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Title: The Scariest Unemployment Graph I've Seen Yet
Source:
The Atlantic
URL Source: http://www.theatlantic.com/business ... ment-graph-ive-seen-yet/60086/
Published: Jul 21, 2010
Author: Derek Thompson
Post Date: 2010-07-21 11:41:06 by Badeye
Keywords: None
Views: 48727
Comments: 64
The Scariest Unemployment Graph I've Seen Yet Jul 20 2010, 12:00 PM ET | Comment The median duration of unemployment is higher today than any time in the last 50 years. That's an understatement. It is more than twice as high today than any time in the last 50 years. OK, you're saying, but what does this mean? Does it mean we must increase the duration of unemployment benefits to protect this new class of unemployed, or does it mean we need to stop subsidizing joblessness? Does it mean we need to expand federal retraining programs, or does it mean federal retraining programs aren't working? Does it mean we need more stimulus, more state aid, more infrastructure projects, more public works ... or does it mean it's time to stop everything, stand back and let business be business? You're going to find smart people make a case for all six of the above public policy directions. (I tend to side with the first of each coupling.) It's hard to know for sure how to design public policy for historically unique crises precisely because they are historical orphans, without precedent to show us the right way from the wrong. One of my first reactions to this graph was: Surely this is why we don't have to worry about inflation for a very, very long time. However, here's evidence that despite the historically inverse relationship between inflation and joblessness, "the long-term unemployed put less downward pressure on inflation." Ultimately, this is a graph that should humble policy makers more than it should scare them into confidently arguing they know exactly how to fix it.
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#25. To: war (#23)
(Edited)
I'm a Vice President at a global company. I know how these decisions are made because I am part of making them. Please tell us all what you do for a living and then we'll see who is naive.
Eliminate all taxes on business and there is still no way the American worker can compete with the Chinese worker and pay his own way through life. The average total labor compensation for a Chinese manufacturing worker is 57 cents per hour, with many making far less than that, benefits included. Here's an interesting little factoid. Moreover, taxes are rarely paid, in part because of the legacy of the Maoist period from 1949 to 1978, during which time taxes were not collected. Lookie there - no taxes collected under Maoism! If the radical right claims the progressive income tax is Marxist, could it then be said Laffer's recent suggestion that all federal tax collection be suspended is Maoist? Maybe taxes are literally the price of freedom.
China seems to be good enough to meet those requirements. All of this makes for a highly competitive manufacturing enterprise that has turned China into a global juggernaut, Banister argues. Low-cost workers and tax avoidance are only a few of the advantages Chinese firms have over foreign rivals. The huge size of China's market is also driving growth. The country has a thriving middle class and people want to buy manufactured goods. China also has convenient logistics located in its coastal regions, and land prices are low. "Many domestic manufacturing concerns in China never had to buy the land for their factories," writes Banister. Land prices are reported to have declined by 70 percent in major urban areas since 1993. The country also offers financial and tax incentives, tax holidays and a favorable currency for export. Its political and economic systems are relatively stable compared to other developing nations.
Thanks WS.
Obama's first all-by-his-lonesome budget, btw, calls for a $1.17 trillion deficit.
What color is the sky on your planet? This is like th eleftwingnut rant that 'Republicans don't want clean air!'. The American GOVERNMENT's current anti business attitude is whats killing the economy currently. Look around. Sheesh.
Obama's first all-by-his-lonesome budget, btw, calls for a $1.17 trillion deficit.
You can discern who actually creates jobs and runs company's in these forums quite easily.
Obama's first all-by-his-lonesome budget, btw, calls for a $1.17 trillion deficit.
(eyes rolling) And yet, people like you don't flock there...why is that?
Obama's first all-by-his-lonesome budget, btw, calls for a $1.17 trillion deficit.
If you got the real Reagan rather than the mythical Reagan you remember, you'd be sorely disappointed.
Cause I ain't no global business, just one of the peeps.
