Reuters article: America Global Sick Man

[BigBagel]

http://www.reuters.com/article/idUSTRE6BF28720101216


A must read on our current economic and political condition.

[DSpencer]

Re: Reuters article: America Global Sick Man

But fixing America's education system for jobs of the future plus retraining unskilled workers would require bipartisan consensus, a long-term commitment by America's political class and funding to make it happen. In today's bitterly divided Washington, that is a tough sell.

Does the author not realize that our politicians are fundamentally incapable of "fixing America's education system"? It's not about being "bitterly divided". It's about being corrupt, out of touch, and generally inept.

Also, the retraining unskilled workers sounds nice, but as always seems to lack details. What kinds of jobs will they actually do? How many jobs are available in these new areas? Will this retraining make them competitive with a worker in China who would be ecstatic to do the same job for $5 an hour?

Per capita income in the US is also higher than Germany if I'm not mistaken. Looking to them as a model for how to increase wages seems like going the wrong way. Maybe our numbers are so skewed by the top percentile that I'm wrong. I honestly don't know.

[flintlock]

Re: Reuters article: America Global Sick Man

Also, the retraining unskilled workers sounds nice, but as always seems to lack details. What kinds of jobs will they actually do? How many jobs are available in these new areas? Will this retraining make them competitive with a worker in China who would be ecstatic to do the same job for $5 an hour?

Excellent point. I hear this all the time and yet nobody explains to me how you are going to take that average American moron and teach them engineering or any other globally marketable skill. Only people who have never worked WITH these people would think you could do this. Its not about where they went to school, or for how long. It's about the lack of raw material and also the lack of basic social skills that these people have. Unless you include finishing school in the mix, most of these types are not going to be competing for anything other than being first in line for tickets to the next monster truck rally. I hate to sound harsh, but most educated Americans have never spent much time around the "average" American working class slob. I have and I know better. These people ridicule those with an education. Factory job, construction, tech job. No problem. Just don't expect to work any miracles in less than a generation.

[DSpencer]

Re: Reuters article: America Global Sick Man

...Only people who have never worked WITH these people would think you could do this...

I hate to sound harsh, but most educated Americans have never spent much time around the "average" American working class slob....

You don't think that Bill Gross and some wealth management executive spend much time around blue collar factor workers...?

That's part of what I found amusing about the article. It's quite long and includes quotes from/ interviews with: blue collar workers, union bosses, politicians, "economists", and investment banker/wealth manager/bond fund types. There doesn't seem to be much/any real input from the owners and managers of the manufacturing companies. Or what about the employers from the industries that supposedly need workers, but just can't find people with the right skill set? If they exist, couldn't they best explain what skills these workers will need? I'm not sure if this is just crappy journalism or intentional bias.

One of my favorite jobs was driving forklifts in a warehouse. It felt like honest work and there were some good and at least a few fairly bright people there. But I'd be lying if I said there weren't many people who hated their job/boss/company/life and had a terrible attitude towards about everything. The idea that you could start teaching them algebra, physics and geometry and next thing you know they are making 70k as an engineer is absurd.

[shiny!]

Re: Reuters article: America Global Sick Man

The article seems to assume that China and developing countries in Asia will continue to manufacture all the goods consumed in the USA, and that the only American jobs available will require higher math skills and engineering degrees. I disagree. With Peak Cheap Oil here and some serious oil shocks coming, it will eventually be more cost-effective to manufacture a lot of our own goods for local and regional consumption. Especially when people in China and developing countries start demanding higher wages.

For instance, Arizona grows a lot of cotton. Instead of shipping our cotton to China and having them make it into fabrics and clothing which they sell back to us, we could convert empty factories and warehouse space right here into fabric and clothing manufacturing plants. Using rail for transport once the price of oil is at a premium, our manufactured cotton goods could cost less for domestic consumption than the same goods imported from China.

[Starving Steve]

Re: Reuters article: America Global Sick Man

The best wage that I ever received in my lifetime was when I was a kid, working at the USP Cannery, on Race Street in San Jose. That was back in the early and mid- 1960s, when there were unions, and one didn't have to be a genius to get a good job.

I used to stack DKID cans ---- the canning code was DKID, for some kind of fruit packed at the cannery--- all night long, in the warehouses. I used 1960s hi-tech: a canning-fork that would allow one to lift 12-cans at the same time, using one's arms.

