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Economic trends in the US

  1. Oct 3, 2014 #1

    analogdesign

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  3. Oct 3, 2014 #2

    OldEngr63

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    Become an electrician. The work environment is not too bad (not perfect, often no AC), but not as bad as being a plumber. The pay is great, and the demand will never go away.
     
  4. Oct 3, 2014 #3
    The interesting thing about this thread is that it is generally leaning away from formal educations and toward trades. It is as if we are all starting to come to the same conclusions that many people are going to college and then realizing that the education doesn't pay for itself. In other words, even with educational subsidies, it is still too expensive for most people.

    This should be cause for concern. On the other hand, are we all really cut out for higher education? I seriously question that. There was a day and an age when anyone could work on an assembly line, or in a mill, or a construction site, and earn a decent living. With international trade what it is, that's not the option it once was for most first and second world countries. Further, automation itself has significantly reduced the number of staff required to keep a large plant working. I admit, I am one of those engineers who made such staff reductions possible. We used to have two to three times as many operators and technicians as we do today. We haven't hired brand new high school graduate operators in years. We have allowed our operations staff to be reduced by attrition, while everyone left continues to work at greater and greater productivity.

    Today, it's hard to get any kind of work without at least some college education. Colleges are victims of their own success. Now that almost everyone has at least some college education, it isn't particularly valuable any more. When even those with mediocre intellects can graduate with a BA of some flavor, what does that sheepskin actually convey?

    I think many high school graduates ought to have a hard look at the educational options in front of them. I think many schools are going to lose staff to attrition as well, and they'll eventually do what we've been doing in industry for some time. Eventually, they'll get to where they can be more affordable to those who actually seek a decent education.

    But those are not the options we're facing right now...
     
  5. Oct 4, 2014 #4

    StatGuy2000

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    A question to both Jake and analogdesign,

    Are both of you claiming that in the foreseeable future, most Americans will have to content themselves to being at constant danger of being reduced to poverty and deprivation? That the very prospect of prosperity, or even the promise of a comfortable, is something that most Americans will have to give up as being unattainable? And perhaps the trajectory for the US is towards a lower quality of life for the vast majority?
     
  6. Oct 4, 2014 #5

    OldEngr63

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    A lower standard of living is a natural consequence of having disowned our manufacturing sector. The illusion of a "service economy" or a "knowledge economy" are simply disguises for 3rd world poverty, the natural outcome of our foolishness.

    This was pushed by the ecological movement, with the idea that we can have a super clean environment and a high standard of living both in the same place. Look at the Arctic region. It has about the cleanest of all environments (very little human impact), but do you really want an Eskimo standard of living?

    We have to come to our senses and get real, or get overwhelmed by those who are much more realistic than we are.
     
  7. Oct 4, 2014 #6
    What makes you think it would be poverty and deprivation? I know automobile mechanics and electricians who live better than I do, and I'm not exactly what you'd call uneducated, impoverished, or deprived.

    There are many twits who presume that one can not possibly learn outside of a classroom environment. They couldn't be more wrong. Unfortunately, we have structured our hiring practices such that anyone who doesn't have exactly the right education is not qualified. I'm not sure that I would get my job if I had applied for it today.

    Something has got to give. A formal theoretical education is a good thing. But it is not for everyone. Many people learn in different environments and fashions. We are using college educations as a hazing to gain admission to the jobs that frankly one could do just as well without the education.

    Am I jaded? Yeah. That education has been devalued in to a pay-to-play sort of parking spot for young men and women until they're in their mid 20's. The colleges have become social watering holes instead of houses of learning. They're all about athletics, parties, and very odd politics that deprecate everything from Western thought in favor some half-baked notions from decrepit third world societies.

    I am in favor of exploring new ideas, but with study, scholarship, and discussion instead of the ignorance and political correctness that passes for "new ideas.''

    So, yes, colleges are becoming their own worst enemies. People are walking away from it because they're starting to realize that this is an extremely expensive way to learn, and they're not getting the education they're seeking. At this rate, those MOOCs are starting to look better and better...
     
