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richardhutnik on 12 August 2011
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HappySqurriel said:
richardhutnik said:


The economy we have today is one, where if you can own assets, these asset will appreciate in value, also earn additional income, compounding what has been there previously.  And with lower tax rates, this compounding effect grows larger and larger.  The owning of assets that generate income has little to do with anyone's own competency or skills. In addition to this though is a scale effect that happens in regards to the area of intellectual properties and being networked, and globalization.  Jobs shift to all over the globe, keeping wages down, unless you are a top player, who is at the core of some intellectual property in demand, that has superior branding behind it.  If you are there, then the end result is you see large scale returns.  In short, be in the top 20% and you make a killing.  If you are anywhere else (bottom 60%) and you end up falling further behind.

Even then, it isn't about the skills or going to college.  It is about being in a place where you don't get buried via globalization and can have your job outsourced.  A system where the "bottom 60%" ends up falling way behind means an end to the middle class, and is primed for there to be uprisings happening.

No, it is 100% based on skill differences ...

The person who enters into Engineering, Computer Science or some other in-demand field in University earns significantly more than th person who studies English Literature or Women's Studies; and all university graduates have a much lower unemployment rate and far greater earning potential than those who only have a high-school education or less. There are similar patterns in trade schools, which are far more accessable that University being that you can get into a co-op or internship program that helps pay your tuition, the tuition is far lower in price, and the education is much shorter.

We have known since the 1970s that a high-school education simply wasn't enough for the average person to have a decent career, and that being a high-school drop-out was almost ensuring you would be a "failure", and yet our education system has chugged along producing the same mediocre results (or worse) completely oblivious to the destruction they would cause.

 

The difference due to globalization now is that, if it can be offshored, your job isn't safe at all.  Some tech and highly trained skills, which can't be offshored, retain their earnings.  But, for stuff in IT, which can be offshored (Iifted up and transferred over the Internet). there is currently wage depression going on.  Take computer programmers.

http://careerplanning.about.com/od/occupations/p/comp_programmer.htm

Job Outlook - Computer Programmer:

Employment of computer programmers, the U.S. Bureau of Labor Statistics predicts, is expected to decline slowly through 2018.

It isn't 100% skill differential.  It is supply and demand and how many workers are needed in an area, and how difficult it is to find individuals for that work.  If there isn't as much demand for workers, then the wages will be lower, if the supply is high or high enough.  Contrast that with IT work that can't be offshored, and you have a different animal, or other professions, say like nursing.

 

It is also important to dig deeper into how people are compensated:

http://modeledbehavior.com/2010/07/22/income-inequality-a-deeper-look/

The current system has shifted benefits to owning capital as a means of generating income, as opposed to wages.  With globalization afoot, wages will have downward pressure on them.