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If I could pay the China wage in US cities, poverty would disappear

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karmypolitics said:
The price level overall would be lower, most likely.
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No. Wages are down and prices are increasing. How much did you pay for gas the last time you filled up?


Labor is a fraction of the cost of goods. Lower wages just make everybody poorer, except the capitalists at the very top.
 
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the big thing we gain from this is the lack of ability for people to bitch about social services. if everyone is participating then none should mind sharing
 
bfdd said:
the big thing we gain from this is the lack of ability for people to bitch about social services. if everyone is participating then none should mind sharing
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That's it? So throwing the baby out with the bathwater is justified to stop someone from whining?
 
glenn1 said:
Many of the poor in inner cities aren't worth hiring even if they worked for free.
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Yes, I have heard this.

but really, it's the only way to revitalize those areas IMO. Especially since they're so close to major markets (i.e. prosperous suburbs full of Walmarts and Targets)
 
bfdd said:
the big thing we gain from this is the lack of ability for people to bitch about social services. if everyone is participating then none should mind sharing
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Really? Because right now conservatives bitch about the working poor getting food stamps and other government services... even free school lunches.
 
Price floors create shortages in demand. Price ceilings create shortages in supply.

If creating a good economy was simply a matter of mandating that everybody makes a minimum wage of $20/hr and gas can cost no higher than $1.00/gal, I think we would've done it by now.

Prices are indicators of demand for a product. You can't mandate what people demand. Or you can, but you're only screwing yourself and those people over in the long term.
 
glenn1 said:
Many of the poor in inner cities aren't worth hiring even if they worked for free.
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Many of the poor all over our entire country aren't worth hiring even if they worked for free. People in third-world countries work very hard because they appreciate the opportunity; their options are working just as hard for less return, often to the point of having no expectation that basic requirements of food and shelter will be met, let alone wants. People in this country have the expectation that the safety net can become a hammock if needed; we simply won't work as hard because the consequences of not working as hard aren't nearly as dire. That's bad, but it doesn't make third world economies worthy of envy or emulation.

Competing with China isn't as easy as paying Chinese wages. We used to compete by restricting technology transfers, so that we always had a competitive advantage. Clinton changed that, removing effectively all technological transfer barriers. Another piece is that corporations, as they grow larger, are run increasingly without loyalty to country or even employees. This accelerates as American companies are purchased by multi-national or foreign companies. So now we're on a level playing field. Even that is going away, as increasingly the technological edge is moving to China because we've outsourced our highly technical work to them and the Chinese government is structuring its policies accordingly. So to compete with China we'd also have to move to higher density housing (smaller units, fewer detached units, more people per unit), cheaper food (largely rice or beans), less (and smaller) private transportation, and much lower regulatory structure. That last seems attractive because so many of our regulations in the news are stupid, but ignores the underlying regulations that stopped child labor, cleaned up our environment, established a forty hour work week, and generally make our lives better in so many ways.

There is no way to continue with our present level of consumption; it just isn't sustainable. There are two ways to compete with third world nations: reduce ALL our costs (and thus living conditions) to match theirs, or establish barriers (e.g. import restrictions and/or tariffs, technology transfers) and implement policies (e.g. immigration policies that favor highly skilled labor over non-skilled, policies that encourage technical and/or scientific and manufacturing jobs and education over liberal arts) that build a technological society. I very much favor the latter.
 
It's an interesting thing to think about, and you're actually correct in your points, but unfortunately you're not considering magnitude.

First, yes, it is very reasonable to conclude that lowering the minimum wage or eliminating it would result in more employment. However, eliminating a price floor only makes a difference in markets where it was binding - eliminating a $7.25/hr min wage can only affect markets in which the equilibrium price would have actually been below that number. How many labor markets in the U.S. do you think that holds for? Not many. Teenagers and very unskilled individuals.

So, let's say you do eliminate the minimum wage. Clearly, people will not work for a given wage if it is not enough to live in some area around the job. You seem to answer this by saying that price levels will drop. It's tough to make conclusions just "eye-balling" the economy like this, but that's probably true as well. But by how much? It is only reasonable to conclude that, 1) prices will drop in the market for products and/or services produced by those now paid under $7.25, and 2) prices will only drop substantially if the cost of bringing the good/service to market was largely dependent on the cost of labor.

So basically, the price level couldn't drop that much. Even in the absence of the min-wage, manufacturing won't move back in great numbers...unless U.S. workers will work for a few dollars a day, which won't be possible because given the current price level such people would starve.

