Labor Shortage? Labor Replaced by AI?

Everywhere today there is talk about a shortage of skilled labor. Fifty -- even ten -- years ago, blue collar trades operatives were viewed as anathema by most Americans, due to "green" manipulation of public opinion. As often happens, when a problem is recognized, the solutions apply the same wrong-headed principles that created the problem in the first place.

Media outlets and congressmen, of course, worry that the exodus of illegal immigrants from the US will create a labor shortage and worsen the housing crisis.¹ At the same time, pundits and lame-stream media bellow that AI may soon wipe out millions of jobs, creating mass unemployment. Meanwhile Big Tech and Silicon Valley venture funds keep demanding more H-1B visas be given to foreign workers to enter the US workforce.²

Hold on a second! Let’s start with human beings instead, our fellow American citizens. For example, states and community Colleges have already been expanding skilled trades programs to woo new manufacturing facilities to their communities. The President now strongly suggests giving Harvard’s federal grant money to trade schools instead.

As Vice President J.D. Vance rightfully points out, deliberate outsourcing of US manufacturing wiped out America's skilled labor force and "hollowed out" the Heartland. Vance's book, Hillbilly Elegy; A Memoir of a Family and Culture in Crisis, is a moving portrayal and indictment of human carnage over two generations.

It is important that what was a brutal betrayal, of fellow Americans and national interest, be brought front-and-center now. Clearly, President Trump and his team are speaking to this. This is seen in the remarks and actions of cabinet members Scott Bessent, Howard Lutnick, and Lori Chavez-DeRemer, as well as JD Vance and the President himself.

Front-and- center because the current popular preoccupations with simply finding "enough workers," in what has been a cultural as well as material vacuum, will not produce tomorrow's labor force. This is a critical moment. How can all Americans think about this "hollowing out," in a fundamental way that puts Man's humanity, his God-given creativity and ingenuity, front and center?

The Actual Power of Labor

Abraham Lincoln said, in a speech given in New Haven, Connecticut in March, 1860,

“I am not ashamed to confess, twenty five years ago I was a hired laborer, mauling rails, at work on a flat-boat – just what might happen to any poor man’s son! I want every man to have the chance … in which he can better his condition – when he may look forward and hope to be a hired laborer this year and the next, work for himself afterward, and finally to hire men to work for him!³

Abraham Lincoln's personal rise, and his very personal grasp of this process of creation, goes to the heart of the American System and still serves as inspiration for thought today.

Now Invest Our Capital in Labor!

An implication to be drawn from the last fifty years, as well as from President Abraham Lincoln's statement as quoted above, is that America can and must now invest its capital so as to insure a "breadwinner" can again support a family.

This means increasing the buying power of an industrial or manufacturing operative to levels that insure the needed income that supports a growing family. That includes, for example, the ability to again afford needed family healthcare. (That healthcare, for instance, must shrink the co-pays that employees and their families now pay for healthcare provided by their employers. This would be a return to sanity, after recent decades of chiseling through Obama Care "reforms.")

If a tech bro or major manufacturing concern will not commit to achieving a rapid increase in the buying power of the American workforce -- and that means a commitment to organize politically to make this possible! -- they are also their own worst enemy.

Calculating a Living Wage

Today, according to Census figures, a US manufacturing worker makes roughly $35 an hour, on average. (Figures vary; in Texas that Census figure is a reported average of $25.00/hour.)

At today's prices a breadwinner, supporting a family of five, needs to earn roughly $55-$60 an hour -- $115,000 - $125,000 a year, after taxes.

The reader might at first be shocked. First recall that the replacement birthrate is 2.2 children per family; the current birthrate is 1.62. To grow again our country needs a birth rate of some 3 children per family. So a family of five - two parents and three children - is conservative.

Now look at what it actually takes to support a family today. The reader can examine this for themselves, utilizing one of several 'living wage' calculators. Here, MIT's Living Wage Calculator⁴ is applied, applying it to counties or metropolitan area. Figures of course vary across the country.

Overall it is found that to barely support three children and homemaker, a bread winner needs to earn in the range of $45 a hour -- just to meet defined "basic needs." $45/hour may already "seem high" to some people. Yet MIT's "living wage" calculation is just calculating "basic" costs by design. As well, the MIT model already assumes that the wage earner works 2080 hours a year -- the equivalent of 40 hours a week and working all 52 weeks a year.

An Overlooked Solution

The USA can also bring the cost of everything down to "make America affordable again." This is exactly what President Trump and his team are committed to achieving.

Combining rising productivity, with an increasing percentage of our workforce actually employed in producing physical wealth, can make increased buying power absolutely achievable, including a rise in wages.

