time changes, our race to the bottom for quality

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Infohawk

Lifer
Jan 12, 2002
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On outsourcing fast food employees: companies always seem to forget that communications is more than just about language. Efficient sales is a lot about culture and nonverbal communications too. There would be problems if you got lower-class English people on the other end of the phone too. Not just Indians. I could see this being useful for rural areas if serviced by Americans in the same region.

On outsourcing in general: Americans of all education levels will have their wages driven down. On the other hand, goods and services will be cheaper or stagnant. It won't stop until the rest of the world is as rich or poor as we are. It's too late to do anything about it now.

Nixon opening up trade with China was a mistake. It was another short-sided move to challenge the Soviets. If the developed (similar labor laws and safety laws), democratic countries had limited free trade to among themselves, things might be different now.
 

Darwin333

Lifer
Dec 11, 2006
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Well wages are low in china, but they are more than 8 cents an hour now. And lets not also forget the overhead of getting stuff from china. Transport cost for tubing(mostly air) has got to be fairly expensive. And wages in china and india are rising fairly quickly.

Yup, they are up to 5 bucks a day or so now, right? Shipping is not all that expensive anymore, we have gotten really really good and efficient at sending stuff across the world.

That alone makes American labor uncompetitive. Throw in the complete lack of environment regs (and a lot of other regs) and it is just icing on the cake.


I did not say we should have no regulation, but I have little doubt that many industries face more than a small amount of over-regulation. Just look at the tax code for corporations, it is excessively complicated. Lets find the right balance between safety and cost. Lets create an environment that is business can thrive in, even when faced with cheap over seas labor. Or we can just keep what we are doing....

The price of labor will still have to meet in the middle somewhere if we are competing with labor from other nations. Add in the minimal overhead to ship crap from there to hear and you might be able to add a few nickels an hour to the American labor side. OTOH, most companies don't have the overhead of retirement or health insurance for Chinese workers either, so you have to remove quite a bit from the American side of wages for that.
 

Darwin333

Lifer
Dec 11, 2006
19,946
2,329
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On outsourcing in general: Americans of all education levels will have their wages driven down. On the other hand, goods and services will be cheaper or stagnant. It won't stop until the rest of the world is as rich or poor as we are. It's too late to do anything about it now.

I can think of a few ways to do something about it now. The question is the political will. China kinda has us over a barrel right now because we need them to loan us money and they know that we can't, at least in the foreseeable future, tax enough to cover our spending. So basically, we can't piss them off by putting tariffs on their stuff because they might not be as inclined to loan us money that we need for day to day .gov operations.

BTW, increasing the taxes on the rich doesn't cover the gap, especially at current spending levels.
 

dmcowen674

No Lifer
Oct 13, 1999
54,889
47
91
www.alienbabeltech.com
Originally Posted by charrison
I dont disagree with anything you are saying. However, you have to ask yourself why it is cheaper to cut pipes in china and send them 1/2 way around the world than it is to do it here. It appears our govt would rather keep excessive regulation and complicated tax code than to let business grow here.

I believe our workforce in general is very talented and capable, but there is a multitude of issues that keep us from doing more. And yes the stats do show services pay more than manufacturing on average and the entire world is moving away from manufacturing as a prime employment area.


Do you really think that cutting our regulations and business taxes will allow us to compete with $0.08 per hour from China? Do you think that a person making $0.08 per hour in China would be able to buy "less, same or more" stuff than someone making $0.08 per hour in US? I guess it's fair trade when the currency is totally manipulated to be extremely cost effective (i.e. cheap) to make stuff in the homeland and export it?

I don't understand why people like Charrison and IndyFan stay here in the U.S. They are so enamored with how well China and India are doing why don't they go there where they love?
 

ProfJohn

Lifer
Jul 28, 2006
18,161
7
0
If the developed (similar labor laws and safety laws), democratic countries had limited free trade to among themselves, things might be different now.
Things would be different in that we would have the same standard of living we had 40 years ago.

The main reason for our huge jump in life style over the past few decades has been the ability to buy cheap items that are produced in low cost environments. Take away access to that cheap labor and the cost of everything rises which leads to us being able to buy less stuff.

Instead of a TV and DVD in every room of the house we go back to the days where there is on TV in the house and maybe if you are lucky a small TV in your parents room.
 

charrison

Lifer
Oct 13, 1999
17,033
1
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Wages were, as of 1.5 years ago, $0.08 per hour for our plants in China. Tubing is shipped via SHIP in bulk. Even if they have doubled, $0.16 per hour doesn't make your argument much better. Again, do you think $0.16 or $0.24 or higher is equivalent to the SAME amount here?

