Rosh, this discussion on low income jobs is really quite interesting, especially as so many higher-end, skilled labor jobs are also exported.
If you look at a lot of developing states that succeed, one trick has been to keep labor costs cheap while providing other side benefits. Sometimes these are public goods (education, health care) and other times its cheap consumer goods (shopping at Walmart, low costs PCs or cheap gas in the US). The problem though is employment.
However, developing countries often have a problem during economic hardship. Because so many people become unemployed or feel the pinch, they begin protesting and challenging the government for economic reform.
If it's only the lower classes and they are a minority, fuck em. They are sacrificed and they are either too poor or too weak to make much of a protest. You can't protest if you need to spend every day trying to figure a way to eat. But if the group is large, it's a problem. Once the protest gets too high, the ruling regime ignores them only at their peril, especially as collective action becomes easier as those disenchanted grow stronger and more numerous.
While this is going on the business and upper classes are protected in their investment and incentives (low taxes) are given to reinvest in the hope that capital gets reinvested in the country. The danger of course is that the private capital doesn't get reinvested but goes abroad for more lucrative markets. Private capital goes to where it's safest and can get the best profit. Thus the argument for state-directed economic planning (which brings with it a variety of its own problems).
Now take that developing model and bring that back to the US.
For years, consumer goods have been fairly stagnant in price, and generally cheaper in the US than most foreign markets. At the same time salaries have been pretty stagnant as well. Had consumer goods increased, workers would have demanded better salaries and you would see more worker collective action (unions). THat hasn't happen and as industry becomes more specialized workers become more individualized, and collective action harder.
At the same time corporate profits have gone through the roof. So the upper classes have done well, become richer, while the middle and lower classes have been stagnant and contented with cheaper consumer goods. The class divisions between upper and lower classes becomes more readily apparent.
For lower and middle classes more the price of expensive 'capital' goods (health care, housing, education), have slowly been increasing making the lower and middle classes more desperate to find jobs- thus the two income household and the number of workers who have part-time jobs in addition to fulltime jobs.
For the few decades low income jobs (such as textiles, cheap electronics) have gone abroad) in part because of the product cycle. Now when my credit card company calls me asking me to change my insurance policy, the call comes from Manilla or Bombay. Higher skilled works, like accounting for business tax, can be done in Calcutta as in New York, for a fraction of the costs. Great for Calcutta, but in NY accountants are out of work.
Americans losing their jobs need to be retrained for more high tech, but we are losing the technological edge and the government is reluctant to invest in education which is slowly being eroded for lower and middle classes. Thus class divisions become even more clear, with upper classes trying to insulate themselves and lower classes making more demands. Indeed, the current regime in power can easily dismiss some of the lower classes- thus cuts in education and summer work programs in urban areas are acceptable because they wouldn't get those votes, or that population is politically unimportant.
Perhaps this is why this election is becoming so polarized? Bush is getting most of his funding from the top 1% of the US population while Kerry is getting a lot of support from disgruntled workers. The election may be taking on class tones.
Part of this can't be helped. It's the product cycle and technology defusion. But part of it also is a question of who controls the government in the US and what are the priorities being set.
But at the same time, this also gives incentives to workers and the middle class to start making demands. This might be why, despite the positive economic stats of recent day, the Bush team might be fucked. The new jobs are low income, low salary and people are increasingly aware that their jobs have gone abroad- good for business, bad for the average joe. There is also a growing awareness that the Bush administration doesn't care, except when it comes to sending poor kids off to die to protect cheap oil.
But the battle then is for the middle class.
