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Unemployed Chinese Graduates Say No Thanks To Factory Jobs
hackingbear writes "While people and politicians are pitching for more education and reviving manufacturing in this country, jobs go begging in factories while many college educated young workers, which now number 11 times more than in 1989, are unemployed or underemployed in China. A national survey of urban residents, released this winter by a Chinese university, showed that among people in their early 20s, those with a college degree were four times as likely to be unemployed as those with only an elementary school education. Yet, it is not about the pay. Many factories are desperate for workers, despite offering double-digit annual pay increases and improved benefits, while an office job would initially pay as little as a third of factory wages. The glut of college graduates is eroding wages even for those with more marketable majors, like computer science. Vocational schools and training programs are unpopular because they suffer from a low status [or are seen as] for people from unsuccessful, poor, or peasant backgrounds. 'The more educated people are, the less they want to work in a factory,' said an unemployed graduate. If we do succeed bringing back factory jobs, are there enough people who want them?"
People still see factory jobs as being for "stupid" people and they are generally looked down on, while even terrible office work is considered acceptable. This shouldn't be.
Yet Another Tech Blog
(but so much more, including game and movie reviews)
http://yanteb.peasantoid.org
Let's be honest, college in China is no where near the difficulty as in the U.S. It's even harder than Japan if folks who've been to both countries are to be belived. You work hard for an education, you deserve something better than being a semi-automoton.
Now we get on our graduates' cases when they complain about doing menial jobs. It's a tough first year (or 5) right after school, but in places like China where you're competing against literally millions in the same line, what are your odds of personal advancement without connections?
If computers were people, I'd be a misanthrope.
From the summary:
Can anyone tell me what this sentence means?
We've all heard the ancient urban myths about PhD's flipping burgers, but here in the States there seems to be a social stigma among younger graduates attached to manufacturing jobs that sometimes clouds one's financial judgement. Holding out for a cool-sounding title and a comfy chair over a steady job that pays considerably more, just because a lot of rednecks or minorities work there too, just doesn't make sense. You can still pursue your dream job while you earn a living, and you can do your laughing at the other people on payday.
Scruting the inscrutable for over 50 years.
and in the us Factorys are saying there are skills gaps with people and they are pushing advanced manufacturing programs from community colleges
http://articles.chicagotribune.com/2012-06-26/news/ct-met-new-harper-college-jobs-program-20120627_1_manufacturing-summit-harper-college-production-workers
The submitter was probably a non-native English speaker so his language errors can be excused. What the hell is with the slashdot editing? Come on guys... it takes one minute to correct the mistakes in that summary.
Jobs are not just an excuse to hand people wages. You hire workers for the product they create. So there must be enough demand for whatever educated people do if they are to make a living. And the more they are the smaller the part each one gets of the pie.
So people just blindly assuming that being educated in a university will automatically make them richer needs to stop. It might be true, but it's not automatic! The more people enroll in university the less true it becomes.
As a holder of a graduate degree who can currently only get work as unskilled labor, I can see both sides of this. I work on the ramp at the airport, and while the job isn't really all that bad, intellectually it is unstimulating and rather boring; obviously I am also greatly overqualified for it. The thing is, turns out there are a lot of people there with college degrees, including in things like law or engineering. And, once you get a few years in, you can actually make decent money: one guy I know who has been there 7-8 years makes about 70k a year with overtime. You actually end up working with some pretty good people, and there is opportunity to move up, especially if you have an advanced degree and the ability/desire to advance. In any case, its a whole lot better than sitting at home drawing unemployment. Not everyone is going to get to work their dream job, and eventually you have to make a decision on whats more important: waiting around for year for a tiny shot at getting a job in the field you studied for, or taking a job with pretty decent pay that will let you pay off your education debt and provide for yourself/your family.
In this specific case, it seems like a no-brainer. If you are in fact skilled and intelligent, take that factory job. In a few years you'll probably end up a foreman, supervisor, or manager. Again, as someone in a similar situation, it comes down to this: job>no job.
The only thing necessary for evil to triumph is for it to be pitted against a slightly greater evil
that have virtually no chance of moving on to a four-year university and They also suffer from a stigma. Is a big issue and we have that in us right now.
WE NEED TO BACK OFF this idea of needing 4 year universitys.
Americans aren't willing to go back to 19th century factory life, which is essentially what they have in China now. It's not enough to raise the pay a little, the working conditions will have to be improved if they want a workforce that isn't completely desperate to take those jobs.
