As Factory Jobs Disappear,

I'm not certain manufacturing is being lost, but it is definitely changing it's form. There are dozens of small manufacturing enterprises in my part of the country (Connecticut), but they are getting by with fewer and fewer employees. There is a hight tech firm not far from me that makes production lines for other firms in which you literally pour the parts in at one end and the finished product comes out the other. This is surely hurting some peoples standard of living but not the guys that make or own those machines, and that is the problem. Or at least part of it.

Acquiunk
The increased productivity contributes to the need for less manpower [employees] However, the greater culprit is the loss of industry and all the allied business that feeds off it.

au

It's happening here in Australia, too. A result of the effects of globalisation. It is far cheaper to import many manufactured good from China, Korea, etc. than it is to produce them here now. Manufacturers simply cannot compete with their much cheaper labour forces. Whole industries are virtually disappearing as a result.

Re: As Factory Jobs Disappear,

In the short run (2003), it will continue to grow at 3%, but lose jobs because productivity grows so fast. In the long run (beginning 2004), cheap money from the Fed will make demand keep up with productivity, and the economy will grow fast enough to generate jobs. It would help if the Bush tax cuts weren't so tilted towards the rich, who are unlikely to spend it. But even so, the perspective isn't too bad in the next five years or so.


Sure! There is nothing magic about manufacturing after all. And even if there was, it isn't so much manufacturing output the US loses. The main reasons manufacturing jobs are lost are productivity growth and the 2001 steel tariffs, which have devastated the bottom lines of steel-consuming industries. If fiscal policy was less irresponsible, and Bush hadn't gone protectionist on steel, all that would happen would be that manufacturing workers change jobs and start working in the service sector, leaving America's standard of living unaffected.


Possible -- given the irresponsible deficits the Bush administration is running, and given that net imports necessarily equal net foreign investment. One day, international investors will find that the USA is no longer a good place to invest in; as a result the dollar will plunge, decreasing foreign investment as well as net imports. Whether the landing will be soft or a panicky crash, nobody knows.


Two things: One is that employment will shift from manufacturing to services. The other is that international trade will contribute to rising inequality in America, which is good for high-paid workers, bad for low-paid workers, and probably bad for society as a whole. The first effect is neutral in terms of the American workers' welfare, the second is bad unless it's offset by some redistribution of wealth. Making the tax system more progressive again, and expanding lower-income programs like Medicaid and the earned income tax credit, seem like a good idea.


Regime change in 2004. America's current problems are actually rather simple as a matter of economic theory. What's lacking is an administration with the decency and the good will to put the theory to work.

An administration with decency

It will not be this administration, and it may not be possible for any administration for quite some time. The Republican party is dominated by a radical group of ideologues who wish to return the economy and the country to a pre 1933 model of free for all capitalism and social inequality. Their social model is something closer to Chile or Mexico that the society we have know for the last 60 years and they are very close to achieving their goal.
In my opinion the Patriot Act has nothing to do with terrorism and everything to do with the social changes these ideologues are attempting. Such a radical shift of wealth and power and an ossifying of social hierarchies will cause wide spread unrest as people find that the government does not provide the protections they traditionally assumed they had. The Patriot Act provides the tools to suppress this unrest. It's only analogue in American history is the Alien and Sedition Act of the 1790's.
This act, passed by the first Adams Administration (which like the Bush administration had it's roots in New England) has been often used as an example of the misuse of legislative and executive powers.

USA

Poverty rises, income down

Posted: Friday, September 26, 10:36am EDT

Poverty rose and income levels declined in 2002 for the second straight year as the nation's economy continued struggling after the first recession in a decade, the Census Bureau reported Friday.
The poverty rate was 12.1 percent last year, up from 11.7 percent in 2001. Nearly 34.6 million people lived in poverty, about 1.7 million more than the previous year.

Median household income declined 1.1 percent between 2001 and 2002 to $42,409, after accounting for inflation. That means half of all households earned more than that amount, and half earned less.

The poverty rate rose again after having fallen for nearly a decade to 11.3 percent in 2000, its lowest level in more than 25 years. Income levels increased through most of the 1990s, then were flat in 2000 and fell the last two years.

Experts had predicted rising unemployment last year and the still shaky economy would increase poverty and lower income for most people, even though the recession officially ended in November 2001.

In 2002, 12.1 million children were in poverty, or 16.7 percent of all kids, up from 11.7 million, or 16.3 percent, the previous year. The Census Bureau said the increase was not statistically significant.

The estimates, calculated annually by the Census Bureau, came from a survey of 78,000 households taken in March. They are the government's official measure of income and poverty.

Comparing poverty rates and income for racial and ethnic groups was more difficult in 2002 because the Census Bureau for the first time allowed survey respondents to report if they were of more than one race.

As It Tries to Cut Costs, Wall Street Looks to India

By SARITHA RAI

Published: October 8, 2003

[]ANGALORE, India, Oct. 7 - Global companies have long taken advantage of India's large college-educated, low-cost work force. Now Wall Street firms, including J. P. Morgan, Lehman Brothers and Morgan Stanley, are joining the chase for more highly skilled Indian labor.
J. P. Morgan, the investment banking arm of J. P. Morgan Chase, plans to hire a few dozen researchers in Bombay by the end of the year. Morgan Stanley, which already has investment banking and mutual fund operations in India, will employ a similar number of researchers this year, also in Bombay. Both teams will consist of junior-level analysts collecting data, analyzing balance sheets and working on basic financial models.
This shifting of more sophisticated work to India comes on the heels of a rush of call center and other back-office nonmanufacturing jobs here, and is seen by many experts as yet another phase in the latest drift of jobs to low-cost countries that began in the early 1990's with Silicon Valley companies.
Some Wall Street firms are just observing the research trend for now, though they already have a presence here. Merrill Lynch has an investment banking, brokerage and asset management joint venture in India as well as a technology development center to build proprietary software for its global operations.

And the beat goes on.
http://www.nytimes.com/2003/10/08/business/worldbusiness/08rese.html?th