronic budget deficit and growth of National Debt what eventually may lead to much greater damage to our financial system and crises bigger than 2008. Large portion of our Debt is own by the Fed Reserve which issues new money and buys Treasuries or other assets they need in order to keep stable economy (at least from 2008 till 2014). Like in my original post I think that return of large portion of lost manufacturing jobs and services (like IT) back to US may resolve our growing problems, the question is how to do it. Of course it is what I think and I could be wrong.

 

[imoldernu]

30 hour work week.

History of the 40-hour workweek - Business Insider

 

[Gone4Good]

When I see arguments against these points, which I'll admit are increasingly in vogue, they almost always focus on only one part of the total system--usually the perceived adverse impact on workers in the developed economies. That makes the case an easy one, but conveniently avoids the huge improvements in living standards for the majority of the world's population who don't live in the developed world. And when they (as is often the case) begin their case studies with a post-WWII US labor market which was at its economic zenith, the errors in the argument become more evident.

It's certainly fair to argue that trade has helped raise global income levels and helped ameliorate world poverty.

But it's also fair to say that the original argument in favor of trade wasn't that it was a zero sum income transfer to poor nations. Everyone believed that trade benefited all participants, poor and rich alike. That last bit is increasingly coming into question.

Of course if our primary concern is helping the world's poor, then we could do far more for them by simply opening our borders and letting them come and work here directly.

 

[Gone4Good]

Even after accounting for major errors in his data and the need to re-look at his conclusions necessitated by the burst of the housing bubble, there may be something to his argument.

I have no dog in the Piketty FT fight, but if you care, Piketty did respond to the FT article you linked to.

The Economist summed up the spat thusly . . .

One suspects that Mr Giles will not be satisfied by [Piketty's] response, and the discussion is likely to continue. But increasingly the battle seems to be one over methodological choices and data interpretation rather than major data errors or fabrications, as the initial FT work suggested. As for outstanding issues, better data and further research will reveal whether Mr Piketty's analysis is too pessimistic—or the opposite.

 

[samclem]

Everyone believed that trade benefited all participants, poor and rich alike. That last bit is increasingly coming into question.

Those questioning it owe a suggested substitute. We've attempted to tariff and protect ourselves into prosperity before, and it didn't turn out very well. So, I'd imagine the "questioners" will either propose a renewal of that approach using "better tools" or some sort of international redistribution scheme that brushes lightly over the issues of private property rights and challenges posed by human nature (linkages of work to reward and all that). But, there is always something new under the sun.

Voluntary trade benefits both buyer and seller (else neither would engage in it). Trade free of tariffs, restrictions, and other "drag" improves the efficiency of markets and the assures resources (capital, labor, etc) are put to highest use. In the aggregate, it benefits all. But that's not to say that that every entity benefits when trade is free of restrictions. The sole concrete contractor in Smithtown benefits greatly from Smithtown's "municipal buy local" ordnance, selling substandard concrete at 50% markup to the city. So do the employees of that contractor. But those putting up buildings using that concrete, those paying taxes in Smithtown, those other concrete sellers in nearby towns--everyone else loses. And, in the aggregate (ha!), there is less wealth than if the markets had been free, because resources are being used less efficiently.

 

[Gone4Good]

Those questioning it owe a suggested substitute.

It's not a matter of questioning all trade. I think the question is whether trade among nations with widely different labor prices and protections is as generally beneficial as you assume. Sure, we get cheaper stuff, but when real median personal income declines - as it has in the U.S. over the past decade and a half even adjusted for all that cheap stuff - it's worth challenging those assumptions.

And we agree that trade is widely beneficial. But just because it is widely beneficial doesn't mean it is beneficial in every instance.

And even if a specific trade relationship is beneficial in aggregate, it still may not be desirable if those benefits accrue to a small fraction of the population while the remainder experience lower wages as a result.

