Do you realize that almost all countries in the world now have high unemployment? If one country finds a solution to unemployment in their nation it most likely will be at the expense of higher unemployment in other nations. China’s great industrial expansion in the last two decades should make that fact abundantly clear.
Industrialization of once largely agricultural societies like China and India have put out of business many manufacturing jobs in many nations in a very short period because with abundant cheap labor they can undersell them. The industrial workforce on our planet has almost double in a few decades and that is the reason for the high unemployment in the world.
China and India are relatively poor countries without environmental regulation burdens and social welfare job benefits. Because of this and because they have new modern factories with modern equipment they can provide manufactured goods for far less than the more advanced nations of the world. In fact, China is sucking up manufacturing jobs from the rest of the world as if it were a big black (red) hole.
Even other third world nations cannot compete with China because they do not have the capital to do the expansion that is necessary. With China running at 10 percent growth for two decades now, the growth is mostly at the expense of full employment everywhere else in the world. China’s $3.5 trillion national reserve surplus makes it abundantly clear that the trade game is tilted in favor of China.
The world has never seen anything like this. Even the industrial revolution and the trade wars of the the 30’s pale in comparison to the doubling of the world workforce with China’s new advanced modern factories churning out products that can undersell most manufactures in developed nations.
I guess the world could level the playing field with China through tariffs but then unemployment in China would explode and their speculative economic expansion bubble would burst and cause massive civil upheavals in China. The leaders of China simply will not allow that to happen without taking some rather drastic world actions. They have no desire to have their head hanging on poles with birds picking out their brains.
China now holds $3.5 trillion of the world’s debt. They now have the leverage to conduct economic warfare against world currencies if they chose to do that. Not to mention, the trouble that they could drum up regionally to deflect criticism and end internal civil upheavals. Of course, at some point, the expansion in China is going to end anyway because it is not sustainable. When that happens it is not going to be pretty and we should be prepared.
Most advanced countries outside of China just borrow more from them and create more paper money so that their people can continue to buy things that they really do not need anyway. Buying from China and India do not create jobs in their own countries so that is one reason why they have very high unemployment. China is not buying as much from these countries as what it sells them. Much of China’s money is spent on raw materials and that does not produce many jobs in the countries that sell them.
The market is saturated with manufactured good. Prices are driven down and only those that can undercut all the rest that make a similar product survive. So there is a race to the bottom in prices but the bottom is on the other side of the earth from here. China and India almost invariably get the sales and that means factories in many countries close down and unemployment rises where they do. Newer factories in China are more efficient through the use of high technology ( e.g. – robots) so they create more products with less people that also get paid far less, so who can compete?
It seems that about the only thing that can be done to reduce worldwide high unemployment in most of the world under present realities is to force decreased production in China and India through higher prices by imposing tariffs on their products but that could lead to an economic war or even a world war.
With that said, there may be two saner solutions for developed countries to take.
1. Big nations like the US could become isolationist self sufficient nations and only trade with nations that they want to trade with. For example, they could buy Canadian oil and the Canadians could buy goods or services of equal value from the United Sates. Countries with their own resources really do not need to buy from emerging nations unless it in their own self-interest to do so. In all cases, they making make the trading even-steven.
2. First world nations can reduce unemployment in their countries by reducing the working hours (you’re not going to get emerging nations to agree to this).
Futurists have been promising us for the last fifty years that increased productivity and robots would make the workweek much shorter by now. Yet, here we are in 2011 and we still have a 40 hour workweek just like in the 1940’s. Perhaps It’s time that the shorter workweek arrive?
The United States has about 20 percent unemployment when you factor in the underemployed and those that gave up. We in the United States can share the jobs or we will share our wealth through government forced welfare. Contrary to the hype from any political party, high unemployment is not going away before the next world war. Even if it does, it will be mostly minimum wage jobs that cannot support even a modest living. That of course would change if the workweek hours were reduced. Anyone qualified should then be able to find a reasonable job.
Along with reduced hours people and government will need to learn to exist on the income that they have and live within their means. Think of what a shorter workweek means socially. It would truly spread the wealth around but it would be through work instead of socialist entitlements. Reducing the standard workweek will mean that almost everyone would have a reasonable job. That would mean that most people would also be paying taxes in contrast to the 50 percent of Americans that now pay no federal taxes.
Few will be collecting unemployment, food stamps, Medicaid etc., and they would not be paid to sit at home to become depressed, lose their work skills and resort to stealing and insurrection. The increased taxes collected, along with less social welfare outlays will balance the budget almost overnight. The icing on the cake is that anyone that wants more leisure time and only wants to work three or four day weeks would now have that opportunity. Those who want to earn more should also easily be able to find a second job.