The economic point here is that, when we let government sodomize markets, mis-allocation of resources occurs.
Cranking out graduates with degrees in Recreational Whining is fine for grievance-group-based politics, but suck-tacular in general. See Instapundit
Get thee glass eyes, and, like a scurvy politician, seem to see things thou dost not.--King Lear
For young people (those still looking for a mate, in particular), taking a factory job would be a big blow to their status, regardless of the level of pay. Better an unemployed white collar professional than an employed manufacturing worker, welder, or truck driver. It's similar in the US. Financially the median person is better off becoming a truck driver at 19 than pursuing a law degree (and racking up the associated debt), but being a trucker is really socially limiting. Likewise manufacturing in China, I expect.
The problem is the pay, if the manufacturing job pays $12.50 an hr why bother? If they won't raise pay to get more people there isn't a real shortage.
apprenticeships and trades schools get no respect now days and that was lead us down the route of college for all with lot's worthless degrees and other degrees that trun out people with big skills gaps. Look at tech / IT to much CS degrees (that is not sever / networking / desktop) and lots of tech / trades schools out that get passed over.
More places need the German system two tier system or at least some like where apprenticeships and trades schools are not kicked to the side.
Here in Germany, there are some factory jobs that can compete with the salary one would get as an engineer, but not many.
And they tend to be skilled jobs, so it is not just a matter of "oh, I feel like doing manufacturing for a change", you usually have to show that you've successfully completed some form of vocational training. So the graduate who has never worked in a factory before might not be accepted for these jobs.
He could try for an unskilled job instead but the pay is much lower then. The Chinese situation seems pretty unique.
C - the footgun of programming languages
It's a pity so many of these bright people remain underemployed, with such a low bar to entry in advanced economies.
+1 ... the apprenticeship system is great.
http://en.wikipedia.org/wiki/Apprenticeship#Germany
I don't agree. People can and do get very substantial raises if they do standout work. I went from $35K per year to $48K in two years at one job, and later from $45K to $75K in six years in an entirely different field. It's true that at the very high end, where you're trying to do something like make partner at a big law firm, the kind of path dependency you're talking about applies. But for 95+% of the work force your salary will ultimately come to match your performance.
but here in the States there seems to be a social stigma among younger graduates attached to manufacturing jobs that sometimes clouds one's financial judgement.
From the article, writing about China:
"Students themselves have not adjusted to the concept of mass education, so students are accustomed to seeing themselves as becoming part of an elite when they enter college" ...
China has a millenniums-old Confucian tradition in which educated people do not engage in manual labor.
The US used to be more about manufacturing, and there was no disgrace to being an engineer in a factory. There was a certain contempt for "college men" as impractical and lazy. That lasted through WWII and into the 1950s. Then came the post-war education boom, a vast number of college graduates, and, for a while, jobs for them. Then came information technology, and a huge cutback in paper-pushing.
China is going into their education boom with the paper-pushing era already over.
So, it took you roughly 9 years to double your salary (to 75k/year)? I wouldn't really call the progress, especially if there is a university education involved. What I am missing here?
This is the classic over education problem. Just because they are a collage graduate doesn't mean they are worth hiring for anything. They may not even be qualified to do ditch digging or accounting. However, they are probably eminently qualified to become politicians.
That's really only a factor of how desperate you are and how much you stand out in the interview. If you're in a current position and could be persuaded to move, you can always say "no" to an offer that you don't like. If you're on your last month of unemployment, maybe it's a different story. An employer who takes advantage of a potential employee like that probably won't keep people for very long, though. At my last interview I was all set to laugh at their first offer, and then say "Oh... you're serious... OH! Um... tell you what, I'll think it over." I had a little trouble keeping my poker face when they put everything I was planning to ask for on the table initially. So I just went with, "That will do nicely... sir."
I'm trying to teach myself to set people on fire with my mind... Is it hot in here?
back in the day factories had to train people to develop these skills, and it cost them money. factories pushing those costs onto education, which is paid for by the future employee or the government is funny. Of course they'd like colleges to teach exactly what they need - it will save them a lot of money!
We need more hands on learning and tech schools also not all jobs need a 4+ year degrees.
And the older degree system is not really build for lot's of jobs maybe high level CS but not other parts of IT that need the tech school parts and real work place setting.
also the college system is teaching skills it was not really build for some stuff 4+ years is over kill and others it can rush stuff.
I say MORE 2 year degrees and some kind of badges systems with skills that have there own time frames and settings.