I recall reading that wages are about 50 cents an hour there now. Yes still very low by our standards, but there is rapid improvement in standard of living there. And it appears the growth in wages is going to continue for some time.

http://www.lexology.com/library/detail.aspx?g=75883e98-7125-4b79-b2a0-531011f8b806

I realize that transport via ship is very inexpensive, but it is still a significant added cost.


I agree that our tax code could be streamlined but with that said, we have the 2nd lowest BURDEN in the industrialized world.

Yes but we start with the highest published marginal tax codes in the world(or close to it). Companies must work hard to whittle those demands down. Why not remove all the loopholes and have a much more simple, lower marginal and more effective tax code.

As for safety, I don't compromise much on that one. I've been in those factories and have seen first hand what removing safety devices cause. Mexico has very little regulation but of course, they have 10X accidents that a US plant has. Was so bad that we adopted US safety rules above and beyond what US plants had because of the severe number of accidents that were there (i.e. forced light curtains on EVERY piece of equipment instead of simply installing cheaper, two hand anti-tie down modules to run the equipment).

I am not going to argue this point, but I am do know that many stupid rules exist. Read a nice article about a business the OSHA was basically going to shut down because someone working on a scaffold did not have gear on to protect from a fall. To protect someone from an 8 foot fall, you would have to keep them on a very short leash, greatly decreasing their productivity. There needs to be balance as apposed to protection at all costs.



People do dumb stuff all the time. There is a reason that it's called "idiot proofing" a machine. Sometimes, the machine is not running in that it's broke but still "live state". Make a sensor and boom, off goes the hand (or finger). A pneumatic cylinder that is stuck and the operator doesn't know this? He/she reaches in and removes a broken clip or assembly piece and the cylinder now is free to jump forward. Remove the energy by a safety device and the issue is now removed. How much is your hand worth? Is it worth the $950 that it costs to make the machine safe or not? Of course, as long as it's saving money and giving you cheap stuff and as long as you keep your job, doesn't matter much.

That in my opinion would be a real money saver. Decreased medical cost alone would quickly pay for that.


Personally, I don't have time to debate this more at the moment and it doesn't matter much anyway, neither side is flexible and changes their views much. I have grass to mow and have not offshored it yet...but am looking for a cheaper way to do it as I currently type this. Maybe I can get the guards removed from the mowers so that we can offer cheaper mowers in the US. Who needs expensive guards anyway.

OR maybe we can get some that are motor driven and wireless and we can sit on our porch and cut the grass.
 
May 11, 2008
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Just saw the new ad of PizzaHut on TV and that got me thinking. I remember 15 years ago their large supreme pizzas cost around 18 bucks (plus tax) and now they are selling them for $10. There were $1 items on McDonald's menu then and they are still here after all this time. Many many other household items of all kinds are barely more expensive now than they were 15-20 years ago. All that sounds great until you figure out their quality all have taken a big dive over those years.

Products nowadays are built as cheaply as possible that most of them fall apart after using them a couple of times. Food, especially fast food are so bad in quality that it's almost a gamble every time you eat them.

Even companies whose names we used to associate with quality products had to adjust their quality for the worse in order to stay competitive. It's like you have to go out of your way to different specialty shops to get better-quality products and I simply do not have enough time to do that.

I remember when I was growing up that the "made in USA" stamp on a product meant it works and it's durable. Now I can barely find anything around my house with that same stamp any more and it's not like I go out of my way to avoid it.

May i still experience the day that people become aware that they are being played for fools ? :'( I have to cry realizing this...
I mean looking at the US for example : Lowest company taxes, lowest employee taxes. Lowest citizen taxes. Almost no regulations... Biggest money borrower in the world. And still, where is all that money going. I would really like to know...

I mean, yet there is never enough money. Why, well since someone decided that commodities can be exchanged as well(virtually increasing the value but not in reality : means just gets more expensive but not more valuable) prices have been rising.

Another point is that when you buy the cheapest products, the companies delivering quality at a bit higher price have to reduce quality to lower the prices and match the price of companies producing garbage. The only way is cheaper materials(which again are not as cheap as they should be because of the commodities exchange).