I'm a Vice President of Fixed Income Sales @ Wall Street's 3rd largest interbank broker. I have 25 years of finace experience. 23 of those years have been spent either trading or covering macro-hedged/laeveraged funds, Corporate treasurers, CTA's and 2a7 funds. If the tenor of a government was a qualification for not shipping jobs overseas, then not one of the Asian Tigers would have had a growing economy for the last 30 years and there'd be no such phrase as "emerging markets".
A computer programmer in the U.S. with 2 to 4 years of experience will make between $50 to $60 an hour including benefits. A similar programmer in India will make at most $20 an hour. It sounds like a big difference, but it's not. Here's why: A.) Indian programmers tend to be less productive and less creative than their American counterparts, so you can't just compare hourly rates. You have to compare rates against output. B.) India is 12 1/2 time zones away from Seattle, so it's a pain in the ass to manage a team there. You wind up doubling your supervision with an onshore project manager and an offshore project manager for each project. Instead of one person managing a team of 6 to 10 people, you need two people to manage a team of 6 to 10 people. The onshore project manager has to have a nightly call at 8PM PST to talk to the Indian team. They have to do this every night to keep the project moving. A weekly call doesn't work. C.) Indian public utilities are generally unreliable, so you have to install gasoline generators for backup power due to the frequent power outages. D.) Periodic trips to India are also required to keep the teams motivated. We go once a quarter. From Seattle to Mumbai, it's 24 hours in the air, plus 7 hours of layovers in D.C. and Frankfurt. It's too grueling to fly coach to India so we have to buy business class tickets ($5,000 to $7,000 a pop). The hotels in Mumbai, Bangalore, Chennai, and Hyderabad are quire expensive -- up to $500 a night. You have to have a private driver in India because the traffic is a nightmare -- dirt roads in the middle of big cities, few traffic lights, whole families of 4 to 5 people zipping in and out of traffic on a single motor scooter. All of this quickly adds a ton of cost to the $20 hour you think you are paying. So, why are we there? Originally because of shortages of qualified people in the U.S. The number of kids graduating with computer science degrees in the U.S. has been dropping since I graduated in 1987. Combine that with the severe restrictions on H1Bs, and we had no choice but to go offshore in the early 2000s. If we didn't open in India, we would have been driven out of business and our high paid American employees might be out of jobs right now. Of course, with the bad economy we are able to hire programmers onshore today, but as soon as the economy heats up we're back to shortages again because American kids are taking enough math and science in school. There are many reasons why America companies go onshore. In manufacturing, taxes and regulations play a big part in the decision. In information technology, shortages of skilled workers in the U.S. are a key driving factor. I know that you'd rather scapegoat evil corporations, but this is the reality of the situation. If you want to keep American jobs in America, we have to do two things: A.) Make American the best place to invest, create new businesses, and hire people by lowering or eliminating taxes on investment, production, and employment, along with streamlining our complicated system of government regulations. B.) Create people that are actually employable. To do this, we need to fix the broken government monopoly schools. Unfortunately, this is will NEVER happen because the Democrat Party is owned by the teachers unions.
Bull. I can point to a company that laid off a dozen programmers and outsourced to India and then HIRED my brother in law back as a consultant and sent him to India to TRAIN and oversee the EXACT function of what was his NY department. When he was there, he met MANY Americans who had been re-hired by their companies to do the same which was, in essence, to re-establish the SAME department. What kind of a degree does one need for answering a phone call and doing data entry? So, while your company may have done it differently, from what I have heard and read, you're the exception. You may have eventually discovered that the grass wasn't greener on the other side, but to claim that IT and programming departments were eviscerated because of a lack of programmers smells like barn funk.
Another piece of mis-direction. In the 80's, as the US moved away from the mainframe technology and languages [COBOL, BASIC, ETC] to desktop [VB, C, C+], the training became more boutique. This is how Bloomberg made his fortune, btw. He was a couple of years ahead of the curve. My wife had a psych degree but got a job on Wall Street in Trades Processing. In 1986, they sent her to learn C and her career took off after only a three month night course in C programming.
