Special Report: Is America the sick man of the globe?

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Capt Worley PE

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Very interesting, but very long article at: _economy_special" target="_blank">http://news.yahoo.com/s/nm/20101216/bs_nm/...economy_special

A few interesting bits:

This is the point of the story where many Americans typically glaze over because they see Michigan as a long-standing financial basket case of a state thanks to the shrinking U.S. auto industry. But the problem is that the broad decline of the manufacturing sector that has been underway in this country for decades now may threaten not just the long-term health of the economy but also the living standards of all but the wealthiest Americans.
"The whole country is now seeing the story that Michigan has been living with for a long time," said Diane Swonk, chief economist at Mesirow Financial. "We have kicked the can so far down the road that now all we have is a cliff to fall off."

"The recession merely revealed a reality that has been with us for a long time. We faced a growing gap in education and skills that we tried to fill with debt and credit, which gave us the illusion of growth."

"The only thing that doesn't get recycled or reused is the people," Clark said. "What do you do with someone who is 50 years old who has been doing the same thing for 30 years? We treat people now like disposable resources and just like that we throw them away."

"America cannot compete when it comes to low-skilled, low-cost labor," he said. "Those jobs are few and far between and the idea that we can bring back those American jobs that have gone is not realistic."
Silvia argues America needs to retrain and retool its unskilled, unemployed workers for jobs of the future.

"The type of workers that are needed in manufacturing has changed dramatically, where workers frequently operate laptops," he said. "The people who run American companies are smart. If we provide workers with skills, the jobs will come."

Gluskin Sheff's Rosenberg says that if he were in charge "I'd have a shovel in the hands of the long-term unemployed from 8am to noon and from 1pm to 5pm I'd have them studying algebra, physics and geometry."
 
The problem as described is known as systemic unemployment. The people looking for jobs (laid off consturction workers) dont have the skills to fill the jobs that are available (nurses, teachers). No matter how many jobs become available the people to fill those jobs cant do it without additional training. The problem is laid off workers with no skills often dont have the financial means or ability to put themselves through the training programs necessary to attain the skills needed to get these jobs.

 
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The problem as described is known as systemic unemployment. The people looking for jobs (laid off consturction workers) dont have the skills to fill the jobs that are available (nurses, teachers). No matter how many jobs become available the people to fill those jobs cant do it without additional training. The problem is laid off workers with no skills often dont have the financial means or ability to put themselves through the training programs necessary to attain the skills needed to get these jobs.
And if a job pops up that they do have the skills for, but they'd have to move, they often can't because they can't afford the move. From the article:

Incidentally, the housing mess also hurt labor mobility. According to real estate website Zillow.com, in the third quarter nearly 1 in 4 single-family homes in America had negative equity, with the home worth less than the mortgage.
"Labor mobility has always been a difference between America and Europe, and has worked in America's favor," said David Rosenberg, chief economist at Gluskin Sheff & Associates. "The housing market has now become a constraint on the labor market."
The article is kinda biased towards manufacturing loss in the North. The south seems to be doing well attracting manufacturing jobs, notably from overseas and the northern states. Cheap land and cheap labor can pay for a lot of training.

 
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this goes back to the concept of choice,many people choose, out of high school to take (what at the time) was a high paying construction or manufacturing job and now 20 years later there isnt anything they are qualified to do, I dont think its as easy to send every 40 or 50 year old back to college to get a degree, many wouldnt even if they could go for free. & the consequences are having a drastic impact on the nation.

Most everyone here probably has a $100 DVD player in their house that was built by some 12 year old in China / Indonesia.. And I dont think thats something that can be reversed in all honesty, and is more our fault than it is the "evil big business"

& about the nursing, at most schools you cant just enroll in nursing, the competition for the slots is fairly active, my wife is trying to help her neice get in a local college (Kennesaw State University- most of you have probably never heard of it) and even at that school, she had a 3.6 and didnt get accepted into the nursing program..,, it sounds good when politicans say that we will just fill all these voids in healthcare with retrained ex-manufacturing people, but its just not going to be that simple..

the type of healthcare jobs available for these retrained workers are more likely the nurse tech jobs, and the hospital my wife works at has cut most of those jobs because they were getting such low performance out of the people they decided to hire more RN's and tell them that they now get to clean up the shit, blood, etc, etc,

 
...first thing the country needs is an "honest conversation" about the fact that unskilled manufacturing work will be done wherever labor is cheapest.
I'm not sure why unskilled laborers feel they should be making a middle class living.

 
...first thing the country needs is an "honest conversation" about the fact that unskilled manufacturing work will be done wherever labor is cheapest.
I'm not sure why unskilled laborers feel they should be making a middle class living.
I think its because they USED to be able to do so...that isn't the case anymore. Things change. That's a bitter pill for people to swallow, but that's the way it is.

Another thought is that engineers just accept continuing education, and most of the population thinks once they got a diploma of one kind or another, there was no need to train any further. This too may no longer be the case.

