Who is looking out for the middle class?

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   rhamsonposted 10 years ago

   Although it is a harped on subject and the answer from the neo cons is work harder, the end result is inevitable.
   Buying more than selling depletes the available capital. When the capital comes back in liquidity who gains from that? The case of selling our jobs overseas to a vastly different labor force operating in sub standard conditions yields the American worker what? A competitor who takes your money until you have none. Henry Ford saw the problem with having his workforce being paid sub standard wages. They could not buy the product they were selling. Is China or India on board to provide for their own wage discrepancy with the US worker so their workers can buy their own manufactured goods? I think not as they can better compete against us and just take all that extra money. Why is China now feeling the effects of a down turn in manufacturing? Because we have cut back as we just don't have any extra money to buy anything from them even at their lower prices.
   Even in this situation the US continues to sign free trade agreements giving away more jobs and we wonder why we are becoming poorer.  Henry Ford may have been a nut in many ways but he was a shrewd businessman and saw the horrible affect of limiting those who would be your customer in the economic cycle.
   
   Read this to see where we are and what has happened to the middle class in the last 5 years.
   
   http://finance.yahoo.com/news/7-setback … 00614.html

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      Credence2posted 10 years agoin reply to this

      Without a vibrant middle class and with our regressing into some sort of fiefdom, the America that most of us grew up with will cease to exist. Contrary to what the conservatives always say, the economy is driven by the mass middle not from the largesse of the  affluent tossed to the masses like so much chicken feed.  America is America because of a strong middle class.
      We have to invest in our people or continue to decline. Too much of the current workforce is irrelevant in the face of emerging industries and technological change. Capitalism by its very nature will insure that certain outcomes that have hurt middle class workers will remain a stubborn fixture. It has to be expected that a great deal of money will move to where labor costs are lower, but as an American worker,  I don't see the need to reward that  We will need to provide a distinct advantage for those that keep productive capacity and labor within the U.S., instead of rewarding outsourcers in the tax code. As Henry Ford noted, if the average fellow cannot afford to buy the products how long do the 'big shots' think that they can survive? If the idea, a fundamental tenet of American life, that one can rise as far as talent and hard work will take them fades away with widening income inequity and less social class mobility than ever before, we may see revolutionary, rather than evolutionary responses in the future . Greed will prove costly for those that insist on it, putting short term, short sightedness ahead of the big picture.

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   maxoxam41posted 10 years ago

   It was Ford's interests to pamper its national demand because it was the only one and furthermore car manufacturing was booming. It means that his answer was ONLY a reaction to his action. Nothing humanitarian.
   Why would anyone look out for the middle class when they ignored the lowest class? It responds to an economical logic called capitalism (no need to explain what it is).
   In response to the offshoring of jobs, at the moment China's workforce corresponds to their (corporations) need, the question is what will happen when Chinese workforce's salaries will align to ours (because it will since Chinese economy is growing)? Will they come back? What we mustn't forget is NEVER will the US corporations will be first over Chinese ones. The Chinese government tolerate them for the transfer of technology but once the Chinese will control the savoir-faire, bye, bye the US.
   If we are in China it is to reduce our costs but also and foremost to get their demand. We want their consumers.

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      rhamsonposted 10 years agoin reply to this

      Ford's decision to make the wages competitive so that his employees could buy the product was common sense and not humanitarian as you state. The idea of making something no one could afford to buy is crazy. Instead of lowering his price he upped the wages to grow the customer base and put it in the cycle of commerce where people can work and buy at the same time, (where has that concept gone?) Yes capitalism at its' best attribute, creating demand. Now that we have China in the picture with their vast labor force working at a much lesser wage, where is the demand going to be for their products in the US when the jobs are over there are taking away the ability to buy anything but the essentials in the US? This is a race to the bottom as China will take a very long time to bring their standard up anywhere near the USs'. They just have too much competition within their own country to fill vacancies because of their huge population. The more people you have competing for work lowers the wage they can expect and it doesn't matter what skills you are talking about. I am afraid this has become a race to the bottom for the US worker while the top 1% rake in the short term profits before this Ponzi Scheme plays itself out.

