So one of the goals of the new administration is to "bring back manufacturing jobs". A laudable goal.
But if the cost of manufacturing something in a foreign country and shipping it to the US, is cheaper than manufacturing it in the US, why would a company bother to manufacture in the US? If the goal of a company is to maximize profits for its owner(s)/ shareholder(s), then isn't it obliged to go with the cheaper option? Can the cost of US manufacturing be reduced relative to manufacturing abroad?
One of the reasons it's cheaper to manufacture abroad is because some foreign countries have less protection for workers, which means they can be more easily exploited. Another reason is because some countries have low, or non-existent, occupational health and safety standards. So in some countries there are lots of sweatshops where people work in unsafe conditions, sometimes with tragic consequences(1).
So how does a US manufacturer compete with overseas manufacturers who can pay their workers $1 per day and have zero safety standards?
You can make it more expensive to manufacture abroad by imposing tariffs on imports, but then other countries can do the same, which impacts US exports. You can encourage domestic manufacturing with tax incentives, but that can only do so much. There still comes a point where the only way to make US manufacturing more competitive in a global economy is to cut wages and cut standards.
Doesn't it then just become a race to the bottom? And the people who suffer most are ordinary workers. If getting manufacturing jobs back means lower wages and standards, is that a price worth the price?
What have I missed here?
(1) https://www.theguardian.com/commentisfr … -economics
I've thought about this as well. Tax incentives may be the only card the Trump administration can play to draw manufacturing jobs back to the states. Well, that and reducing some environmental regulations. Will be interesting to see what Trump has in mind.
The U.S. has had stagnant wages for years except for the very rich. At the same time, countries such as China have had a rapid increase in wages.
Together they are slowly shifting the economic balance back to the U.S. Or so I have read.
http://www.usatoday.com/story/money/bus … /83406518/
Gosh it's hard when reality hits home!
America and Americans have been worshiping the god of consumerism for so long now that cheap and plentiful has become the mantra sung daily by it's citizens.
Firstly, America is large enough to function well even if it closed itself off from (or was shunned by) the rest of the world, you would simply adjust your consumption with your real needs and abilities.
Yes stuff made by American workers would be more expensive unless you reduce labour costs, but so what?
Get some reality and man up to the fact that you have lived as spoiled brats for 50 years, and the time has come to reassess your living conditions and downsize your appetites and ability to consume everything in reach until you reach a point where your lives resume being balanced.
Being born in America DID NOT give you all the right to rape and consume the assets of the world in pursuit of the perfect consumer lifestyle you all idolize.
Those abused third world workers are very content to get their couple of dollars a day, I've lived there, sure the abuse is wrong, but they prefer it to starvation and unlike you lot of 'entitled' folk, they hope to improve life for their grandchildren if they can, their own lives they hold forfeit to fate, they were just born into poverty and servitude and they just rejoice that they are less likely in today's world to be killed at the whim of their master.
Perhaps Trump, who also understands what real life is about, who also has seen the real world, perhaps he will bring some reality to you Americans, you won't like it, but if you bite the bullet and live withing your means, your own grandchildren may have a chance of living a real life, like the ones your grandparents enjoyed, rather than being battery hens producing profits for the 1% while gorging yourselves on as much corn as you can get.
What your addressing is a spiritual condition that will never be satisfactorily dealt with outside of turning to God.....as a nation that won't happen.
This is not a matter of moral turpitude but of basic economics. It is also you can't put the genie back in the bottle. When a whole economy and other countries reliant on it is established on a concept such as consumerism you can't just turn off the spigot and expect the country to prosper or even thrive without the spigots rewards. Yes there is unbridled greed associated with this with kids in Pakistan and India sewing up soccer balls for $0.12 while the manufacturers charge $70.00 to $100.00 for that same ball. The imbalance has plummeted wages in the US and decimated jobs and growth. This is a race to the bottom and where it stops no one knows. If you look to Trump to erase these inequities you are sadly mistaken because he has been profiting from this arrangement for years and as President I don't see him shooting himself in the foot as even as this is being written he is rewriting the situation to favor himself and many other 1%er's.
