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Lost middle class jobs being replaced with "burger flipping and retail jobs"....gasp

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Matt1970

Lifer
Mar 19, 2007
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From http://en.wikipedia.org/wiki/Balance_of_trade#cite_note-38:

The successful American businessman and investor Warren Buffett was quoted in the Associated Press (January 20, 2006) as saying "The U.S trade deficit is a bigger threat to the domestic economy than either the federal budget deficit or consumer debt and could lead to political turmoil... Right now, the rest of the world owns $3 trillion more of us than we own of them."
From same page:

The U.S. has held a trade deficit starting late in the 1960s. Its trade deficit has been increasing at a large rate since 1997 and increased by 49.8 billion dollars between 2005 and 2006, setting a record high of 817.3 billion dollars, up from 767.5 billion dollars the previous year.
And look what started happening around the late 60's:

 

PingSpike

Lifer
Feb 25, 2004
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What choice do we have?

Name a single TV made in the USA and I will buy it.
Also keep in mind that just because it says "Made in USA" on it doesn't mean it actually is. It might have just been put in a box in the USA or had two pieces stuck together in the USA after it was unloaded from a boat.

And again, that's if you can even find one that says that on it.
 

werepossum

Elite Member
Jul 10, 2006
29,876
460
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You really think a retail/wholesale company takes the tariffs out of it's own pocket.

Those price increases are past on to the consumer.

Tariff is just another tax on the consumer to protect a business
It's not to protect the business; the business can make as much if not more money selling product made in China. It's to protect our manufacturing workers and thus, our way of life. Beyond that, America is built on a strong middle class, originally the yeoman farmer but since World War I on blue collar manufacturing and tradesmen. Retail sales simply doesn't generate enough added value to support a middle class lifestyle; even if we could balance the trade deficit using IP, we would simply devolve into a nation of haves and have-nots.

No country can long survive consuming more wealth than it produces, but how its wealth is produced defines the character of the nation. A nation where most of the people are either at or near poverty, or a nation where most of the people are kept at a pseudo-middle class lifestyle through government hand-outs funded by debt and redistribution, is not going to be recognizable as America.

And yes, the consumer will pay for the tariffs in higher prices and a lower lifestyle, but in return will have access to better-paying jobs for a better lifestyle. There's no free lunch in either direction.
 

Matt1970

Lifer
Mar 19, 2007
12,321
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What choice do we have?

Name a single TV made in the USA and I will buy it.
The reason why there are no USA maqde TV's is nobody wants to spend the extra $$ for them. It can't happen overnight but if we start with a few items then it will grow from there. Demand for USA made products mean more USA made products.
 

Aikouka

Lifer
Nov 27, 2001
29,764
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The reason why there are no USA maqde TV's is nobody wants to spend the extra $$ for them. It can't happen overnight but if we start with a few items then it will grow from there. Demand for USA made products mean more USA made products.
I'm not so sure that it's just the manufacturing cost increase, but also the fact that the majority of the components are made overseas. For example, the largest LCD panel manufacturers are in South Korea and Japan. Why not just build everything there or somewhere with cheap labor closer to there (i.e. China)? There's nothing wrong with shipping the components to the United States to build here, but it just doesn't make much sense to do.

It may not seem as good for us to be so far out of the manufacturing aspect, but sometimes it's helpful. Looking at it strictly in an electronics sense, most chip-related companies could never afford the cost or the time to handle their own semiconductor businesses. At least to my knowledge, Intel is the only American company that manufactures their own products. Companies such as AMD, nVidia, Qualcomm, Apple, etc. will use outside companies to manufacture their chips because it's easier. Let TSMC or GlobalFoundries figure out the difficulties behind 22nm production.

To be a bit more succinct, in other words, we're becoming more specialized. The United States seems to focus more on the innovation aspects of design rather than building said design. Is that a good idea? I'm not too sure. Manufacturing jobs have always been decent lower-end middle class jobs.
 