That statistic is way out of date. Manufacturing wages average about $3 an hour in Beijing and Shanghai. Even textile workers, who tend to be paid much less than people employed in heavy manufacturing make an average of $1.84 an hour. Like India, Chinese wages are escalating fast (25% to 40% a year) because demand is outstripping supply.
Those were the days. Companies actually paying to have their employees trained. Once they figured out how much cheaper is was to just outsource the jobs to people receiving no benefits, who could be disposed of at no cost, it was all over.
We've downsized corporate liability to the point where it's a joke. We've gone to war for American corporations. Corporations want citizenship. Let's see that they can behave as good AMERICAN citizens first.
When she came to Pru, where I met her, she had already been sent for training in VB and C+. The fact is worker displacement due to outsourcing rather than qualification was the rule not the exception.
It's call TRUTH. I was part of a big startup in 2000 -- a joint venture between two large computer companies. Today we have almost 10,000 employees. About half are onshore in the U.S. and Europe (where we do business) and about half are in India. Before that I worked at Microsoft. When I started in 93, they had about 8,000 employees. They have 93,000 today. Half of those are here in the Seattle area. Microsoft has gone offshore too in India and China because they can't enough people onshore to fuel their growth.
Answering the phone and doing data entry??? What in the hell are you talking about. I'm talking about software engineers and systems engineers -- people who need computer science, engineering, or math degrees to be successful. The U.S. graduates far too few of these types of people to remain the world technology leader. So, we have to go elsewhere to get them. Why don't we graduate enough of these people? Because the government monopoly schools are a failure at delivering kids with the proper math and science backgrounds to get into these programs in college. For example, 2/3rds of high school physics teachers have NEVER take a physics class in their lives. You can't take a big dope with a physical education degree and expect him to teach calculus or physics, but that's exactly what's happening and this is the problem.
No offense to your wife in particular, but this is why the IT projects had a very low success rate. Most corporate IT projects are never delivered. Those that are delivered are never used because of problems. The issue was all of the poorly trained people (with business or liberal arts degrees) who got into the computer industry in the 70 and 80s. Software engineering is an engineering discipline. You need people who have the appropriate background to be successful. I've been in this business for over 20 years, and I WILL NOT hire a software engineer who doesn't have a college degree in computer science, engineering or math because they generally don't know what they are doing. And no, Bloomberg doesn't cut code. He hires people to cut code.
None taken. In her case, she stayed home after our second and telecommuted for three years [90 to 93]. When she said "enough" [because we had another turn key biz that was taking off], they would have doubled her hourly rate from $80 to $160. So that might actually be a point in your favor. The truth of this discussion probably lies somewhere between us.
I was referring more to on the cutting edge of desktop delivery...
In the last ten years have you had to call tech support for anything OR order something over the phone? Apparently, you have not.
Its been a long time since I've been in India, but even so, $500 a night seems a bit high. Here's a site that rates hotels and posts cost for Mumbai. www.hotelstravel.com/Asia/IN/Mumbai/index.html I'm not familiar with the Oberoi in Mumbai, but as Remember, the Oberoi in New Delhi was very nice. Mumbai seems to be the most expensive place to stay on your list. Traffic is a nightmare in India. I was lucky enough to have a car and driver provided by the Bank of India so I don't know how much that costs - however I can't imagine its much by US standards. Of course taxis are avaiable too and are pretty inexpensive. Either you're exaggerating your expenses or living very large in India. So, why are we there? Originally because of shortages of qualified people in the U.S. The number of kids graduating with computer science degrees in the U.S. has been dropping since I graduated in 1987. Combine that with the severe restrictions on H1Bs, and we had no choice but to go offshore in the early 2000s. If we didn't open in India, we would have been driven out of business and our high paid American employees might be out of jobs right now. I live in Silicon Valley and have worked for high tech companies. In the late 80s, companies were bringing in software engineers from India, putting them up in group homes and paying them considerably less than their American counterparts. It was a big issue here. B.) Create people that are actually employable. To do this, we need to fix the broken government monopoly schools. Unfortunately, this is will NEVER happen because the Democrat Party is owned by the teachers unions. While the Republican party is bent on destroying the public school system. Somehow other countries are able to do a good job educating their children in public schools. Perhaps if we didn't approach education like driving a car up hill with one foot on the gas and the other on the brake, we could do a good job too.