In terms of gold, that was my highest wage in my life. Plus, I had a union to protect me---- not labour aristocrats, but little me, Starving Steve.

The job was boring, but I used to think of what I could buy with my pay for stacking cans for one night, all by myself. I could buy something like a roll of silver dollars or a gold sovereign.

And when the first rays of a California dawn would shine through the glass of the warehouse, I was rich. Each night, another roll of silver dollars, or another gold sovereign.

I took the train from San Jose to San Francisco and bought gold sovereigns at the foreign-exchange near Union Square. I think it was on Sutter Street in SF at that time. That was in the early 1960s. People used to think I was nutty, but I would stare at my gold sovereigns on the way back to San Jose on the train.

Silver dollars were available at all of the banks, everywhere. They were the same as a dollar bill. In the Western states, silver dollars were everywhere until LBJ stuck his nose into Vietnam. Then the trouble began, and the standard-of-living went to hell in America, slowly with inflation.

The USP cannery is no-more. It was torn-down decades ago. San Jose evolved into a centre of chip-manufacturing, and to-day San Jose and the Santa Clara Valley are the centre of B.S, hype about toy-phones for the world's rich, hype about solar-energy paint, and over-all decline. But some techies still drink their lattes in Palo Alto and Los Gatos, as if nothing has happened.

The old Falstaff Beer brewery was not far away from the USP cannery. It is gone now too. Everything has changed. Anyone could find work in the early 1960s, and they didn't have to be educated in anything but just standing and breathing-air.

[c1ue]

Re: Reuters article: America Global Sick Man

With Peak Cheap Oil here and some serious oil shocks coming, it will eventually be more cost-effective to manufacture a lot of our own goods for local and regional consumption.

My view is that offshoring is a net negative activity for many types of consumption, but the price of oil isn't the major factor.

The net negative is not based on the price of oil, but rather in the amount of income derived at the state/federal (from taxes) and at the individual level (wholesaler/retailer/manufacturer/service providers/suppliers).

Even with oil at $500/barrel, it would STILL be cheaper to manufacture in a low wage nation and ship it over by container.

The Emma Maersk - 11000 to 15000 twenty foot container equivalents, let's say 12500 - consumes around 2500 barrels a day and requires about 10 days to sail from Shanghai to Los Angeles.

The cost at $80/barrel is about $160 per container. If the return trip is empty, the cost is $320/container.

http://en.wikipedia.org/wiki/Emma_M%C3%A6rsk

http://www.guardian.co.uk/environmen...ouse-emissions

The average value of a container is around $30000 with many estimates far higher.

http://www.aimu.org/Presentations/Cowie07.pdf

At $500/barrel, the oil cost on the ocean transport is 6.7% of TEU average value as opposed to 1.07% of TEU average value. Significant, but unlikely to offset the labor component of the TEU contents ($2000 worst case = 500/80*320).

That $2000 worst case represents only about 200 hours in the US vs. at least 1000 hours at average wages in China.

[shiny!]

Re: Reuters article: America Global Sick Man

My view is that offshoring is a net negative activity for many types of consumption, but the price of oil isn't the major factor.

The net negative is not based on the price of oil, but rather in the amount of income derived at the state/federal (from taxes) and at the individual level (wholesaler/retailer/manufacturer/service providers/suppliers).

Even with oil at $500/barrel, it would STILL be cheaper to manufacture in a low wage nation and ship it over by container.

The Emma Maersk - 11000 to 15000 twenty foot container equivalents, let's say 12500 - consumes around 2500 barrels a day and requires about 10 days to sail from Shanghai to Los Angeles.

The cost at $80/barrel is about $160 per container. If the return trip is empty, the cost is $320/container.

http://en.wikipedia.org/wiki/Emma_M%C3%A6rsk

http://www.guardian.co.uk/environmen...ouse-emissions

The average value of a container is around $30000 with many estimates far higher.

http://www.aimu.org/Presentations/Cowie07.pdf

At $500/barrel, the oil cost on the ocean transport is 6.7% of TEU average value as opposed to 1.07% of TEU average value. Significant, but unlikely to offset the labor component of the TEU contents ($2000 worst case = 500/80*320).

That $2000 worst case represents only about 200 hours in the US vs. at least 1000 hours at average wages in China.

Well, darn!