A Profile on the World Changing

The NYTimes is running a great piece called “How the US lost out on iPhone jobs.” It’s essentially a piece on capitalism, globalization and comparative advantage (sort of…that actually might be the most debatable part of the article…as comparative advantage usually is).

A section that stood out:

At the same time, however, the electronics industry was changing, and Apple — with products that were declining in popularity — was struggling to remake itself. One focus was improving manufacturing. A few years after Mr. Saragoza started his job, his bosses explained how the California plant stacked up against overseas factories: the cost, excluding the materials, of building a $1,500 computer in Elk Grove was $22 a machine. In Singapore, it was $6. In Taiwan, $4.85. Wages weren’t the major reason for the disparities. Rather it was costs like inventory and how long it took workers to finish a task.

“We were told we would have to do 12-hour days, and come in on Saturdays,” Mr. Saragoza said. “I had a family. I wanted to see my kids play soccer.”

Modernization has always caused some kinds of jobs to change or disappear. As the American economy transitioned from agriculture to manufacturing and then to other industries, farmers became steelworkers, and then salesmen and middle managers. These shifts have carried many economic benefits, and in general, with each progression, even unskilled workers received better wages and greater chances at upward mobility.

But in the last two decades, something more fundamental has changed, economists say. Midwage jobs started disappearing. Particularly among Americans without college degrees, today’s new jobs are disproportionately in service occupations — at restaurants or call centers, or as hospital attendants or temporary workers — that offer fewer opportunities for reaching the middle class.

My quick personal view on this is that Apple has done way more to create vast amounts of wealth and satisfaction for many people than if they didn’t exist. On balance, it’s net positive.

That said, it’s completely terrifying to see segments of America’s middle class disappear. Smart people. People who know their stuff.

And what sort of message does it leave us educators to say to our students?

And, the bigger conversation that’s starting to happen, what obligation does our society have towards those who are becoming “have nots” (have nots being defined in any number of ways…from material have not to educational have nots)? We are an incredibly, incredibly wealthy nation (stunningly so). If the will was there (and make no mistake, it has happened in the past), we could create a society that helps people transition into future realities.

The ending quote:

“New middle-class jobs will eventually emerge,” said Lawrence Katz, a Harvard economist. “But will someone in his 40s have the skills for them? Or will he be bypassed for a new graduate and never find his way back into the middle class?”

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