It needs to be destroyed, and rebuilt. Simply based on its decreasing performance, which is measurable.
Obama's first all-by-his-lonesome budget, btw, calls for a $1.17 trillion deficit.
I remember it was pretty common for companies to blackmail there American employees into training they're Indian replacements.
The U.S. graduates far too few of these types of people to remain the world technology leader. So, we have to go elsewhere to get them. Why don't we graduate enough of these people? Because the government monopoly schools are a failure at delivering kids with the proper math and science backgrounds to get into these programs in college. What is the cost to the student attending IIT compared to the cost at an American University?
Same for getting approval for service for insurance providers.
Could it be that half the country is actively trying to destroy it? Naa - that can't be it. Maybe its time we just admit that while other countries can manage public education, we're just not up to the task as Americans. Does that make us inept?
Private schools in America are producing excellent results, as is homeschooling. So the premise you offer here is simply false. The public school system is rotted to its core by Teacher Unions that protect the inept and incompetent at the expense of every single student in the nation. End unions and the ridiculous concept of 'tenure' and the public school system could recover.
Obama's first all-by-his-lonesome budget, btw, calls for a $1.17 trillion deficit.
The US is about the only industrialized nation in which the public school system is a political football. Every other nation has teacher tenure and unions, too, btw. The problem with US education begins in the home.
They paid my brother in law a PISSLOAD of money to go there. He had a car and driver and a bodyguard, btw. I'm pretty sure that he was in New Dehli most of the time. I'll try to find out where.
That's certainly part of it.
A bodyguard!
Apparently, you have not. I have. 10 years ago my phone company was CenturyTel. I bought DSL service from them. It basically just didn't work. For about two months, I called them everyday complaining that my DSL was down. The person on the other end was some hillbilly from Louisiana who was reading from a script: "Is your computerrrrr plugged into the walllllll...." ARGGG!!!!! YES MY COMPUTER IS PLUGGED INTO THE WALL JUST LIKE IT WAS YESTERDAY WHEN I CALLED YOU AND THE DAY BEFORE THAT... I have nothing against people from Louisiana and I love New Orleans, but you've got to be kidding me with these BOZOS that CenturyTel hired. You're right. Indian call centers suck. Many companies, including American Express have abandoned their Indian call centers. However, the call centers in the Philippines are top notch -- native English speakers, extraordinarily polite, great service.
100% absolutely correct!!!
Something going on between India and Pakistan. New Delhi was the only city he worked in but he did travel.
How did he like India?
He didn't like having to get a dozen vaccinations before going and he said that it smelled like curry. Other than that he loved it.
Mumbai is a different story than Bangalore. Bangalore hotels tend to be booked months in advance and are very experience.
Dude...that statement betrays a naivete that, frankly, coming from you, shocks the shit out of me.
#26. To: war (#20)
You're of the mind that labor costs are not a factor in exporting jobs?
#27. To: jwpegler (#22)
Labor costs are indeed a factor in determining where to invest, but so is political stability and the rule of law, i.e., the risk of political corruption, revolutions, and nationalizations are part of the decision process too.
#28. To: WhiteSands (#10)
#29. To: lucysmom (#21)
No, its the anti-American attitude of business that's put the country in the toilet.
#30. To: jwpegler (#25)
#31. To: lucysmom (#27)
China seems to be good enough to meet those requirements.
