Jimmy Carter’s most eloquent words were in response to a question about abortion: “There are many things in life that are not fair, that wealthy people can afford and poor people can’t” (typically condensed to “life is unfair”).
Let’s revisit two young MIT graduates. Back in 2005 I found them sharing an apartment. My student was earning $90,000 per year working 80 hours per week on a new videogame. His classmate was selling $750,00 mortgages to people with bad credit, earning $150,000 per year working six hours per day (story). I figured that this couldn’t last forever. A society could not continue bestowing most of its economic rewards on those citizens who contributed the least to sustainable GDP growth. I thought that surely the pendulum would swing back and the engineer would be reaping much more in the way of rewards than the mortgage fee collector.
What’s the story in 2008? The mortgage gig came to an end and our young genius is now in law school, preparing to join his fellow lawyers in reducing GDP. What about our diligent engineer? Laid off when the project ran over budget and got canceled. He’s looking for work.
This got me thinking about globalization. When the infrastructure for globalization was new, nobody was quite sure how the benefits and costs would be distributed in American society. The container ship, the jet airliner, and the Internet introduced only subtle changes at first and then any costs were softened by a global economy that was mostly booming from the early 1980s through 2007.
As the U.S. economy collapses and people stand in unemployment lines it is easier to see who got hit the hardest by globalization.
Consider the domestic autoworker. His counterparts in Mexico are happy with a wage of $1.50 per hour. The more money that the U.S. government gives his employer, the more rapidly it builds new factories in Mexico and China. The container ship brings in inexpensive products from China, but once our autoworker gets laid off he can’t afford to buy too much. Food is a big portion of a laid-off worker’s budget, but we have decided that food will be one of the few things that we won’t let foreigners compete in supplying to American consumers, so the price of food in Michigan remains much higher than on the world market. What about housing? That’s also a big expense for a newly unemployed person. Construction labor and materials have become much more expensive because of increased demand from the countries that grew as a result of globalization.
Consider the public school teacher. If she has been in her job for a few years (2 in California) she has earned tenure and can’t be fired. If she holds onto her chair for 10 or 20 years she’ll be earning $70,000 per year in many systems. She cannot lose her job if she is less effective than a teacher in China or South Korea who earns far less. She benefits from being able to buy a 2010 Ford Fiesta built in Mexico by workers earning $1.50 per hour.
Consider the medical doctor. More than half of her income comes from programs guaranteed by the U.S. government, e.g., Medicare and Medicaid. As long as the U.S. has old people or poor people, she will always have work. Her professional association prevents the licensing of new medical schools that would increase competition among doctors for jobs. Thanks to the reduction in manufacturing costs from globalization, she can afford to purchase a brand new flat-screen TV every day for the rest of her life and give it away after watching one program.
The broad trend seems to be growth in government jobs, growth in health care (essentially a government job because more than half of all health care dollars are spent by the government), and shrinkage in private industry jobs. Another 10 or 20 years of this and 100 percent of employed Americans will work for the government or the health care industry.
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contains an explanation for how dams built by rich countries cause the Earth to spin faster.]
on my 
(still loving the Kindle for travel when a book is 100 percent text; the Kindle is also good for use on treadmill; the Kindle is useless for books with illustrations due to its lack of pan and zoom).
(remarkably readable despite deep scholarship).