Tuesday, April 24, 2007

Simply Consumers

One Sunday morning while back, I heard an interview with Secretary of Labor Secretary Elaine Chao. I was disappointed by this smiling, fast talking lady who would reply to every inquiry with answers like "No, thats not true, income as a function of total compensation has gone up", or "No thats not true, peoples real take home income is actually higher", or "No thats not true, we have created more jobs in the last two years than we have lost", or "No, that not true, we are actually retaining and creating more high tech jobs.", or "No, that not true, the new jobs being created are actually higher income jobs".

Secretary Chao was being asked rather simple questions, such as "What do you tell someone whose income has not kept up with the rise in prices?", or "How do you reply to those who say that good paying jobs are being lost to foreign manufacturers?"

Now, I understand the problem with providing a real answer to questions like those. Secretary Chao is a not a psychological counselor and she is not there to dish out personal sympathy when her job deals with huge numbers, long term trends, or economic/demographic shifts or whatever the Big Picture is. But the simplistic nature of her replies ended with a final statement that the future for the United States job market was high tech jobs filled by a more educated workforce.

This has been said many times, mostly to answer those who say we are losing our manufacturing base in machinery, automobiles, clothes manufacturing, appliances or whatever. I sort of look at like this....

1. The relative economic development and different living standard of China, southeast Asia, or India means that they will be manufacturing the same quality of goods for less cost, compared to what we produce ourselves in the US.

2. Market forces will cause the flow of manufacturing jobs into countries with lower labor costs.

3. The US loses those jobs.

4. In order to replace these lost jobs, the US economy needs to develop jobs that the lesser economic countries cannot yet do, and the US labor force needs to get more educated in order to perform those jobs.

Here are some other observations, not too sure about their premises:

A. A person I know says the future of the US is not in manufacturing, but in providing management expertise to the rest of the world. "We need to educate people to be business managers, venture capitalists, lawyers, investment bankers".

B. It is said the the flood of very inexpensive goods from various places is a good thing, because it leaves more money in the pockets of US consumers.

C. The only way for American companies to remain competitive is to lower labor costs in step with foreign manufacturers, which means relocating to a foreign labor market, or by importing exploitable foreign labor to the US.

At this point, I could rant about the destruction of the American downtown, or the unfair competition between workers from countries with vastly different standards of living, or illegal immigration and its effect on wages. Maybe later.

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High Tech and Higher Education

The high tech jobs talked about are generally unspecified. What is high tech anyway, programming a computer? Designing a new airplane? Maintaining the automated assembly line that replaced 20 factory workers? Being a medical assistant? Nanotechnology? In what way does being an investment banker help create wealth except thru speculation? And besides, what is it that makes being a cabinet maker so much less glorious or viable in this modern high tech economy?

Maybe I am missing the point. Maybe, despite using the words "high tech" jobs and "better educated workforce", Secretary Chao meant something different. Maybe she meant "salesperson" or "medical assistant" who use computers and electronic cash registers instead of a hammer or a plow. Maybe she meant "retraining" instead of "higher education". Maybe it was all crap, easy talk to get thru a 10 minute interview, you know, toss a few terms out there like "high tech" and "better education".

Or, maybe I am really, really missing the point. Maybe its all about smoothing out the United States economy so that it can be a more reliable, predictable source of income for corporations operating on the mega international level.

Bottom line is that there are not enough really good paying high tech jobs to replace the basic manufacturing jobs being lost. And nobody is going to start a vast retraining of the public in order to fill jobs like that anyhow, because we don't have a shortage of jobs for folks with high school education. Walmart and Home Depot are huge employers, but now all those people are selling stuff instead of fabricating it, or they are working for a huge store instead a a buncha small ones, the smaller ones being owned by individual people instead of faceless shareholders who are actually more important to upper management than the folks spending money at the cash register.

Lets start out again with a different premise, which is this. Most folks in the US would probably be happy to spend 12 years in school, then get out and start working, as long as there was someting to do that would pay decent.

Lets add premise #2, which is this. If we keep on losing manufacturing jobs, we will forget, as a nation, how those jobs are done.

The amount of training to become partially skilled in a trade, or several trades, can be absorbed by kids by the time they leave high school. Further education in college should be directed towards learning basic management and financial skills to open and run a business based on those trades. Higher education has always had a place when providing a ready supply of engineers, medical professionals, and lawyers. The idea that even more universal higher education is the solution to our problems doesn't make any sense to me. It might make sense to those who run the schools, since education is a business in itself, and for the most part, not subject to competition.

Most of us have a doctor or a dentist. Many of us have an accountant, a favorite car mechanic, maybe even a lawyer. We know these people personally, and we have a business relationship that provides a mutual benefit. Its a system that is easy to understand. But how many of us have a business relationship with a woodworker, or a machinist, or a farmer? If you had a problem around the house, and you didn't have the yellow pages, who would you call?

The system described by the folks who talk about higher education/high tech is a system too big to understand. One cannot individually grasp how it works. It is too far removed. One cannot participate in this big system except as a consumer. Why am I buying forks and spoons made in China? Why are these new flourescent lightbulbs all made in China? Who actually grows the spinach that is in this resealable bag that I just purchased at the mega grocery store? And why is everything suddenly available in resealable bags? Why do I know NOTHING about where ANY of this stuff comes from? Why am I being asked to TRUST those who say its okay for me to buy it, to use it, to eat it?

I think we need to have young people who learn trades, and the trades should be evenly dispersed throughout the educational process. Everyone should know people who know how to work with metal, or know how to fix basic machinery, or do woodworking, or normal household repairs. Everybody themselves should have some skill to do something, whether its weaving, or growing food in a garden, or knowing how to make paper from fibers. Every neighborhood should have someone who knows how take old scrap iron or bronze, smelt it and pour castings.

These are things that are completely gone in most areas of the United States. Don't tell me its better for us to simply be a country of wage earners who supply a ready steady supply of money as consumers to a system where we know nothing about where stuff comes from. It is absolutely the future of the United States that we be able to supply our own needs locally through the efforts of skilled people. The higher tech the job is, the more likely it won't be needed when the economy in China crashes anyhow, and we will have to take care of our own. Hell, look what happens to cell phones during a widespread power outage. All the higher education in the world isn't going to get them going until some electrical power worker goes out and fixes the grid.