Excerpt for Good Jobs Are Disappearing: Solutions? by , available in its entirety at Smashwords










Good Jobs Are Disappearing



Solutions?







By Mel Clark

Clear Thinking LLC, 2018 


Contents


Prologue


Johnny Can’t Find a Job


Fiat Money Enables Massive Trade Deficits & Job Outsourcing


20% Front End Load Mutual Funds and $35 Brokerage Commissions


Free Trade Reduces the Cost of Outsourcing Jobs


Johnny’s Interview Results, $1 Commissions & No-Load Mutual Funds


High US Corporate Taxes Incentivize Job Outsourcing


Johnny Embraces the “Gig” Economy


Technology Enables White Collar Job Outsourcing


Johnny’s Business Starts Slow


Technology Enables Rapid Job Elimination


Johnny Takes a Part-Time Job


Labor Force Participation and Unemployment Rates


Johnny Wants to Take a Car Loan


Saving Crisis


Johnny Wants an Apartment


Johnny’s Friend Loses His Job


The Insecurity of Jobs Compared to Gigs


Johnny Wants to Get Married and Have Kids


Live like NO ONE else, so later, you can LIVE like no one else.


Epilogue



Prologue


The Washington Post, May 11th 2016, article titled “The middle class is shrinking just about everywhere in America


“Pew reported in December that a clear majority of American adults no longer live in the middle class, a demographic reality shaped by decades of widening inequality, declining industry and the erosion of financial stability and family-wage jobs. But while much of the attention has focused on communities hardest hit by economic declines, the new Pew data, based on metro-level income data since 2000, show that middle-class stagnation is a far broader phenomenon.


The share of adults living in middle-income households has also dwindled in Washington, New York, San Francisco, Atlanta and Denver. It's fallen in smaller Midwestern metros where the middle class has long made up an overwhelming majority of the population. It's withering in coastal tech hubs, in military towns, in college communities, in Sun Belt cities.


The decline of the American middle class is "a pervasive local phenomenon," according to Pew, which analyzed census and American Community Survey data in 229 metros across the country, encompassing about three-quarters of the U.S. population. In 203 of those metros, the share of adults in middle-income households fell from 2000 to 2014.”


As I write this the US and world economies are nine years into an economic recovery. A weak recovery, but a long one.


The unemployment rate in the United States recently clocked in at 3.9%.


Full Employment so they say. Many companies can’t find qualified workers to fill job openings.


According to www.careercast.com, the most difficult jobs to fill in 2017 were:


1) Data Scientist

2) Financial Advisor

3) General Manager and Operations Manager

4) Home Health Aide

5) Information Security Analyst

6) Physical Therapist

7) Registered Nurse

8) Software Engineer

9) Truck Driver


Three of the most “in demand” jobs are in Information Technology.


1) Data Scientist

5) Information Security Analyst

8) Software Engineer


Four more need specialized education or certification.


2) Financial Advisor

3) General Manager and Operations Manager

6) Physical Therapist

7) Registered Nurse


I don’t know what's required to be a Home Health Aide, but to be a Truck Driver you need a CDL driver’s license.


The jobs going begging are relatively high skilled jobs. Nothing unusual about that. But, people without those skills have a harder time of it.


Across the board, real wages (wages adjusted for inflation) lag.


The chart below is published by www.pewresearch.com. It shows inflation-adjusted real wages have improved by $1.49 (in 2014 dollars) over the past 50 years. Pathetic.



The FED’s been trying to create inflation above 2% and failing.


Some say they’ll succeed beyond their wildest dreams. The same people (I was one of them a few years ago) have predicted high inflation for years; ever since the FED began buying bonds on the open market (called “QE1”).


It turns out a great many of the new jobs created during the recovery were part-time, low wage jobs.


Below is an excerpt from a post on www.businessinsider.com. It was written by Pedro Nicolaci da Costa on August 8th, 2017. The title is, “More Americans need a 2nd job to make ends meet — and it's sending a troubling message about the economy”.


One trend could be especially ominous: a spike in the number of Americans taking multiple jobs that have effectively reversed a decade-long* decline.


"The plight of low-income workers is underlined by yet another statistic," Sri-Kumar writes.

The Labor Department reports that 7.6 million workers held multiple jobs last month, up 2% from 7.4 million in July 2016. That's back to highs not seen in 20 years. And it should not be mistaken as a sign of healthy entrepreneurship.”


Could it be that more Americans need to work multiple jobs because more Americans can only find part-time jobs?


If half the population has below average education, below average skills, or below average capabilities, shall we protest and agitate for the government to “do something”? Shall we “vote the bastards out”?


Can we possibly live in Lake Woebegone, “where all the women are strong, all the men are beautiful, and all the children are above average”?


I think it was Peanuts who said, “Wherever I go, there I am.” And it was Jesus who said, “The poor are with you always.”


Poor is a relative state. Relative to average. Average is the middle of a population.