Feb 4, 2009
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Yup I've sworn off Chinese products as much as possible & honestly it really doesn't cost more. You do need to look more, I've yet to find a US made metal spatula but amazon does have them.
I'm not going to vote for any politician who suggests more free trade deals. Personally I can't think of one that has benefitted us more than its damaged is.
I'd love more people to join me.
 

mshan

Diamond Member
Nov 16, 2004
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Video clip: http://video.cnbc.com/gallery/?video=3000114263&play=1


"Homebuilders Don't Have Enough Workers to Meet New Demand


After losing 70 percent of their business in the housing crash, the nation's home builders are breaking ground again. New orders for homes are rebounding strongly, and housing starts have shown sustained growth over the past year. The demand is there; unfortunately, in some areas, the workers to build these homes are not. "This industry has had a tough time in the last five years, and lot of people have left it and I guess gone into other things. We need ‘em back," says Dallas, home builder Don Dykstra, president of Bloomfield Homes.

Dykstra sees buyers taking advantage of low interest rates and low home prices. He is building about forty houses a month now, but says he would build sixty if he had enough labor and contractor support. (Read More: Homebuilders Most Confident in More Than 5 Years)It's the same for Stephen Brooks, CEO of Grand Homes, also in Dallas. The shortage of skilled workers is hitting his bottom line.

“The cost of housing going up very, very fast,” says Brooks. "You sell a house, and you typically could deliver it within 6 months; now the cycle time, today, with the shortage of labor it takes 9 months. Instead of being 6 months of overhead, now your overhead is 9 months overhead for the same the house, so not only has the increased cycle time effect your margin, but the increase in labor cost effects your margin.”

Labor prices in some markets have increased as high as 10 percent with the median hike at 4 percent, according to Ted Wilson of Residential Strategies. He did a survey of Dallas/Ft. Worth builders.

"We lost over half of our production builder companies, and the subcontractors were enormously gutted as well," notes Wilson. It’s not like these guys are waiting by the phone. It’s been six years. These guys have moved on and found other jobs."

Many former construction workers moved on to facilities maintenance work or remodeling, or whatever jobs they could find. Replacing them is difficult because today's market demands highly skilled workers, and there is simply no available base. In the past, builders would hire workers and train them on the job. (Read More: US Home Builders Begin to See Credit Thaw)

They don’t have the luxury of that now," says John Courson, CEO of the Home Builders Institute, an industry training group. "They want workers that are available to them, that come out trained with a skill, and ready to hit the ground working. They don’t want the expense of on the job training.” Home construction technology has changed dramatically just in the past decade, as builders must adhere to green building standards. Dykstra says it is especially important that his homes be built with the latest energy-efficient features because that gives him a leg up on his biggest competition, which is cheaper, foreclosed homes. Due to that competition, he can't raise his prices much.

"Charging higher prices is a challenge because it can be difficult to get appraised values right now, so there’s a lot of pressure between being able to raise prices versus the need to increase what we are paying the labor," says Dykstra.

The shortage is across the spectrum, but especially in need are framers, concrete workers, plumbers, roofers and painters. The shortage is also felt most in areas where housing is coming back strongest, and permitting is easiest, like Texas and much of the West. The situation is not nearly as dire in the Northeast, where home building volume is smaller, and it can take years to get a project off zoned and ready to build. Still, as construction across the nation pulls itself off life support, the bitter irony persists. After years of nobody knocking on the door, suddenly this industry is struggling to meet demand"


http://www.cnbc.com/id/48926517
Wonder if some or a large chunk of these former construction workers who have basically gone into business for themselves are not on the books and counted in government establishment reports (Morningstar economist Bob Johnson has been wondering why we haven't seen a spike in construction jobs in monthly reports starting around mid-year because of all new housing starts from spring).
 
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Vdubchaos

Lifer
Nov 11, 2009
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If it keeps jobs in the USA, who gives a fuck. Products are crazy cheap now. I'd rather the USA support itself than China if it means product pricing is a bit higher.
You are assuming our politicians/corporations CARE for this country/America.

They don't, BUT pretend like they do.

You know how I know? ACTIONS speak louder than words.
 

Dulanic

Diamond Member
Oct 27, 2000
9,793
398
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The reason why there are no USA maqde TV's is nobody wants to spend the extra $$ for them. It can't happen overnight but if we start with a few items then it will grow from there. Demand for USA made products mean more USA made products.
The consumer doesn't care what's best for America. A company typically doesn't care what's good for America. It's the government's job to do what's best for America. If that is by force through regulations or creating incentives so be it. But a corporation or consumer will always do what is best for themselves only.
 
