Monday, 18 October 2010
Jobs Employment, Career Job, Employment Job
Summary
Without excessive government or consumer spending - which can only create temporary jobs - we believe 9% is now close to full employment job in America. Although this statement is initially somewhat shocking, we've been expecting it and only recently realised why it took so long to finally show up.
For ten years - from 1998 to 2008 - excess consumer spending, which amounted to about $400 billion a year, created millions of temporary but really nonessential jobs. This somewhat artifical job production masked for ten years the damage being done to America from the loss of 20 million jobs to overseas labor. There are only so many products and services people really need and too many of them were now made overseas. When consumer spending and savings came back to normal levels, the nonessential temporary jobs disappeared exposing the employment damage.
If we are right, it represents a major wakeup call and the consequences to both business and real estate forecasting are profound. So are the political ramifications.
The problem is Globalization. Globalization, while good for multinational companies, is known to be very damaging to employment levels in developed countries like America and Great Britain as millions of productive jobs move to developing countries like India and China.
The Process of Globalization Brings Country "Normalization"
The process of globalization helps bring about “normalization” in the world – a leveling of standards of living from country to country. For this to happen standards of living in developed countries must suffer a little while the developing countries move up rapidly. From a world view that’s good – from an individual country view it may not be.
But it doesn’t start out this way. At first globalization seems a blessing. Many essential items cost less so more money is available to spend on services and the niceties of life – life gets better, one feels “richer.“ But as the outflow of jobs to foreign countries continues this view changes. After a while it becomes hard to replace all the lost jobs with meaningful ones. Unemployment rises.
Without excessive government or consumer spending - which can only create temporary jobs - we believe 9% is now close to full employment job in America. Although this statement is initially somewhat shocking, we've been expecting it and only recently realised why it took so long to finally show up.
For ten years - from 1998 to 2008 - excess consumer spending, which amounted to about $400 billion a year, created millions of temporary but really nonessential jobs. This somewhat artifical job production masked for ten years the damage being done to America from the loss of 20 million jobs to overseas labor. There are only so many products and services people really need and too many of them were now made overseas. When consumer spending and savings came back to normal levels, the nonessential temporary jobs disappeared exposing the employment damage.
If we are right, it represents a major wakeup call and the consequences to both business and real estate forecasting are profound. So are the political ramifications.
The problem is Globalization. Globalization, while good for multinational companies, is known to be very damaging to employment levels in developed countries like America and Great Britain as millions of productive jobs move to developing countries like India and China.
The Process of Globalization Brings Country "Normalization"
The process of globalization helps bring about “normalization” in the world – a leveling of standards of living from country to country. For this to happen standards of living in developed countries must suffer a little while the developing countries move up rapidly. From a world view that’s good – from an individual country view it may not be.
But it doesn’t start out this way. At first globalization seems a blessing. Many essential items cost less so more money is available to spend on services and the niceties of life – life gets better, one feels “richer.“ But as the outflow of jobs to foreign countries continues this view changes. After a while it becomes hard to replace all the lost jobs with meaningful ones. Unemployment rises.
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