  8. Oct 5, 2014 #7

    "Regression towards the mean" comes to mind. Even a minimum wage a family in the US can consume more resources than 90% of humanity can. Its a hard thing to sustain such high standards. The notion that one can be in the top 10% of humanity and still be in poverty is hardly defensible. Its hard to
    maintain such high standards, that shouldn't be surprising.
     
  9. Oct 5, 2014 #8

    StatGuy2000

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    Have you ever lived in or spent any considerable time in a 3rd world country (i.e. countries in Africa, south Asia, southeast Asia, Latin America)? Anyone from outside of the "developed countries" (i.e. US, Canada, western Europe, Australia, New Zealand, Japan) who reads the quote above will laugh in your face if you talk about the "knowledge economy" being equal to 3rd world poverty.
     
  10. Oct 5, 2014 #9

    StatGuy2000

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    It is defensible if poverty is defined as relative poverty, i.e. having significantly less income and wealth than other members of the society. There are various measures of poverty, both based on fixed thresholds (as based by the Census Bureau) and by other measures using relative poverty.

    http://en.wikipedia.org/wiki/Poverty_in_the_United_States#Recent_poverty_rate_and_guidelines
     
  11. Oct 5, 2014 #10

    StatGuy2000

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    What I am trying to pose to you and others on this forum is whether or not Americans will have to accept the fact that a significant percentage of the population will essentially be shut out completely from a "stable" job with the promise of a livable lifestyle (I'm not talking about wealth, just a livable lifestyle where one can raise a family). This has nothing to do with whether learning can occur inside or outside a classroom.

    Of course there are automobile mechanics, electricians and others who live better than you or me. There are many who are in the skilled trades who have lucrative careers. However, just like not everyone is cut out for white collar work, not everyone is cut out to work in the skilled trades. Many skilled trades are highly physically demanding that can take a major toll on those who work for an extended period of time. What I'm wondering is whether or not there is enough variety of career paths exist in the US today and (more importantly) the foreseeable future that can promise a livable lifestyle.

    And as for colleges becoming social watering holes -- this has to a certain extent always been the case, but is it really more so now than in the past? At my alma mater (University of Toronto), I have never gotten the feeling that the students there were primarily there for the athletics and parties (yes, there are odd politics to be sure e.g. you can find actual members of the Communist Party on campus, but these are fringe groups among the vast majority of students).
     
  12. Oct 6, 2014 #11

    analogdesign

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    If you mean poverty relative to the expected standard of living in the USA, then yes. I think people are becoming more and more unstable in their finances. We've still got a long way to go, but we're heading back to the national situation of the late 1800s. But, like I said, we have a long way to go, and as long as legal protection for working people remains in force, I don't foresee us getting that back. Since the second world war, Americans have come to expect an ever-increasing standard of living. I think that is finally changing.

    No I wouldn't say that. We certainly will have to (and have) lower our expectations. My father was an engineer (now retired) and he was able to afford a house in a safe suburban community on a single income (I grew up in that house). He also was able to send three children through college to get four year degrees. I am about the age my father was when we bought the house he lives in. Even with my own income (I'm an engineer as well) and that of my wife, we could not afford to live in the house I grew up in. My experience is not unique. Look at the last 50 years, more and more two-income families, yet we still tread water. We've used debt to maintain our standard of living for a couple decades now, and look at the mess THAT has got us into!

    The quality of life for the vast majority of Americans has already declined for the last 25 years. Where have you been? We can acquire more cheap plastic crap than we could in the past but many of the things that define the "American Dream", such as housing, education, and health care, are becoming increasingly difficult to attain. I don't see this changing. No, I'm not claiming in any way that we're going to turn into Mexico but our standard of living will slowly grind down with painful ratchets down like the 2008 financial crisis that most people (expect the top of the food chain) still haven't recovered from.

