One of the big political arguments swirling again this season is “how do we rebuild and restore the Middle Class?”
The next question for me is “what income range is considered Middle Class?”
I’m no economist but I think of Boeing Machinists as being Middle Class type folks. I would guess their incomes range from $40,000 per year to $80,000 per year or roughly $20/hour to $40/hour. And even though they are highly trained, many of them are not college educated.
So for the sake of my argument that is how I will define Middle Class.
Once you establish the income range you just look around for the jobs that pay that kind of money. Or maybe you look for the jobs that used to pay that kind of money and follow that with where did those jobs go?
As a resident of the Puget Sound region in Washington State Boeing is a big part of our economy. For many years it was the only game in town. Fortunately we lucked out when Bill Gates and Paul Allen decided to keep Microsoft local, Howard Schultz opened Starbucks in Seattle; and again when Jeff Bezos headquartered Amazon in town.
So we have four very different businesses that produce and incredible amount of wealth in the region with very different operating models. One that manufactures a product, one that produces a digital product and two that provide services.
Without a college degree in computer science or business management, most remaining Microsoft employees struggle to make it into the middle class. The bulk of the Amazon and Starbucks employees also just bump the bottom of the range at best.
What is missing is the manufacturing jobs like Boeing offers. And what we know about Boeing is that they are also looking to reduce the cost of their workforce as well by opening factories in locations where the cost of labor is lower.
Is anyone surprised that I have an opinion about this dilemma?
Since our government bought into the “world economy” argument the American manufacturing sector has been withering and along with it the Middle Class.
The jobs most often associated with the Middle Class in the past were family wage factory jobs that have been shipped over seas to build up the economies of our trading partners. The adoption of the North American Free Trade Agreement NAFTA signaled the exit of many manufacturing jobs to Mexico. American participation in World Trade organizations encourage relocation of previously American jobs to third world economies to bolster those countries as trading partners but at the expense of American manufacturing jobs.
In most cases the jobs that go overseas are jobs that require training but not significant education.
The jobs that remain here are the ones that are tied to raw materials or require a highly trained and educated workforce; and even those raw materials jobs are at risk as the government is regulating many of them out of existence.
By today’s standards the Middle Class jobs are the public sector employers like governments and school systems. Locally we have city and county governments, we have Policemen, Fire Fighters and Public Works employees and at the state and federal levels we have the Department of Transportation, Department of Energy, Department of Ecology, Department of Education…..yadayadayada. Is it any wonder that the Middle Class has changed so dramatically?
The Middle Class swapped private sector jobs that produced the highest standard of living and best quality products in the world for public sector jobs that suck up the resources of society and produce nothing but a bill.
The Middle Class today is the Bureaucrat Class with the Service Sector groveling for a handout.
The cost of government skyrocketed at every level while the private sector industries our country was famous for have fled. Even a country boy like me could see this as it was happening but the rationale for world trade was too deep for me to grasp.
Whether it’s big business or big government, both political parties still champion the world trade argument even though it sells American workers down the river. There is no safe haven with either the Democrats or Republicans.
If you really want to know what happened to the Middle Class look at China where economic development is producing record numbers of millionaires even in this depressed economy. Our Middle Class moved overseas!
If our goal is to return America to the prosperity we enjoyed for many years after WW2 we have to examine what our government did to cause the exodus and systematically reverse it. We will also have to analyze the political ramifications to our trading partners and make value judgments. Bringing the private sector Middle Class back to America will have international implications.
Build American, Employ Americans, Buy American
by Steve DanaI can remember a couple years ago when the Boeing Company was planning the 787 Dreamliner program and where to build the airplane. There was mega competition between our state and a bunch of others. I remember a half dozen state representatives from various states making a case for Boeing building the factory there. Attracting Boeing jobs to their states and the economy created by those jobs is the thing we want for our whole country moving forward with the Trump administration.
The state of Washington was eager to throw in the kitchen sink to keep jobs here while South Carolina made a similar offer and was rewarded with an assembly plant.
Don’t tell me that every manufacturing company in and out of the US isn’t playing that same game. Who is willing to give up the farm for the jobs our company brings when we choose your state or country.
If our government adopts regulatory policies, tax policies and trade policies that encourage businesses to move jobs out of the country, can we be too surprised when they do move to Mexico, China or Viet Nam?
When the goal of our elected officials is to tear down our country in order to build up foreign economies it all makes sense. The New World Order folks are determined to level the playing field and it will happen at the expense of Americans and America. For me, whatever we do needs to consider American interests first, period.
The two sectors of the economy growing in our country are Service and Public Employees. Since we need a robust service sector to take care of us this group cannot be outsourced. We are making it really easy for immigrants (illegal or legal) to get jobs in the service sector. The problem is that they are the lowest paid sector and only insures that the workers remain poor.
The health care industry is one of the fastest growing service sector components, it does include workers in upper income areas, but since it’s closely tied to insurance companies, it isn’t really a free market industry. Consider how many doctors are retiring because of the government and insurance company restraints. Health care is a growth industry, but because of the regulation and insurance it’s not as much a profit center it once was.
The Public Employees range from Police and Fire Fighters, to city, county and state public works employees, transportation workers and many social service agencies. Federal agencies also employ millions of Americans. The good news for these employees is the pay tends to be higher than service sector jobs. The bad news is public employees work for a non-producing segment of the economy. Public agencies rely on the private sector economy to produce the revenues that feed the growth of government agencies. Can you think of any government worker that is paid the minimum wage?
The bottom line is we need a very robust tech segment coupled with a robust manufacturing segment to create the jobs required to have a growing, producing economy that will produce tax revenues to feed government’s needs. The role of government is to be good stewards of the public funds but since they didn’t have to work or sacrifice to make that money, it is often squandered.
The key is not the government, but the private sector businesses that produce the products and services and jobs that make up a healthy economy.
How could NAFTA or any other international trade agreement that encourages American businesses to move their facilities out of the country be good for Americans?
It used to be that there were American companies and foreign companies. Now companies are international or not affiliated with a country; they are looking out for their share-holders first, second, third and last. Privately held American companies are an exception but they represent a small percentage of businesses and a large number of employees.
If we want to grow the American economy, we need to create incentives to retain businesses and jobs here like we did with Boeing while we consider appropriate penalties for companies that move their jobs off shore but want to sell their goods here in America.
The answers are not simple, but since the companies don’t have allegiance to America first then I’m not as likely to cut them slack if their decisions exploit our economy but don’t enhance it.
If Americans believe that they will get a fair shake from any international government or company, they are nuts. We need to fight for our economy even if it means some consumer goods are more expensive. Build American, Employ Americans, Buy American.
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