I think it all comes down to one thing. Way to much administration and way to less productivity. Sack 50% of the managers and hire working personal and you would have a lot more productivity. But then again, thinking there is an infinite market will be the downfall for every country exporting products.
You are not alone ^_^.

http://www.youtube.com/watch?v=_hYYYFtXFmo&feature=related
 

Fenixgoon

Lifer
Jun 30, 2003
33,037
12,407
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So not only will our lower educated jobs (manufacturing, etc) be offshored, so will our technology jobs (engineers, scientists) will be offshored (or replaced by cheap labor). My company recently hired a new engineer with a Masters Degree and is paying him $17 per hour with no benefits. He is very happy with the pay vs what he would have received in his native Taiwan. Said that he makes enough to live on and gets to travel around and see the world.

China to USA: All your jobs are belong to us.



Yep. Even professions like surgeons are being offshored. It was touted that you can have heart surgery in India for $6,000 (including flights to and from) vs $150,000 that it costs here. Was touted to be as good (clean, professional, etc) but I'm not sure about that. (Steve Forbes was the one touting this by the way). I know that there are people in the US going to dentists in Mexico because the work is as good (from their experience) and it's 20% of the cost (and that is with no insurance coverage in Mexico vs insurance covered in US).

Can't compete with wages (partially a currency issue) like those.

jesus, $17/hour for a master's in engineering? that's absolutely ridiculous.

ditto at the heart surgery/dentistry. i don't think i'd trust doctors elsewhere except maybe west europe. not that i'm going to fly out of the country for health issues any time soon.
 

Darwin333

Lifer
Dec 11, 2006
19,946
2,329
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The Chinese bogy man is slowly going to go away over the next few years. Wages are raising and they are actually running out of labor.

Also, as their wages rise the Chinese people will buy more stuff and this will boost the entire world economy and hopefully improve our trade imbalance.

http://www.nytimes.com/2010/06/08/business/global/08wages.html

Still got a long way to go for that bud. Even after doubling wages a Chinese worker would have to spend an entire months pay to purchase one of the iphones he is making. Exactly how many do you think would be sold here if they cost an entire months worth of a persons earnings?

Competing with $3,600 yearly wages versus $1,700, while it is an improvement, doesn't really change anything. I doubt you will see wages double every few years to the point that they have a median income anywhere near our current median income in the next 10 years. Besides, once Chinese labor becomes too expensive they will move on to cheaper labor.
 

Infohawk

Lifer
Jan 12, 2002
17,844
1
0
Things would be different in that we would have the same standard of living we had 40 years ago.

The main reason for our huge jump in life style over the past few decades has been the ability to buy cheap items that are produced in low cost environments. Take away access to that cheap labor and the cost of everything rises which leads to us being able to buy less stuff.

Instead of a TV and DVD in every room of the house we go back to the days where there is on TV in the house and maybe if you are lucky a small TV in your parents room.

I don't disagree but we'd have higher employment and we'd be relatively stronger compared to the rest of the world. What's more important? A more robust society or cheap dvd players?
 
Oct 16, 1999
10,490
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Lower costs generally mean more supply. It also makes it much easier for someone else to make a competing product because it doesn't require as much capital to enter the market.

$20 DVD players are a perfect example. This is especially true when costs are cut to the limit, the only way to increase profits at that point is to increase market share. In most industries that means lowering price in order to increase volume.

More market share doesn't necessitate more profit if your price deviates from the optimum to get you there. It would be against a company's interest to initiate/increase production if market demand is not there to maintain optimal pricing. You don't just start producing more because it's cheaper to produce because optimal pricing is independent of production costs. $20 DVD players are more of an example of lowered demand than lowered production costs. From the info I can find sales for DVD players have been trending downward from their peak in 2003. Production costs have become low enough to still profit from them, but that's not what has driven the pricing down, it's the lowered demand.

Price is controlled by supply and demand. Producers control supply to optimize price. And the supply value that results in that optimal price is wholly determined by the demand curve. Optimal price is independent of changes in production costs.

Edit: This is also why increasing taxes on producers doesn't necessitate increasing prices on consumers, and decreasing taxes on producers won't necessarily result in more production, as folks of a certain political mindset love to spout.

