The Middle Class RADICALLY shinking

[StageLeft]

First sentence

 

[Engineer]

First sentence

I can assume that you are agreeing with me on this one? Not sure if you are saying that it did depend on demand or that my statement of cheap labor was correct. Sorry, I am more easily confused as I get older!

 

[sandorski]

Domestics have employed slightly less expensive Canadian labor to create vehicles that are imported into the US. In any case, cars are unique in that they are expensive to ship. Many things are not, which is why many manufacturing companies in the US have outsourced production to other countries and then import the product back to the US.Of course it did.

Canadian Auto Manufacturing is largely based around the Auto Pact. Basically a Pact that required the Big 3 to Manufacture Vehicles in Canada in order for them to have Access to the Canadian Market. Labour Cost was mostly lower due to Low $CDN and no Health Insurance requirements(although Union agreements would include Dental/Optic(sp) coverage).

 

[StageLeft]

I can assume that you are agreeing with me on this one? Not sure if you are saying that it did depend on demand or that my statement of cheap labor was correct. Sorry, I am more easily confused as I get older!

I'm a bit familiar with outsourcing manufacturing to Mexico and we both know a lot of products being made there are being shipped right back across, but they work for a few bucks an hour.

 

[Engineer]

I'm a bit familiar with outsourcing manufacturing to Mexico and we both know a lot of products being made there are being shipped right back across, but they work for a few bucks an hour.

It was $0.80 per hour + 1 meal per day a few years ago. The turnover rate was about 75% in any given month. Not sure how well they are doing since the recession started.

Part of the problem is that some of the products are being made there, sent to the US for integration of final assembly and then stamped with "made in the USA" on them because a certain percentage is finalized here.

On other point is that the remaining manufacturing plants are hiring more and more temps to do the work. I was shocked to walk into a plant in Indiana that actually had Kelly Services reps (2 of them) on staff during every shift just to take care of the temps that worked in the plant (about 50% of the people there). I know that Toyota and many others are doing it more and more. Lower pay, no (or few) benefits, etc.

Pretty sad.

 

[drebo]

How about the skilled trade machine builder jobs from my plant going to Korea?

How about the importation of 25% of the tubing from China while closing down a plant in Michigan that makes (not to mention laying off 50% of another plant in KY that also made the tubing)?

What about buying the presses and other equipment from China (even though it wasn't worth a shit) and not buying it from the trusted sources in the US that had done it right and at a fair price for decades?

I can't explain everything, because I don't know all of the details.

Businesses are, however, not charities. They're businesses. If American-made commodity items are too expensive, they'll buy them elsewhere, all other things being equal.

 

[Jhhnn]

"too expensive", drebo?

Wrong emphasis. Try "less profitable in the short run" for greater accuracy.

 

[drebo]

"too expensive", drebo?

Wrong emphasis. Try "less profitable in the short run" for greater accuracy.

If it's not profitable in the short run, it's not profitable in the long run, either. "Too expensive".

Protectionism causes inflation, remember?

 

[sandorski]

If it's not profitable in the short run, it's not profitable in the long run, either. "Too expensive".

Protectionism causes inflation, remember?

"less"

 

[llee]

That being said, a guy in a chair in India can't diagnose a failed network drop in a dental office in California. Nor can he repair it. There are some things he can do, but there are a lot of things that outsourced people cannot do. Outsourcing is not the biggest problem our economy faces, because the vast majority of jobs cannot be outsourced.

You can't outsource a gasoline attendant or a greeter at Walmart. You can't outsource a janitor. You can't outsource a stockroom attendant. Paying them market wages should be our priority. If we pay them inflated wages, we will suffer inflation which makes us automatically less competitive in the global market.

Drebo, have you read The World is Flat by Thomas Friedman? He covers some of the same ideas in his book about economic realities in the 21st century.

 

[StageLeft]

I see a distinction between public and private companies. Public are legally compelled to benefit their shareholders and if they can do it with nothing but a CEO then they'll do it; they ultimately don't care about workers at all. A private company, however, is not always driven by the same ideals. It is literally possible for an owner of a private company to decide he has enough money and all future profits will simply be split by workers. Unlikely, but at least possible. I read of a guy who recently retired and gave his company to his employees.

 

[alkemyst]

I run an ITSP that I built from the ground up. Cisco classes don't teach you how to do that. Hell, I'm not aware of any classes that do.

I also provide software programming and network engineering, but my main function is to develop and implement new telephony technologies for my customers (mostly businesses, though we're expanding into residential).

That being said, a guy in a chair in India can't diagnose a failed network drop in a dental office in California. Nor can he repair it. There are some things he can do, but there are a lot of things that outsourced people cannot do. Outsourcing is not the biggest problem our economy faces, because the vast majority of jobs cannot be outsourced.