    You're a Canadian, right? When I was a kid the USA had a significantly higher standard of living and I could see that when I visited BC in the early 1980s. Now Canada has surpassed the US.

    I suspect no, there aren't enough high-paying jobs with a future that can provide the kinds of standard of living Americans expect. Will there be a "livable lifestyle"? Sure. We just have to adjust our expectations. We can't live in the huge houses, with the two cars, and a beach vacation each year the way many of our parents did. We can still have a full belly, a warm house, and a wonderful life though. It's all about expectations.
     
  13. Oct 7, 2014 #12

    StatGuy2000

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    I question whether the standard of living in Canada is really that much higher than the US. For example, housing and education costs have risen considerably over the past several years (in particular housing in large cities like Toronto -- the average semi-detached home in Toronto now costs somewhere within the vicinity of $500000, and tuition, while lower than many schools in the US, have been on an upward trajectory).

    But at any rate, following up on your post above, you state that Americans will have to lower their expectations. In your opinion, how much lower should they lower their expectations? Would you say that the average American family may have to give up being able to send their children to college? Or that the average American family may have to give up home ownership? You say that a full belly, a warm house, and a wonderful life is available, but if finances are unstable, are even these necessarily attainable?

    After all, you had stated that the US is headed on a trajectory for a standard of living akin to the late 1800's. If I recall my reading of history, malnutrition, disease, and the types of extreme poverty (akin to what you find in the slums of, say, Mumbai, at least in the larger cities) were not uncommon in the US during that time (the film Gangs of New York illustrated this starkly in New York of that time period).
     
  14. Oct 7, 2014 #13

    analogdesign

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    I think Canada is roughly on par with the US (at least from my limited traveling in BC and the Maritime Provinces. But I agree with you that it isn't much different. I guess I didn't express myself there. The point was that when I was a kid and visited over 30 years ago the Canadian standard of living was quite obviously BELOW the US. Now it is roughly the same I would say. You have a lot of the same issues we do.

    I don't know how much Americans have to lower their expectations. No one does. We had a remarkable run of a more egalitarian society from WWII through the 1970s but we're reverting to a more natural state of being. More and more people are falling through the cracks for sure. In my city homelessness is an epidemic, and the cost of living is so high I don't see how these people will be able to get back on their feet.

    Perhaps college enrollment will drop over the next few decades. We're already seeing the rate of homeownership go back to historical norms. I don't know what is going to happen but the slow, inexorable decline has been going on since around 1980 or so. It's been papered over by an increase in personal debt, but we are reaching the limits there.

    I think you misunderstood me. Again, I wasn't clear. I didn't in any way mean that I think we are going back to the conditions of the late 1800s. What I meant was we are, from an economic standpoint at least, going back to the situation of the late 1800s where most people had very little bargaining power, the government was highly pro-business and regulatory capture was rampant, and life was very uncertain. However, food, clothing, and consumer goods are much, much cheaper to produce now, so I don't see mass hunger or extreme poverty in the future. Also, inertia is a powerful force in society, so I think while some people will continue to work to dismantle the welfare state they won't be able to completely do so. I could be wrong but I don't see us dropping child labor laws, workplace safety, social security, and environmental laws.

    So I think the future will be a lot like the 1800s in some ways (huge companies acting as quasi-governments & a weak workforce without bargaining power). I also see a continuing decline in the standard of living. Maybe I'm wrong. There could be a new technology that comes that turns this all around. It's quite possible.

    There will still be jobs for scientists and engineers and marketing executives. It's not like we're going to be a Dickens novel. It should still be very much like today, just harder and harder to make ends meet and afford the things our parents and grandparents did.
     
  15. Oct 7, 2014 #14

    StatGuy2000

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    It's worth pointing out that the birth of the labour union movement arose precisely in reaction to the lack of bargaining power and the pro-business government policies that existed during the late 1800s. So perhaps there is a possibility of a rebirth or re-invention of the labour movement as a significant force to represent the new wave of workers as a counterbalance (we're seeing inklings of this already with food-service workers and others engaging in strikes/protests demanding a living wage).