 
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...first thing the country needs is an "honest conversation" about the fact that unskilled manufacturing work will be done wherever labor is cheapest.
I'm not sure why unskilled laborers feel they should be making a middle class living.
You could say the same about engineering----why should they make a middle class living? It comes down to the willingness of others to pay for such endeavors. It has absolutely nothing to do with a judgment about what someone deserves or not. I know computer programmers and insurance underwriters with no university degree who make a lot more than engineers of the same age. There is nothing about education that guarantees a better living. There is actually no guarantee that an educated person will have better opportunities either. Simply graduating more engineers does not create engineering jobs, just more competition leading to frustration and disappointment.

 
...first thing the country needs is an "honest conversation" about the fact that unskilled manufacturing work will be done wherever labor is cheapest.
I'm not sure why unskilled laborers feel they should be making a middle class living.
Because in this country, people are rewarded, rather than punished, for spending more than they can afford. The question SHOULD be why does the government feel that unskilled laborers should have nothing less than a middle class lifestyle?

 
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Gluskin Sheff's Rosenberg says that if he were in charge "I'd have a shovel in the hands of the long-term unemployed from 8am to noon and from 1pm to 5pm I'd have them studying algebra, physics and geometry."

I like that quote. Except that it tends to ignore the whole bell curve thing. Maybe I am not the most politically correct in thinking this, but a substantial percentage of the population probably just does not have the aptitude for algebra, physics, and geometry, and really isn't capable of much more beyond handing the shovel (or mop, or cash register).

As the old saying goes, "the world needs ditch diggers, too."

 
...first thing the country needs is an "honest conversation" about the fact that unskilled manufacturing work will be done wherever labor is cheapest.
I'm not sure why unskilled laborers feel they should be making a middle class living.
I think its because they USED to be able to do so...that isn't the case anymore. Things change. That's a bitter pill for people to swallow, but that's the way it is.

Another thought is that engineers just accept continuing education, and most of the population thinks once they got a diploma of one kind or another, there was no need to train any further. This too may no longer be the case.
I grew up in Flint in the 1980s, when the GM factory workers made huge money. People would go to college and end up in jobs serving the factory workers and the workers' children - teachers, retail, etc.

Flint was full of disposable income. Per capita, the concentration of boats and golf courses was staggering. There were a dozen "gentlemens clubs" for each factory and they would be open 24 hours if possible so workers from all three shifts could go there before, during and after work.

 
The only disposable income for factory workers now goes to booze and weed during their lunches.
The ones who are still working are doing OK but there are not many of those.

Almost all the adults in my family who worked in the 1980s were employed by GM - stepdad, grandfathers, aunts and uncles. Now I have one aunt who works for GM.

Meanwhile, essentially my entire generation has left the state. The youngest of my cousins is still in college at UM-Flint. Besides him and me, all of our generation has moved to Arizona, Texas or Florida.

 
& about the nursing, at most schools you cant just enroll in nursing, the competition for the slots is fairly active, my wife is trying to help her neice get in a local college (Kennesaw State University- most of you have probably never heard of it) and even at that school, she had a 3.6 and didnt get accepted into the nursing program..,, it sounds good when politicans say that we will just fill all these voids in healthcare with retrained ex-manufacturing people, but its just not going to be that simple..
A state legislator in Michigan introduced a bill this year to allow community colleges to grant bachelor's degrees in high-demand areas like nursing.

I'm not sure if the bill made it through.

But at least legislators are recognizing that enough programs are not in place to match the need in certain career fields.

Of course it does not hurt either that JUCOs charge lower tuition rates than state universities.

 
I feel bad for MI. My grandfather and his family is from MI, but he moved when he joined the Air Corps. It's such a cold place... and with the auto industry and other factories shot - there just isn't much appeal for anyone not from MI to go there.... sad really, it's beautiful in the summer - tulip festivals, and things like that... (sorry, Im dutch... isn't that weird?)

 
I feel bad for MI. My grandfather and his family is from MI, but he moved when he joined the Air Corps. It's such a cold place... and with the auto industry and other factories shot - there just isn't much appeal for anyone not from MI to go there.... sad really, it's beautiful in the summer - tulip festivals, and things like that... (sorry, Im dutch... isn't that weird?)
I still enjoy living in Michigan. Otherwise, we never would have moved back from Florida after I finished college.

But the past couple generations did not deal us a great hand. They were shortsighted with their policies and left us a high number of bills to pay. Furthermore, we are expected to pay those bills without the old cash cow (the auto industry) and while paying for the fat retirements of the old folks who screwed us.

Not to mention we are supposed to invest long-term so the next generations will have it better than we do.

Most of these conditions are common across the country, just at a higher degree in Michigan.

But I think Michigan might be a good long-term bet. The population of the world keeps getting higher and higher. Al Gore says we will soon have less livable land. Developing, overpopulated countries like China and India are contaminating their lakes and rivers. Converting seawater to drinking water is not getting much cheaper.

Meanwhile, the old Rust Belt is sitting on a bunch of cold, fresh water.

I don't know - maybe I am reading too much into it.

On the other hand, a century ago, nobody thought the oil reserves of the Middle East were worth much either.

 
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