<Full job recovery is years away>
And wage recovery is even further away. When unemployed people find a job, they often have to accept much lower wages than their previous job. That's because China graduates more engineers each year than the U.S., and Chinese engineers are happy to work for 100$/month. They also speak English, and are just as smart and productive as Americans.
Many interesting graphs here:
theoildrum.com
The one labeled "A history of world GDP" (about the 10th graph) is fascinating. It shows that, for 18 of the last 20 centuries, China and India combined have produced 1/2 the world's GDP. The last 2 centuries are an outlier, a bizarre deviation....and we are in the process of returning to the LT norm. Our grandchildren are going to live in a world where the U.S. doesn't matter, and the center of the world (economically, politically, militarily, socially, culturally, in every way you can think of) is in Asia.
One of the implications, is that today's unemployment rates in the U.S. are part of a secular trend, not a short-term cyclical problem. |