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         maxoxam41posted 10 years agoin reply to this

         I am totally agreeing with you. What I meant was had Ford created his company 10 years ago, his objective would have been internationally versus domestically. The example of Ford was perfect (when was it late 19th century, beginning 20th?) at that time.
         A couple of years ago China experienced strikes accentuating the increase of wages and given our government pushing towards the reduction of our social advantages, the point P where our wages and theirs will meet is not as far as you may think! It seems logical to me. Again as our middle class is melting, theirs is rising. Chinese are travelling the world like the Japanese use to do in the eighties. I think that it's coming quicker that we may think. Unless we wage war against them. Our presence in the Pacific is a tell-tale.

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            rhamsonposted 10 years agoin reply to this

            I agree with you as Ford made incredible business sense with his move that made it possible for a rising middle class. His clash over the unions is phenomenal. He was a nut case when it came to the Nazi situation as well.
            
            Perhaps you have a point about the lower of wages in some segments of their work force. While it is hard to average out the equity between the two work forces (America and China) the quality or standard of living is where we will see the difference. The average Chinese worker makes around $656.00 (1) a month while the average income for an American $737.00 (2) a month. The thing that is not expresses or adjusted in these figures are the earnings disparity between the corporate and workers as it is impossible to adjust taking into consideration the total population of workers in both countries.
            
            This has been a race to the bottom for the last twenty years and it is beginning to slow China a bit as large orders are now being switched to countries such as Vietnam. It is funny how our economic capitalist model relies so heavily on Communist regimes to make it effective.
            
            (1) http://www.forbes.com/sites/kenrapoza/2 … underpaid/
            (2) http://usgovinfo.about.com/b/2003/07/17 … r-make.htm

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               maxoxam41posted 10 years agoin reply to this

               The main difference, I think, is the speed of industrialization. It took us almost a hundred years to reach the top. It took China 20 years. As for its national income, it grows stronger and quicker than ours did. In 20 years, the average Chinese, as you rightly, underlined it is at $656,00 (not yuans but dollars). It clearly means that its growth is stronger and quicker than ours for the same time period.
               Another fact, China has not tapped into its natural resources yet. As vast as the US, its policy privileges its imports, it doesn't mean that its search reached its peak or that the country lacks of it, it only and probably means that the current conjuncture forces them to focus on industrialization versus exploitation.
               By accentuating the industrialization it will imply increases of production, productivity that will affect the national income, consumption, the investment what will it be in 10, 20 years?
               China didn't reach its peak in development yet. The national demand hasn't yet been reached. At the moment, they are the world manufacturer and purveyor. What will happen when they will reach 50 years of industrialization with a demand that reached a higher purchasing power? It will be the US in the 80's.
               The giant is awakening and we are sleeping (sedated by "our" government at the mercy of the corporatocracy). It is part of the Kondratieff cycles. As for its perennity, I emit some doubts.

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               Quilligrapherposted 10 years agoin reply to this

               Good evening, Mr. Rhamson. It is nice to chat with you once again.
               
               You must have overlooked the fact that your figure for American workers ($737 a month) is misquoted from an article published over 11 years ago. The amount stated in the article was $737 a week, not a month, for American workers and, clearly, it is stale number unless used as a point of reference. {1}
               
               The average hourly compensation costs of urban manufacturing employees in China (in U.S. Dollars) has grown 300% in seven years from $.95/hr in 2002 to $2.85/hr in 2009. {2} Despite the rapid growth, wages have been about 2% to 5% of the US hourly wage. {3} A direct comparison between China and the U.S. is problematic due to inconsistencies is standards, never the less, it is revealing that the hourly U.S. manufacturing cost during 2011 was $35.53/hr. {4}
               
               I thank you, Mr. Rhamson, for sharing your thoughts.
               
               {1} http://usgovinfo.about.com/b/2003/07/17 … r-make.htm
               {2} http://www.bls.gov/fls/china.htm
               {3} ibid. Chart: Average houly compensation costs of manufacturing employees, selected economies and regions, 2002-2009.
               {4} http://www.bls.gov/news.release/pdf/ichcc.pdf, p.1

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                  rhamsonposted 10 years agoin reply to this

                  Sorry for the misquote as I was trying to get my post done before I had to leave. No excuse I know, but the reason none the less. You are correct and it shows an increase in Chinese wages through out this economic boom for them that is unsettling never the less. If we were to meet in the middle with our labor force earnings it would have such a significant affect on our standard of living and create such a gully of debt which one can't possibly see an upside too. Thank you for the correction and I will endeavor to make more time to re-read my sources. It certainly changes the gist but not the thrust of my statement.

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