The American economy will remain strong because.... 15

[EngineerDave]

Assess the validity of this statementz;

The American economy will remain strong because we are a nation of spenders. This continual flow of money for goods will keep a strong service sector going for many years. While we don't have all the benefits of a great number of manufacturing jobs, we will have a increasingly larger proportion of service jobs.

Never mind the trade deficits, because where will China and India sell all their goods, if the US is not buying?

The American as the worlds most avid consumer is saving the economy by spending spending spending (while I secretly hoard my money and preach for others to spend!)

I know this is greatly oversimplified, but what do you think?

 

[StressGuy]

I think part of the problem is trying to take free market capitalism as it worked in the United States for the 20th century and expanding it to a world wide application.

There are a couple of major problems that I see with the translation - labor mobility and standards.

In the U.S., we have high labor mobility. If I lose my job in Houston or the company I work for goes out of business, I can send my resume to California, New York, or Florida to compete for another job because I can relocate there without much difficulty. The language is the same. And, while the cost of living varies across the country, it is not so much that I couldn't take it into account and adjust.

As for standards - a lot a people have died in the last century so we can enjoy the kinds of labor and environmental protections standards that we have, along with programs like social security, unemployment insurance, etc.

To be certain, the various states compete using incentives/tax breaks, etc to lure businesses with the idea that the job created will more than pay back the revenue "lost" from the tax breaks. Still, all the states know that they compete under the same umbrella of wager, labor, and environmental standards.

None of this framework exists on a global scale, so countries like India and China that have nothing like the standards of living we have come to expect in the U.S. are in a position to severely undercut costs of U.S. labor. Are we to say that they are "more efficient" becuase of this? If so, it certainly spells a bad outlook for the future of most Americans.

I would agree that, if things were to "clear" as they are supposed to, new jobs would be created and new industries arise to replace the jobs lost and the balance of trade would remain. But it's not, the U.S. is running a trade deficit with the world on the order of hundreds of billions of dollars and I haven't seen anything to suggest that this will change until the U.S. standard of living drops to the point that we can't afford to spend money that quickly (to go back to my leaking bucket, the hole is somewhere up the side. Eventually, after so much has been lost, the level will be too low for anymore to leak out.

When it comes down to it, what incentive is there for a company to locate any kind of R&D center in the United States?

Edward L. Klein
Pipe Stress Engineer
Houston, Texas

All opinions expressed here are my own and not my company's.

 

[PVH]

I guess the big question for this board is then as an engineer in America, what specialty and education do you need to sustain a high income level and avoid being bypassed by outsourcing? From my perspective it looks like all R&D and test engineering can be outsourced to India and China for cheaper. What does that leave here but local construction management, testifying as an engineering expert witness in our courts, managing engineering groups overseas and conducting local market reasearch and sales. Not much fun engineering stuff left after that.

 

[davefitz]

pvh:
there are a number of growing fields in the practice engineering , which we should all consider studying for, since they are immune to outsourcing:
a) pyro-bovine engineer- flip burgers on a grill
b)sanitary engineer- clean bedpans at a nursing home
c)packaging engineer- fill grocery bags at A+P

 

[funnelguy]

Since the "jobless recovery" is causing Dubbya some grief in the poles, he is evidently considering classifying burger flippers as Industrial jobs! Check out this link to Schumer's response.

http://www.senate.gov/~schumer/SchumerWebsite/pressroom/press_releases/PR02454.html

This is Dubbya's answer? After creating something like 20,000 jobs instead of the predicted 200,000 in the last month? Even a creation of 200,000 jobs would be a drop in the unemploment bucket, at this point.

Not that I think Kerry would be any better....

 

[DRC1]

Wealth is created by taking an object of some lessor utility, such as flint and laboring to create a product fo greater utility, such as a spear. Service industries, such as spear polishers, are useful as long as there are spears to be polished. I know it this sound simplistic, but it is basic economics. A strong manufacturing economy supports a strong service economy. If the manufacturing moves away, the service industry will eventually follow it. Manufacturing, which provides a wide varity of jobs for a varity of skills and provides many avenues of advancement. In the mid '80s manufacting was something like 295 of the economy. Now it is around 12%. In terms of per hour cost American workers are one of the most expensive. In terms of cost of units produced they are the least expensive. We can be competative in a global market. We need to rebuild our manufacturing base NOW. We can not as a nation spend our selves to wealth any more we can as individuals spend our way to wealth, We need to create value. (to answer the orginal post)