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werepossum

Elite Member
Jul 10, 2006
29,876
460
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Yup I've sworn off Chinese products as much as possible & honestly it really doesn't cost more. You do need to look more, I've yet to find a US made metal spatula but amazon does have them.
I'm not going to vote for any politician who suggests more free trade deals. Personally I can't think of one that has benefitted us more than its damaged is.
I'd love more people to join me.
With a little careful shopping one can find a lot of non-Chinese stuff. I found a Mexican-made hammer drill at Lowes, a third more expensive but worth it, and actually found an American-made (albeit with "domestic and imported components) Lasko fan at WalMart. The fan wasn't even any more expensive.

The consumer doesn't care what's best for America. A company typically doesn't care what's good for America. It's the government's job to do what's best for America. If that is by force through regulations or creating incentives so be it. But a corporation or consumer will always do what is best for themselves only.
QFT But a government and a consumer and a corporation should be able to look past immediate gratification and examine long term consequences too.
 

Dulanic

Diamond Member
Oct 27, 2000
9,793
398
136
QFT But a government and a consumer and a corporation should be able to look past immediate gratification and examine long term consequences too.
Should is the key word :) A corporation is only about what this quarters balance sheet shows as that indicates how big of a bonus they will get. CEO's typically have no real interest in the long term growth of a company, they only care about the short term as that is how they get paid.

And same with a consumer, they only care about what is cheapest as they need to pay their bills etc...
 

werepossum

Elite Member
Jul 10, 2006
29,876
460
126
Should is the key word :) A corporation is only about what this quarters balance sheet shows as that indicates how big of a bonus they will get. CEO's typically have no real interest in the long term growth of a company, they only care about the short term as that is how they get paid.

And same with a consumer, they only care about what is cheapest as they need to pay their bills etc...
Far too often that's true.
 

1prophet

Diamond Member
Aug 17, 2005
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Should is the key word :) A corporation is only about what this quarters balance sheet shows as that indicates how big of a bonus they will get. CEO's typically have no real interest in the long term growth of a company, they only care about the short term as that is how they get paid.

And same with a consumer, they only care about what is cheapest as they need to pay their bills etc...

And how did that come about?

http://video.google.com/videoplay?docid=9167657690296627941

The business and political world uses psychological techniques to read, create and fulfill our desires, to make their products or speeches as pleasing as possible to us. Curtis raises the question of the intentions and roots of this fact. Where once the political process was about engaging people's rational, conscious minds, as well as facilitating their needs as a society, the documentary shows how by employing the tactics of psychoanalysis, politicians appeal to irrational, primitive impulses that have little apparent bearing on issues outside of the narrow self-interest of a consumer population.
Paul Mazur, a Wall Street banker working for Lehman Brothers in the 1930s, is cited as declaring "We must shift America from a needs- to a desires-culture. People must be trained to desire, to want new things, even before the old have been entirely consumed. [...] Man's desires must overshadow his needs".
It's called a deliberate cultural change that centers around me instead of we, greed is good, buying things you don't need with money you don't have because what you have is outdated and not in vogue anymore, relative morality, end justifies the means, etc.

While all this may appear good to the individual in the long run they are detrimental to society as a whole.
 

Gigantopithecus

Diamond Member
Dec 14, 2004
7,665
0
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This isn't a dem vs rep game, unless you're saying that both sides are to blame (because they are).
Damn right I am. The root causes of employment woes have not been addressed, but we had the nice diversion of the stimulus that some are so proud of with the results we see. Yes it is a game that the dems and reps play against us. Bandaids which have no chance to heal. So are the pols stupid or their loyal fans? I'm not pleased with either choice.
George said it best:
http://www.youtube.com/watch?v=07w9K2XR3f0
 

Cerb

Elite Member
Aug 26, 2000
17,485
33
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You really think a retail/wholesale company takes the tariffs out of it's own pocket.

Those price increases are past on to the consumer.

Tariff is just another tax on the consumer to protect a business
Which is perfectly fine. If cost on the shelf is similar, which do you pick? I pay more when I can, but increasingly it all but impossible.
 

mshan

Diamond Member
Nov 16, 2004
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"US Payrolls and Past as Predictor for Construction and Manufacturing Employment"










"CreditSights has updated its sector-specific chart to reflect this morning’s payrolls report, and you can see that construction and manufacturing employment continue to be well below their pre-recession levels, while education & health are well above and kept climbing in August.

