In all our economies manufacturing jobs as a percentage of total employment have fallen since the 1970s. Those traditional industries now employ a fraction of the workers they did in the 1970s - take a look at, say steel & iron production. The real problem is that wages have fallen in real terms since the 70s & prices, especially housing, have rocketed & not just in the last 4 years. The recent Boeing deal on pay, 38% over 4 years sounds great, but then you look at what they had the last 8 years & predicted inflation for the next 4 & by 2028 they will be worse off than they are now.
The "economy" is booming but most families live hand to mouth with huge debts & no savings. There will be no return to the good ole days.
You are right.
I cant argue that point.
I worked in Steel, oil, mining, pulp and paper.
I've watched this happen......
I have a theory::
I'm not an economist but people around here talk about all kinds of crack pot theories from chem-trails to people eating dogs and cats so here is mine.
We have a complicated combination of things happening.
Work is become more specialized and less skilled.
We don't fix so much as replace parts so there is little incentive for employers to train up and pay to retain worker.
( work in general )
We have a productivity problem.
In order to increase wages worker must be more productive and improve constantly.
We don't really increase our productivity the way we used to and where we do become more productive this leads simply to job cuts.
Scarcity doesn't really happen like it used to to drive innovation and products.
The last supply line crunch after the pandemic showed us what things used to be like and this triggered inflation but no real growth in new investment to create substitution or new capacity.
A lack of competition.
Without real fair and normal competition there is no real need to grow or hire companies
Where competition does get heated enough to spur innovation we end up in a round of mergers and acquisitions to cool things down.
Or cheap imports tamper down the heat and cool any inflationary demand driven growth and innovation..
Then we get into Zombie companies that are too big to fail so they get bail outs but they remain like zombies and don't innovate or grow.
They remain stagnant and so do the wage they pay.
But they are too big to fail and they smother start ups with their size.
Money is cheap to borrow from a historical perspective and inflation ( now normalizing ) is low enough to divert investment form riskier growth investments into mergers, stock buy backs and take overs.
This does not innovate or grow.
In this kind of environment inflation is low dangerously low and can cause people to save rather than spend if they think prices may drop.
I'm watching battery and solar prices drop.
I'm holding off spending because I will wait and see if they drop further...
If others do this is will cause a sales slump so manufactures need to slash cost
Without more investment to grow and become more companies stagnate.
Money does not flow into these industries and companies its does not pay unless you intended to slash burn to increase short term profits ( this is the 3G capital method or blackrock way of buying stagnant companies and squeezing them to make more money rather than growing )
The worlds population is not growing in a way that encourages economic growth.
The countries with money are shrinking and aging this does not drive consumer and investment growth.
Where you do have population growth they are not consumers with cash.
Capitalism works well when you have healthy competition.
Demand and growth and you are feeding a young dynamic growing population.
These things cause feedback loops that stir innovation, consumerism and real wage and standard of living growth.
This does not seem to happen anymore.
Worse there are other forces that suck money out of the system and concentrate wealth.
The dead money pools up in tax havens.
To prevent the flight of cash we cut capital gains and other taxes on profits and windfalls.
This diverts money from productive investments in new technology training or machinery. ( places where you used to get more back in tax incentives than you do now )
Well these are what I think are causing the stagnation in our economy.
And I don't see an out.
I saw this happen first in Japan and I have not see them really recover
What you do see is a lot of really rich people who are scared of spending their money on things that are risky rather than easy.
Stocks, property leveraged buyouts these are the safest ways to grow your money ( or pension ) but they do not create growth where there is not demand for it...
Random thoughts but I think some of this holds water.
Other will look for simpler reasons.
taxes are too high cheap foreign labour ect...
I think its just because we are no longer young dynamic and trying new things.
The flip side of that is also scary if we were to spur growth by growing at what point do we bump up against the limits of our society to continue to grow.
Is thats whats happening????
Is it too expensive to grow???
Do we want to grow forever and can we????
Cancer grows for ever and thats not a good thing, thats unregulated growth untill it kills you
