In the linked article, CNN Money blames finance, not capitalism, on the current economic situation. They make a good argument that is right in as far as it goes.
But they are ignoring something that shouldn't be ignored. The world economic situation is going to be dominated by a trend for the next several decades. That trend? And evening in lifestyle between the Chinese worker and the US worker.
This is a result of free trade and China's continuing efforts to become an economic powerhouse. China can produce goods far more cheaply than the US can for a variety of reasons. I'll list the ones I know (or feel I know):
1. Chinese workers are paid significantly less than US workers
2. Chinese workers also do not receive the sorts of benefits that US workers receive
3. China does not have remotely the same laws for such things and environmental protection and workplace safety.
4. Nor does China practice the same sorts of human rights that the US does (such as child labor laws)
For those of us in the US, the trend is scary and filled with uncertainty. We like our lifestyle, and the uncertainty is quite unsettling. Furthermore, I contend that the trend isn't going to stop in the factories. Intellectual Property is the most portable of all industries and generally highly profitable. Yes, computer programming jobs, research jobs, etc. All of these jobs have been migrating out of the US for 10 years, and that trend is going to continue. This will have a downward pressure all across America. Some people will continue to make outstanding salaries, but almost everyone else will face a declining standard of living.
What can we do about it?
Well, we can try to undercut the Chinese. That is probably a mistake.
We can implement trade barriers. I doubt that will work, but I won't be surprised if it happens.
Or we can try to be BETTER than the Chinese. Produce superior products so people will buy them in spite of their cost. This is what I try to do as a computer programmer. I'll happily pit my skills against else in the rest of the world. In spite of my elevated salary (as compared to a programmer in China, India, etc), I believe I provide a better return on investment.
You get what you pay for.
I only hope that fact means I have continued employment without starting to take pay cuts. It would be great if salary increases outpaced inflation.
The rest of you whining about your job going overseas -- what are you doing to make yourself more valuable? Are you providing a good return on investment by your employer? Can you honestly tell your boss you're worth two or three workers from overseas? Will he agree? Will his boss?
If not, do something about it.