Matt Yglesias and Planet Money have good posts also looking at sectoral shifts since the start of the US recession, but we wanted to take a longer look back here."


http://ftalphaville.ft.com/blog/2012/09/07/1151091/us-payrolls-and-past-as-predictor-for-construction-and-manufacturing-employment/
 
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Engineer

Elite Member
Oct 9, 1999
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It's interesting to note that the local school is now replacing teacher aids, traditionally lower paid with no degrees, with full blown teachers (who cannot find teaching jobs) at much lower pay (than the aids that they are replacing). There is a reason that college graduates have a better employment rate than those that have not attended/graduated college....it's because they are taking the jobs that were traditionally left for them.

This is happening at the school across from my house.
 

mshan

Diamond Member
Nov 16, 2004
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"Here's a little chart I whipped up showing how the American labor market has transformed over the past five years. Everything is indexed to the recession low point, so this doesn't capture the change in the absolute size of these four sectors but they're all pretty big.

I picked these four because they illustrate the four totally different trajectories that are out there.


In the health care sector, it's as if the recession never happened. When nominal incomes and nominal spending fall, it seems that citizens of technologically advanced wealthy democracy simply don't cut back on health care services. That's the fixed point, and it's other stuff that gets squeezed.


Then there's manufacturing, where you can see that the much-ballyhooed "manufacturing recovery" is a real thing but also very much a political construct more than an economic one. Obama took over at the tail end of a truly epic collapse in manufacturing performance, so a rebound that's left us well below where we started looks good if you just blame Bush for the collapse.


Then there's food services—waitresses, cooks, bartenders, and busboys. This is the sector that's displaying a proper recession/recovery trajectory. Lots of job losses during the downturn, but a nice bounceback and there are now more people working in restaurants and bars than at any time in American history. Which is good because there are also more people living in America than at any time in American histroy.


Last the teachers. Employment of teachers held up decently during the recession, which is what you expect from government workers. But there's been a years-long slow bleed that's very unusual."


http://www.slate.com/blogs/moneybox/2012/09/07/sectoral_shifts_in_the_u_s_economy_more_waitresses_nurses_fewer_teachers_and_factory_workers_.html
Yes, it does unfortunately look like teachers are having a very difficult time with state and local governments probably getting squeezed these last years.

Last peak in Construction Jobs above was not "real" in a sustainable sense, because we were building so many more houses than market needed at time (stealing demand and future from future?)

Brandeis economist on CNBC a few days ago also said that as many jobs have been (presumably permanently) lost to robots (http://bits.blogs.nytimes.com/2012/03/25/disruptions-at-amazon-the-robot-world-comes-a-little-closer/) as have been shipped to China.

Healthcare appears to have continued it's uptrend, construction looks like it had a massive cyclical boom and bust, manufacturing has been in a brutual secular downtrend since early 2000, and teachers have been slowly squeezed by fallout of housing bubble bursting and subsequent stock market crash and economic downturn (all new tax property tax revenue got spent poorly, and now teachers and other state and local government workers are paying the price)


:(
 
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Engineer

Elite Member
Oct 9, 1999
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Brandeis economist on CNBC a few days ago also said that as many jobs have been (presumably permanently) lost to robots (http://bits.blogs.nytimes.com/2012/03/25/disruptions-at-amazon-the-robot-world-comes-a-little-closer/) as have been shipped to China.



:(
That may or may not be true. I've seen plants replace people with robots and say open here in the US. I've seen plants that didn't replace people with robots and close down and move to Mexico. Which would you rather have?

Not to mention that the thousands (millions?) of technical people required to build, program and setup robot cells as well as the highly skilled maintenance personnel required to keep them up and running well.

I would rather have a plant full of robots here in the US as a plant full of Chinese in China. At least we have a few people employed here doing so.
 

mshan

Diamond Member
Nov 16, 2004
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I agree wholeheartedly!

Cam Hui has said that with 10 year transition of power in China that is going to take place right around now, they are (or at least were previously) trying to switch from an "iron rice bowl" economy (crony capitalism with enough government welfare thrown in to pacify the masses http://seekingalpha.com/article/713691-china-beyond-the-hard-soft-landing-debate) to a more free market one driven more by internal consumption. However, still seems like there is an awful lot of corruption there (Communist Party and national and local government officials and their relatives; (kleptocracy is term I've the government described as), and downturn in global economy (China apparently exports alot to Europe) has made their attempt at soft landing (trying to slow rapid growth of economy to say 7 - 8% GDP growth to get wage inflation under control) of economy quite uncertain.

