Remember the American middle class?

[Ursa Majoris]

One of the main missions for our IT and process people is to figure out ways to reduce headcount.  It's explicitly stated.  Find ways for our systems and processes to work more efficiently so we can get rid of people.  You'd think that means IT is the place to be in our company, but they've been so successful that we need fewer and fewer of them each year too.  And of course, all help desk calls are answered by people named Srivinash or Venkatesh.  Software issues only though -- hardware issues now have to be reported online.  The level of service from our help desk has declined abyssmally over the years.  I've heard sales people say the same about our ordering and project management since we've been outsourcing so much of it, and ultimately our customers feel that too.  

 

That's the fallout from technology-driven efficiency -- fewer, more remote and less-qualified people doing the work, and providing the minimal amount of customer service.  Our customers choose us for our network reliability for sure, but the key driver is price.  And because cutthroat competition has slashed everyone's margins razor thin, service is what becomes expendable.  Which sucks when you're a conscientious individual who wants to please your customers -- your mission is volume, period.  You're busy putting out fires all day, finding little time for proactive follow-up.  The work becomes increasingly dehumanizing.  

Interesting. I'm IT Director for a medium sized company and the moment a vendor reduces customer service, they're history. I'm actually seeing the opposite in the medium-sized business space - vendors are generally improving customer service. For instance, our network provider gives us outstanding service and not just through reliability but through their knowledge of our difficult business and willingness to work hard for us.

 

I outsource virtually nothing and never will.

[Duchess Jack]

Why don't we just leave taxes where they are at and quit giving Pakistan money - get out of Afghanistan - quit helping countries like Libya - get out of Iraq and......

I'd love me some isolationist America!

[SEC=UGA]

Matt's example is a good jumping off point...

 

A good number of the jobs shipped over seas have been manufacturing jobs. What did most of these manufacturing jobs have in common... Organized labor. The burdens placed on businesses by collective bargaining, pensions, and hostile employees/employer relationships forced companies to look elsewhere for labor in order to decrease costs in order to provide better returns to their investors and owners.

 

Simply look at the stats for union membership in the private sector in 1970 and today, you will find very quickly that many of the jobs that have moved were from this group.

 

Another major issue is the onerous tax burden placed on companies in the US vs. overseas. You have two things working here, one, US companies are going to move operations and foreign companies are not going to locate here.

 

Further, companies here are regulated to death, why keep operating in an area where regulations are going to cost you an extra, oh 25 to 30% just to start a manufacturing operation?

 

The other issue I see is that the US tax code offers US corporations an incentive to locate operations overseas by not taxing foreign subsidiaries as US companies.

 

You combine all of these things and the picture begins to emerge that the US is a hostile place for corporations to conduct business. YOu then take into consideration that we are becoming a more poorly educated society with a populace that has a huge sense of entitlement with regard to wages and working conditions and what do you expect to have happen, do you really expect for corporations to flock here? Compounding the problem is the emergence of other countries being highly educated and not having the same expectations of lifestyle (also these countries have more industry friendly policies) and the US labor force becomes more and more insignificant.

 

Many will say, well, if the American middle class goes away so do all of those consumer dollars... Not a chance, those consumer dollars are being produced in other countries and they are spending those dollars. We are becoming more and more irrelevant every day. Until there is a shift in tax policy towards corporations and a shift in ideology by the US work force these jobs will remain overseas and people, for a while anyway (next 100 to 150 years) will remain in relatively low paying service industry jobs.

 

You guys can sit around and blame "trickle down" economics all you want, you can blame the mean evil corporations that offshore manufacturing to create value for their shareholders, it isn't going to change a thing until we do some introspection and change a number of policies to make the US more industry friendly.

[SayItAintSoJoe]

Simply look at the stats for union membership in the private sector in 1970 and today, you will find very quickly that many of the jobs that have moved were from this group.

 

Union memebership goes down and the middle class shrinks. Is that the correlation you are making? If it is then I agree with you. If it is not, then I'd like to know how the lack of unions would have increased the middle class.

