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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (14355)	10/30/2004 2:40:14 PM
From: GraceZ	Respond to of 116555

If you could answer how we've weathered the loss in manufacturing supremacy in the world while still having 142 million jobs and quadrupling our standard of living over the last sixty years then you'd know the answer to how jobs can be lost and created at the same time. Surely the job you lost when the bubble burst wasn't an assembly line job was it? I can't tell you where or when technology will create new jobs in this country (and neither can Greenspan or George Bush). I just know that throughout US history we've continually shed lower productivity jobs and replaced them with higher productivity jobs. I don't expect that to stop any time soon although, as I said before, there will be many individuals who will get stuck, will not be able to adapt. This is as true for college educated software engineers as it was for high school educated steel workers and auto workers who lost their jobs to automation and low cost labor abroad. Few will reach their former income levels but the economy on the whole will continue to create those jobs which do pay more if productivity continues to rise. re:poverty Actually I answered the low wage problem in another post. The government indirectly subsidizes industries which employ low wage workers keeping more low productivity industries alive and effectively making more fall into the category of "working poor" like the retail slaves ThirdEye is worried about. Message 20687338 "The very worst aspect of Socialism is that it prevents this simple market adjusting mechanism from occurring because with the best of intentions people vote to try to take some of the pain away from those with low skill, low wage jobs. The same distortions and misallocations occur when whole industries are subsidized directly. Tax schemes which take money from high wage earners and direct it to low wage earners essentially do the same thing that direct subsidies do, they subsidize whole industries that employ unskilled low wage workers. Without the tax benefits bestowed on these low wage workers, the various industries would have to pay a higher wage in order to attract employees or employ more labor saving technology or employ capital equipment which compensates for the employee's shortfalls or finally move to a country which has a lower cost of living."