Edit 2:
http://en.wikipedia.org/wiki/Profit_maximization#Changes_in_fixed_costs_and_profit_maximization
 
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Engineer

Elite Member
Oct 9, 1999
39,230
701
126
By the way, before mowing the lawn, I would like to thank each and every one of you in this thread for having a very "civil" conversation on this subject. Hell, I might have went more overboard than most here, lol. Sort of refreshing, in that even we may not agree, we can discuss and debate with civility. :thumbsup:

Now off to mow the lawn with my freshly purchased "imported" gasoline (well at least the crude oil - do we import gas YET? I know that the world biggest refinery is set to go online in India and is to export gas to the US at some point)! :biggrin:
 

IndyColtsFan

Lifer
Sep 22, 2007
33,655
687
126
Looking at the company is basically meaningless since GM operates in every country and has share holders in every country. Look at where the individual product is made. GM made in Mexico is bad. GM made in USA is good.

As I mentioned, I understand that and my intention will be to review the specific model I purchase to see where it is from. However it will still be a GM or Ford. :)

Oh oh, I just looked -- I was thinking about an Equinox but I see it is made in Canada! D:
 

IndyColtsFan

Lifer
Sep 22, 2007
33,655
687
126
I don't understand why people like Charrison and IndyFan stay here in the U.S. They are so enamored with how well China and India are doing why don't they go there where they love?

People like Charrison and IndyFan stay in the US because it is people like us who built this country, unlike whiners like you. Why don't you try reading my posts before making such ridiculously stupid comments? You know, like the post I said we should outsource executives:

IndyColtsFan said:
I find it humorous that the executive ranks never consider outsourcing their own jobs. Talk about cost savings -- you'd get a guy in India doing their jobs equally as well for 10% of their bloated pay.

You know, the posts where I said companies outsourcing should be taxed out the wazoo?

IndyColtsFan said:
Enough is enough. I really believe that we need to tax the crap out of companies that do stuff like this.

Or would it be the posts where I say that outsourcing manufacturing will be the death of the US?

IndyColtsFan said:
The erosion of our manufacturing base is killing our country.

Yeah, you caught me Dave. I'm REALLY supportive of outsourcing! Now that I've owned you (or really, you owned yourself), crawl back under your rock.
 
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xj0hnx

Diamond Member
Dec 18, 2007
9,262
3
76
But there comes a time when people need to wake up and stop with the mindset that "Well it sucks that their job has been outsourced, but it makes things cheaper for me and after all, I still have my job!" As individuals, we're not looking at the bigger picture here. We NEED jobs to stay in America, and we NEED the middle class to grow. That's why I will always buy American cars. Sure, you can say "Well they aren't really totally 'American' anymore!", but what else can I do? I'd rather give my money to Ford or GM than Toyota or Honda.

Toyota and Honda probably higher a lot more Americans than Ford and GM combined, and my Civic is more American made than some Ford on the road.
 

Acanthus

Lifer
Aug 28, 2001
19,915
2
76
ostif.org
The Chinese bogy man is slowly going to go away over the next few years. Wages are raising and they are actually running out of labor.

Also, as their wages rise the Chinese people will buy more stuff and this will boost the entire world economy and hopefully improve our trade imbalance.

http://www.nytimes.com/2010/06/08/business/global/08wages.html

Except theres hundreds of other places that manufacturing will move when China is no longer the cheap place to be.

Vietnam and Sub-Saharan Africa are the new spots.
 

IGBT

Lifer
Jul 16, 2001
17,967
140
106
doesn't matter. you'll eat it any way. you've been programed by tv to be a impulse buyer/eater.
 

jackace

Golden Member
Oct 6, 2004
1,307
0
0
It was a good ride while it lasted. Now everyone is up in arms because other countries want a piece of what we have, but who can blame them? Will you take an 80% paycut to do your job? If not, you're ceding it to someone who will do it for 20% of your pay. Distance and geographic location don't matter much any more. The only way you'll keep your current pay is if you work for the government (in which case you'll get a raise) or if you are truly irreplaceable.

Instead of being smart about things and bringing other countries up to our level, our leaders sold out to corporate America and the free trade crowd which just opened the doors to everyone. Now American Labors who have seen decades of inflation and increased costs of living are forced to compete with labors from second and third world countries which have substantially lower costs of living.

Our leaders sold us out to the highest bidder.
 

al981

Golden Member
May 28, 2009
1,036
0
0
What I want to know is what will happen to us 20 years down the road once China, India, etc, get to where we were 10-15 years ago? I'm so nervous about how half of our population (rough personal guess) are not educated to the level to be competitive with the rest of the world. Seems like a huge portion of our population are riding on the economic success of a shrinking portion of their countrymen.

america=idiocracy ;)

dual citizenship ftw!