Edited May 9, 2011 by SayItAintSoJoe

[SEC=UGA]

Union memebership goes down and the middle class shrinks. Is that the correlation you are making? If it is then I agree with you. If it is not, then I'd like to know how the lack of unions would have increased the middle class.

 

Your reading it wrong. Union membership has decreased do to their jobs being shipped overseas due to the onerous burdens that unions created for the companies that employed their workers (the management got sick of dealing with the union's BS.) For this reason it became much cheaper, and an easier decision, to move manufacturing overseas. The unions could have kept the middle class in tact to a great degree if they hadn't continually pushed for more, more, more, creating a hostile environment between the employer and employee.... They needed to do a better balancing act. There has recently been a push by auto manufacturers to locate in the SE US, these people are making good middle class wages (albeit lower than what they were making in the Midwest) and there is little to no Union involvement.

 

Good Article:

 

GEARING UP

And get this: Even as Ford and GM cut production last year, North American plants built 15.8 million cars and trucks, the same as in 2004. That happened thanks to foreign carmakers producing 4.9 million vehicles, an increase of 500,000 from 2004. Overall production is expected to rise to 16.8 million by 2009, when an estimated 5.8 million vehicles will roll off foreign-owned assembly lines. Looking back, car and truck production in the U.S. has nearly doubled since Detroit's heyday in the early 1960s. "The domestic auto industry is as healthy as it has ever been," says Eric Noble, president of Car Lab, an industry consulting firm in Santa Ana, Calif. "The names on the plants are just changing."

 

That isn't to say there won't be pain, especially in Michigan. Hiring by foreign auto makers will only partly offset jobs lost as domestic carmakers downsize and their sprawling network of suppliers continues to go through a painful shakeout. Despite new foreign investment, the auto industry employs 200,000 fewer factory workers -- about 950,000 now -- than it did in 2000. Plus, much of the profit made selling cars to Americans heads back to Japan, Korea, or Germany, creating wealth overseas. And even though foreign car companies are investing in the U.S. at a higher rate, imports are still rising, from 2.8 million in 2000 to 3.4 million in 2005, says auto forecaster CSM Worldwide.

 

But it would be misleading to weave all of these developments into a tragedy. The reality is that many of the layoffs at the Big Three were inevitable. Even if Ford and GM weren't in so much trouble, they and their parts suppliers would be cutting back. Japanese auto makers have set the pace on productivity, forcing GM, Ford, and Chrysler (DCX ) to get in step. In 1999 those companies all needed at least 24 hours to assemble a car. Now it's closer to 20 hours, while Japanese plants do it in about 18, says Harbour Consulting Inc. in Troy, Mich. "This is an industry that has been in need of a restructuring at all levels," says David E. Cole, executive director of the Center for Automotive Research in Ann Arbor, Mich.

 

Some industry watchers say American workers aren't competitive, but foreign carmakers are hiring them faster than ever (and picking up political goodwill, to boot). In addition to Toyota's new pickup plant in San Antonio, which opens this year, the surging auto giant will open an SUV plant in Ontario in 2008. Hyundai Motor Corp. will gear up its Montgomery (Ala.) plant, with production expected to rise to 240,000 vehicles this year from 93,000 last year. And Hyundai affiliate Kia Motors Corp. plans to build a 300,000-capacity plant at a site nearby. "Car production is changing hands, and it's going up," says CSM Vice-President Michael Robinet.

 

Expansion has a nice ripple effect, too. Around every factory is an industrial park full of suppliers. Toyota Motor Co. and Honda Motor Co. pack their U.S.-made cars with 65% to 75% domestic parts, compared with 80% to 85% at Ford and GM. Officials in Mississippi estimate that the Nissan factory where Nandra Barnes works has spawned the creation of 25,000 supplier and support jobs that generate a combined $500 million in economic activity. In nearby Madison, three new red-brick shopping centers have sprouted up with a Wal-Mart (WMT ), a Home Depot (HD ), and a Lowe's (LOW ). "You can drive down the interstate and see it in increased traffic," says Tim Coursey, executive director of the Madison County Economic Development Authority. "We have been busting wide open at the seams."

