Tuesday, August 16, 2011

Friedman - A Theory of Everything (Sort of...)

Friedman's piece in the NY Times on Sunday (click HERE) raises some very good points... but, I'm curious about a particular line of reasoning he uses that is common today, TF wrote:

"The merger of globalization and I.T. is driving huge productivity gains, especially in recessionary times, where employers are finding it easier, cheaper and more necessary than ever to replace labor with machines, computers, robots and talented foreign workers.It used to be that only cheap foreign manual labor was easily available; now cheap foreign genius is easily available. This explains why corporations are getting richer and middle-skilled workers poorer. Good jobs do exist, but they require more education or technical skills. Unemployment today still remains relatively low for people with college degrees. But to get one of those degrees and to leverage it for a good job requires everyone to raise their game. It’s hard." (Italics added)

Everyone is proposing to "compete" we must get more education or technical skills, but this simply doesn't address the question I've raised in a previous post - how do you compete against cheap foreign genius and increased automation? My sense is that "...why corporations are getting richer and middle-skilled workers poorer." is directly related to how, or if, as a country we will decide to address that question. Left unaddressed, the corporations are content to race to the bottom and choose the "genius" that is willing to accept the lowest wages.

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