Originally posted by twhitehead
The recession was a good excuse for most companies to shed excess employees. Now there is simply no reason to take them back on. Once a company realises it can make more money with less employees, its not going to start hiring. Even better, hire some cheaper employees in another country.
You Americans need to:
1. Improve your skills so you are actuall ish, slowly ask for it back and gradually impoverish you without harming themselves too much.
You seem obsessed with the idea that the economy is a static, zero sum game. Salaries are just numbers in a vacuum. They are meaningless outside of the context in which they are paid. To say that "Americans" in general have to "accept lower salaries" means nothing. The question is always what the country as a whole produces (GDP) and what number in relation to that GDP the individual worker is able to take home. I wouldn't mind cutting my salary in half if GDP remained constant and there were 60% deflation and I would not be satisfied with a 100% raise if GDP were constant and there were 125% inflation.
===1. Improve your skills so you are actually worth what you want to get paid.===
You could make the argument that there are too many people looking for skilled positions to the point where we need to rely on immigration (legal or otherwise) to fill the quota for needed unskilled workers. Educational achievements have continually increased.
===2. Accept that you are not worth what you want, and accept a lower salary.===
If the economy grows, all people can get increases in salary. There is no need for anyone to earn less in a strong economy.
===3. Recognize that the 10 years before the crash was all fake and you were never really as rich as you thought. That was borrowed money. Now you've got to pay back with interest.===
If you're not talking about debt, then "borrowed" is a bizarre choice of words. But in any case, while it's true that the housing boom was ephemeral, the growth most other sectors, especially technological, were
real and ongoing. The housing market has already burst and is now growing again. There is absolutely no reason that production and employment levels that are stronger than ever cannot be attained.
===And I am not even talking about all the money you have borrowed from the Chinese which they can't even ask you to pay back without creating another crash. I don't know what their plans are, but they could if they wish, slowly ask for it back and gradually impoverish you without harming themselves too much.===
Here's where you're just plain lost. Counter intuitive though it may seem, the Chinese have built themselves a production oriented economy. They need someone to consume their goods or their enormous production engine will be useless. If the Chinese tried to call their US debt, the US would simply devalue its currency. We owe the Chinese X dollars, not X percentage of our GDP. If the Chinese refused to keep making our crap in exchange for our less valuable dollars, we would naturally rebuild our industrial plant to start producing our own crap. 5 or 6 decades ago, the US had by far the most dominant industrial plant on Earth. Aside from the performance of the Red Army, the second most important reason the Allies won World War II was the size and strength of the Us industrial plant. If there were money to be made in production of crap, we'd have no trouble re-building our industrial capacities. You think we forgot how to produce textiles? We didn't. The Chinese do it for less $$ so we don't bother any more. But we could if we needed to. It might even help us to re-build our textile manufacturing industry.
Sure, crap would become more expensive and we'd no longer have every person able to have every damn gizmo we want, but we'd live. With a strong industrial plant in addition to our flourishing high tech and service industries, unemployment would shrink to insignificance. Immigration would no longer bother us so much as we'd need people to work on the assembly lines, rather than worrying that every immigrant is out to steal an American job.
The only people who would really be hurt by the Chinese making a dollar run would be people with large savings and the holders of our now deflated currency.
Personally, I hope it happens. I don't have real savings and the Chinese would richly deserve this consequence of their artificial currency depression measures.