4 years is to much theory.
Why underestimate yourself in the first place?
.... a Milton Friedman quote. Brilliant.
Especially since it is unlikely Milton ever said it. The attribution is third hand, and the quote has also been attributed to other people about other places.
If a backhoe does as much work as twenty men with shovels, it still makes sense to use the shovels if the cost of a laborer is less than 1/20th of the cost of the backhoe, which would often be the case in poor countries. Even more so if the laborers would otherwise be unemployed and on the dole. Using spoons would never make sense. So it is a poor analogy, and one Milton would be unlikely to make.
Mike Rowe covered this exact phenomenon here in America. Truth is, it's globally universal. Please listen to his speech with regard to work ethic on TED below.
http://www.ted.com/talks/mike_rowe_celebrates_dirty_jobs.html
Life is not for the lazy.
So it is a poor analogy, and one Milton would be unlikely to make.
Now, let us assume that Milton is not likely to make poor analogies...
False. People "deserve" things when they have first given something to someone else as part of a reciprocal (implied or otherwise) agreement. Getting an education is hard work, but it is worked at bettering the SELF, not bettering others, and hence nobody with an education is owed (or "deserves") anything.
Economic realities determine what the needs are, not idealistic "should-be"'s. If there is a higher demand for low-end labor than there is for highly educated labor, then that state is a fact of reality. College graduates, like anyone else, must adapt to reality's facts.
They won't like the work? Too bad, nobody likes the work. They think they are entitled to better work? Too bad, nobody is entitled to squat. They refuse to take the work? That is their choice and best of luck to them. If they insist that they should be paid a smart-person stipend while being unemployed (but deserving it since they are educated), then reality will slap them in the face.
You get the work you can earn. What you deserve has nothing to do with it.
While this phenomenon is to be expected, it happened much faster than I expected. And I consider it a good thing. We need people to move people out of low-level manufacturing.
The problem with manual labor is that sooner or later, automation will cause a majority of the workforce to become unemployed. Irrespective of wage cuts, cramped spaces, etc. A machine can almost always do it better than a human can (and for cheaper given a large enough scale). If there is a fixed algorithm/procedure to follow with very little dynamic decision making, you don't need humans to do it.
We should be educating people more and more and give them the skills that won't be automated in 5-10 years. Otherwise, you are just pushing the problem a few years down the line - "iPhone manufacturing is now automated? Fine, I'll join an iTeleport manufacturing plant". Which is why when I hate it when a politician talk about how they are going to "bring back manufacturing from China" - they aren't addressing the problem. Those low-skill manufacturing jobs aren't coming back. Either they will be automated, or you are competing against an extremely cheap labor force and will never win out.
"not've" is actually an English word, although an older one. I added it to match the use of 'wrote' as past participle.
And yes, it was a joke.
"First they came for the slanderers and i said nothing."
So, LFTR's are Liquid Fluoride Thorium Reactors, & as soon as these, SAFER, new generation, nuclear reactors has been proven, we'll want to start building small to medium sized LFTR's in plants in China.
Young Chinese, et al. will be PROUD to help build pollution-free electricity generation capacity for their smoke-filled cities.
We don't need no stinking badges.
It's a bad idea. Soon you won't be able to buy a welder without the 'badge'. If they caught you making one out of 12 stacked car batteries/jumper cables and a coat hanger, you'd be cited.
John McAfee 'It was like that time I hired that Bangkok prostitute; to do my taxes, while I fucked my accountant'
In the book "The China Price", a factory worker is discussed who had his hand mangled in an injection molder. He was left to fend for himself with a tiny bit of "compensation" from the factory. No wonder smart people in China want to avoid factory jobs -- they are not like factory jobs in the USA. See:
"The China Price: The True Cost of Chinese Competitive Advantage" by Alexandra Harney
http://www.amazon.com/The-China-Price-Competitive-Advantage/dp/0143114867
"In this landmark work of investigative reporting, former Financial Times correspondent Alexandra Harney uncovers a story of immense significance to us all: how China's factory economy gains a competitive edge by selling out its workers, environment, and future. Harney's firsthand reporting brings us face-to-face with a world in which intense pricing pressure from Western companies combines with ubiquitous corruption and a lack of transparency to exact a staggering toll in human misery and environmental damage. This eye-opening expose offers, for the first time, an intimate look at the defining business story of our time."
