Recently I attended a components industry conference, and much of the discussion focused on the necessity of building a supply base in China for personal computers, communications and other systems that are being manufactured there. It's all about cost, but manufacturing in China is only one part of the cost-structure strategy. The other piece is about doing basic design there while keeping the bleeding-edge development projects here at home. The annual salary of a Chinese design engineer is around $6,000, while American engineers typically earn 10 times as much, or more. For many component companies, the mantra will eventually be: "Design and build in China."

As I understand it, the Chinese working middle class is about as large as the middle class in our country. And while the Chinese middle class is optimistic about the future and growing rapidly, some would argue our middle class is shrinking and running job-security scared. But China is not without problems. It has more than a billion peasants, who will some day want their share of the economic pie. The thought of a billion folks taking to the streets is chilling.

One CEO at the conference spends nine days a month in China, meeting with his Chinese executives and with government officials to make sure his projects stay on track. After his talk, he was asked: "As manufacturing and engineering jobs move offshore, do you think there is danger of a middle-class uprising in the United States?"

That's a tough question for a CEO struggling to compete in the global economy, a CEO who has had to move his manufacturing to China to stay competitive. It's also a tough question for a CEO who is also moving design to China to reduce engineering costs.

It's all about cost. CEOs aren't evaluated on how many manufacturing and engineering jobs they create in America. They're judged on their ability to deliver financial results, results that will make the Wall Street crowd dance. Wall Street is king, and lately those dudes have been dancing in the street. So don't blame corporate America if the middle class in our great land is not reaping the benefits of globalization and is running job-security scared.

So, whom do we blame? When all else fails, blame our government. As the 2004 elections grow closer, there will be even more finger-pointing about our exit strategy in Iraq. Chances are by then U.S. manufacturers will be posting nice profits, often as a result of shifting jobs and manufacturing offshore. But for the middle-class working stiffs, their way of life is crumbling before their eyes. So what do we do and who does it? Not even my barber has a clue about how we fix the problem. And he is one smart cookie. What do you think?

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