Its time for creative solutions to entrenched social problems and that means we need leaders that will find solutions by thinking outside the box. If high world unemployment continues social unrest is assured. What will be the cost of scores of burned out cities and martial law when people in the inner cities have neither handouts nor jobs?
Don,
Those are certainly good points and good solutions for the working classes…I like it.
I laughed and cried :). I am one of the unemployed, heading toward middle age (with a 3-yr-old) and a single mom. I’m on public assistance and seeking part-time employment with hopes to use my future tax refund to start a small business to supplement the part-time work. Hasn’t happened yet, but this is what I’m praying for and working towards in my employment/small business search. I like how you put it and it sounds like a great solution…the problem is…how do we get the government to do it???
There first has to be a grass roots effort. After that the idea may catch on or it may not.
Lisa,
I wish you all the best and hope for your success : )
Don,
The only problem with your outstanding solution to the problem is that it is common sense and good business sense…something I haven’t seen our government contribute to.
Our government over taxed & overburdened businesses to cause this problem (outsourcing overseas) in the first place.
I remember when you could call a big department store customer service representative and they actually spoke clear English…now, you talk to people where English is their second language, if that.
Abba, You know Lisa’s circumstances and all the many responsibilities she has, and You know the difficulty of finding work these days in America (especially for those who are currently unemployed!): please direct her to the work that You have for her! Please supply her needs to get to that point and then beyond. You have promised that if we make You a priority in our lives, You will see to it that our needs are met. And You remind us that we are of more value to You than Your other marvelous works of creation. Please remind Lisa that this is a test (very likely one of many?) that You are using to help her grow more comfortable with trusting and depending on You. (This is *so scary* Father! And little-ones are depending on her! BUT none of this is news to You and we here are asking You on her behalf BECAUSE Your Spirit impels us, and THIS is also part of Your plan.) Abba, we look in eagerness to see just what You will do for Lisa and her family, and we praise You now for blessings that we know You will bring into their lives! (Please reassure her of the truth of Your Greatness and goodness to her; she has testified of her need AND her reliance on You!)
Dear Brett, Don and all others who prayed for me:
God bless you with all His blessings. I can’t adequately express just what it meant to me to read those words and know that my brothers and sisters (whom I haven’t even seen or met yet) care enough to lift me to the Father. Usually I’d be crying up a storm with something like this but I’m not and I think that is because I feel assured of God’s love and care just through that prayer itself, without even seeing the fulfillment of the answer yet; it’s as if it’s been answered already. Thank you all so much for your kindness and I will be certain to share any and all praise reports with you so that we may together thank and glorify our Lord. I can’t wait to be with Him and to meet you all in our eternal home. God bless you always. Amen!
Lisa, I am also praying for you as ,I am certain, every other regular on this site is…Brett, I thank you as well for the sincerity and elouquence in your petitions to The Lord. I’m not in the same circumstances as Lisa, Ken, and a whole lotta others YET, but I feel the strain as well, and confess that I have not been as stoughthearted as I KNOW I should be. I needed to hear those prayers too. God Bless You, my brother.
You all are *so kind* 🙂
The thing is even with Robots,PLCs, a more educated workforce and work systems such as Lean Manufacturing and no longer offering pensions we can not compete with the Chinese cheap labor. I am sure you know this but the reason Japanese auto companies have moved their production facilities for cars they sell in the US to the US is because it is more profitable for them. It wasn’t out of the goodness of their little corporate hearts! Versus the Japanese, the labor cost in the US is now less and of course they don’t have to pay for the shipping. With these world trade agreements that have sprung up Corporations are free to have there production facility where ever they want with no penalties. I can really see only two options for the USA. 1. Get out of these trade agreements that are designed for the benefits of the corporations, reimpose tariffs and start returning prosperity to America or 2. Continue on as we are and keep sliding further and further down the pay scale until it becomes cheaper for the Corporations to build their plants in the US.
The hopeless thing to me is I can’t see how we the people who really care about the future of this once great nation can or could do anything to change the status quo. Vote? I am a registered, practicing voter. But who would I vote for that had any intention of doing something that would hurt the Corporations profit? Which of the two parties that get 98% of the votes cast in the US elections would do anything to move manufacturing jobs back to the US. All the “two” parties focus on is whether taxes should be higher or lower on the corporations or higher or lower on the American people. Or whether and how much money we should borrow to throw at the joblessness.
Since NAFTA was passed with the support of the “two” parties in 1992 manufacturing jobs have fallen from 38% to 18% of the total employment in the US.
