SACRAMENTO, Calif. - California’s unemployment rate hit a modern record of 12.6 percent in March 2010 the state Employment Development Department reported Friday. That amounts to more than 2.3 million unemployed workers in California.
See the story at breitbart.com California jobless rate swells to 12.6 percent
There is lots of talk about the recession in America being over, yet the unemployment rate is at record highs? The happy talkers will say that unemployment lags the the economic recovery. That was true in past recessions that were ordinary cyclical economic slowdowns. But the “Great Recession” of 2008 was not an ordinary recession. One reason it is different this time is because it is a credit bubble-bursting depression, not a cyclical recession.
A big problem is that jobs that are lost in America don’t come back like they used to. Back in the “good old days” plant closings were temporary. Today, manufacturing plant closings are permanent and the factory is moved to China where labor costs are 1/10 to 1/20 of labor costs in America. American workers with their high living standards are simply too expensive to hire.
High paying engineering jobs are also moving to China. IBM continues to reduce its U.S. workforce while it opens new design centers in China. A senior engineer in silicon valley California might earn $150K per year. How much does his counterpart in China earn? Maybe one quarter of that figure?
The forces of globalization are powerful. Any job that can be outsourced, will be outsourced to reduce labor costs. One strategy for American workers is to become competitive by reducing U.S. wages. Naturally this means a reduction in the standard for living in the U.S.
Other ways out of this mess involve war, which is the same way we got out of the 1930s Great Depression. For instance, if a world war broke out in Asia that destroyed most of China’s industrial capacity, the U.S. would benefit the same way it did from the destruction of most of Europe and Japan during World War II.
Read this comment from a reader at MISH’S Global Economic Trend Analysis blog Mish Mailbag: IBM Abandons U.S. Workers
Here’s a website where you can look up salaries in various countries of the world: Engineer Salaries - International Comparison