 

DESIGN IS HEADING HERE, TOO

In a region where the average manufacturing wage still runs around $12 an hour, Nissan's jobs are coveted. Even though the plant isn't unionized, Nissan starts workers at $14.19 an hour, including what Nissan calls a "guaranteed bonus" of $1.25 an hour. They top out after five years at $23, just a few bucks less than United Auto Workers earn in Detroit.

 

Benefits are close to union scale, too. UAW members have the gold standard of health-care plans, paying nothing but drug and office visit co-payments. Toyota's plan is similar, while Nissan workers pay 10% to 13% of health insurance premiums and have higher co-pays. The only area where they lag behind is retirement: While UAW members have traditional pensions that kick in after 30 years of service, Nissan provides a 401(k) plan that matches 68 cents for every dollar a worker contributes, up to a relatively skimpy 5% of salary.

 

One myth about foreign carmakers is that they don't do creative, intellectual work in the U.S. Just in the past year, Toyota, Nissan, and Hyundai all have expanded their U.S. design and research-and-development facilities. Hyundai just opened one in Ann Arbor and staffed it with 150 tech-savvy people, with plans to expand that headcount to 1,000 by 2010.

 

And Detroit carmakers? They're downsizing at home. GM has been cutting its white-collar payroll by 10% a year since 2000. Its engineering staff has been reduced from 19,000 then to 12,000 now. Fortunately, top researchers and designers have other places to go. Just ask Joel Piaskowski, chief designer at the Hyundai Motors Design & Technical Center in Irvine, Calif. Sitting at Hyundai's booth at the Detroit auto show, Piaskowski says he left his job at GM after designing the new Buick Lucerne sedan to join Hyundai -- with a nice promotion. He left Detroit, he adds, to be part of a company that is thriving. Piaskowski's new job gives him the freedom to design more types of vehicles. "Other companies are burdened by cost and overhead. We can do things they can't do," he says. While the upheaval in the car industry has shaken up the majority of Piaskowski's former co-workers at GM, it has left him in a better position than ever.

 

As stated earlier, unionization and their antics was just one of many nails in the coffin for the middle class, but it was definitely a significant one for the manufacturing industry.

[detlef]

Are people actually still defending trickle down? Besides the rather obvious real-world evidence that it doesn't really work, it shouldn't really work. We shouldn't be surprised it doesn't work. There's no logical basis for it to work. Sure, on the absolute surface, it sounds good, because things in the physical world trickle down. Even money. If you hold it up high and let go, it falls, or trickles, as it were.

 

But, in the big picture, money does not trickle down. Never has, never will. It "trickles" up. Each and every time. Money starts in the poorest hands and moves up the ladder until it reaches the top. Hopefully passing through as many hands as possible along the way. There are only two ways that money goes the other way, through charity and taxation. Even if the wealthiest are creating jobs, they're doing so in response to increased markets, which means that more people with less money than they do are eager to give them their money for whatever they're selling. If we expect that the wealthy will expand their business and create jobs simply because they've got money in their pockets, but despite the fact that consumers do not, that goes under the category of charity, and, well, stupidity. And I don't think that's the basis for an economic policy. Hoping the wealthy are charitable and/or stupid.

 

Now, this is not to say that this is the only reason why the very, very wealthiest continue to get wealthier still at the expense of everyone else, but it's a fine place to start looking. That, somehow, someway, despite all our good intentions, handing the wealthiest in America tax breaks, did not result in a bunch of that money ending up getting sprinkled around into everyone's hands.

 

And I'm not even talking about raising the base tax rates on corporations or the highest tax brackets. I'd be happy if we could just somehow make it so they actually have to pay taxes at all.

[Ursa Majoris]

Are people actually still defending trickle down? Besides the rather obvious real-world evidence that it doesn't really work, it shouldn't really work. We shouldn't be surprised it doesn't work. There's no logical basis for it to work. Sure, on the absolute surface, it sounds good, because things in the physical world trickle down. Even money. If you hold it up high and let go, it falls, or trickles, as it were.