You can't outsource a gasoline attendant or a greeter at Walmart. You can't outsource a janitor. You can't outsource a stockroom attendant. Paying them market wages should be our priority. If we pay them inflated wages, we will suffer inflation which makes us automatically less competitive in the global market.

Buying power (the only measure of wealth that matters) does not increase for the lower class (minimum wage or slightly above earners) as minimum wage increases. It stays the same. However, when minimum wage increases, buying power is REDUCED for the middle class, because it's unlikely that their wages will be affected (those that make between 2 and 4 times minimum wage), yet everything they buy will increase in price. THIS is what is destroying the middle class.

ahh one of those dudes that think he is smarter than a room full of CCIE's because they probably never did anything from the ground up.

Dude, you can outsource janitors more or less how people are trying to explain to you.

You take American Janitor making $20-30k a year with benes and replace him with green card holding Janitors willing to work for minimum wage and no benes.

Toilet gets cleaned just as well and even sometimes better.

I do agree that replacing american workers with foreigners is wrong though. I don't agree you are irreplaceble.

 

[drebo]

ahh one of those dudes that think he is smarter than a room full of CCIE's because they probably never did anything from the ground up.

Dude, you can outsource janitors more or less how people are trying to explain to you.

You take American Janitor making $20-30k a year with benes and replace him with green card holding Janitors willing to work for minimum wage and no benes.

Toilet gets cleaned just as well and even sometimes better.

I do agree that replacing american workers with foreigners is wrong though. I don't agree you are irreplaceble.

What's wrong with hiring someone else to do the work cheaper? Why's it matter if the person who accepts the lower wage is American or an immigrant? Why do you feel the American is entitled to a higher wage than the immigrant just because he's American?

This is exactly the problem: American's are not worth more just because they are Americans. If the labor is commodity (i.e. unskilled) labor, and anyone can do it, why shouldn't a business go with the lowest cost option? It leaves more money to invest elsewhere, the work still gets done, and it means lower prices for all customers...win-win-win.

Additionally, I did not say I was smarter than a room full of CCIEs, so don't put words in my mouth. There are tons of people who know things that I don't know. However, what I do know and what work I do cannot be learned in a classroom and only comes with experience. Hell, the CCIE Voice exam doesn't even go in to the details of VOIP switching.

 

[SammyJr]

it means lower prices for all customers...win-win-win.

Except, of course, for the poor schmucks who were laid off and who can't find another middle class job. In that case, lower prices mean exactly jack and shit because unemployment and your glorified minimum wage jobs force Americans to choose between rent and food.

But who gives a shit about them? They're not you and their misfortunes could never, ever affect you. And no, I'm not looking for you to feel pity. I'm asking you to consider the effect on your taxes as social programs grow. I'm asking you to consider the effects on your property when these people run out of benefits and there aren't even McDonald's jobs to be had. The hungry and unwashed are very dangerous. Its much better for society if those people don't have to be hungry and homeless and can actually provide for themselves.

 

[alkemyst]

nothing wrong with hiring an american for less...however adults living with parents still mess this up.

 

[Craig234]

What's wrong with hiring someone else to do the work cheaper? Why's it matter if the person who accepts the lower wage is American or an immigrant? Why do you feel the American is entitled to a higher wage than the immigrant just because he's American?

This is exactly the problem: American's are not worth more just because they are Americans. If the labor is commodity (i.e. unskilled) labor, and anyone can do it, why shouldn't a business go with the lowest cost option? It leaves more money to invest elsewhere, the work still gets done, and it means lower prices for all customers...win-win-win.

Additionally, I did not say I was smarter than a room full of CCIEs, so don't put words in my mouth. There are tons of people who know things that I don't know. However, what I do know and what work I do cannot be learned in a classroom and only comes with experience. Hell, the CCIE Voice exam doesn't even go in to the details of VOIP switching.

You don't seem to understand much how American's standard of living and relative wealth has largely been based on inequality of wealth in the world.

This means that yes, indeed, Americans are 'worth more' just because they're Americans - if you want to protect Americans' higher wealth.

Which is is what our foreign policy has largely been built around - ensuring the availability of cheap foreign goods and services to our benefit, by force when needed.

And we've had domestic policy that does the same thing for 'underclasses' - slaves, targets of racism, migrant workers ('Harvest of Shame'), illegal immigrants.

If you take a workforce of 100 Americans at American wages, our system comes out with one set of wages for them. If you make that 100 Americans and 1000 poor foreigners, and put them on equal basis for wages, the Americans' wages are going to plummet. This will make the guy paying the wages very happy in the short term; and it'll even make many of the Americans say it's ok while they spend their wealth and borrow more to buy the cheap goods the policy allowed - but what see is American saving going negative, big debt.