So it's an interesting point, but it's NOT really the problem we face right now as a nation. The vast majority of us, unemployed or not at the moment, would not be affected by a min wage decrease.
 
karmypolitics said:
Yes, I have heard this.

but really, it's the only way to revitalize those areas IMO. Especially since they're so close to major markets (i.e. prosperous suburbs full of Walmarts and Targets)
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So these people suddenly working $1/hr jobs, how do they afford rent, insurance, food, clothing, bills and the various expenses that living entails? You seem to have a child's understanding of this, so I'm pretty sure you don't actually have an answer.
 
Throckmorton said:
No. Wages are down and prices are increasing. How much did you pay for gas the last time you filled up?

Labor is a fraction of the cost of goods. Lower wages just make everybody poorer, except the capitalists at the very top.
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If people have less money to buy good with...where do those at the top get their money?
 
karmypolitics said:
Theoretically, areas with super high unemployment rates should not exist, since when employment goes down, wages go down and thus attracts employers who need low wage workers.

but there are areas of the US which have entrenched high poverty and unemployment rates. Meaning that they are not worth paying minimum wage to.

Low-paid work is better than no work IMO, especially since once you get a base of low wage industry the region can become a supply hub and eventually move up. Much like how many countries in asia started off as low wage assembly countries and then moved up to higher value.
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You would be a front runner in the GOP primaries with this thought process.
 
actually since productivity is higher in the US per worker than in china, we need not necessarily pay the 'china' wage to provide a better cost-benefit proposition for the international companies to come and bring those jobs back home.

it can be argued however, if you pay less than minimum wage (7.25 currently) that the productivity would go down. but if you knock down the 7.25 barrier, then companies can see the benefit of cheaper labor to compete with china, along with an advantage of having goods produced domestically rather than having to worry about logistics issues and costs.
 
Spikesoldier said:
actually since productivity is higher in the US per worker than in china, we need not necessarily pay the 'china' wage to provide a better cost-benefit proposition for the international companies to come and bring those jobs back home.

it can be argued however, if you pay less than minimum wage (7.25 currently) that the productivity would go down. but if you knock down the 7.25 barrier, then companies can see the benefit of cheaper labor to compete with china, along with an advantage of having goods produced domestically rather than having to worry about logistics issues and costs.
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On this point, the US wouldn't have to actually match the China wage of a buck or two an hour, since you wouldn't have to worry about time delay or international shipping or customs or any other logistical problems.

But at the same time apparently the US min wage is too high right now to encourage bringing such jobs back.

Also, as a side note, actually Chinese workers are probably more trained and more efficient at manning factory lines than are US workers. The difference is that in the US things tend to become highly automated.

I know someone who tried to have something made in the USA, like a custom piece of apparel for a cultural subgroup. He found that not only was China better on price, they were better on quality as well, since they had more practice than the US.

someone else said that you can have high barriers and high regulations or low barriers and low regulations (including min wage). True. Which is why I said if you paid a decent wage to someone making a pair of khakis in the US the khakis would end up costing like 5x what you see in Target. but right now what you do get are low barriers and uneven regulations like the min wage, which results in pockets of poverty.
 
Spikesoldier said:
actually since productivity is higher in the US per worker than in china, we need not necessarily pay the 'china' wage to provide a better cost-benefit proposition for the international companies to come and bring those jobs back home.

it can be argued however, if you pay less than minimum wage (7.25 currently) that the productivity would go down. but if you knock down the 7.25 barrier, then companies can see the benefit of cheaper labor to compete with china, along with an advantage of having goods produced domestically rather than having to worry about logistics issues and costs.
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I have a better idea. End the free trade experiment and tax the hell out of Chinese goods. If they don't like it, fuck them.
 
karmypolitics said:
On this point, the US wouldn't have to actually match the China wage of a buck or two an hour, since you wouldn't have to worry about time delay or international shipping or customs or any other logistical problems.

But at the same time apparently the US min wage is too high right now to encourage bringing such jobs back.

Also, as a side note, actually Chinese workers are probably more trained and more efficient at manning factory lines than are US workers. The difference is that in the US things tend to become highly automated.

I know someone who tried to have something made in the USA, like a custom piece of apparel for a cultural subgroup. He found that not only was China better on price, they were better on quality as well, since they had more practice than the US.

someone else said that you can have high barriers and high regulations or low barriers and low regulations (including min wage). True. Which is why I said if you paid a decent wage to someone making a pair of khakis in the US the khakis would end up costing like 5x what you see in Target. but right now what you do get are low barriers and uneven regulations like the min wage, which results in pockets of poverty.
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In the 1970s, wages were higher, we still manufactured things in America, and people could buy khaki pants.

