The New Rich-Rich Gap (Robert Reich)

[rodeodance]

http://www.commondreams.org/views05/1212-20.htm

Published on Monday, December 12, 2005 by CommonDreams.org

The New Rich-Rich Gap
by Robert Reich

Almost 15 years ago, in "The Work of Nations," I described a three-tiered work force found in most advanced economies. At the bottom were workers who offer personal service, mainly in retail outlets, restaurants, hotels and hospitals. In the middle were production workers in factories or offices, performing simple, repetitive tasks. At the top were "symbolic analysts," like engineers or lawyers, who manipulate information to solve problems. Educated to think critically, almost all have university degrees. They were the knowledge workers of the new economy. ......


.........The top and bottom tiers are growing, and the middle shrinking, much faster than I expected. Symbolic analysts now make up more than a fifth of all jobs in advanced economies, up from about 15 percent 15 years ago. Their incomes in developing economies are soaring, relative to other workers'. In China, the wealthiest 5 percent now control half of all bank deposits. India's symbolic analysts are becoming a new national elite.

Two different groups of symbolic analysts are emerging: national and global. Most symbolic analysts still work within a national economy, manipulating various kinds of symbols with the aid of computers. They're at the core of their nations' middle class— accountants, engineers, lawyers, journalists and other university-trained professionals.

Yet a new group is emerging at the very top. They're CEOs and CFOs of global corporations, and partners and executives in global investment banks, law firms and consultancies. Unlike most national symbolic analysts, these global symbolic analysts conduct almost all their work in English, and share with one another an increasingly similar cosmopolitan culture. ...........

[rodeodance]

1. What's going on? In two words: higher productivity.

The growing number of symbolic analysts is also helping fuel the growth in the lowest tier, the personal-service workers. It used to be that about a third of the work forces in advanced economies were in person-to-person jobs; now, close to half are. Today, more Americans work in laundries and dry cleaners than in steel mills; more in hospitals and nursing homes than in banks and insurance companies. More work for Wal-Mart than for the entire U.S. automobile industry.

This is happening because busy households are "outsourcing" more housework, because populations of advanced economies are aging, raising demand for elder care, and because the richest 10th have so much discretionary income they can afford lots of pampering. They're hiring coaches, masseurs, drivers, gardeners, cooks and therapists of all kinds. Yet the supply of service workers is increasing faster than demand, due to a flood of new immigrants, and of workers no longer needed in routine production. As a result, the pay for these jobs is low and falling.

Meanwhile, the ranks of production workers have fallen, from about a third of advanced-economy work forces 15 years ago to one quarter. Analysts at Alliance Capital Management in New York, in a study of 20 major economies, found that between 1995 and 2002 more than 22 million factory jobs vanished. The United States wasn't even the biggest loser. America lost about 11 percent of its manufacturing jobs, while Japan lost 16 percent and Brazil lost 20 percent. The biggest surprise: China, which is fast becoming the manufacturing capital of the world, lost 15 percent of its manufacturing jobs.

What's going on? In two words: higher productivity. Factories are becoming more efficient, with new equipment and technology, and in nations like China, market reforms are replacing old state-run plans with modern ones. As a result, even as China produces more manufactured goods than ever before, millions of its factory workers have been laid off......

[EVDebs]

2. The decline of the global labor force and dawn of post-market era

Jeremy Rifkin's The End of Work: The decline of the global labor force and the dawn of the post-market era

www.jobsletter.org.nz/art/rifkin01.htm

c. 1995 What's going on ? Apparently Reich doesn't read much. Since 1995 and before, the concentration of wealth has been KILLING those not fortunate enough to have been born into the largest stock-owning families or having the ability to avoid taxation by offshoring both lower-rank jobs along with capital. That capital doesn't make its way back home...it merely props up the current administration's vast deficits.

Paper money provides only so much 'insulation' for warmth. Reich also might want to read Kevin Phillip's Wealth and Democracy along with David Cay Johnston's Perfectly Legal. The system is slowly sinking as it is to Top Heavy !