Politicians know that they are voted for more than anything on whether people 'feel' they are economically ok, and they do all kinds of crazy borrowing to win the election.

They'll say they are for a balanced budget, but Clinton balanced the budget after its 12 year spike under Republicans, and the country (almost) elected Bush over Gore.

We could have had a careful bunch of policies to have more globalism - in fact, the great inequality I mentioned that's important for Americans does leave the world masses poor, which is a problem for liberals who want to see the human race prosper. We are seeing a big transfer of wealth. But the way we're doing it seems very problematic and driven only by the rich's benefit while the US is endangered, while we increase our domestic concentration of wealth and inequality. The Middle Class's wealth is under siege.

It's not 'win win win' for simply clobbering the American worker with cheap foreign labor.

But the American worker has lost much of their representation in Washington since Reagan especially.

Between Republicans who veto nearly everything they can and the corporatist part of Democrats, the workers are still in a minority.

Globalism has some benefits, for a period while cheap goods are collected. But the middle class is being gutted. And there's very little talk about it.

Both parties just maneuver to not get the blame - and more and more, to just be on the side of the more and more powerful rich and corporations who benefit, to the point of 'who cares about people's opinions, big budget ads only our side can afford seem more able to get votes'. There was a good tv segment on this recently pointing out how Republicans are voting against very high public opinion - against countermeasures to Citizens v. United, against unemployment benefits, against more protections from big oil's accidents, against the modest Wall Street regulation bill, all votes flying in the face of public opinion, up to 80% of public opinion opposed to Citizens v. United.

It's almost as if the US government used to represent the public as it built up the middle class, and now represents more the rich as they are helped instead.

Oh, it's more complicated than that - for example, the government didn't deregulate Wall Street simply to help the Rich (at least the Democrats who went along) - they did it when the budget was balanced and the people who would benefit by getting to do things they'd been banned from since the last time they crashed the economy put out an effective propaganda campaign that the US 'was not able to compete with other countries who did not have their hands tied'. But the effect was to help the rich (in the short term).

 

[BoberFett]

Wow Craig, I'm impressed. At least here, you do get it.

 

[Zebo]

Unless you want to live like a cave man, which is the results of global wage arbitrage as Thais found out, we have to (re)recognize that abusing people for cheap labor when they have little other option, as people have to eat, is unsustainable and not in the interest of those who think they’re getting a benefit from it, on both ends of the transaction. There are very few who benefit long term. They include the 5 or so billionaires in Thailand who convinced their people to suffer low wages while they made immense profits by virtue of a con job and control of production. Our billionaires who parleyed cheap goods onto US customers. Same goes for any country which does not have redistribution of profits from labor. We benefited only in the short term with cheap goods but at a heavy cost called unsustainable debt. And that party is over.

 

[BoberFett]

Unless you want to live like a cave man, which is the results of global wage arbitrage as Thais found out, we have to (re)recognize that abusing people for cheap labor when they have little other option, as people have to eat, is unsustainable and not in the interest of those who think they’re getting a benefit from it, on both ends of the transaction. There are very few who benefit long term. They include the 5 or so billionaires in Thailand who convinced their people to suffer low wages while they made immense profits by virtue of a con job and control of production. Our billionaires who parleyed cheap goods onto US customers. Same goes for any country which does not have redistribution of profits from labor. We benefited only in the short term with cheap goods but at a heavy cost called unsustainable debt. And that party is over.

Not that I disagree, because you're right about the process. But for the sake of argument, how would trade ever happen if it was mandated that both sides must have wealth parity before a transaction could take place. How would a nation build themselves out of poverty to take place in the global market? Would they have to completely build everything themselves? Do they need to reinvent the wheel? Rely on charity?

And I've alluded to this elsewhere, but there is wealth disparity between LA and West Virginia. Between New York and Alabama. Should people in a wealthy part of the US be allowed to purchase goods manufactured in Sticksville, USA? Are New Yorkers taking advantage of people from Mobile by paying them lower wages than they could pay someone in New York? And are those people in Mobile taking jobs away from the impoverished in NYC? Where do you draw the line? What makes one trade good and another bad?

 

[drebo]

You don't seem to understand much how American's standard of living and relative wealth has largely been based on inequality of wealth in the world.

This means that yes, indeed, Americans are 'worth more' just because they're Americans - if you want to protect Americans' higher wealth.

A person's "worth" is measured by what someone is willing to pay them, not the country they live in or the "standard of living" in the country they live in.