Example: Home Building

For example, we have stopped building affordable homes, now in such short supply, and in a "free market" economy, shortages fuel Wall Street-led, predatory speculation. The cost of a median priced new or used home increased 1,608% from 1970 to 2021, while official inflation increased 'only' 644%. If medium home costs had increased at the rate of official inflation, the medium cost of a home today would be around $177,000 rather than over $400,000 today. Real estate speculation, including tolerated land speculation, built the portfolios of Invitation Homes, Progress Residential, Blackstone Group and other equity funds.

The price of housing can be brought down by deflating real estate speculation, as by targeted capital gains taxation, with the broader solution resting on a multiplication in the number of home builders. Expansive, targeted low-cost lending, through community and regional banks, can create -- along with bringing down the cost of energy, forest products and other building materials -- a low-cost building boom in single family homes. It is a matter of intention; where there is a will there is a way.

With all the means at hand, the USA can raise the buying power of the average industrial and manufacturing operative by a lot! No class of citizens need be permanently trapped in their circumstances.

Also consider — as straightforwardly stated by the folks at MIT — that their Living Wage Calculator does not include the needed income that would allow savings for the down payment on a home, saving towards retirement, or saving for the children's future education:

"...the living wage does not budget for... leisure time, holidays, or unpaid vacations; or savings, retirement, and other long-term financial investments."⁵

To account for some or all of these real family requirements is what pushes this writer's ballpark estimate of an hourly wage figure for a family of five to $55-$60 an hour -- that is, unless the USA increases buying power through real physical economic growth, which can bring prices down. Rising wages and falling prices might also meet somewhere in the middle. Consider that in the 1950's, Detroit was America’s wealthiest cities, with one of the highest per household incomes of any city in the US - because it was a manufacturing dynamo.

Trump Challenges Young Americans

Circumstances also important require addressing younger Americans, including Gen Z: America is back, an America they never personally knew!

The President spoke to this, very personally, when he addressed the graduating class at the University of Alabama on May 1st. This was not only a message for graduating college students, but expressed the new spirit that the President and his team have been taking to young Americans everywhere:

" ...For the business majors here today; I challenge you not merely to use your talents for financial speculation but to apply your great skills that you've learned and had. To forging the steel and pouring the concrete of new American factories, plants, shipyards and even cities which are going up all over our country. Don't just build a strong portfolio. Build a very, very strong America and you're going to do that. To the engineers, brilliant; you are technicians, scientists. and math majors. We need your Alabama spirit - competition - to keep our country at the forefront of every single domain...

How Did We Dig Such a Deep Hole?

If it seems incredible that in today's dollars, America would have to provide today's and tomorrow's workforce with the equivalent of $60 an hour in wages, and "inflation" serves as only a superficial explanation. This is not about money, money, money.

The truth is that the US physical economy has been operating below "break-even" for more than 50 years. For a company, operating below the break-even point indicates that the company is experiencing financial difficulties. If this situation persists, it can lead to mounting losses, debt accumulation, and ultimately, potential insolvency or bankruptcy.

For decades now the USA, and humanity, has been living off past investments, made by past generations -- until now!

How might it be measured, that the physical economy of the USA fell below "break-even"? Here are a few elements:

The last major investments in US national infrastructure ended with the Kennedy presidency, with much of it built before WWII. Drinking water and wastewater infrastructure often date back to the early 20th century. The electrical grid’s core components, like substations and transmission lines, were largely built in the mid-20th century. The U.S. Army Corps of Engineers’ National Inventory of Dams (2023) reports that the average age of the nation’s 91,000 dams is about 60 years, with many constructed during the New Deal era (1930s). In short, pre-WWII infrastructure (pre-1945, 80+ years old) is common in urban cores, and post-WWII construction (50–70 years old) dominates highways, bridges, and power systems.

In parallel, the "outsourcing" of US manufacturing evolved or devolved, on the 'The City' of London, "Wolves of Wall Street" model. Americans were coaxed along, told that America was entering the green pastures of a "post-industrial" era. "Consumers" and services were replacing nasty producers. Factory closures led to depopulation; Detroit, for example, lost over 60% of its peak population by 2020. American cities decayed and social networks weaken as families moved away, and civic institutions like unions, churches, and local businesses now struggle. It did not happen because it was natural!

Consider that America's total consumption of energy flatlined since the late 1990's. It should have been growing, as our population grew by more than sixty million people!

The truth was that the USA stopped investing real capital back into its communities; stopped investing the nation's wealth back into its people!

Instead, in today's “financialized” economy, on any given day, $7 trillion dollars sloshes around in US money market mutual funds, moving in and out of other largely speculative financial investments.

Almost forgotten has been the remonstration of Honest Abe:

“Capital is only the fruit of labor, and could never have existed if labor had not first existed. Labor is the superior of capital, and deserves much the higher consideration.”