You know, maybe it's better to make clothes in China. But why are $400 graphics cards being built in China? The labor cost savings is miniscule as a percentage of the final price. I guess this is what happens when you have a race to the bottom in prices. They used to be made in Taiwan, but manufacturers just had to squeeze out a few extra cents of profit. Does Korea even make electronics anymore, or has Samsung moved its operations to China? Remember when "Made in Japan" was a thing? What do they make there anymore besides cars and hentai?

In conclusion, fuck China and whatever financial shenanigans they use to keep their wages so low and screw workers worldwide.
 
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karmypolitics said:
On this point, the US wouldn't have to actually match the China wage of a buck or two an hour, since you wouldn't have to worry about time delay or international shipping or customs or any other logistical problems.

But at the same time apparently the US min wage is too high right now to encourage bringing such jobs back.

Also, as a side note, actually Chinese workers are probably more trained and more efficient at manning factory lines than are US workers. The difference is that in the US things tend to become highly automated.

I know someone who tried to have something made in the USA, like a custom piece of apparel for a cultural subgroup. He found that not only was China better on price, they were better on quality as well, since they had more practice than the US.

someone else said that you can have high barriers and high regulations or low barriers and low regulations (including min wage). True. Which is why I said if you paid a decent wage to someone making a pair of khakis in the US the khakis would end up costing like 5x what you see in Target. but right now what you do get are low barriers and uneven regulations like the min wage, which results in pockets of poverty.
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As a rule, always be very suspicious of someone who does something with an obvious reason (e.g. getting manufactured product much more cheaply) while claiming he's doing it for a different reason. There are few if any products in which China actually produces a superior product than can the USA.

On a side note, while lowering the minimum wage would conceivably reduce unemployment, at least as long as you also offered a stick to drive people away from government hand-outs, it would not reduce poverty as we currently define it in America. A forty hour week of $2/hour work, even assuming that the ancillary programs like WIC and Section 8 are continued, would unarguably leave one in poverty by American standards.
 
Throckmorton said:
In the 1970s, wages were higher, we still manufactured things in America, and people could buy khaki pants.

You know, maybe it's better to make clothes in China. But why are $400 graphics cards being built in China? The labor cost savings is miniscule as a percentage of the final price. I guess this is what happens when you have a race to the bottom in prices. They used to be made in Taiwan, but manufacturers just had to squeeze out a few extra cents of profit. Does Korea even make electronics anymore, or has Samsung moved its operations to China? Remember when "Made in Japan" was a thing? What do they make there anymore besides cars and hentai?

In conclusion, fuck China and whatever financial shenanigans they use to keep their wages so low and screw workers worldwide.
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It's not just labor, although that's a big part of it. Another big part is the lack of regulation. If you want to use the best lubricant (lead) for your presses, just do it. No worrying about where the excess goes, no environmental study required, just do it. Want to use 1950s technology for your 2011 plant? No problem, just pump that carcinogen-filled smoke into the atmosphere. Part of China's success has been its rapid integration of our technology, but most of it are things we shouldn't want to emulate.
 
werepossum said:
It's not just labor, although that's a big part of it. Another big part is the lack of regulation. If you want to use the best lubricant (lead) for your presses, just do it. No worrying about where the excess goes, no environmental study required, just do it. Want to use 1950s technology for your 2011 plant? No problem, just pump that carcinogen-filled smoke into the atmosphere. Part of China's success has been its rapid integration of our technology, but most of it are things we shouldn't want to emulate.
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Right.

There was a study that showed that even though Great Britain was carbon neutral and so forth, if you took into account CONSUMPTION then Britain's carbon output had gone up quite a bit.

That is, if you want to have a clean earth and good fair standards, you should also be prepared for dramatically more expensive stuff in general.

Price might be the point, but seriously, if people aren't in an industry, their skills deteriorate. If khakis aren't being made in the USA, of course people forget how to make them.

Interestingly, for my friend 1000 units cost $1 each (minimum 1000 order) and $1000 to ship to the USA.
 
karmypolitics said:
Right.

There was a study that showed that even though Great Britain was carbon neutral and so forth, if you took into account CONSUMPTION then Britain's carbon output had gone up quite a bit.

That is, if you want to have a clean earth and good fair standards, you should also be prepared for dramatically more expensive stuff in general.

Price might be the point, but seriously, if people aren't in an industry, their skills deteriorate. If khakis aren't being made in the USA, of course people forget how to make them.

Interestingly, for my friend 1000 units cost $1 each (minimum 1000 order) and $1000 to ship to the USA.
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All good points, and one of the biggest problems with our outsourcing is our loss of what some call our "commons" - our common skill pool. So much of manufacturing and design is becoming part of a vanishing skill set. That's an effect of outsourcing though, not a reason.
 
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