The US was still riding high off the post-war boom.
In the 40's - 60's, the US was the manufacturing powerhouse while Europe and Asia were rebuilding. The US had the baby boom and the enormous natural resources to lean into that growth.
After some decades, we grew to a point that labor became increasingly expensive. Workers wanted more, consumers wanted more for less. So we outsourced the lower-end manufacturing jobs to lower cost of living areas, and ultimately shipped them overseas to developing economies.
The US now does mostly high-cost, value-add. We're sitting at the top of the production food chain and labor costs a tremendous amount. Fewer people, as a percentage of the population, are able to fill these jobs due to the high skill required.
20-30 years ago the end of the post-war tailwinds. We've been experiencing the US operate in a global economy where our lower class doesn't have access to what were once well-paying jobs. We moved those over to cheap overseas labor, and we benefitted greatly from the lower cost of goods.
Our highly compensated knowledge workers are pushing prices up at the high end, and there's less middle ground.
The middle and upper classes will be fine. It's those at the bottom that are suffering. Instead of providing means to lift our poor up and into the middle class, we're lifting laborers in India, Vietnam, and Mexico out of poverty and into their own growing middle classes. (Which I think is absolutely great for them. I just wish we could also help our own lower class.)
Labor costs are high primarily because the USD is kept artificially propped up by other countries depreciating their currencies faster (I.e. see China’s manipulations). If we allowed USD to drop, American labor could become competitive again.
In the 40's - 60's, the US was the manufacturing powerhouse while Europe and Asia were rebuilding. The US had the baby boom and the enormous natural resources to lean into that growth.
After some decades, we grew to a point that labor became increasingly expensive. Workers wanted more, consumers wanted more for less. So we outsourced the lower-end manufacturing jobs to lower cost of living areas, and ultimately shipped them overseas to developing economies.
The US now does mostly high-cost, value-add. We're sitting at the top of the production food chain and labor costs a tremendous amount. Fewer people, as a percentage of the population, are able to fill these jobs due to the high skill required.
20-30 years ago the end of the post-war tailwinds. We've been experiencing the US operate in a global economy where our lower class doesn't have access to what were once well-paying jobs. We moved those over to cheap overseas labor, and we benefitted greatly from the lower cost of goods.
Our highly compensated knowledge workers are pushing prices up at the high end, and there's less middle ground.
The middle and upper classes will be fine. It's those at the bottom that are suffering. Instead of providing means to lift our poor up and into the middle class, we're lifting laborers in India, Vietnam, and Mexico out of poverty and into their own growing middle classes. (Which I think is absolutely great for them. I just wish we could also help our own lower class.)