Wednesday, December 28, 2016


Sponsored by Helios Ruehls, Inc.


Too much of the US population has been either falling out of the middle class ranks , or upon entering the country legally or illegally, failing to rise into the middle class ranks since the 1970s. This downward trend in upward economic mobility has been paralleled by an upward trend in US individual worker productivity. That upward trend in productivity coincides with the start and growth in the commercial and consumer use of devices based on microchip technology. 
Image result for Images of microchips
Are Micro Chips Old Hat Now?

The microchip industry that propelled this growth in productivity is now nearing the half century mark. The micro chip is certainly now a mature product. We believe based on our contacts with the innovative Helios Ruehls Inc. that while there may not be much new to come in micro chips per say, the microchip launched revolution is not as over as some analyst would have you believe. "The Internet of Things" promises to link for interaction a wide variety of "computerized", or computer based devices. NEMS (NANO Electro-Mechanical Systems) and MEMS (Micro Electro -Mechanical Systems) may hold the promise of yet another round of productivity revolution. But two schools of thought indicate that the aging of micro chip technology and the emergence of NEMS and MEMS based interlinked technologies don't make for a bright employment out look. Indeed as productivity is going up, the number of workers needed at all levels is shrinking in proportion to the tons, gallons, crates,  service hours, etc.being produced for sale. 

Economist George Friedman recently commented that in terms adjusted for inflation, U.S. productivity in 2016 produced its first decline in more than ten years. According to Friedman this decline in productivity may mark the start of a global shift in productivity. The rise in productivity caused by the wide use of microchip technology that launched the economic expansion that started in 1982  is sliding into an irreversible decline. My thought as your giant catfish scioeconomic analysts is that sounds like biped speaks, not with a forked tongue, but inadequate insight. I have to agree the micro chip "revolution" is old hat. However, I doubt that anyone is going to go backward in technology for manufacturing or delivering services.  I don't see any decline in employment based on stagnant microchip technology. I actually see an increase in productivity based on MEMS and NEMS technologies, but a related decrease in employment. In a nut shell we need fewer and fewer people to produce ever increasing amounts of wealth. Unfortunately, unless you bipeds start using common sense there will be no one left gainfully employed and thus having the medium of exchange (money?) to buy all this production?  Increases in productivity are a good thing but they can lead to reductions in the compensated work force which is the death knell of an economy.

 Whats the solution? First face the inevitable. An economy that can produce endless wealth but few jobs is already evolving. There will be no one to buy the production if our economy remains based on the James Town principal of "he who doesn't work doesn't eat". History also teaches us that the collectivist solution such as communism and socialism don't work.

  The answer has to be in the reform of labor laws that redefine the ideas of "career", and "retirement". We must link health insurance and retirement benefits to steadfast participation in an identifiable productive field. We must increase unemployment compensation and non loan educational assistance to deal with the fact that most young workers are going to be involved in a protracted period of at best intermittent work experience mixed with protracted training periods before they can compete with better trained older workers for those few full time jobs. Social Security is headed in the wrong direction, instead of raising the retirement age, it needs to be lowered to encourage older workers to rotate out giving the younger workers a real shot at the shrinking full time job market. The Congress needs to balance the budget and start to pay back all those IOUs in the social security fund that they borrowed for other purposes. Some general revenues need to go into the social security fund to pay the debt to the fund. Some general revenues presently marked "welfare" need to go into social security and unemployment compensation. Ultimately part of the great savings that industry is experiencing due to productivity increases should be taxed to support an economy characterized by a shortage of full time employment, a highly educated work force, and lengthy career preparation. This is of course too far "left" for the right and demands a commitment to education, training, and career development of the electorate, vice being on a straight forward government dole. The left won't like it. That alone should tell you that I'm on the right track. No one likes this plan because everyone's pet ox gets gored, a sure sign of a real solution.

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