Keeping the World Working

The motto of the world ever since Adam Smith has been “grow or die”. Prosperity and standards of living and education levels have increased in most countries dramatically. Growth has come to mean producing huge quantities of goods that no one needs and convincing them to buy them anyway. Perhaps this is like the disease organism that grows and grows until it kills its host and then dies itself.

Many of the Developed countries have taken worker security and benefits to the point where their economies have become uncompetitive. Now there is clamor for increasing working hours and push back retirement age as an incentive for companies to expand or hire more workers. The short term benefits of this are pretty obvious. Long term, the goal is to reduce the expected deficits in entitlement programs.

Most of the countries considering these things are experiencing high un-employment. Is squeezing more out of workers the answer to this problem? This will eliminate the need for more workers. More jobs are needed. The solution to this is more consumers not more workers. A retired person or a person on vacation is a professional consumer. Perhaps, the whole structure of production, consumption and employment needs to be re-examined in the light of and organism that may be growing itself to death.

David Segrest, CCIM, CIPS, CEA, TRC, is a REALTOR in Charlotte NC. His web page is http://www.segrestrealty.com. His email address is david@segrestrealty.com.

Linkages and Countries

In commercial real estate we talk about linkages rather than location. This used to mean proximity to airports, other transportation hubs, population centers and highways. Now the importance of linkages goes beyond the location and extends to the global community. An auto plant is more connected to the parts suppliers and raw materials producers and the dealerships that sell the cars, than to the community of its location.

Globalization has lead to greater productivity and lowered employment. While this seems to be a sudden phenomenon, it is not. The current economic crisis has merely accelerated the process. The jobs that are lost will not come back. The labor type of jobs that have been outsourced will continue moving for cheaper production. The new plants used to just move and take advantage of cheaper labor. Now they move and take advantage of new technologies as well.

This means that the 4000 jobs that moved to Mexico, were probably replaced with 3500 jobs when they went to China and 3000 jobs when they go to Viet Nam. Each time the factory moves, productivity and production increase. Employment decreases. A new strategy will be needed to keep the world working.

David Segrest, CCIM, CIPS, CEA, TRC, is a REALTOR in Charlotte NC. His web page is http://www.segrestrealty.com. His email address is david@segrestrealty.com.