As far as China and India suffering from us returning to an America first attitude for our country, I hate it for them. But they were just there 20 yrs ago and for the most part the standard of living in these countries has only improved in the large cities where the jobs are. They are a communist country so they will have to hand out more rice. Not sure what you meant by China would not allow this? I don’t see what they can do to prevent it if in the unlucky event we should decide to do it. At the moment we still have the worlds most powerful military and the world largest GDP. Now if you say the Corporations wouldn’t allow it, I can see that! I honestly don’t see how the American people can overcome the “two” parties and the “independent” media. And sadly it doesn’t seem most people I come in contact with are aware of the real issues or even if they are seem to care, they just shrug their shoulders and seem to think its hopeless. I can see where they are coming from.
David,
I agree with you. We either need to level the playing field with China or quit playing their rigged trade game.
I really am saying here that all nations need to cut the length of their workweek because the world has an overproduction problem. There is high unemployment just about everywhere. With modern production methods there is not going to be enough jobs for the expanding labor pool in the world under present conditions.
If we or someone else somehow gets the jobs it will be at the expense of jobs in other nations. I am offering a solution for the overproduction capability in the world but I have no delusion that anyone will do it before the next world war.
What they will do is try to steal those jobs from each other like China is now doing to us and that can only go so far before the heads of the most impacted nations are on poles with birds picking out their brains.
What I meant when I said China would not allow economic collapse is that they hold 3.5 trillion of the world debt. If they rapidly start selling by necessity or on purpose they will crash the whole world economic system. Not to mention the regional or EMP threat that China already is to Japan, South Korea, Taiwan and the US.
In any case, what they might or might not do is all idol speculation anyway because like you indicated we are not going to change anything significant by electing a different elitist and media chosen leader anyway.
The real problem in America is spiritual darkness and that will be the subject of my next post.
In Germany they do have a reduced work week which I beleive is 36 hours and they are also required to take so many weeks of vacation. I learned this a couple of years ago when working with some Germans who were installing a Robotic packaging line at a plant I was working at. While in our Country they could work overtime but believe it or not they were required to return back to Germany to take 3 weeks of vacation. They were high-tech technicians and we actually had to plan our start up around it! So at least one country has implemented your idea.
I think its a good idea in many ways, It sure would be nice if my girlfriend didn’t have to work sooooo many hours as a salaried employee. At this point in my career I am back to construction and benefiting from from getting lots of overtime. Of course, I also am laid off right now for a couple of weeks. You gonna be glad when I head back out and don’t have the time to comment so much on your articles? JK! You know I am a Constitutional leaning individual. Do you beleive the Federal government does have or should have this power? Or would it take an amendment to the constitution?
Thanks for explaining about what China might do! Appreciate it very much. Hadn’t thought along that line before. Of course we could alway boot the Fed Reserve, disavow our debt and return to the gold standard, while placing congress once again in responsibility of coining money. 🙂
You think I ask a lot of questions on here, you should have attended a class with me in College! I just gotta know. Really looking forward to your next post. Not a pleasant topic but it is really dark and really a problem. Its so hard to find Truth. Thankful for this site and promise no more comments on this particular post!
God Bless you Don
David,
I am aware of the shorter work week and longer vacation time in Germany. In spite of that they don’t seem to be complaining.
I suppose the power you are talking about is power for setting the length of the work week. Being a constitutionalist myself I think the Federal government should butt out of state issues.
I also am not saying that people should be limited to working a certain amount of hours. I am thinking more in the lines that employers could not tell employees that they have to work more than 30 or 32 hours a week.
There really are a lot of people that want to work – say three 10 hours days a week – or four 8 hours days but they cannot do so because their employers require 40 hours and if they are allowed to work reduced hours they will be considered part time and lose all their benefits.
At least for those doing the same job working for the same employer benefits should be prorated by the hours that you work.
If it was an amendment to the Constitution it would be what most of the people in this country want so I would go along with that.
Yeah, we probably could do what you suggested but that person can’t get elected so it probably won’t happen. Maybe after the crash it could happen because then it will get rather revolutionary in this country if you know what I mean.
I probably won’t get that next post up until some time tomorrow. My next post touches on a topic that some might disagree with but that goes with the territory.
Don and David ,
In my early years in the aerospace industry I worked a lot of overtime. It was not unusual when
we were busy to work seventy hours a week . It was cheaper to pay people to work overtime than
it would be to hire additional employees because every additional employee was $14,000.00 in
fringe benefits on top of their salary. That was the cost of medical, dental, and pension .
There were 7 support people for every Production/ Maunfacturing employee. Support would include engineering,purchasing,maintenance,human resources,legal and accounting, etc.
Don,
There is still a lot of that in certain fields and it is perfectly understandable. In the ideal world people would get paid what they are worth to the employer and the employee would buy his own benefits with a bigger paycheck. I think what you mention mostly got established in our society because of tax laws.