—Abraham Lincoln, 1861, Address to Congress⁶

A Word About the Enemy

Many of the tech bros and aerospace-defense management are simply ambitious and tending to the mercenary. That is a significant reason why they were picked up and promoted, under the monetarist influence of Wall Street and "The City" of London, UK. Their shortsightedness was induced.

This was never an inevitable historic trend or an act of nature; instead it was the Council of Foreign Relation’s “1980’s Project,” witness Paul Volker's stated policy of "controlled disintegration" of the USA's remaining agro-industrial sectors.⁷ Their stated oligarchic intention was to de-industrialize and ‘green’ the United States as part of a globalist “collective management” of “limited” resources within imposed, finite markets. To this end, the Anglo-Dutch financial oligarchy had to rid the USA of people that created and produced. The intent was to cut the USA off at the neck; to convince actual citizens of their purported littleness, and thereby acceptance of their place in the feudal, Malthusian “global order.”

The American Revolution Underway

Abraham Lincoln spoke in universal terms:

“Any people anywhere, being inclined and having the power, have the right to rise up, and shake off the existing government, and form a new one that suits them better.” - Abraham Lincoln in January, 1848

As candidate Trump's 2024 Republican Party Platform -- dedicated to the "forgotten men and women of America" -- announced,

"The Republican Party must return to its roots as the Party of Industry, Manufacturing, Infrastructure and Workers."

That outlook is affirmed, as Vice President JD Vance points out, in the encylical, Laborem Exercens, issued by Pope John Paul II in 1981. The main concern of Laborem Exercens being to speak to the dignity of workers as human persons. One can readily see why the Vice President, a Catholic and author of Hillbilly Elegy, would draw all of America's attention to this work.

The encyclical identifies the threat of reductionist, materialist perspectives in the economic world, viewing labor as simply a means of production. Labor instead, rather than being a commodity, is constituted by human persons and the work that they do. In Laborem Exercens the point is also made that all capital is the result of labor. The document contains a philosophical analysis and critique of both Marxist and (so-called) capitalist systems. While Marxism sets labor and capital in opposition and views history as merely the outcome of material forces, Pope John Paul II equally warns that a "radical capitalistic ideology" also sees workers as instruments to be exploited.⁸

The return to our “roots,” and fully animate the dynamic process of Mankind’s participation in creation and nation building, is to return to the unique American System of political economy and national credit as understood by our greatest forefathers. Confidently, they struck out on their own, recognizing that it was actually the very abundance that the nation was creating and constructing, with an eye always to coming generations, that more than secured the credit extended today.

That was the instigating insight of the First and Second National Banks of the United States; Abraham Lincoln’s “Greenback” program (recently noted by Treasury Secretary Scott Bessent); and the essential truth at the heart of the dramatic success of the Reconstruction Finance Corporation in the FDR era.

As the USA expands its exploration of space, constructs hundreds of nuclear power plants, and builds beautiful new neighborhoods to be filled with optimistic young families, there will also be a fresh recognition and appreciation of those builders and families who came before and contributed to the greatest nation. They built our cities, cleared the land, built the industries and waterways, and planted our orchards. That is again the proud American task, today and tomorrow.

1. https://www.jec.senate.gov/public/index.cfm/democrats/2024/12/mass-deportations-would-deliver-a-catastrophic-blow-to-the-u-s-economy

2. Even universities. Stanford University ranked 29th in fiscal year 2022 in the number of H-1B petitions approved for new H-1B workers . Stanford was, at that time, the only cap-exempt employer in the top 30.

3. “Speech at New Haven,” March 6, 1860, in Lincoln: Speeches and Writings, 1859-1865, ed. Don E. Fehrenbacher (New York: The Library of America, 1989), p. 144

4. https://livingwage.mit.edu/

5. https://livingwage.mit.edu/pages/methodology

6. https://millercenter.org/the-presidency/presidential-speeches/december-3-1861-first-annual-message

7. Speech by Paul Volcker at Warwick University, Coventry, England, in 1978: https://www.newyorkfed.org/medialibrary/media/research/quarterly_review/1978v3/v3n4article1.pdf

8. Note: Rerum Novarum, issued by Pope Leo XIII in 1891, is often cited as a foundational document of Catholic Social Teaching, and certainly JD Vance is familiar with it. Rerum Novarum addresses the social and economic issues arising from industrialization, particularly the plight of the working class. The encyclical affirms the right to private property, while advocating for a just wage. It supports the formation of trade unions and emphasizes the importance of both employers and the state in ensuring fair treatment and protection for laborers. It firmly rejects socialism and communism, and underscores the importance of moral virtue and Christian principles in shaping economic and social life.