America's Future Looks Bright

[Zippyjuan]

I can't figure out why you think the price of labor in China is going to rise dramatically. Do you realize how many Chinese people there actually are? No, you can't.

It has already been rising. http://www.nytimes.com/2012/02/18/op...more.html?_r=0

Chinese Labor, Cheap No More

By MICHELLE DAMMON LOYALKA

Published: February 17, 2012

(snip)

But while China’s industrial subsidies, trade policies, undervalued currency and lack of enforcement for intellectual property rights all remain sticking points for the United States, there is at least one area in which the playing field seems to be slowly leveling: the cheap labor that has made China’s factories nearly unbeatable is not so cheap anymore.

China has experienced sporadic labor shortages, which in turn have driven up its once rock-bottom labor costs. This trend is particularly evident in the weeks following China’s Spring Festival, or New Year, when more than 100 million rural migrants return to the countryside to spend the year’s biggest holiday with family. Coaxing those same migrants back into the urban work force has proven increasingly difficult.

This year has been no exception. Although nearly two weeks have passed since the Lantern Festival that officially marks the end of the 15-day holiday, cities across China are still facing a serious labor shortfall. In order to lure new workers and retain the old, some companies give employees sizable bonuses just for coming back to work, while others offer cash for every new employee they bring along with them. And in many areas, wage increases ranging from 10 to 30 percent have become the norm.

Despite all this, cities like Beijing, Shenzhen and Guangzhou are still short hundreds of thousands of migrant workers. Shandong Province is missing a full third of its migrant work force, and Hubei Province reports a loss of more than 600,000 workers. Last week, the Chinese government released a report describing this year’s post-Spring Festival labor shortage as not only more pronounced than in years past, but also longer-lasting and wider in scope.

Numerous factors underlie China’s mounting labor woes. Until now the country has been able to achieve its stunning economic growth by shifting large numbers of farmers into nonagricultural jobs. Over the past several years economists have warned that China may be reaching the so-called Lewis Turning Point — the stage at which the rural surplus labor pool effectively runs dry and wages begin to rapidly increase.

At the same time, China’s population has been steadily aging, and by 2020 the nation will have more than 200 million people over age 60. Furthermore, rising living costs in urban China coupled with markedly improved conditions in rural areas are encouraging many would-be migrant workers to look for opportunities closer to home.

In addition to a shortage in the sheer number of available workers, China’s labor problems are further exacerbated by a shift in the quality and character of its work force. For the older generation, there is very little that a factory or foreman can dish out that seems too difficult to deal with, given that they witnessed, or grew up with parents who had witnessed, the nation’s rocky ride through the Communist Revolution, collectivization, the disastrous Great Leap Forward and the Cultural Revolution. These are the people who pioneered the model of migrant labor on which Chinese manufacturing has come to depend: long hours in substandard conditions, all for a fraction of what United States workers earn.

In the past, China’s migrant workers were just thankful not to go hungry; today they are savvy and secure enough to start being choosy. Higher salaries, basic benefits, better working conditions and less physically taxing jobs are only the beginning of their demands, and for many factories, these are already too costly to be tenable.

[Odin]

This is sarcasm right? Please tell me it is...

If not, you have to ask why the Fed is doing QE. If everything looks rosey they have no reason to do so, it smells like desperation to me, because they know shit is going to hit the fan.

[Steven Douglas]

I guess it's all a matter of perspective. Looks awfully bright from where I'm sitting.

[AmericasLastHope]

I suppose everything's ice cream and beer if you're the Fed Chairman, but here in the real world America's future is anything but bright...



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[S.Shorland]

Gold is setting up for a major move so there will be some 'news' behind it.I'm not in the club that knows what it is.

[AmericasLastHope]

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[NoOneButPaul]

I negative repd you for your post. Seriously Jordan, your comments are starting to resemble professional sarcasm posters. There is absolutely zero basis for saying the country in general has a bright future ahead of itself (given its current path of projectile). The single biggest problem, that you don't even bother mentioning, is the federal reserve and other central banks. They have taken over the stock, bond, currency markets, and any price signals from them are now meaningless. This is leading to the biggest mis allocation of capital in the history of the world. Interest rates of completely bankrupt states are negative after accounting for inflation and people are bidding up risk assets in search of any yield on capital. This makes all of the markets very prone to crash, as they are not driven by real fundamental supply/demand any more but rather central bank decisions of qe 1..2..3...4...5...n. The real craziness will begin when the ignition of this misallocation (money printing) makes a debt crisis turn into a currency crisis. No one knows when, but this ponzi scheme is coming down whether you like it or not.

Now as far as improving ones self, when has rpforums been filled with people against gaining new skills and marketing ourselves?

This.

[NoOneButPaul]

However there's always the chance paper has one more great bubble left in it, but if that happens it will drive the prices of commodities back down and we could really take advantage since we know a huge currency event will happen in the future.

I don't think that last bubble is coming though... I think we got the last great one in the 90s. Ron Paul has now woken too many people up, regardless of whether or not they were or are apart of the movement, the economic ideas he's preaching cannot be unheard and over the last 5 years we've made sure they've been heard across the internet. Information about unsound money and federal reserve intervention is pretty well known at this point and because of that a huge segment of the population will NEVER regain the confidence or TRUST they had in the system before Ron Paul.

The entire paper system is built on this trust, and while a lot of people will march back into it there are now too many of us that understand what's going on. If we play the bubbles right we won't have anything to worry about until the currency does start to crumble... they however will not let it crash, they'll give us a new currency before then and the process will continue...

Still, an understanding of Austrian economics can save you from this, I can't stress how important it is to learn these economics... together we could do a lot of good and prove to people the ideas are correct and it would legitimize the school even further.

Either the bubbles will continue and we can play them masterfully, or the currency will crumble back to earth and the commodities we've been stockpiling will rise.

[matt0611]

I beg to disagree. America's future looks a lot like Europe, which is effed.

[Michigan11]

I like Jordan's optimism and contrarian view, its healthy to see things more objectively. I agree that an optimist is much more prone to being successful, but its very difficult to forget things you see and know, to remain an optimist for long in this system. However, I also see a growing disconnect between people prospering and the growing masses that are falling further behind. There seems to be the real economy and the illussional economy. Both are growing apart, and the later is a shrinking lot, while the former is a growing lot that has people falling further and further behind in real terms, becoming the dependent class. I don't know, I've always been a sort of optimist, self-employed for the most part, semi-working for others.

I currently manage and sell for a large roofing company in Florida here, and all the roofers are great hard working guys from Mexico mostly. I talk to one guy in particular alot, because he knows all about the debt money system, from his father I'm guessing, because he never tells where he learned all of this from. . Anyways, he is street smart, and makes most of his money doing side jobs. He makes good money here but has been waiting for this collapse he talks about, so he could undercut the roofing companies that are going out of business right now. He's doing better than ever, but those who have been prospering(roofing companies) are not. These companies are working to survive, and he is doing better but not so great he is able to start spending like his predecessors (roofing company owners). I see this particular example, as more telling of what I see going on with people I speak to down here. My boss, who inherited money, keeps his money in buying houses and renting them out, because he doesn't know what else to do with his money, in his own words. He said the key to keep renters is to keep rent reasonable because he doesn't want his renters to be stressed on payments or miss one (that becomes costly to evict). Anyways...