(And while the ruling elite can launder their money in Macau (http://seekingalpha.com/article/319907-unofficial-money-fleeing-china) and invest outside of China, that option is, I'm guessing, not too readily vailable for an average Chinese citizen...)




"Reverse Offshoring Begins


Already, the strains are starting to show. The Chinese competitive advantage of a seemingly inexhaustable supply of cheap labor is starting to erode. Wage pressures are rising as fewer and fewer workers are migrating from the countryside to search for work in the cities. In reaction, the decision of multinational companies to offshore production to low-wage countries like China is not the no-brainer it once was.

Indeed, a recent poll by Boston Consulting Group (full study here) indicates that more than one-third of American manufacturers are considering reversing the offshoring trend and bringing the jobs back to American shores (emphasis added):
Decision makers at 106 companies across a broad range of industries responded to the survey, which BCG conducted in late February. Thirty-seven percent said they plan to reshore manufacturing operations or are 'actively considering' it. That response rate rose to 48% among executives at companies with $10 billion or more in revenues -- a third of the sample.

The top factors cited as driving future decisions on production locations: labor costs (57%), product quality (41%), ease of doing business (29%), and proximity to customers (28%). In addition,92% said they believe that labor costs in China 'will continue to escalate,' and 70% agreed that 'sourcing in China is more costly than it looks on paper.'
In particular, some companies are nearing "tipping points":
Interest in shifting manufacturing to the U.S. is particularly strong among companies in several sectors identified in BCG’s March report as nearing a 'tipping point.' In these industry groups, China’s cost advantage is likely to shrink within the next few years to the point where companies should rethink where they produce certain goods, mainly those for sale in North America. These tipping-point sectors are transportation goods, appliances and electrical equipment, furniture, plastic and rubber products, machinery, fabricated metal products, and computers and electronics. BCG predicts that production of 10 to 30 percent of U.S. imports from China in these industries, which account for approximately 70% of goods that the U.S. imports from that nation, could shift to the U.S. before the end of the decade.
This development must be particularly worrisome to Chinese policymakers and makes the objective to rebalance growth away from infrastructure spending to the Chinese consumer far more urgent. In this way, the Chinese economy would be able to grow more sustainably by creating a new source of demand from their own domestic economy. Alas, it does not appear likely to happen as refocusing growth away from infrastructure spending would seriously hurt Party insiders who have gotten obscenely rich in this boom, as I pointed out before (see "Good News: China Soft Landing, Bad News...").

Ironically, the latest Chinese move to engage in the more-of-the-same infrastructure-based stimulus will have the effect of rebalancing growth away from infrastructure spending to the consumer. But instead of the Chinese consumer, it will be the American consumer as the reverse offshoring trend starts to take hold and accelerate."


http://seekingalpha.com/article/814022-could-china-be-rebalancing-growth-to-the-wrong-consumer
 
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Engineer

Elite Member
Oct 9, 1999
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and as soon as it starts moving from China (like Japan over 20 years ago), it goes on to the "next big cheap thing". Vietnam? India? Etc. I just saw a set of tools in Home Depot that was manufactured in India. Just a few years ago, it would have been China.

A race to the bottom is occurring and we're not winning.
 

mshan

Diamond Member
Nov 16, 2004
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My guess (and it is truly just a guess) is that it depends upon what is being produced.

Really cheap made in China stuff (true commodity items where lowest price is all that will matter to consumer) probably does go to Vietnam and elsewhere like you said.

But perhaps things such as appliances / high end industrial equipment will make more sense to produce in U. S., just like some foreign car makers (e. g. BMW Spartanburg, SC plant, which apparently exports to other countries, too: http://www.autoblog.com/2012/01/12/bmw-pouring-990m-into-spartanburg-plant-to-build-more-cuvs/).

Locate in a small rural community where they will basically have absolute control as only employer in town, no unions, low cost of living / low home prices translating into employees accepting low but competitive for cost of living in that area wages, and lower distribution costs to other parts of the U. S. May not have to deal with hedging out currency fluctuations, too.
 
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Engineer

Elite Member
Oct 9, 1999
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Speaking of shipping costs, I wonder how long it will be before NAFTA is changed to allow Mexican trucks to not only deliver Mexican made items into the US but to allow Chinese (and others) to port in Mexico (killing US ports), unload onto Mexican trucks and then ship to various destinations in the US using the cheap, Mexican trucking labor.

I'm sure there are people who have thought about and have tried to push this.....just a matter of time.
 

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