thought it was an interesting thought…
Q. How does society gain or lose from this change in market structure?
A. The United States market is said to be changing everyday. In America’s production era (1910-1970) the economy was heavenly depended on skilled blue collar workers. However, new firms from outside the country, who have lower marginal private costs, have forced US industries to compete to the point that they have to find cheaper labor and thus force manufacturing plants in the US to shutdown and fire skilled laborers. On the other hand, America is very dynamic and in most cases jobs just get shifted from the tangible industry to the service industry.
Some economists have said that this solution is best for America, but the solution is only somewhat good. The manufacturing job to service job switch is entirely depended on the worker. If workers cannot afford retraining (and there is no government support to retrain workers) then the plan is flawed. Also, the desire to change jobs is alarming too. From a purely economic stand point, the switch of labor industries is pretty straight forward, but from a worker who is in his mid to late 40’s, who had a pension, 401k, etc. that is now unemployed; there is no solution for him.
Often manufacturing industries just layoff employees and never call them back. In Georgia, unemployment was at an all time low. Recently, KIA agreed to build a 1.2 million dollar plant in Georgia which would re-employ 2,500 previous workers who did not switch careers to the service industry. The move was said to be a step in the right position; yet, the deal came with serious draw backs for Georgia’s state government which granted next to nothing in taxes in order for the deal to take place. The question this brings up is that while jobs are changing and the market becomes more and more “globalized” the repercussions might out weigh the benefits.
As for whether society will benefit or loose from more firms entering the US market is based upon whether or not Americans’ income will not be able to afford the products due to large-scale unemployment, age discrimination, loss of 401ks, increasing tuition for community colleges for re-training, etc. If we are to make this transition so that society will benefit, then we must address ways to help the American help the economy by providing him with some financial security.
That’s all I could muster for that question.. I truely believe that waiting 10 years for the U.S. economy to just “flip” to a service based work force is too long… Action is needed now! what can the government do?
(after ending this war on terror)
- Start assisting workers who have been layed off to retrain by offering tuition breaks at state community colleges,
- Give incentives for business owners to hire re-trained workers,
- stop trying to figure out “mobile retirement plans” and “mobile healthcare packages” and start giving incentives to American businesses to keep their retirement packages, healthcare, etc. (i.e. Make it affordable for the Business and the employee)
- Protect American workers… help those who have lost a job to India/China.
- Stop saying it will fix itself, you know it’s wrong so stop doing it…
There is more too, just open your ears for a minute and people will help you.. Toyota has a slogan, “Buy Toyota parts to keep your Toyota a Toyota.” Well I say, “buy/sell American goods to keep your American Business an American business!!!”
~R3D
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