Fukuyama warns on middle-class collapse: report

The collapse of middle-class employment in developed countries is upsetting the global geo-political balance, American political commentator Francis Fukuyama says, according to The Australian Financial Review.

The newspaper reports the professor told a Centre for Independent Studies forum in Sydney that although the American economy is in full-scale recovery, companies are choosing not to reinvest and expand because they do not expect demand to increase.

Middle-class jobs are ceasing to exist or being exported to low cost countries, Professor Fukuyama said.

"America has 50 federal programs to retrain workers and improve their skills, but the results have been negligible," he said, the AFR reports.

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When it cheaper for companies to hire workers where the standard of living is low there is no incentive not to do so. So called wealthy countries need to accept that the population either has to be prepared to pay a higher price for goods with tariffs or limits on imported goods or alternatively the wealthy countries will have to lower their standard of living to match that of the poorer countries. Unfortunately we live in a global economy with free trade the second option is the most likely.
Yes so welfare spending has to drop - with the aging demographics - otherwise wealthy countries will no longer be wealthy. It's baked in the cake at present!
People generally have the belief – as standard as it is silly – that lower wages elsewhere means with “high” wages gere we’ll all be rooned. Though one pushed long and hard by the worker-haters, it is largely untrue. Let's try a basic test, rather than employer propaganda. If deregulation and small enterprise really created jobs and meaningful growth, which is it that Balinese aren't rich and touristing to Australia instead of it being the other way around? Many Business Spectator columnists and postees would take the view that no country could be more regulated than Australia. We'd agree I think that regulation and industrial relations are not a real issue in Bali. Similarly, there is no automatic correlation between Services and Taxation. We can have much better services without necessarily needing more taxation, least of all on individuals. Just go back to the pre-1980 model of direct provision by government, cutting out all the profit-seekers with both hands out for a cut of the take.