What shall we do with the “below average”? No matter. Half will remain below average regardless of what we do. What’s more, there will always be a bottom 10% too.


You can be, and probably are, above average in some things and below average in others. Vive la difference!


But if you’re below average in marketable job skills, what then?


What if you had above average job skills yesterday, but discover your job skills are below average tomorrow?


I submit, if you depend on the government you'll regret it. If you expect the government to solve your problems, you'll be disappointed. If you think the government will “provide jobs”, you’re mistaken.


On the other hand, never before in history have you had so much opportunity to become an owner instead of a worker. A capitalist instead of a laborer.


I don’t mean to suggest you don’t need to work.


On the contrary, if you start a “side gig” you may work harder than ever. If you set aside a little money each month to buy stocks in other people’s companies, you’ll do without something to make it possible.


But, if you “live like NO ONE else, then later, you can LIVE like no one else”.

 


Johnny Can’t Find a Job


“Hey Johnny, your Grandfather’s pulling in the driveway and dinner’ll be ready in ten minutes.”


“Okay, thanks, Nana. I’ll have the game on pause in just a minute.”


After killing three more gargoyles he pressed pause and the screen went blank. The door opened and a late 60ish man of medium height entered the foyer.


“Hey, Hon. How was your day?” he said as he walked into the kitchen.


“Same ol, same ol. The manager of the Manila call center can’t seem to enforce the talk time rules. Everything’s harder in the Philippines. I wish the company’d kept the Greensboro center open.”


“Me too, Di. I know it’s harder for you now. I’ve got the same issues. My genius management figures we’ll save a boatload of money contracting our website overhaul to somebody in India. Somebody nobody’s ever heard of.”


“Will it affect your job, Al?”


“Nah. My job’s safe for now. It’s just getting harder. Speaking of jobs, how’s job hunting going, Johnny?”


“Well, I got another interview. It’s at 3 on Tuesday. In that new office building on Waymore.”


“That’s wonderful Johnny,” his grandmother said. “Maybe this is the one!”


“Maybe Nana. But, it’s hard to get excited over an interview. This’ll be the eighth one since I graduated.”


“Just do your best every chance you get. You’ll land a good job eventually. Two years is a long time, but don’t give up.”


“I know Gramps. ‘Put your best foot forward.’ ‘One step at a time.’ I get it.”


“Changing the subject,” said Johnny’s grandfather, “I ate lunch at the new McDonalds on Grant. They’ve got those kiosk things you order from like we saw in France last year. Remember Di?”


“Yeah. They were confusing.”


“Yup. Here too. It took me five minutes to order a Big Mac Value Meal. It would’ve taken ten minutes if I’d stood in line at the register though. They only had one register open, but they had ten kiosks.”


“I wish you wouldn’t eat at McDonald's. You know I hate that.”


“Yeah, I know. I just didn’t have time for anything else today.”


“Say, Gramps, I found the brake pads for my car online. They were $10 cheaper than Pep Boys, so I ordered ‘em. They should be here Friday. Will you help me put ‘em on?”


“Sure. Looks like dinner’s ready. Let’s eat.”



This scenario is fiction. But, it could be happening in any kitchen in any town in the United States. Perhaps, any in the developed world.


Jobs are outsourced. White collar jobs as well as blue.


Jobs are replaced with technology. White collar jobs as well as blue.


Grandparents are working longer, delaying retirement. Because they keep working, fewer jobs are available to younger workers.


Even after retiring, grandparents often take low wage part-time jobs. Jobs that might otherwise go to entry-level workers.


I make no value judgments here. I’m one of those over-65 grandparents still holding down a full-time job.


But, I want you to think about how much harder it is today for young people to find a good job. Not a part-time job. Not a minimum wage job, but a job you can start a family on.


It’s not impossible of course.


Much depends on a person’s skills. But even skilled work is outsourced and threatened by technology.


They say computers with rudimentary artificial intelligence (AI) will write novels in just a few years.


When technology displaced workers in the past, people were hurt in the short-term. But new technology always created more jobs in new and different industries. More jobs than it displaced.


It may again. I sincerely hope so. But, and I say this with fear and trembling, this time just might be different.


Perhaps the difference will be in the compressed time-frame in which the displacement occurs.


Perhaps, eventually, many more jobs will be created than destroyed. Just like in the past. 


But, this time the displacement will occur over a few years, not decades.


It may be much more difficult to create the new jobs. And, the new jobs will likely require even higher skill levels.


Technology changes, society adapts, and the lives of people change. But, we can proactively change to make our lives better.


You can take steps now to mitigate the risk you and your family will face. Failing that, the changes are coming anyway.


You may find them unpleasant.

 


Fiat Money Enables Massive Trade Deficits & Job Outsourcing


Gold: Regulator of International Trade


With a few isolated exceptions, the money of the entire world was gold and silver from before Roman times until 1944. Most of the exceptions were countries paying for wars using fiat currency for as long as they could get away with it.


