POLITICAL observations & opinions

* If our labor force cannot be competitive in a way that sustains our standard of living, we will be on a downward spiral as a country that is frightening to contemplate … the first step towards an answer is to frame the question correctly, which perhaps none of our political leaders have yet done … at least not publicly

Posted by Lew Weinstein on January 28, 2011

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Robert Reich writes (1/26/11) …

  • two years after the worst recession most of us have ever known, the stock market has come roaring back Corporate profits are up. The economy is growing again
  • but little of this has yet trickled down to ordinary people who continue to be plagued by a huge debt load, business’s unwillingness to create full-time jobs, and a still fragile housing market.
  • The Great Recession wasn’t due to America’s loss of “competitiveness” relative to the Chinese or anyone else. In fact, American corporations are now enormously competitive, racking up some of their highest profits in history.
  • But much of their success is occurring outside the United States.
    • GE has more foreign employees than American.
    • General Motors now sells and makes more cars in China than at home.
  • Republicans and their supply-side economists say the nation got into trouble because government became too large, and the answer is therefore to cut spending, cut taxes, and shrink the deficit. The President, having apparently given up on Keynesian pump-priming, has no retort except to invest for the long term.
  • What the President should have done is talk frankly about the central structural flaw in the U.S. economy – the dwindling share of its gains going to the vast middle class, and the almost unprecedented concentration of income and wealth at top

read the entire article at … http://robertreich.org/post/2942788440

LMW COMMENT …

  • What Robert Reich refers to as the “central structural flaw in the U.S. economy” is perhaps the most critical issue facing the U.S. today.
  • The global economy has been good to corporations but not to American workers, who are increasingly being priced out of the labor market, when compared with low-cost workers in countries like India and China.

Americans have achieved an unprecedented standard of living

as a result of these higher wages,

and the resulting purchasing power has spurred the economy for all of us.

But is this sustainable when companies can go anywhere

to hire lower cost labor?

  • The future of the U.S. as we know it depends on answering this complicated question. If our labor force cannot be competitive in a way that sustains our standard of living, we will be on a downward spiral as a country that is frightening to contemplate.
  • The first step towards an answer is to frame the question correctly, which perhaps none of our political leaders have yet done.
  • The stakes are enormous.

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2 Responses to “* If our labor force cannot be competitive in a way that sustains our standard of living, we will be on a downward spiral as a country that is frightening to contemplate … the first step towards an answer is to frame the question correctly, which perhaps none of our political leaders have yet done … at least not publicly”

  1. Lew Weinstein said

    Productivity is part of it, but whereas increased productivity is always good for the company, it is not always so for the worker. Did we hear the other day of a steel plant that used to employ 1000 workers and now has only 100 to produce the same or greater amount of steel. I’m not arguing against higher productivity through investment in technology, but only noting that one consequence of that, with which we must ultimately deal, is less workers.

  2. eds203 said

    The answer? Certainly not to keep companies from moving, which can’t be done, but to raise wages everywhere. The issue for companies, in any case, is not merely wages, but a range of productivity/technology issues.

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