Boom Eonomy?

Is the Economy booming?

There are a lot of positive measures and if you are in the top groups you are doing pretty well.

This is a reflection of the ongoing economic trend where skills get rewarded and robots replace the rest.

So we see a concentration of wealth at the top while the middle shrinks and the poor generally get poorer.

This is not an unusual model in world economies, just a bit unusual for this country.

For most of our history we had a labor shortage, not just a shortage of skilled workers but workers for unskilled positions as well.

This enabled those workers, with the help in many cases of unions to win pay raises and benefits for doing, well robotic type work.

The factory used to have many jobs for able bodied people who had few skills, and it paid well.

Then two things happened.

One of the great trends in the last 25 years or so was outsourcing of subassemblies.

Not so long ago, at least it doesn't seem that long ago, a major manufacturer would build everything in plant with some exceptions for specialized items.

Then we saw a realization that parts could be outsourced, at first domestically and later internationally for less then it cost to build them, partly because of the pay and benefits of employees.

So non-union domestic shops started taking jobs from union workers in the old manufacturing plants.  This expanded to non-union and non-domestic shops as we saw shipping costs reduce and trade barriers disappeared.

The second thing was the advent of automation.  Robots could weld, turn bolts, cut parts and move objects with a vey small amount of human intervention.  I remember years ago in IT, the goal was to have a lights out environment for the servers meaning no people needed to be involved.  We are getting close to that in many of our manufacturing plants.

If you see pictures of an auto assembly plant (they are assembling all those outsourced parts) you see robots and generally no people.

Of course it was more than just manufacturing, automation has impacted every aspect of our lives.  New jobs were created, primarily in service areas and generally lower paying with fewer benefits, if any so we see low unemployment rates but little growth in disposable income, for these people.

The profits increased as payroll decreased and those profits went to the owners and managers as well as the fewer skilled workers still needed.

Most of the prior workers got left out.

So booming?  If you are one of the fortunate ones, it is.

But to quote an old song, for a lot of the country, "It ain't me".