China is already moving to increase automation. From a couple years ago:
http://ww5.plasticsnews.com/china/english/headlines2.html?id=1278958338
"In the wake of labor unrest, Chinese factories are adding automation to control rising labor costs. It was bound to happen."
The same issues will play out as in the USA with a declining need for most human labor in all areas. For ideas on what to do about it:
http://www.pdfernhout.net/beyond-a-jobless-recovery-knol.html
I also don't understand why China does not just print money to give out as a "basic income" to Chinese citizens so they can buy Chinese factory products (eventually recycled by taxes when the money supply grows to the right size). While in the past it might have made sense for Chinese factory workers to accept low wages as a sort of "tax" so China could learn how to make things based on Western know-how, it seems that has passed the point of diminishing returns. The big issue is that the Chinese don't have enough cash to buy their own goods, and that should be relatively easy to solve. I guess even the Chinese don't understand modern fiat-dollar economics, let alone the emerging post-scarcity economic model? Of course, I could say much the same about the USA, where there is a shortage of money supply because so much digital cash is either sitting on the sidelines parked in zero interest bank accounts or is in the zero-sum "casino economy" on Wall Street. Related links:
http://www.globalresearch.ca/an-emergency-program-of-monetary-reform-for-the-united-states/5494
http://www.youtube.com/watch?v=Q3p48upXJaA&feature=mfu_in_order&list=UL
http://www.basicincome.org/bien/aboutbasicincome.html
http://www.moneyasdebt.net/
A 21st century issue: the irony of technologies of abundance in the hands of those still thinking in terms of scarcity.
I went from $28K to $50K in one year. That was 88 so adjust for inflation.
It was more then the entire departments 'raise budget'. Then they told all my coworkers they got no raise because I had 'taken it all'. I told them each to jump up and down until their balls dropped (that was particularly funny when I said it to the dyke). They had blown the budget to keep me, what made them think it wasn't just a wish, written down on paper?
The only way you will get a good raise from a current employer is to have someone ready to pay you more. It's a fact of life.
John McAfee 'It was like that time I hired that Bangkok prostitute; to do my taxes, while I fucked my accountant'
Any factory that is really "desperate for workers" would improve their pay, benefits, and working conditions until they were no longer desperate for workers. (Note that opportunities for advancement are factored in--if your job has fewer opportunities for advancement than other jobs, you need to improve the other factors enough to compensate.) If the industry is not dead (and this one clearly isn't), they will get enough workers before they make themselves unprofitable.
In the H1B context in America, "desperate for workers" means "desperate with workers who will work for what little we have to offer". Interesting to see that it works the same way in a different industry, different country, and different circumstances as well.
Sorry AC but:
Capitol is a building in DC. Or are you referring to pwned politicians?
Capital is a city like DC or financial assets. Can be used to pwn politicians.
The same stigma hurts NON degree classes and tech / trades schools that get roped into the degree system.
... and invest in your own country. You can't be an exporter only nation forever, you have to let your people become consumers as well. That will help your country the most.
If you know, maybe you should be applying for promotion - some of the people that operate them obviously need help! http://www.amazon.co.uk/dp/B007QC9QS2
Sent from my ASR33 using ASCII
Lets not be naive about factory jobs. Yes, there are clean factory jobs, but many of them are dirty. Most industrial processes give off some sort of waste and byproducts. The list starts with air born particles from handling the materials (via grinding, polishing, heating, etc.) to solvents and chemicals used to process the products. EPA guidelines are limited and often discount the cumulative effects of multiple byproducts. Even common stuff like a little bit of unburned hydrocarbon and gas additives are not healthy. Now, over times, thus accumulates in your system, and our medical procedures are not advanced enough to properly attribute a cause and effect in many cases. I used to work in an exotic chemicals lab where we had in stock lots of synthetic chemicals on hand. We use to joke around that if someone was exposed, we could sooner describe the quantum chemistry rather than suggest a cure. Also, most of us have dealt with blue collar workers. Yes, some are nice and genuine, but most would kick the shit out of you just for a joke. They know that most educated folks don't want to be in their position and resent you for that. As a child, I used to live in Wisconsin, cheese and paper mill country. Most of my classmates were junior thugs. Even though everyone in my school was of White European descent (mostly Germanic), I saw so many cases of school bullying because some did not fit in. I heard that the same thing happens on the job.
