Friday, July 07, 2017

What is the solution for the globalization of poverty?

"The future of work is the low-wage health care job," wrote Soo Oh. "The poor taking care of the poor are driving the new economy." "In 1970, 29 percent of workers were employed in the manufacturing industry. An additional 4 percent of workers were in production jobs in other industries..." They were highly paid as "nearly half the people employed in manufacturing or production earned within the top 40 percent of wages in the country". And, "Nearly all the production workers -- 93 percent -- never went to college." Unfortunately, "The manufacture industry now employs 11 percent of all workers, and only 6 percent of workers are in production." As the baby boomers get older an increasing number needs personal care so people without college education are taking these jobs. "A salary of $20,000 for a personal aide or home health aide is typical, with 90 percent of workers making less than $30,000." The eurozone economy is not doing so well either, wrote A Nageswaran. Portugal, Italy, Greece and Spain, dubbed PIGS by some, have double digit unemployment rates, credit is contracting in relation to GDP in these countries and Spain and Portugal have missed their fiscal deficit targets. Negative interest rate and bond buying by the ECB have created asset price bubbles. Britain is just not creating enough wealth, wrote Kamal Ahmed. Productivity fell by 0.5% in the first three months of the year, taking the ability to create wealth to below 2007 level. Wage growth is below the level of inflation and increasing labor costs are squeezing profits, so that tax receipts are low. The middle class in Britain has racked up 198 billion pounds of unsecured debt in credit cards, car loans and overdrafts, Bank of England figures showed. On top of this there is a mass migration from Africa and the Middle East into Europe, which seems unstoppable. A leaked German report has warned that there are 6.6 migrants waiting to cross over into Europe. Mass migration could lead to war, wrote Max Hastings last year. Unthinkable? Recently, Austria moved tanks and troops to its border with Italy to stop migrants from crossing over, leading to a furious reaction from Italy. Poverty in Africa and the Middle East is because of the age old problem of excessive birth rate, in excess of 5 children per woman. Girls are also married off at an early age. Brazil has passed a law restricting government spending for 10 years, to reduce government debt, but this will lead to a situation faced by Argentina in the nineties, wrote Professors Campante and Rodrik. What of India? A Pakistan economist once said that India has "ten percent socialism", meaning only 10% of people have secure jobs and benefits, while the rest faced a life of struggle. Now we have an elite ten percent doing great while the masses are suffering, so "We now have ten percent capitalism," wrote M Chakravarty. We have all the problems, but what is the solution?

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