Where Have All The Jobs Gone? By Barbsright

I saw an interesting graph, on Dr. Krugman’s blog, showing that in 1993 the top 20% of incomes stated to increase at a much higher rate than in past USA history. I would blame both NAFTA, and changes in the USA tax code for stock and bond investments for this change. The USA’s government is responsible for selling out the middle class. There is no doubt in my mind that the problems we are facing are due to these two economic policies with their ‘designed in defects’. 40% of the USA’s workforce is unemployed, and it is not the people’s fault but rather the federal government’s.

6 thoughts on “Where Have All The Jobs Gone? By Barbsright”

  1. An economist would say that people respond to incentives. The explosion of granting stock options for higher-paid employees (over a million dollars) can be traced to the disallowance of deductibility of corporate salaries over a million dollars.

    I live in the city with the second-cheapest cost of living in the United States. It had the seventh-cheapest cost of living in 2013. The fastest growing crime has gone from theft from non-merchant (things like pulling up to someone’s house and cutting out a section of their chain-link fence so that it can be sold as scrap to get a few dollars, to second-degree burglary (breaking into houses, which seems like it ought to be first-degree, but first-degree burglary requires use of a weapon). A lesser, though growing, crime is to steal the rear license plate from people’s cars to make it seem like your car is properly registered because it has a sticker that expires some time in the future, though not more than a year from now.

    It is common to see people standing by the exits of I-25 holding signs, asking for money, or asking people for money at convenience stores or shopping centers. An important shift is the death of the “will work for food” sign, replaced by begging. I felt bad about posting a “No Soliciting” sign on my front door about 18 months ago, but didn’t want anything more to do with the people who went door-to-door, supposedly wanting work. I got ripped off by one of them, and though I did have the satisfaction of having him prosecuted and convicted, there are still two warrants out on him for other thefts.

    Suppose that you are charged with shoplifting (theft from merchant, in the municipal code), and you are barred from the store. If you go back and you steal again, the charge increases to second-degree burglary, a felony.

  2. Sadly they have been replaced by outsourcing, visa workers and automation. I was reminded of this when I’ve had to cll various IT people recently about my pc. Almost all were overseas. I rarely deal with an American on these calls, except Discover Card.

    1. Just about all the jobs have left my immediate area.

      Roche in Nutley — a huge campus of 120 acres and many buildings — laid off its last worker a year ago. The campushas been empty since then.

      Some developer is going to buy the parcel of land. No big company will be taking over the whole kitad caboodle

      Ferguson Plumbing is moving into the area. They refitted a warehoiuse left behind by Pansonic and they should be ready to go in a few months or so.

      I wonder how many jobs there will be available? Not everybody will follow the company from upstate NY to this area.

      When you are considering a town to live in: See what it has to offer you and your family: how are the schools…and where are the jobs!

      Not everybody works in the city.

      I can’t see why anybody would want to move to New Jersey. The jobs are gone and it is too expensive to live here — there are nearly no amenities, also. The roads are either falling apart or are under perpetual construction.

      Here is a company in Westwood; they were a lighting manufacturer. They have to move because there is a dispute with a lease. 102 jobs are lost.

      Give this company an INCENTIVE and let them stay! We can give every other piking company in that Newark “enterprise zone” a hand out from the state to conduct business there – give the lighting company an incentive so they can either stay in that building or be able to move into another one not far from there! Do we really need to lose another manufacturer???

  3. A century ago, Henry Ford has what was probably a radical idea: if he paid his workers enough to be able to afford his product, he would unleash prosperity across the land. His employees would be able to afford not only cars, but nice homes and the other elements of what we now call the middle-class lifestyle. And other employers would have to raise wages, as well, to retain their best workers. Meanwhile, Ford’s own profits would grow as his market broadened, even though in the short run, he might not make as much as he did if he paid his employees less.

    It worked.

    Henry Ford was running a very profitable business, so he could make the decision to forego some profits now to build a better future. But small businesses are generally on the edge of survival and don’t have that luxury, and large businesses are run to be maximally profitable in the short term, so they will continue to screw over their employees.

    But now, there is very little money to be made making things or providing services within the US. Pretty much everyone has cars, televisions, telephones, etc., so there is no market to broaden. An individual employer can raise wages, if he has the means to do so, but that won’t move the overall labor market.

    It used to be (more recently than Henry Ford) that employers who hired full-time employees had to pay a living wage, which was generally (at least around NYC) in excess of the Federal minimum wage. If an employee wasn’t paid enough to keep a roof over himself and food on the table, he wouldn’t stay. But now, between the Earned Income Tax Credit and food stamps, an employer doesn’t have to pay a living wage, as the government will make up at least some of the difference.

    The essential problem is that real work (providing actual goods and services) isn’t as profitable as trading in stocks and bonds and derivatives. It’s easy to blame NAFTA and the tax code, but the tax code’s treatment of capital gains has been around for a long time, and while NAFTA encouraged some American manufacturers to move to Mexico, it wasn’t the real driver of the destruction of American industry. Mexican labor may be cheaper than American, but Chinese labor is cheaper still.

    The Federal government cannot create prosperity. States and local governments can’t, either. The best a government can do is create an environment that encourages commerce and productive activity, so that people and businesses can create prosperity for themselves. And as long as businesses are run to be maximally profitable at the expense of everything else, we’re pretty much screwed.

    1. In order to take full advantage of food stamps and the EITC, one has to have children. The EITC for someone without children is very little (maximum of $496 for 2014), and starts to phase out well below full-time minimum wage employment. I remember how disappointed that I was back in 1981, when I was making about $4000 per year as a student, that I didn’t qualify for it.

  4. True enough, but for a poor working family, EITC and food stamps enable them to survive on a job that pays $8/hour, when in another time, the employer would have had to pay perhaps $12/hour (in 2014 dollars) or he would be unable to retain his employees.

    It’s another case of businesses shifting costs onto the government… because they can.

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