I remember reading about some republican figurehead who claimed that liberal people are just over-educated..... not to be political or anything though, I digress... I have a B.S. and work at a donut factory. I had been working with a PhD student until she got an assistantship finally. I don't really feel entitled to better work and I'm sure I could've found some shitty office job by now if I wanted to. The economic situation isn't working in my favor but it's not impossible. I'd rather have a semi-skilled job with low stress and plenty of free time. So what if I have to dumpster dive sometimes? it's more fun anyway. I can'not imagine the factory work that the Chinese are turning away. My brain immediately envisions hot lead, barrels of mercury, 18 hr days. I'm sure they're modernizing the conditions as much as any other place but really, alot of the current education paradigm is based on generating more drone workers anyway. More cogs in a gigantic machine with too many cogs that's gonna splatter allover the place....
The point of having a college education is so they dont catch you but you still need to be able to weld like that to get a job on a farm.
Sent from my ASR33 using ASCII
In the USA though so it may be totally different in other places... I recently heard some girl call into a radio show with "I have a college degree, I am not going to work at a factory", which I took offense to, "why not" I shouted out.
factory's can be very interesting places, you dont just take a army of drones, stick them in a building and say make me shit. No, there's mechanics, machinist, IT and communications staff, computer programmers, designers, engineers, sales staff, accounting, HR, wearhousing, logistics and more, often in the same facilities.
Its a rare hornets nest of activity and creativity that takes an idea produced out of thin air into a product you can make and sell thousands of in a day, and it takes a huge skill set over teams of people to make all those cogs line up perfectly.
Its also possible to learn how to operate an arch welder in a few hours. Really talented people could probably learn in a day to make decent welds. The same most talented ones could become experts in under a week. Less talented people might require a years worth of practice and apprenticeship under the guidance of someone who really knew what they were doing.
No degree, here. And you're changing the terms of the discussion: you claimed 'I'd never see 80k at the position that should be paid at 80k.', i.e. you are saying that your salary is highly dependent on your previous salary history. I'm pointing out that this is a pretty short term effect in the vast majority of cases. It's true that it might take a few years to close the gap if you accept a position that pays less than you're worth, but it won't doom you forever. Or even for very long. And personally I think doubling my salary in nine years is quite respectable. No doubt there are real go-getters who have much bigger success stories, but I don't think it's anything to sniff at.
Experts know how to weld many different metals with many different welders.
I know what you're saying about talent. But 1 week experts, aren't. They are overconfident and possibly dangerous.
I was making 'decent' welds on steel in a day with a stick welder. Doesn't make me an expert 30 years on. The only thing I can do with stainless is warp it.
John McAfee 'It was like that time I hired that Bangkok prostitute; to do my taxes, while I fucked my accountant'
I was already pretty sneaky in high school. Come to think of it, middle school was where I learned 'Never get caught. If you do never admit to nothing.' Served me well in college and professional life so far.
John McAfee 'It was like that time I hired that Bangkok prostitute; to do my taxes, while I fucked my accountant'
Funny how this story has nothing to do with the US, nor government, nor are these employees being given hand-out jobs, or labor stimulus.
Funny how economic principles don't depend on which country it is that you are talking about.
"His name was James Damore."
I work in the IT Department at a huge factory. My pay is above average for this area, I have freedom to do side projects and keep the rights to my code. I get to talk with interesting people from all walks of life and its much more interesting than the consultancy I was working at before this. Having to work on writing queries that involve the payroll databases I know how much most people make, and most of the blue-collar managers and shift leaders make more than I do. My point in all this is factory work shouldn't have a negative connotation. I love my job and the people I work with.
"Chance favors the prepared mind." ~Me
Why aren't there more white-collar jobs, then?
I am curious -> there is usually a market force behind many people attending a college / university; they see a better life by attending college / university.
So what, may I ask, has compelled them to choose a career path that seems to lack any of the qualifiers or metrics for choosing it in the first place?
I am John Hurt.
You know, as much money that China has (building ghost cities, ramping up their Navy, a space program, Shanghainese buying expensive western goods..etc), you would think there would be some serious consideration at pooling more money and resourced together for ITER (International Thermonuclear Experimental Reactor).
The world has ran out of cheap oil. For the BRIC nations, Fusion and LFTR technology is not a fantasy, it's a requirement if they wish to live the same comfy lifestyle we enjoy today. In fact, ditto for the West now and into the future.
Life is not for the lazy.
Remember, these are only children who are used to getting their own way. In other words, they've been spoiled. Sound familiar?
Instead of using their capital to make things more efficient, companies are using their capital to create small areas of control.
