There is an old saying. It is a Recession when your neighbor loses his job. It is a Depression when you lose your job. That sounds reasonable. But how does it help us plan the economy for the nation?
America is becoming a more productive nation. There is more manufacturing. But there are fewer jobs. Machines are replacing people in the workforce. This is not a new trend. There will be even more robots working in the future.
Candidates for president are saying they will stop this loss of jobs. Bring them back to this country. This is not likely. The real future is about training workers for the new jobs.
American companies look for places where it costs less to make their products. Televisions, appliances, and clothing, are cheaper to buy when they cost less to make. Consumers can buy things they can afford. It is one reason why people shop at Walmart.
It is not just a question of trade agreements. Big businesses will look for cheaper labor in offshore places. For example, Apple is a big American company. It makes many products in China. The U.S. does not have a trade agreement with China. Trade agreements may make it easier to move a business. But the search for lower wage workers is always on.
The income of many Americans has not grown much in the last few years. Wages are too low. Minimum wages are starting to go up. Still, workers are not feeling good about their place in the economy.
Sometimes economies grow and sometimes they shrink. Workers with training and skills will always do better.
Candidates are saying they can change lives. Maybe yes. Most likely the answer is no. If change were that simple, it would have happened long ago.
Source: The New York Times May 8, 2016