I have serious concerns that the unemployment rate might not come down significantly for many years to come.
Originally Posted by bigtex
Tex, it can come down, but only if wages and benefits for American workers fall. With a global economy, manufacturing will always go to the cheaoest source of reliable labor. That ain't us. If we are going to compete, the cost of labor has to come down. If the cost of labor doesn't come down, then unemployment will rise.
Globalization has been VERY bad for the American worker and the American middle class. You can see it in the trend over the past 25 years in retirement plans. Businesses (even small business) used to routinely offer defined benefit pension plans. Over time, those changed to defined contribution plans. With the further passage of time, businesses have reduced the amounts they pay into those defined contribution plans, and increasingly don't offer a plan at all, making the employee entirely responsible for his post-retirement income through IRAs.
China's average standard of living will rise and ours will fall until the cost of production and delivery are roughly equivalent between our two countries. Where they meet will not be a happy place for most Americans. Perhaps the worst part is that Chinese production costs would be lower than ours even if wages and benefits were comparable because of their lack of regulation. Pure free marketers likely orgasm at the though of it, but I prefer not have melamine in my milk, or
soy sauce made from human hair. When businesses aren't regulated, they are guided solely by the profit motive, and that leads to reducing costs wherever possible, with predictable results.
Without a serious change in policy in this country regarding trade and globalization, we're headed directly to poverty, without passing 'Go'.