The Federal gov't has done the same thing with currency. They control the amount of it and use inflation to steal increased productivity, by devauling your pay. The price of food drops because farmers get better at it, the mint prints more money and puts it in the gov't's pocket causes inflation, and the price of food goes back up to the orginal price or as we've seen higher.
There are shortages now and then and that does necesitate higher prices, but most of what we see of price increases is due to the gov't either with inflation or regulation.
While what you say about fiat dollars is true as far as it goes, it ignores the bigger picture of "Credit as a Public Utility" as discussed by Richard C. Cook at two of the links.
http://www.globalresearch.ca/an-emergency-program-of-monetary-reform-for-the-united-states/5494
http://www.youtube.com/watch?v=Q3p48upXJaA&feature=mfu_in_order&list=UL
"The author of this independent report worked for the Carter White House and NASA, then spent 21 years with the U.S. Treasury Department. In the report, he explains that the U.S. financial system headed by the Federal Reserve System has failed and that only an emergency program of monetary reform can address conditions which may be leading to a catastrophe like the Great Depression or worse. Such an assessment has become increasingly familiar as economic storm clouds continue to gather. But the analysis and recommendations contained in the report may be surprising, even to many progressives. "
Fiat currencies are more than just a "store of value" which is what you are focusing on. Fiat dollars are actually in many ways a very poor store of value (compared to real estate, gold, monopolies, skills, or whatever). Fiat dollars are also a medium of exchange, which transmits signals of "demand". That's why I sometimes call them "ration units". When a society with our sort of heavily-exchange--based economic system has too few such fiat tokens to signal demand, the system does not work well, just the same as if you had too few "Kanban tokens" in a factory.
http://en.wikipedia.org/wiki/Kanban
Both the USA and China have an inadequate money supply for the current needs of their societies. In the USA this is true for two reasons. One is because most digital currency in the USA has left the real economy most US citizens are engaged in, and those digital blips in banking computers have moved to the zero-sum casino economy of speculative investments in "FIRE" asset inflation. The other is that the Clinton Administration so well managed the US Federal Budget that it moved into surplus and stopped borrowing, which meant new currency was no longer being created and injected into a growing US economy. That helped cause the subsequent economic depression.
To understand this, imagine what would happen to the US economy if everyone stuffed all their US dollars (or digital banking equivalents) into their mattresses. Soon everyone in the USA would be out of work. Why is that? The demand is still there. The infrastructure is still there. The raw material is still there. The reason is that there is no way for "consumers" to send signals (via fiat dollars) to make the system work.
Granted in real life, people would begin to barter, would invent local currencies (search on LETS), or would start trading with foreign currencies. Or people might begin to somehow more formally communicate demand via twitters or emails, which could even get passed around as IOUs as another form of currency. So, there are limits to this thought experiment. But for the sake of the argument we could assume all these other means of exchange had been outlawed (as some countries have done, including to an extent Cuba or the old USSR).
As is suggested at the following link, the main reason for the American Revolution was mainly that got laws passed to prevent American colonists from printing their own money any longer, which led to a depression in the American colonies:
http://georgewashington2.blogspot.com/2009/06/other-reason-for-american-revolution.html
"This, [Benjamin Franklin] said, was the real reason for the Revolution: "the colonies would gladly have borne the little tax on tea and other matters had it not been that
A 21st century issue: the irony of technologies of abundance in the hands of those still thinking in terms of scarcity.
BTW, "TheLink", thanks for the link to the Zimbabwe 100 Trillion Dollar Bill Banknote 2008" at Amazon. I just bought a few such notes for home education and to give away. :-)
It is unfortunate the solutions to Zimbabwe's economic problems on this Wikipedia page do not include other possibilities of improving the subsistence, give, and planned parts of the Zimbabwe economy, or creating LETS systems:
http://en.wikipedia.org/wiki/Hyperinflation_in_Zimbabwe
The Wikipedia page on Zimbabwe talks about problems in Zimbabwe with lack of transparency and corruption. It just goes to show that any token is meaningless without some sort of democratically-accountable or otherwise generally-agreed-upon way of defining what it means. That goes the same for bank notes as twitter hash tags. So you are right to be concerned, but that does not mean the issue can not be managed in practice most of the time (at least until we fully transition to a post-scarcity economy where rationing via ration unit tokens like fiat dollars is not very important in practice, similar to how the USA does not generally ration access to public library drinking water fountains). See also on symbols and meanings:
"Data and Reality"
http://www.bkent.net/Doc/darxrp.htm
And on post-scarcity economics:
http://en.wikipedia.org/wiki/Post-scarcity_economy
Still, as you point out, those Zimbabwe 100 trillion dollar banknotes still can be useful in various ways. So, their symbolic meaning may just be different than the original printers intended. :-)
But that example does not mean all printed materials have no meaning depending on the social context. Clearly, LETS dollars can have useful value in local areas:
http://en.wikipedia.org/wiki/Local_exchange_trading_system
"LETS can help revitalise and build community by allowing a wider cross-section of the community -- individuals, small businesses, local services and voluntary groups -- to save money and resources in cooperation with others and extend their purchasing power. Other benefits may include social contact, health care, tuition and training, support for local enterprise and new businesses. One goal of this approach is to stimulate the economies of economically depressed towns that have goods and services, but little official currency: the LETS scheme does not require outside sources of income as stimulus."