Well, I certainly agree with you about trusting Trump. Trump has benefited, yes, but besides that, even if he wished, he'd be unable to noticeably alter the wage situation. If he was serious about altering things, he'd be stepping on a lot of toes. Kennedy is a lesson in what happens when a politician gets too far out of line.
If the goal of globalization is to lift the third world economies up to a more even standard then why aren't the people of those third world nations paid a comparable wage? Because it is a hoax brought on by BS introduced to Congress by the lobbyists. If we are to have open trade with these countries then let us compete fairly and evenly. Make a prevailing wage clause whereby if we make a product here with a set wage then the foreign nation competing should also pay the same wage to their workers. And while we are at it make the agreement hold the foreign nation to the same safety and health requirements. Just saying..........
Corporate tax rates
Anti Trust laws
Unemployment and workman's comp payments
Corporate FICA taxes
And the list goes on and on and on and...
The point isn't whether the laws are good or bad: it is that the playing field is NOT level, not by a long shot.
Right, so rather than a race to the bottom, standards get pulled up which benefits workers, and evens the playing field.
But that's not happening. Companies are simply being asked to return to manufacturing in the US. To do that shareholders would need to either accept a voluntary reduction in profit (unlikely), or consumer prices would need to increase (more likely). But then people will just vote with their feet and buy from competitors who still manufacture abroad (which is why manufacturing jobs were lost in the first place).
The danger is that Trump tries to take what he (and others) think is the best way to reduce costs: slash regulations. That would be a false economy, because the reduction in costs afforded by lower standards would potentially be offset by the direct and indirect costs of higher accident rates, more instances of work-related ill-health, environmental damage etc.
Sure you can return manufacturing to the US if you make working conditions the same as in some countries abroad (and I can see how that would benefit business ) but that's not going to benefit ordinary workers much. Hazardous sweatshops, low-paid workers, more work-related accidents and illness and damage to the environment, is a high price to pay for being able to say you returned manufacturing to the US.
Then you agree that to reverse the trend to offshoring jobs under the guise of globalization is a ruse? In reality it is just another excuse to manipulate the country into thinking they are serving a better cause by lifting up lesser economies. The byline has always been that America needs to do this to become more competitive in the globalized marketplace. It is a ridiculous claim as reducing the cost by using foreign labor will never be offset by the expensive costs of American products to compete in foreign countries markets. Are we to believe that producing the household items we import is anywhere competitive as selling them our technologies? How does that compare in the many jobs displaced by it?
The bottom line is it is a manipulation that ultimately puts more money in the pockets of those who profit from the manipulation rather than those who suffer from the losses..
The idea that companies are offshoring manufacturing for the benefit of developing countries is nonsense. It's for the benefit of their profit margin. So we agree there.
But while driving improvement in wages and standards into the supply chain could be an unintended benefit for workers in developing countries, there's only so far you can go with that. For example Apple produces a "Supplier Responsibility Report"(1) which lays out the standards the company expects from its supply chain in terms of not exploiting workers, safety, human rights etc, Apple doesn't (and can't) dictate the hourly rate paid by its suppliers. That's dependent on other variables like the stat of supply and demand for labor in the local market, which is itself affected by population and various other demographics. So wage equivalence with the US is not a realistic prospect, which means the US simply cannot compete with developing countries in terms of cost.
Low skilled manufacturing jobs will continue to decline in the US, and although some of that is due to offshoring manufacturing, it's also because of an increase in labor productivity due to automation and other advances in technology. That affects workers globally, not just in the US. At some stage in the near future, when those developing countries catch up in terms of technology, low-skilled manufacturing jobs will start disappearing globally.
So will there be legislation against the use of automation and robots in manufacturing, in order to save jobs? That's not the right approach. Instead the labor force needs to be re-tooled. The next generation needs to be gaining the right skills and knowledge (mechanical engineering, programming, artificial intelligence, robotics etc.) to be able to take advantage of the jobs of the very near future.
