Nurturing the goose that lays golden eggs

There is enough and more articles about what ails US and its economy.  Here is my noise.

Every society has its share of skilled, less-skilled and unskilled people.  The split up usually forms a pyramid with unskilled at the bottom and skilled at the top.  US is no exception.  The pyramid may be steep or a gentle slope, but it is a pyramid.

The lower levels of the pyramid is fed by the higher levels.  People at the higher level generate more wealth with their skills, entrepreneurship etc and pay the lesser skilled people for using their less valued skills.  This is well understood and many capitalists do agree on this.

What isn't obvious is, the presence of  the base ensures that the people at the top stay where they are.  That is, the lower levels must exist and be strong so that they can support people at higher level.   The lower levels are not just service providers but are also consumers to keep a number of businesses alive.  In other words, businesses must use their services so that they can stay as consumers.

Here is a small digression here.

Have you heard of ITC's Choupal story?  It is a simple one, where ITC reached out millions of farmers and purchased the produce directly.  Couple of things didn't get the attention they deserved.

• Through the Choupal, ITC is able to push its  products to the farmers just as they sold their produce to ITC.
• In the process ITC ensured the low income group is taken care and is part of its market.

When businesses in US focused too much on markets and profits, the less skilled were left out.  

• When everyone drove a car, public transportation was killed and there are no jobs for the drivers, cleaners and mechanics.  Car services and maintenance doesn't create jobs for unskilled people.
• Though car manufacturing created jobs, shutting down and lay-offs have left a large workforce out there in the cold.  
• With washing machines, dishwashers, lawn movers and with every item at Home Depot, more jobs like domestic help, gardener and small time carpenters and masons went away.
• When manufacturing moved to China and other cheaper locations, jobs at assembly lines were gone.
• Low technology jobs at call centers moved too, taking away another chunk of jobs.

While all of these made perfect sense for the businesses and the bottom-line, over a period, it eroded the number of jobs of unskilled and semi-skilled.

Here is my less than 2 cents worth wisdom for a turn around:

• Opportunities must be created at less skilled service oriented industries.
• Any concession on taxes must be given to sustainable service industries.
• Funding on public transportation can create jobs and might even work out during these days of high fuel costs.
• Tax benefits for payments toward domestic services may encourage the middle class to outsource work to local unskilled workforce.