Realistically, there are hundreds of trillions of US dollars in the US financial system in various ways (including derivatives and future obligations). Printing even another 15 trillion (the US annual GDP) would likely have little effect overall if, say, the money went to invest in improved infrastructure., education, preventive health care, sustainable energy, rethinking national security to be mutual and intrinsic, and general scientific R&D (including on fusion energy and agricultural robotics) which all would increase the value of the USA as an ongoing community. China has already been doing some of that with great success. I'm suggesting it could do even more to even more success.
More on all of lots of other alternatives here:
http://www.pdfernhout.net/beyond-a-jobless-recovery-knol.html
Expecations in our global society are changing. TFA about expectations rising in China is just part of all that. It is hard to predict where those rising expectations will lead us. Maybe the asteroids and then stars?
http://www.guardian.co.uk/science/2013/jan/22/space-mining-gold-asteroids
With space craft powered by LENR (aka cold fusion)?
A 21st century issue: the irony of technologies of abundance in the hands of those still thinking in terms of scarcity.
Seems like bullshit to me. If there really is inadequate money supply there wouldn't be inflation, you'd get deflation. The last I checked that was not happening at least with the US dollar.
There's nothing so magical about money more than any other item you trade with. If you create more money (and it is actually used) it becomes worth less relative to the other items in the world. If lots of people are holding your money when you create it, you just made them poorer. If your family is the only one using your money, you just made yourself richer at the expense of the rest of your family (but it affects no one else).
Now if the amount of goods in the world increases faster than the amount of money then you have deflation- the money becomes more valuable than goods - so you can buy more stuff with less money. But if it goes the other way around you get inflation.
It usually takes some time for other people to realize something has changed, so the prices take a while to adjust, but it does happen eventually.
The observation by Douglas that there is not enough money to buy back goods produced by nonbankrupt companies is not a surprise. You profit by selling stuff for more than it costs to make- you retain some of that wealth. If you don't do that you go bankrupt.
As for who gets the US printed money first, it's obvious: the Federal Reserve gets the money first - they create it. And their favoured ones get the money second (they were quite secretive on who they gave the money to[1]). Perhaps the US citizens benefited from that printed money in the past (through highways and other government programmes) more than now. If that is so, maybe they as voters and citizens should inform their Gov that they want a bigger cut, or vote in a Gov that does.
If nobody prints more money but goods kept being created then the prices of goods may go down- since fewer could otherwise afford them. If your goods remain in greater demand that goods of other companies, your prices don't go down but theirs do, and you become richer than them.
Many people claim deflation is a bad thing but from my experience with PC hardware I'd say being able to buy better and more PC stuff for the same amount of US dollars year after year doesn't make me unhappy. Are you really that unhappy that the same amount of money allows you to buy more 500GB HDDs today than 10 years ago?
Inflation just allows those printing money to tax and transfer wealth from people and redirect it to whoever/whatever they choose to favour. If they use that transferred wealth for the benefit of the country (invest in stuff that has good ROI - maybe much-needed highways or infrastructure) then the country becomes richer- the higher ROI means more wealth/goods produced and that offsets the printed money and thus there is no/low inflation. If they just use it to make themselves and their friends rich then the country becomes poorer (see Zimbabwe).
It's not that complicated.
[1] Trillion dollar loans with low interest rates are the same as printing money, but the created amount is a fraction of the trillion - depends on the interest rate.
I worked menial jobs while in school. Plenty of my co-workers and relatives would nver consider letting their children do such.
"Seems like bullshit to me."
