One of the big political arguments swirling again this season is “how do we rebuild and restore the Middle Class?”
The next question for me is “what income range is considered Middle Class?”
I’m no economist but I think of Boeing Machinists as being Middle Class type folks. I would guess their incomes range from $40,000 per year to $80,000 per year or roughly $20/hour to $40/hour. And even though they are highly trained, many of them are not college educated.
So for the sake of my argument that is how I will define Middle Class.
Once you establish the income range you just look around for the jobs that pay that kind of money. Or maybe you look for the jobs that used to pay that kind of money and follow that with where did those jobs go?
As a resident of the Puget Sound region in Washington State Boeing is a big part of our economy. For many years it was the only game in town. Fortunately we lucked out when Bill Gates and Paul Allen decided to keep Microsoft local, Howard Schultz opened Starbucks in Seattle; and again when Jeff Bezos headquartered Amazon in town.
So we have four very different businesses that produce and incredible amount of wealth in the region with very different operating models. One that manufactures a product, one that produces a digital product and two that provide services.
Without a college degree in computer science or business management, most remaining Microsoft employees struggle to make it into the middle class. The bulk of the Amazon and Starbucks employees also just bump the bottom of the range at best.
What is missing is the manufacturing jobs like Boeing offers. And what we know about Boeing is that they are also looking to reduce the cost of their workforce as well by opening factories in locations where the cost of labor is lower.
Is anyone surprised that I have an opinion about this dilemma?
Since our government bought into the “world economy” argument the American manufacturing sector has been withering and along with it the Middle Class.
The jobs most often associated with the Middle Class in the past were family wage factory jobs that have been shipped over seas to build up the economies of our trading partners. The adoption of the North American Free Trade Agreement NAFTA signaled the exit of many manufacturing jobs to Mexico. American participation in World Trade organizations encourage relocation of previously American jobs to third world economies to bolster those countries as trading partners but at the expense of American manufacturing jobs.
In most cases the jobs that go overseas are jobs that require training but not significant education.
The jobs that remain here are the ones that are tied to raw materials or require a highly trained and educated workforce; and even those raw materials jobs are at risk as the government is regulating many of them out of existence.
By today’s standards the Middle Class jobs are the public sector employers like governments and school systems. Locally we have city and county governments, we have Policemen, Fire Fighters and Public Works employees and at the state and federal levels we have the Department of Transportation, Department of Energy, Department of Ecology, Department of Education…..yadayadayada. Is it any wonder that the Middle Class has changed so dramatically?
The Middle Class swapped private sector jobs that produced the highest standard of living and best quality products in the world for public sector jobs that suck up the resources of society and produce nothing but a bill.
The Middle Class today is the Bureaucrat Class with the Service Sector groveling for a handout.
The cost of government skyrocketed at every level while the private sector industries our country was famous for have fled. Even a country boy like me could see this as it was happening but the rationale for world trade was too deep for me to grasp.
Whether it’s big business or big government, both political parties still champion the world trade argument even though it sells American workers down the river. There is no safe haven with either the Democrats or Republicans.
If you really want to know what happened to the Middle Class look at China where economic development is producing record numbers of millionaires even in this depressed economy. Our Middle Class moved overseas!
If our goal is to return America to the prosperity we enjoyed for many years after WW2 we have to examine what our government did to cause the exodus and systematically reverse it. We will also have to analyze the political ramifications to our trading partners and make value judgments. Bringing the private sector Middle Class back to America will have international implications.
No Loss for Words 
CHINA: Ally or Adversary?
by Steve DanaWatching the drama of Hong Kong unfolding, it makes you wonder how they got into that predicament. The agreement China made with the UK was for fifty years after which China would have full control over Hong Kong. We’re only twenty years into the agreement and China is already cheating. Makes you wonder if China can be trusted to fulfill any agreement they sign. The basic answer is that China will say what it needs to say to get what they want in the long term. If it requires that they cheat on an agreement, they don’t have a problem with that.
When China was allowed into the WTO it was with the understanding that they were good citizens. Over the past 25 years, China has revealed its true character (if you didn’t already know it, they are not).
Tienanmen Square was an indication of how China deals with a population objecting to the boot on their neck. A heavier boot on their neck. China of today is as brutal a dictatorship as it was during Mao’s years in control. They dress it up on the surface for Western sensibilities. They learned to make nice with western countries only for the purposes of exploiting the West with their ridiculously cheap labor. They learned from westerners how to go back to China to turn what they learned against their teachers.
China realized after Mao that being like North Korea wouldn’t serve them in the long term. The billion people in China are a resource that can be put to work for the benefit of the state, so China became a place for cheap labor.
Later, they learned that by giving the people the chance to be capitalist on a small scale, their productivity skyrocketed. Socio/Economic policy in China has evolved into a capitalistic dictatorship. The people can have their own businesses in partnership with the government. That opportunity gives the people at least a chance to improve their own standard of living. They can drive a Mercedes car but have no voice in their government or say in how other aspects of their lives are managed.
American manufacturers were led to believe that China would be a great partner because they had a billion people available to work and a government that greased the skids to facilitate production. Did any of the companies that dumped their American workforce ever look at the human rights conditions in China before they moved? Not likely! In the effort to produce cheap crap cheaper, American manufacturers screwed American workers while forming partnerships with the devil to satisfy corporate demand for better margins. The American government allowed strategic industries to collapse in the US in favor of suppliers in China. Did anyone wonder if there was a confrontation with China, would they continue to supply steel or other strategic goods to a rival?
America is at a crossroads in our relationship with China.
Our challenge is to decide whether doing business with a country that abuses the population like China does, that wages war against trading partners with their cyber tactics, that dumps surpluses of manufactured goods on the market to weaken competitors, that regularly steals intellectual property from trading partners, that manipulates their currency to create a competitive advantage, or that charges tariffs for goods coming into China to prevent competition for Chinese companies? Do we want to be business partners with a country whose military is aggressively harassing neighbors while doing little to assist in efforts to rein in North Korea? In my view, China is a bad actor and yet we’ve intertwined our economy with theirs. Why?
The government of China should be considered hostile. Trade with China should be considered in that light. Let’s see how well China will fare without US markets.
In typical government fashion, it will be determined that trade with governments that want to defeat us is okay. China is not the only culprit in this discussion. Our neighbor to the south, Mexico is in the same boat.
The big question is, “Should the United States of America be a trading partner with a country committed to undermining our national security?” We cannot commit to trading with a country like China, then think about their human rights record or their treatment of their neighbors. Most of us as citizens think about the reputation of a vendor before we hire them to work for us. Why wouldn’t our government do the same before promoting China as a preferred trading partner?
The elected leaders in our country were seduced by China with cheap labor to produce cheap consumer goods. At the expense of our national security. Our country has no obligation to develop labor markets for companies without allegiance to the United States. Companies with only an obligation to the bottom line will do business with anyone. Aren’t we better than that?
What kind of idiots run our country?
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