You have your reasoning backwards, as usual. Buying power (loosely meaning wages) dictates standard of living, not the other way around.

 

[BoberFett]

You don't seem to understand much how American's standard of living and relative wealth has largely been based on inequality of wealth in the world.

This means that yes, indeed, Americans are 'worth more' just because they're Americans - if you want to protect Americans' higher wealth.

A person's "worth" is measured by what someone is willing to pay them, not the country they live in or the "standard of living" in the country they live in.

You have your reasoning backwards, as usual. Buying power (loosely meaning wages) dictates standard of living, not the other way around.

Actually you're both right. Worth is based on what you contribute to the world. And Americans are going to find out that we don't contribute as much to the world as we thought we did. We built our supposed "worth" by selling our future worth in the form of debt. Unfortunately we didn't use that debt to build future productivity. We used it to buy iPods.

 

[3chordcharlie]

Not that I disagree, because you're right about the process. But for the sake of argument, how would trade ever happen if it was mandated that both sides must have wealth parity before a transaction could take place. How would a nation build themselves out of poverty to take place in the global market? Would they have to completely build everything themselves? Do they need to reinvent the wheel? Rely on charity?

And I've alluded to this elsewhere, but there is wealth disparity between LA and West Virginia. Between New York and Alabama. Should people in a wealthy part of the US be allowed to purchase goods manufactured in Sticksville, USA? Are New Yorkers taking advantage of people from Mobile by paying them lower wages than they could pay someone in New York? And are those people in Mobile taking jobs away from the impoverished in NYC? Where do you draw the line? What makes one trade good and another bad?

Eliminate foreign ownership and capital. Since poor countries tend to export low-value products, shipping costs help equalize prices. In come cases there might be no choice but for poor countries to protect domestic consumption (of, say, food) by price controls.

If poor countries maintain a trade surplus, and don't starve their population, then their economies can grow aggressively in the long run, and the profits and capital are all domestic.

Keep capital stationary (or have host countries heavily tax any profits being re-patriated to the country of foreign-ownership) and you eliminate wage labour arbitrage. This doesn't equalize wages overnight (nor should it), but it does level the playing field.

This sort of trade between relative equals (USA, Canada, Japan, much of Europe) isn't really harmful, because the field is already level.

 

[rchiu]

Eliminate foreign ownership and capital. Since poor countries tend to export low-value products, shipping costs help equalize prices. In come cases there might be no choice but for poor countries to protect domestic consumption (of, say, food) by price controls.

If poor countries maintain a trade surplus, and don't starve their population, then their economies can grow aggressively in the long run, and the profits and capital are all domestic.

Keep capital stationary (or have host countries heavily tax any profits being re-patriated to the country of foreign-ownership) and you eliminate wage labour arbitrage. This doesn't equalize wages overnight (nor should it), but it does level the playing field.

This sort of trade between relative equals (USA, Canada, Japan, much of Europe) isn't really harmful, because the field is already level.

Okay, so instead of GM outsource work to their GM plant in China, they outsource work to a Chinese company in China to avoid any tax levied on profits repatriation. In addition to labor lost, you lost some of the profit that would have gone to GM American shareholders. Great idea.

Or are you going to outlaw companies like Apple from outsourcing their entire manufacturing to Foxconn/China (for example)? Are you going to look at every company's supply/manufacturing chain and if any part is not in the US gets heavily taxed?

Or better yet, why not just nationalize the whole country and make sure all American gets 6 figure salary, full pension and total health coverage. And before you say you don't want your tax money to pay for that, why should private shareholder's money be used to ensure American middle class lives comfortably?

What about the government invest in some domestic project and not some BS foreign nation building that could have hire lots of local American middle class labor? Isn't it government's job to ensure social/economic structure is sound, including a healthy/growing middle class?

And by the way, unemployment rate by education level in June 2010
http://www.bls.gov/news.release/empsit.t04.htm
Less than a high school diploma 13%
High school graduates, no college 10%
Some college or associate degree 8.2%
Bachelor's degree and higher 4.2%

Get middle class educated if you don't want it shrink further.

 

[jackace]

I think the point many people are trying to make is we (US, Europe, Japan and other 1st world countries) should look to bring other countries up to our level instead of us being brought down. With us being brought down we hurt our poor and middle class (working classes) while our rich and ultra-rich (business owners profiting from cheaper labor) grow exponentially. We have created a society of haves and have-nots, and it's only getting worse not better.

 

[Jhhnn]

We have created a society of haves and have-nots, and it's only getting worse not better.

Sheesh. That's been the whole point of Republican policy for the last 30 years. Viewed objectively, it's a no-brainer. Viewed thru the lens of rightwing agitprop, it's completely invisible...