Ha! Still waiting on this headline!
Monday, July 10, 2006 at 7:50AM
Thomas P.M. Barnett

Check this one out from today's Washington Post: Well-Paid Benefit Most As Economy Flourishes.


I'm waiting for the headline that says: "Unprecedented Recovery Benefits Poor While Screwing Rich."


No offense, but why the obssession with rich-poor gap? Question isn't whether rich do better, but do lower ranks simply advance?


Here's the key analysis:


Businesspeople cite shifts in the world economy that give educated workers leverage to negotiate for higher wages but make low-paid workers replaceable -- a disparity that is especially pronounced in a service economy like Washington's.


Does this sound broken? Or just the result of a more competitive global economy, one that promotes and emphasizes the benefits of higher education?


I mean, how are you planning to fight this reality?



The region's economy is strong and businesses are expanding, hiring more software engineers, financial analysts, salespeople and other skilled workers, thus bidding up their pay. But companies are simultaneously finding ways to automate clerical tasks, move call centers to cheaper places and handle business online, weakening demand for less-skilled workers.

Consider Focuspoint Inc., a company in Manassas that sells recorded messages for companies to play when callers are on hold. Three years ago, two order clerks frantically juggled calls and faxes from several hundred clients placing orders. Now the company has 1,700 clients and is expanding its sales and other high-level staff but still has just those two clerks -- who now sit quietly overseeing Internet orders.


"Three years ago, we would have had to hire more people to handle all our new clients," said Joe Martin, a vice president. "Now, we rely on new technology to pick up that work."


Should we not be in the business of replacing people with technology and thus advancing productivity?


Ah, but here's the legitimate rub:



Such innovations help explain why, from 2003 to 2005, the average wage for people in the lowest pay bracket, with salaries around $20,000, rose only 5.4 percent in the Washington region -- not enough to keep up with rising prices. For the jobs that pay around $60,000, salaries rose 12.4 percent, well ahead of the 6.8 percent inflation in that period.

That tells me we need to raise the minimum wage--at a minimum.


But, as always, the key is more educational opportunity, especially generous retraining benefits for anyone who's displaced by globalization's rising competitive environment. The key isn't job protection, but job creation and transitioning.

Article originally appeared on Thomas P.M. Barnett (https://thomaspmbarnett.com/).
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