I am going keep harping on this point until it sinks in. As I have blogged in the past, you will never hear anything like this in a college or university Economics class. I know because I have been there.
Here is an example, but first I need to remind you that the objective or name of the game is "median family income". The reason that I use this as the objective is that it has a one for one relationship to the median quality of life. We can't go by the top 10% or the bottom 10% because in every country those at the bottom are poor and those at the top are rich, but we can compare the "median".
Now let's take a look at a company like Apple. I know a lot of Apple people and some of them worked for me before they went to work for Apple. Years ago, I was Chairman of the WEMA Industrial Engineering Management Round Table in Silicone Valley, so I know something about the place. I have not verified these numbers, but I think they are close enough to make my point. I estimate that the median salary for people working for Apple is about $100,000 per year. That is over twice the national average so this should make them in the top 20% of all workers. If you just look at the numbers for Apple, it looks great. What we need is more companies like Apple, but wait. Did you know that Apple does not make any of its products here in the USA? They make most some place in Asia where the pay is a lot less.
Now if we were to compare Apple with a door or window company in the Midwest, the door or window company would have a median pay for its workers that was about $35,000 or 1/3 of Apple. We would then wonder how workers in the USA could ever expect to get rich by "value added" work? Isn't it clear that we need more companies like Apple? Let's look deeper. If we were to construct Apple like the window and door companies and include all their workers in Asia, we would come up with a median pay of more like $15,000. The only reason that Apple looks so good is that you are only looking at the engineering and sales portion of the company or the high tech portion.
The point that I am trying to make is that technology does make those at the top rich, but it does not raise the median pay all that much. If you look around the world, what you will see is that the only segment of the economy that significantly raises the median pay is the exploitation of natural resources. You can find it in Oil, Gold, Timber, Coal and farming all over the world. The only problem with the exploitation of natural resources as a means for wealth is that too much immigration spreads the wealth out too thinly, so to stay rich from the exploitation of one's natural wealth they need to control immigration, and that is exactly what the USA is not doing.
Some of the poorest places in the world as well as the USA is where too many people immigrated into an area to exploit the natural resources and the resource played out. This is additional proof that immigrants do not create real wealth. It can be even worse when the most talented people migrate "out" of one of these natural resource boom areas and leave behind the least talented. This is what happened in coal mining areas of West Virginia or the iron ore mining area of Upper Michigan or the city of Detroit. Not very nice places to live today All would be better today if we had not had the over immigration into these areas and the same applies to the USA as a whole today. We do not need any more low skilled people to work on farms, mines or to cut timber. We have enough!!!
Here is an example, but first I need to remind you that the objective or name of the game is "median family income". The reason that I use this as the objective is that it has a one for one relationship to the median quality of life. We can't go by the top 10% or the bottom 10% because in every country those at the bottom are poor and those at the top are rich, but we can compare the "median".
Now let's take a look at a company like Apple. I know a lot of Apple people and some of them worked for me before they went to work for Apple. Years ago, I was Chairman of the WEMA Industrial Engineering Management Round Table in Silicone Valley, so I know something about the place. I have not verified these numbers, but I think they are close enough to make my point. I estimate that the median salary for people working for Apple is about $100,000 per year. That is over twice the national average so this should make them in the top 20% of all workers. If you just look at the numbers for Apple, it looks great. What we need is more companies like Apple, but wait. Did you know that Apple does not make any of its products here in the USA? They make most some place in Asia where the pay is a lot less.
Now if we were to compare Apple with a door or window company in the Midwest, the door or window company would have a median pay for its workers that was about $35,000 or 1/3 of Apple. We would then wonder how workers in the USA could ever expect to get rich by "value added" work? Isn't it clear that we need more companies like Apple? Let's look deeper. If we were to construct Apple like the window and door companies and include all their workers in Asia, we would come up with a median pay of more like $15,000. The only reason that Apple looks so good is that you are only looking at the engineering and sales portion of the company or the high tech portion.
The point that I am trying to make is that technology does make those at the top rich, but it does not raise the median pay all that much. If you look around the world, what you will see is that the only segment of the economy that significantly raises the median pay is the exploitation of natural resources. You can find it in Oil, Gold, Timber, Coal and farming all over the world. The only problem with the exploitation of natural resources as a means for wealth is that too much immigration spreads the wealth out too thinly, so to stay rich from the exploitation of one's natural wealth they need to control immigration, and that is exactly what the USA is not doing.
Some of the poorest places in the world as well as the USA is where too many people immigrated into an area to exploit the natural resources and the resource played out. This is additional proof that immigrants do not create real wealth. It can be even worse when the most talented people migrate "out" of one of these natural resource boom areas and leave behind the least talented. This is what happened in coal mining areas of West Virginia or the iron ore mining area of Upper Michigan or the city of Detroit. Not very nice places to live today All would be better today if we had not had the over immigration into these areas and the same applies to the USA as a whole today. We do not need any more low skilled people to work on farms, mines or to cut timber. We have enough!!!