Trump does not seem to appreciate or understand any of this. Hopefully the people advising him do, but I have seen no evidence of that.
What is a detractor in this forecast is the need for qualified skilled workers. With the rising costs of living and education in the US how many will be able to afford the training and skills necessary to fill these technical fields? Even now you have college graduates working in restaurants and flipping burgers because either they haven't the skills yet or haven't the right skills to fill these technical fields. Is more student debt in order to fill these slots and what kind of wage will be needed to overcome the debt and higher cost of college and technical trade schools?
A little confused. Joe Blow goes to college and gets a degree in a field with no job prospects, whereupon he cannot fill the job of a skilled laborer so instead flips burgers. What does that have to do with the cost of education? Had he learned to do something useful and productive, he could have a job, but that's hardly the fault of the college.
I've got a better one. Joe Blow goes to college for what his counselors and high school direct him to. Robotics and off shoring his new profession leaves him penniless without a means to pay the now mounting interest college debt. Not everybody comes straight out of high school and knows what it is they want to do. I know, I know, so what. Right? Life is not fair, right? Nobody owes you a job, right? Whatever hard luck story you have doesn't matter, right? I can't help their stupidity, right? Whatever hard ass answer that comes to mind, right? Right?
So Joe made a bad decision - still don't see what that has to do with the cost of education, or even who should pay for his useless education. Joe could have been trained in auto repair, heavy equipment operation, building construction or any of hundreds of other jobs that cannot be sent offshore. That he made a poor choice, or accepted a poor choice from a third party doesn't change that.
The problem isn't education (we already have too many college grads) or the cost of that education (an enterprising youth can still work their way through college with little debt) - it's that far too many jobs are leaving the country in response to consumer greed and demand for ever lower prices. That's what must be repaired before any education of most kinds can be considered actually useful.
I knew you would react the way you did in the first part of your answer as I stated. Not everybody comes straight out of high school and knows what it is they want to do. I know, I know, so what. Right? Life is not fair, right? Nobody owes you a job, right? Whatever hard luck story you have doesn't matter, right? I can't help their stupidity, right? Whatever hard ass answer that comes to mind, right? Right?
You don't get that industry through the corporations and their control of Congress manipulate the economy and job market? How many times have you seen technology take over an industry to change it to their advantage? I'll give you an example. The music industry comes up with a new format every ten to fifteen years to make you buy your music collection all over again as the repair of your "old" equipment is no longer supported. The newer cars are coming out where it will be illegal to work on the proprietary equipment they now embed into your software requiring you to only use one repair option. Computers are now a throw away only option as the blue screen of death appears to destroy it and the cost is more that a new unit to fix it. Your reference to building will remain here is ludicrous as China is making modular housing that will soon displace any of those so called for sure jobs. You still don't get that the goal of corporate greed is to take the labor to its' bottom line which because of our standard of living cannot reside here. No industry is safe as this model plays itself out. Eventually corporate greed will bleed the consumer dry by eliminating their jobs. The American greed model plans for no tomorrow as today is more important.
Since you take the hard ass stance you have then no answers in the direction this is headed will mean any change in industries minds or the world capitalist conquest. Remember unbridled capitalism and its' control over our government has led us to this situation. More capitalism seems to be the result of your non answer. More control of our lives and no turning the course their control over it will mean more greed as our fight to survive continues.
Disagree with much of this. Music industry: were not cassette tapes superior to vinyl records in that they could be recorded on (making music theft possible) plus the tape itself cheaper? Are not CD's superior to both as they hold far more and last far longer? You would blame all progress, all improvement, on corporations trying to kill off previous items but it just doesn't work that way. That computers are throw away is due to the low cost of producing them coupled with the high cost of labor to repair them, not that manufacturers are trying to force you to buy a new one.
"China is making modular housing that will soon displace any of those so called for sure jobs."
Unfortunately for this scenario, modular homes have been available, at cheaper prices than stick built, for decades here. I looked at buying a new on in the 80's, but they haven't taken over anything at all and remain a niche product.
