Monday, October 27, 2014

Economy - Wages

I was reading tonight that the largest employer in the U.S. 50 years ago was General Motors. The average wage in that company at that time was $50 and hour (in today's dollar). Today the largest employer in the U.S. is Walmart. The average wage in that company today is around $10 an hour. My how things have changed. I think that explains exactly what has happened in the U.S. over the last 50 years. We have gone from a manufacturing and production based economy to a retail and service based economy. Unfortunately, retail and service jobs can't pay as much as manufacturing and production based jobs. The margin in profit is not there to support higher wages. For many reasons (which would require way more space) we have squandered what made us prosperous and have become a nation of low wage jobs.

Thanks to globalization and the internet, that will not change. What if government did all it could to encourage manufacturing? How about tax breaks, reduction in regulation and compliance laws, zero interest loans, and maybe a tariff or two on imports (though I know that many times tariffs are counter productive)? Our government could and should be doing much more, but even that I doubt will not help now. It's to late and the U.S. is stuck. We will be a low wage job economy for the foreseeable future. I feel sorry for future generations. They will probably never know how good things could be (and were).