No doubt most people would agree with you. :-) That is part of the reason the US economy is in such a mess. :-(
But hey, if people won't listen to a Nobel Prize-winning economist like Paul Krugman for ideological reasons, why should they listen to me? His book on this:
http://en.wikipedia.org/wiki/End_This_Depression_Now!
"But the essential point is that what we really need to get out of this current depression is another burst of government spending. Is it really that simple? Would it really be that easy? Basically, yes."
But before I reply to your points, agreeing with some and elaborating on other, let me make one point clear. I feel a healthy society balanced four different types of economic transactions -- subsistence, gift, planned, and exchange, while minimizing theft. I write about that on my site.
http://www.pdfernhout.net/media/FiveInterwovenEconomies.pdf
The rest of this is my musings about getting the exchange economy moving again (short of a basic income which would be better) and is certainly arguable. But what I feel is unquestionable is that ultimately we need all four types of those economic transactions for a healthy society. The USA has been suffering a huge loss in those other three areas of subsistence, gift giving, and planning, meaning those areas were not as available recently as they could have been to pick up the slack when the exchange economy started failing a big percent of the US population.
In many ways, getting those other types of economies to function well is a more important issue than tinkering with the money supply. As Zimbabwe shows, one can always make mistakes with regulating a money supply. We can't count only on fiat dollars to sustain a healthy society, even though they are by themselves easy to count and so mainstream numerically-oriented economists tend to focus on exchanges of them while ignoring non-monetary gifts like posts on slashdot, or subsistence efforts like people being able to print their own toys at home or generate their own solar power on their roof.
Those areas are actually in resurgence these days and will interact or substitute for the exchange economy more and more in years to come. Which actually might argue for a decrease in the need for as much money supply. :-)
Now on to your points.
"If there really is inadequate money supply there wouldn't be inflation, you'd get deflation."
True in general as the economy freezes up. I don't think I said we face much inflation overall right now? My point is the economy has stopped functioning for many people in the USA and also China (leading to few jobs for the college educated in China due to having an product-export-oriented economy needing factory workers until they can be automated away).
http://news.cnet.com/8301-1001_3-57549450-92/foxconn-reportedly-installing-robots-to-replace-workers/
"The last I checked that was not happening at least with the US dollar."
Well, over the last few years, US household have lost on the order of US$8 trillion in wealth; seems like something must have deflated in value to me (mainly real estate, but some other things too like some stocks etc.):
http://money.cnn.com/2011/06/09/news/economy/household_wealth/index.htm
"U.S. household wealth fell by about $16.4 trillion of net worth from its peak in spring 2007, about six months before the start of the recession, to when things hit bottom in the first quarter of 2009, according to figures from the Federal Reserve. While a rebound in the stock market, an improved savings rate and consumer steps to reduce debt resulted in net worth g
A 21st century issue: the irony of technologies of abundance in the hands of those still thinking in terms of scarcity.
It looks like shifts in global markets are unforgiving. Here you have a overabundance of college graduate in China, but no career jobs to match their field of degrees. They will not take the lower paying jobs. Those in America would be stereotyped as “lazy” because they won't take these jobs because of its low pay, no benefits and long hours too. Under the Clinton Administration, globalization would have welcomed these students to get work visa in America. Today, that would cause a problem because so many jobs that were exported back then caused the closing of our factories and other jobs, as well as a trade imbalanced. Our economy is rebounding under the Obama, administration, but jobs can’t be export to other countries like China, because they have a shortage in factory workers. How would they meet the demand with a less than capacity workforce? Nevertheless, these Chinese graduates can’t be imported to work here in America because American’s needs its own jobs, to hire and train their own people. It is going to have to be another major shift in environmental policies and global workforce strategies. China is a emerging giant, but when it comes to energy efficiency and environmental protection of its resources and populations, China is way behind the curve. Major cities have been faced with city clogging smog pollution, because of their outdated used of coal mining and other fossil fuels. China would benefit greatly from the new emerging green technologies, already in full force under the Obama administration here in American. Taking this glut of talented Chinese graduates to retrain in green technologies and environmental sciences industries to save their cities from acid rain, deforestation, polluted lakes, streams and waterways and enormous health issues, is where the Chinese governments should be focusing on right now. They could modernize their factories and office building to be energy efficient, this would entice more rural and village workers to want to be employed in better working conditions, benefits and pay. But China, like the Tyrannosaurus Rex, its heads was so tiny in comparison to its massive body, it took several minutes to send a signal to its brain to just move its limbs. Sea (2013 1 28)