“Fiat” money is money because someone decrees it is money. Usually the someone is a sovereign government. It’s backed by the government’s willingness to use force and by its willingness to accept the fiat money when taxes are paid.


When money was gold, a country could only import as much as they could pay for in gold. Most countries, most of the time, earned gold by exporting their own goods in turn.


16th and 17th century Spain was an exception to the rule. Spain mined huge quantities of gold and silver in its Western Hemisphere colonies. All countries, except Spain, had to export in order to have gold for imports.


In order to maximize their gold inflows countries tended to specialize. They focused relatively more attention on producing things they could sell outside their borders. On their “comparative advantage”.  


And yet they kept their domestic production capacity for most things.


Employment would shift from industry to industry as technology improved. But, labor would remain more or less fully utilized in all of the trading countries.


The Bretton Woods accord created a new monetary order. It was the first of three major steps that ended the role of gold in international trade.



Step One: Bretton Woods


In 1944 in Bretton Woods, New Hampshire, representatives from 44 nations met to develop a new international monetary system that came to be known as the Bretton Woods system.


Conference members had hoped that this new system would “ensure exchange rate stability, prevent competitive devaluations, and promote economic growth."[2] It was not until 1958 that the Bretton Woods system became fully operational. Countries now settled their international accounts in dollars that could be converted to gold at a fixed exchange rate of $35 per ounce, which was redeemable by the U.S. government. Thus, the United States was committed to backing every dollar overseas with gold, and other currencies were pegged to the dollar.


For the first years after World War II, the Bretton Woods system worked well. With the Marshall Plan, Japan and Europe were rebuilding from the war, and countries outside the US wanted dollars to spend on American goods—cars, steel, machinery, etc. Because the U.S. owned over half the world's official gold reserves—574 million ounces at the end of World War II—the system appeared secure.[3]


However, from 1950 to 1969, as Germany and Japan recovered, the US share of the world's economic output dropped significantly, from 35% to 27%. Furthermore, a negative balance of payments, growing public debt incurred by the Vietnam War, and monetary inflation by the Federal Reserve caused the dollar to become increasingly overvalued in the 1960s.[3]


In France, the Bretton Woods system was called "America's exorbitant privilege"[4] as it resulted in an "asymmetric financial system" where non-US citizens "see themselves supporting American living standards and subsidizing American multinationals." As American economist Barry Eichengreen summarized: "It costs only a few cents for the Bureau of Engraving and Printing to produce a $100 bill, but other countries had to pony up $100 of actual goods in order to obtain one".[4] In February 1965 President Charles de Gaulle announced his intention to exchange its U.S. dollar reserves for gold at the official exchange rate.[5]”

From Wikipedia, Nixon Shock


The Bretton Woods system used US Dollars as the medium of exchange between international trading partners. For countries other than the United States, the system worked just like the international gold standard. Countries exported to earn US Dollars so they could spend US Dollars on their imports.


The United States took the role of 16th and 17th century Spain, only worse. Instead of mining huge quantities of gold and silver, the United States created huge quantities of US Dollars out of nothing.


The US Treasury issued sovereign debt (bill and bonds) to borrow US Dollars - so far so good. The Federal Reserve would buy the Treasury debt in whatever quantities the Fed thought was “good”. This process continues to this day.


The Fed, however, pays for their purchases by entering a US Dollar value in the accounts of the banks from which they buy the debt. The accounting entries in the Fed’s books require only ink, but the money is transferable by the banks and just as spendable as if it were real.


In the days following World War II, lots of US Dollars were needed around the world to act as the new medium of international exchange. The Federal Reserve was obliging and the mass of US Dollars they created was spent on net imports and loaned out in “The Marshall Plan”.


Thus, was born chronic trade deficits. And with them, the gradual movement of jobs out of the United States.



Step Two: Eliminating the “Gold Cover”


The Vietnam war was raging and it was expensive. 


At the same time, President Lyndon Johnson wanted to increase spending on his “Great Society” social welfare agenda.


There was an unfortunate law on the books. It was unfortunate from President Johnson’s point of view anyway. It required that every dollar in the money supply must be backed by gold (the M2 money supply for the economists in the crowd).


The gold was held in US Treasury vaults valued at $35 per troy ounce, the official exchange rate.


The law required that there must be enough gold to cover 25% of the total value of the M2 money supply.


There just wasn’t enough gold to do this and still pay for the “Great Society” and the Vietnam War.


On March 19, 1968, President Johnson signed a bill eliminating the “gold cover” (i.e., the reserve backing by gold) for Federal Reserve notes. Prior to the removal of the gold cover, each Federal Reserve Bank had been required to hold a gold certificate reserve of not less than 25 percent against its Federal Reserve note liability. (The gold certificates represented gold actually held by the United States Treasury.) When the gold cover requirement was removed in March of 1968, the ratio of the gold stock of the U.S. to the total Federal Reserve note liability stood at 25.0084 percent. "


Purchase this book or download sample versions for your ebook reader.
(Pages 1-12 show above.)