Bush’s recent visit to India started me thinking about the prospects for my own children and grandchildren in this new age of globalization that Bush touts for us.There are several things that point toward a diminishing return for people in the more advanced ( read higher cost) countries and a transfer of wealth to the lower cost countries.
The first such sign for me was the implosion of the auto supply industry with the major automakers following suit.GM and Ford are now gasping for breath and it is merely a matter of time before they either declare bankruptcy or are merged out of existence.The collapse of that industry is already setting off alarms in the Midwestern States.
I believe that the automotive industry is likely to follow the precedent of the steel industry which went through similar gut wrenching changes just a generation ago.Many previously prosperous communities in the Midwest were reduced to poverty and destitution.
In their place, a new global player, Mittal Steel, has arisen that owns nearly 50 million tons of steelmaking capacity in a far flung empire from Kazakhstan to Trinidad.When, as expected, Mittal Steel completes the acquisition of Arcelor, a Luxembourg based steel maker, it will own fully a third of the world’s steel making capacity.Mittal Steel expects to serve the booming economies of India and China with steel made in the low cost mills it owns.
A similar prospect looms on the horizon for the automotive industry.Both India and China have their eyes on this industry as their economies want to move up the global food chain.They have the entrepreneurs, knowledge base and access to vast amounts of capital that has soured on our high cost labor force.Expect another Mittal Steel to arise in the automotive business within the next decade.It will further dim the prospects for anyone contemplating a future in this country in the automotive business.
It is in this context I have realized that, even education, at the university level, may not offer the security that we seek for our children because there is going to be a glut of highly educated people from India and China flooding the world markets.Engineers, lawyers, accountants, doctors, what have you are emerging out of the many fine institutes and universities in these countries.As those in the IT industry already know,corporations simply relocate their facilities in these countries to gain access to the vast pool of highly educated labor.Along with the relocation of manufacturing facilities, such a drain on our service jobs will devastate the future for our children, education or no education.
There was a time when we used to pity Mexican farm laborers for having to move north to pick berries and lettuce in the farms of California or Oregon.That day is dawning for our technical professional class who may have to take drastic cuts in income and migrate to parts unknown in search of a living.Many Ph.D s in the social sciences are already living such existence moving from school to school as adjunct faculty with no benefits and no security doing the equivalent of menial chores for the highly touted professorial class. That is likely to become the fate of many highly educated people in industry as well.
Who could have predicted a generation ago that a Ph.D will land you among the glorified migrant worker class in the global economy?