#32. To: Badeye (#9)
Maybe we just need a disasterous couple of Presidents ala Nixon/Ford/Carter or Bush/Owe-bama to get a Reagan or whoever will be hired in 2012.
#33. To: Badeye (#31)
And yet, people like you don't flock there...why is that?
#34. To: jwpegler (#25)
(Edited)
Please tell us all what you do for a living and then we'll see who is naive.
#35. To: lucysmom (#26)
(Edited)
Eliminate all taxes on business and there is still no way the American worker can compete with the Chinese worker and pay his own way through life. The average total labor compensation for a Chinese manufacturing worker is 57 cents per hour, with many making far less than that, benefits included.
#36. To: jwpegler (#35)
(Edited)
Originally because of shortages of qualified people in the U.S.
#37. To: jwpegler (#35)
(Edited)
The number of kids graduating with computer science degrees in the U.S. has been dropping since I graduated in 1987.
#38. To: lucysmom (#26)
(Edited)
he average total labor compensation for a Chinese manufacturing worker is 57 cents per hour
#39. To: war (#37)
n 1986, the sent her to learn C and her career took off after only a three month night course in C programming.
"To suffer the slings and arrows of outrageous liberals,
or to quit halfterm, and by opposing, rake in speaking fees." - ShakesPalin
#40. To: jwpegler (#24)
Furthermore, if we had the best business climate in the world...
#41. To: Skip Intro (#39)
#42. To: war (#36)
Bull.
#43. To: war (#36)
(Edited)
What kind of a degree does one need for answering a phone call and doing data entry?
#44. To: war (#37)
My wife had a psych degree but got a job on Wall Street in Trades Processing. In 1986, they sent her to learn C and her career took off after only a three month night course in C programming.
#45. To: jwpegler (#44)
No offense to your wife in particular, but this is why the IT projects had a very low success rate...
#46. To: jwpegler (#44)
And no, Bloomberg doesn't cut code. He hires people to cut code.
#47. To: jwpegler (#43)
Answering the phone and doing data entry??? What in the hell are you talking about.
#48. To: jwpegler (#35)
D.) Periodic trips to India are also required to keep the teams motivated. We go once a quarter. From Seattle to Mumbai, it's 24 hours in the air, plus 7 hours of layovers in D.C. and Frankfurt. It's too grueling to fly coach to India so we have to buy business class tickets ($5,000 to $7,000 a pop). The hotels in Mumbai, Bangalore, Chennai, and Hyderabad are quire expensive -- up to $500 a night. You have to have a private driver in India because the traffic is a nightmare
#49. To: lucysmom (#48)
While the Republican party is bent on destroying the public school system.
#50. To: war (#36)
I can point to a company that laid off a dozen programmers and outsourced to India and then HIRED my brother in law back as a consultant and sent him to India to TRAIN and oversee the EXACT function of what was his NY department.
#51. To: jwpegler (#43)
I'm talking about software engineers and systems engineers -- people who need computer science, engineering, or math degrees to be successful.
#52. To: war (#47)
In the last ten years have you had to call tech support for anything OR order something over the phone?
#53. To: Badeye (#49)
It needs to be destroyed, and rebuilt. Simply based on its decreasing performance, which is measurable.
#54. To: lucysmom (#53)
Maybe its time we just admit that while other countries can manage public education, we're just not up to the task as Americans.
#55. To: lucysmom (#53)
Maybe its time we just admit that while other countries can manage public education, we're just not up to the task as Americans. Does that make us inept?
#56. To: lucysmom (#50)
#57. To: war (#55)
The problem with US education begins in the home.
#58. To: war (#56)
He had a car and driver and a bodyguard...
#59. To: war (#47)
(Edited)
In the last ten years have you had to call tech support for anything OR order something over the phone?
#60. To: Badeye (#49)
It needs to be destroyed, and rebuilt.
#61. To: lucysmom (#58)
#62. To: war (#61)
#63. To: lucysmom (#62)
#64. To: lucysmom (#48)
Either you're exaggerating your expenses or living very large in India.
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