"You still don't get that the goal of corporate greed is to take the labor to its' bottom line which because of our standard of living cannot reside here. "
No it's not - it's to increase bottom line profits. Whether by lowering taxes, paying labor less or making more sales, it's always about increasing profits. And all good companies recognize that good employees do that, but must be paid more to keep them. Bad employees, worth less money, can hurt the bottom line in spite of lower wages. Seen it happen more than once, when a company refuses to pay going rates and suffers greatly for their shortsightedness.
We have a problem now because the labor market is over saturated (too many jobs lost overseas) which makes the price/demand curve go down. Which in turn means companies can pay less while keeping good employees because the competition for jobs is greater than the competition for labor.
More troubling than affordability of training is the fact that selling labor for pay, which is how people have sustained themselves for years, is set to be significantly disrupted in the coming decades. When there is no further need for manual labor (or significantly less need) what happens then? For some people a low-skilled manual job is all they can do (not everyone has the aptitude for skilled technical jobs). Are those people expected to disappear?
Societies have adjusted to these types of shifts before (moving from an agricultural economy to a manufacturing economy, a manufacturing economy to a service-based economy etc.) but there's a difference between changing the type of labor, and replacing labor altogether. Part of the issue is that the pace of technological change is going faster than society can adjust. If that's not addressed there is going to be a large swathe of people for whom there will be literally no jobs available.
The best way to address that is debatable, but I can't see these discussions taking place at a high level (not even in the last administration). It doesn't even seem to be on the radar. A new sustainable economic model is needed, but for that people need to be thinking in decades (even centuries). Instead, we get the president elect micromanaging the affairs of a private company to save 750 manufacturing jobs in Indiana. Aside from all the other issues with doing that, Carrier says those jobs will be lost to automation anyway)(1).
(1) https://thinkprogress.org/carrier-autom … .q67o961g8
"...there's a difference between changing the type of labor, and replacing labor altogether."
Is there really? Each change has come with a change in location, environment, and most especially they amount of training necessary. And this one is no different in that regard.
"Part of the issue is that the pace of technological change is going faster than society can adjust."
Now this is a very real problem indeed, and not just in terms of the workplace. While it might be self-limiting (people can't keep up, so the pace slows automatically as they don't buy, work, etc.) but I doubt it. There will always be a few specialists that do keep up in their particular field and that means the display of that change will produce desire for more of it.
If you are correct there will be fewer and fewer that can keep up with cost of the consumerism that is the basis of our economy. Without good paying jobs society will evolve into something else. What that something will be may be very distasteful to many.
Americans have also lost the advantage of maintaining a good work ethic , most Americans are far more apt to find their comfort zone at work , thus adjusting their productive output to accommodate their personal "off hours "happiness . I have manage working class positions for years and all too many workers adjust to a formula of just enough of a commitment to the "okay" amount of compensation . One reason , one hand is always on the cell phone.
People are more apt to adjust the invested workweek to the available formula of personal , vacation, and comp time , The average American has no clue what the puritan work ethic involved , IMO. The one advantage and main reason for the acceptability of illegal immigration . How many times I've heard an American worker say , "I'm not doing that ".
And they don't.
It needs to be a two-pronged approach, not just giving businesses in the US incentive to manufacture in the US, but educating the consumer public about the horrendous working conditions in overseas factors so that they think twice about buying a cheaper product made in China instead of a more expensive version of the same product made in the US. And that goes for the people in other developed nations, not just the US. The developed world as a whole has a problem with outsourcing.
Donald Trump has already created more legitimate jobs than Obama --------and he's not even in office yet !
The great thing about dreaming is that to believe your dream you must never wake up. So keep on dreaming my friend.
I find it funny when confronted with plain logic how the BS stops rather quickly.
So apparently you have neither read the news or watched the economic speculation as of late , the entire economic market is already moving after years of stagnation !
The entire economic system? Do you mean the stock market? It has been skyrocketing since Obama bailed it out in 2008. The paper society has done well in the great recession as it is made up of speculation. Talk to Detroit or Cleveland and tell them your story.
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