    Because part of the assumption is that the slow inexorable decline you speak of will simply be accepted by American society at large. While the Occupy Wall Street was arguably an abject failure, it could serve as a harbinger for other political or social movements engaged to fight what is the growing inequality within the US.
     
    Last edited: Oct 7, 2014
  16. Oct 7, 2014 #15

    analogdesign

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  17. Oct 7, 2014 #16

    StatGuy2000

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    That is a question of which neither of us has a clear answer.

    As to the chart, part of the reason I suspect that union membership has been declining over the past several decades was the inability of unions to adapt to a changing nature of employment (many unions continued to be wed to the manufacturing sector which occupied an increasingly lower # of workers, and anti-union state laws certainly did nothing to help). I have read elsewhere before that unions have started to change their tactics and have become savvier at attracting more support from a new generation of people, and as I pointed out about the food-service workers, there is reason for optimism that the labour movement may become more significant a force in the future (we're not at that stage yet, but I see the trends).
     
  18. Oct 7, 2014 #17

    analogdesign

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    I agree with a lot of your reasoning. Also, I would point out that unions were notoriously corrupt. Like any human organization, crap rises to the top, and many unions got taken over by gangsters. Also, many of the unions paid lip service to solidarity but they often had a "I got mine so screw you" attitude. This is especially true of the trade unions, and select industrial unions that got themselves well situated (like UAW).

    I suspect the decline of unions isn't about to reverse. There is a lot of anger in the USA about public employee unions (they haven't declined in membership anywhere near as much as private sector unions). Public employee pensions are becoming quite a burden for some cities, counties, and states. I think we will increasingly see municipalities go bankrupt (such as Detroit did) to start lowering the power of the unions. This will continue to reduce the standard of living.

    The pendulum always swings, so perhaps if there is a new blossoming of the union movement it can be more true to its stated principles.
     
  19. Oct 7, 2014 #18

    StatGuy2000

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    I also agree with much of what you've written above. I should point that any revitalization of the labour movement doesn't necessarily mean that current, existing unions will necessarily regain the power or influence they might have had. Indeed, the power of public sector unions will be under considerable assault, to a significantly degree due to the burden of the public employee pensions for various cities, counties and states.

    What I envisage instead is that of new unions springing up within various areas of the private sector, in areas not traditionally associated with the labour movement (e.g. IT workers, new trades, etc, food services, etc.)
     
  20. Oct 7, 2014 #19

    russ_watters

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    So, sorry I'm late here and perhaps I'll get to some of the other discussion later, but did anyone here -- including you, analogdesign -- actually read the linked article? Did you scroll down far enough to see the graph? Your one sentence thesis is completely wrong.

    The article says median net worth is lower today than in 1989, but that isn't when it peaked: it peaked in 2007, the year the recession started. It's a common purposeful tactic and error to misread cyclical changes as trends (and the article contains such errors*), but you went one step much worse.

    *From the article: "Even adjusted for household size, real median incomes haven't increased at all since 1999." Well, no: they hit a peak in 1999, dropped during the 2000-2001 recession, then went back up again, then dropped again. No, the 2007 peak wasn't quite as high as the 1999 peak, but you need more than two data points to have a solid trend. And, of course: "That's right: the middle class hasn't gotten a raise in 15 years." No. The second biggest way these statistics are abused is by implying that the classes are static. They aren't. 15 years ago I was in the Navy making less than minimum wage. 10 years ago I started an entry-level engineering job. Today, I'm making an above-average 10-year experienced engineer salary. That's bottom 20% to top 20% in less than 15 years. That's the reality of how people move through the "classes".

    Also, was this broken-off of another thread -- the first sentence seems to be lacking some context. Above where?
     
  21. Oct 8, 2014 #20

    Pythagorean

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    Hi Russ. I'm curious, was the peak in 2007 biased towards particular sectors related to the inflating bubble or was it representative of the majority of sectors?
     
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