Masoud had been an engineer for 29 years. In late 2006 he was laid off. After 2 years of not having a job, he became a real estate broker. Sima had also been an engineer for over 25 years. After she was laid off, she became a mortgage broker.
I am pretty sure all of you have friends in their mid fourties to mid fifties who have have followed the same carreer path as Masoud and Sima. But lets face it, how many realtors, mortgage brokers, insurance agents or financial advisors do we need in the U.S. ?
When I first started working in the U.S. there were many many manufacturing companies. They made computers, washing machines, VCRs, auto parts, Tvs, furniture, socks, suits and pretty much anything else you could think of. These companies hired a whole lot of engineers, technicians, accountants, production workers etc. Engineers made a good living. Not like doctors or surgeons but middle or upper middle class comfortable lives.
Today, 80% of what we buy in the U.S. is made elsewhere. From the Chilean grapes we buy at the supermarkets, to shirts made in Bangladesh, to computers and TVs that are made in China, there is nothing with a made in the U.S. lable anymore.
A few hours ago I had dinner with an American couple. The wife is a friend of my wife and the husband works for a very large semi conductor equipment manufacturers in the U.S. He was in China to strike a deal with a Chinese company to take over production of extremely sophisticated machines that are currently made in Japan and the U.S. When I asked this guy as to why they were doing this, he said pressure from wall street. They were not making 65% gross margin on what they sold and the only way to get there, in their view, was to make the equipment in China. He estimated that this move which was to be finalized in 6 months would cost between 200-300 high paying U.S. jobs in the Silicon Valley.
China today is prospering because every province you go to, you see signs of manufacturing; people are actually making things (goods) that are sold to other countries or consumer domestically. Don’t get me wrong; there is no shortage of service workers in China. But there is at least a couple of manufacturing jobs for every service type job. This is why China is prospering. And this is why the U.S. is in its worst economic downfall which could prove to be unrecoverable.
I am really concerned for the future of my 2 boys.