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On finding work
The Left.
"There's one economics-driven thing that matters enormously to human
wellbeing...having a job. People who want to work, but can't find work, suffer
greatly. Not just from the loss of income, but from their diminished sense of selfworth. And that's a major reason why mass unemployment, which has now been
going on in America for four years, is such a tragedy."
Paul Krugman, 2012
Markets do indeed fail, and that if individuals or private enterprise cannot or will
not spend in the short term, then the government must act to boost employment.
John Maynard Keynes' 1936 book, The General Theory of Employment,
Interest and Money
The Right
I am hearing from manufacturers that people are not motivated to return to the
workforce because they are enjoying their unemployment insurance.
R. Illinois State Sen. Bill Brady
"The longer you pay people not to work, the longer they're not gonna try to work.
Rush Limbaugh
"Paying unemployment benefits to America's unemployed, only makes them lazy."
Newt Gingrich
the unemployed are spoiled".
.. Sharron Angle, Republican candidate for senator of Nevada
people who are unemployed right now are generally people with poor work
habits and poor personalities
Republican Ben Stein
"Unemployment benefits keeps people from going and finding jobs."
Former Republican Majority Leader Tom DeLay
In 2013, there were 34.1 million white people in the US age 45 to 54. With a death
rate of 413 per 100,000 in 2013 (above chart) about 141,000 of these Americans
would die in one year. According to the chart to right of the above graph, well over
one in four are dying from unnatural causes: drug or alcohol overdose, lung cancer
(smoking?), suicide, liver damage (pills) or diabetes (overweight?). But look at the
death rate in Sweden for example. If we had their death rate of about 200 in 2013,
we would be saving the lives of 72,000 people a year. Indeed, if we even had the
death rate we had in the year 2000 we would have 11,000 fewer deaths.
Middle aged blacks and Hispanics during this same time frame are not
experiencing this awful problem. Death rates for them declined at about 2.1% per
year.
Note that the death rate turned in the wrong direction for our group of older white
Americas in the late 1990s. This correlates well with our new direction in
manufacturingwhich briefly stated was, if making a product requires lots of
workers then find someone else to do it. Preferably someone in another
country who will work for almost nothing--how about the Chinese. Maybe the
Mexicans. Even the Vietnamese. Does it really matter?
But why do France, Germany, the U.K. Canada, Australia and Sweden appear
essentially free of this problem. Many of these countries have negative trade
balances. They also automate their factories and they all engage in some level of
off shoring jobs. None are free of racial intolerance.
Two factors may be mentioned which might explain the differences. First,
government support in other counties maybe more robust for the laid off worker,
This support can include retraining, subsidies for new jobs, and other services. See
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chart below. The US program is at the bottom. Spending roughly 10 times what we
do, Sweden is at the top. Another possible factor is discussed ahead, starting on
page 11.
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US
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Year
The BLS stated that in October 2015 we had about 1.9 million workers marginally
tied to work with about 670,000 who have given up looking, A sad situation.
By 1995 the incoming trickle became a river, by 2000 a new Mississippi River was
born, by 2005 a tsunami had swept into our ports.
As the years went by, the US saw whole domestic industries disappear: down the
drain went all optics products such as binoculars and microscopes, domestic
production of cameras, telephones, and TV sets disappeared. We stopped making
writing tools. In decline or decimated were the making of bicycles, shoes, autos,
apparel, trucks, wooden furniture, hand tools, power tools, lawn mowers, tires,
cardboard boxes, lighting fixtures, light bulbs, ship building, integrated circuits,
copy machines, fasteners, metal plumbing, earth moving equipment, flooring,
kitchen appliances, washing machines, machine tools, leather, semiconductor
processing equipment, robots, batteries, table wear, silver ware, aircraft
manufacturing, steel forgings, foundries, book printing, home lighting fixtures,
computers, vacuum cleaners, battery chargers, calculators, paint brushes, monitors.
Workers making apparel fell from 900,000 in 1990 to 180,000 by 2011. From the
year 2000 to 2014 we shut down 60,000 factories.
We expanded our ports to handle the growing volume of imports. Vast container
ships dropped the cost of overseas shipping.
A measure of the extent of the new free market trend or structure is of course given
by the trade balance. In the late 1990s it feel off a mountain.
With the advent of off shoring strongly rising after 1990, the rate of rising
productivity of US manufacturing jumped. From 1945 to 1990 productivity
climbed about 1.7% per year, but after 1990 it rose to 3.1% per year. This was of
course due to off shoring virtually all labor intensive operations, This left behind
the domestic operation already automated, thus changing the domestic mix.
Below we see the participation rate of men between the ages of 45 to 54. Their
decline accelerating somewhat in the late 1990s. This negative trend is the most
serious of all age groups shown. This is the heart of their higher death rate.
See below the labor participation rate for males age 25-54 for several countries.
Note that the US is on the bottom for the seven industrialized countries shown.
Source: Jason Furman. VOX, February 20, 2015.
men fail to find work at age 45 to 54, when they may be convinced they will never
work again, the level of agony must be maxed out. Some then essentially give up
and adopt a destructive life style and perish before their time. When the Hispanic
or Black person cannot fund work, the fall is not as deep.
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The number 14.4 million by 2013 correlates well with a value determined using an
alternative method of calculation. The value added dollar value of all products
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manufactured in China in 2013 was $2.6 trillion. This required about 100 million
factory workers. Thus the dollar productivity of Chinese manufacturing was
$2.6x1012/ / 100 x106 workers = $26,000 per worker. In the year 2013, according to
World Integrated Trade Solution, China exported to the US, goods valued at $369
billion
Dividing the 26,000 value into $369 billion gives 14.2 million workers making
products to be shipped to the US. This is remarkably close to the 14.4 million
number above. Since China has few name brands of its own, most of these workers
are doing contract manufacturing for US companies such as Apple and HP.
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At the same time our larger corporations begin building various divisions and
operations in foreign venues. See chart below.
By the year 2006, many multinational corporations had more people off shore than
at home. See graph below.
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And we are sorry about dropping all those pension plans we offered years ago.
They were just too expensive. How about a nice 401K in the stock market that you
mostly pay for?
And its a shame about the demise of the American middle class. But that is not our
fault either. We serve world markets now, not just the US.
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