Meanwhile voluntary trade between a shopper in Megamart and the hugely complex international system that puts products on store shelves tells us nothing about the dispersion of benefits. The shopper can't possibly know that saving 13 cents on a product might cost him 25 cents in lost wages. Just because he thinks he's getting a good deal doesn't mean he's actually getting a good deal.

I'm not saying definitively that all or even any of this is true. All I'm saying is that the theory of trade advanced in the 80's and 90's doesn't seem to match the reality of the world in 2016. And good science dictates that when empirical evidence yields results that differ from theory, it's wise to revisit the theory.

 

[samclem]

Sure, we get cheaper stuff, but when real median personal income declines - as it has in the U.S. over the past decade and a half even adjusted for all that cheap stuff - it's worth challenging those assumptions.

The good news, even from a parochial US perspective, is that median household incomes are headed in a good direction since the post-recession hit and are just about back to where they were 15 years ago on an inflation-adjusted basis.

But, again, we are just looking at one country.
Notional and for illustration only: If annual median incomes declined by $500 per family in developed countries, but that was accompanied by a 25% increase in median family incomes in the least developed countries, is the world worse off? If an average family in the US or Germany has to wait 3 additional months before replacing their car, but thousands of families get electricity in their homes for the first time, has the world experienced a net increase or decrease in prosperity? In happiness?

 

[Gone4Good]

If an average family in the US or Germany has to wait 3 additional months before replacing their car, but thousands of families get electricity in their homes for the first time, has the world experienced a net increase or decrease in prosperity? In happiness?

I don't disagree with your utilitarian argument in favor of trade. But it is a highly unusual position to take with regard to crafting a nation's policy.

As a test of how much we really support this kind of approach to policy we might ask how willing we are to extend it to other areas. Are we willing, for example, to use "the needs of the many outweigh the needs of the few" as the basis for our immigration policy too, or just trade?

 

[sanfanciscotreat]

Before this thread closes, I'd just like to say, "please stay away from my pieces of the pie." Thank you for your support.

Which pieces do you want?

 

[sanfanciscotreat]

I think it is not uncommon for college-educated folks to move a little bit even though they have a preference for being near family and friends.

But less educated folks really do not just pick and move for jobs as much. They just cannot afford it for the most part.

There was that exodus in the 1980s from Michigan to Texas though.

There was also a large historical migration of minorities from south to north for union jobs. Most have now retired and moved back to MS, AL, AR, LA, GA.
Automation and moving jobs overseas have eliminated those jobs for minorities.

 

[samclem]

As a test of how much we really support this kind of approach to policy we might ask how willing we are to extend it to other areas. Are we willing, for example, to use "the needs of the many outweigh the needs of the few" as the basis for our immigration policy too, or just trade?

With regards to immigration, some points:
-- There are practical limits to how many of the world's poor can be smoothly assimilated into developed economies. This lifeboat is only so big, no one is well served when the whole cruise ship tries to climb in.
-- There are political and cultural limits to how many of the world's poor can be brought into developed countries. Ms Merkel could tell us all about that, but we don't need to look beyond our own borders to see how it is already affecting US politics in negative ways.
--Does it enrich Botswana when their most industrious people migrate to the developed world? Or would it better for Botswana for them to stay there and develop businesses, with all the ancillary benefits for other Botswanans?

I think it is more practical to bring development to poor people than to bring poor people to the development.

 

[Gone4Good]

As a test of how much we really support this kind of approach to policy we might ask how willing we are to extend it to other areas. Are we willing, for example, to use "the needs of the many outweigh the needs of the few" as the basis for our immigration policy too, or just trade?

With regards to immigration, some points:

I'll take that as a no.

 

[samclem]

I'll take that as a no.

Okay. The rationale is there for anyone to use in deciding which policy best serves the "needs of the many."

 

[Gone4Good]

Okay. The rationale is there for anyone to use in deciding which policy best serves the "needs of the many."

That's why they're called rationalizations.