 

But, in the big picture, money does not trickle down. Never has, never will. It "trickles" up. Each and every time. Money starts in the poorest hands and moves up the ladder until it reaches the top. Hopefully passing through as many hands as possible along the way. There are only two ways that money goes the other way, through charity and taxation. Even if the wealthiest are creating jobs, they're doing so in response to increased markets, which means that more people with less money than they do are eager to give them their money for whatever they're selling. If we expect that the wealthy will expand their business and create jobs simply because they've got money in their pockets, but despite the fact that consumers do not, that goes under the category of charity, and, well, stupidity. And I don't think that's the basis for an economic policy. Hoping the wealthy are charitable and/or stupid.

 

Now, this is not to say that this is the only reason why the very, very wealthiest continue to get wealthier still at the expense of everyone else, but it's a fine place to start looking. That, somehow, someway, despite all our good intentions, handing the wealthiest in America tax breaks, did not result in a bunch of that money ending up getting sprinkled around into everyone's hands.

 

And I'm not even talking about raising the base tax rates on corporations or the highest tax brackets. I'd be happy if we could just somehow make it so they actually have to pay taxes at all.

This.

 

The only thing that drives jobs is demand, not tax breaks. And demand can only increase with money in the hands of the people lower down the chain. The notion that forever cutting the taxes of the super-rich will create jobs just because they now have more money is beyond ludicrous.

[SEC=UGA]

Are people actually still defending trickle down? Besides the rather obvious real-world evidence that it doesn't really work, it shouldn't really work. We shouldn't be surprised it doesn't work. There's no logical basis for it to work. Sure, on the absolute surface, it sounds good, because things in the physical world trickle down. Even money. If you hold it up high and let go, it falls, or trickles, as it were.

 

But, in the big picture, money does not trickle down. Never has, never will. It "trickles" up. Each and every time. Money starts in the poorest hands and moves up the ladder until it reaches the top. Hopefully passing through as many hands as possible along the way. There are only two ways that money goes the other way, through charity and taxation. Even if the wealthiest are creating jobs, they're doing so in response to increased markets, which means that more people with less money than they do are eager to give them their money for whatever they're selling. If we expect that the wealthy will expand their business and create jobs simply because they've got money in their pockets, but despite the fact that consumers do not, that goes under the category of charity, and, well, stupidity. And I don't think that's the basis for an economic policy. Hoping the wealthy are charitable and/or stupid.

 

Now, this is not to say that this is the only reason why the very, very wealthiest continue to get wealthier still at the expense of everyone else, but it's a fine place to start looking. That, somehow, someway, despite all our good intentions, handing the wealthiest in America tax breaks, did not result in a bunch of that money ending up getting sprinkled around into everyone's hands.

 

And I'm not even talking about raising the base tax rates on corporations or the highest tax brackets. I'd be happy if we could just somehow make it so they actually have to pay taxes at all.

 

I'll just go with one thing here. Simply look at the % of the income taxes paid by the top 10% of income earners compared to the bottom 90%. This group pays their "fair share" of taxes.

 

Tax breaks aren't what is causing the fall of the middle class in the US, the whole idea is comical. You can raise the taxes, whether it be through doing away with loop holes or actually raising the rate, all you want and the only effect it will have is to drive corporations away from the US, the goods they sell will become too expensive. At the end of the day, the increase in taxes is going to be factored into the price of the good and ultimately the poor, pitiful, exploited working class is going to have to go without because they can't afford to buy products manufactured in the US... then the jobs go, then the working class becomes poorer and can buy less, then more jobs go...

[Duchess Jack]

Trickle down does not jive with the laws of supply and demand.

Edited May 9, 2011 by Duchess Jack

[Ursa Majoris]

I'll just go with one thing here. Simply look at the % of the income taxes paid by the top 10% of income earners compared to the bottom 90%. This group pays their "fair share" of taxes.

I love this old canard. There are lies, damned lies and statistics.

 

Let's reduce to absurdity, a useful exercise when evaluating numbers. So, if the top 1% paid 100% of the taxes, what would that tell you?

[SEC=UGA]

I love this old canard. There are lies, damned lies and statistics.

 

Let's reduce to absurdity, a useful exercise when evaluating numbers. So, if the top 1% paid 100% of the taxes, what would that tell you?

 

What % of the income in the US does the top 10% earn? What % of taxes do they pay? Are the two disproportionate?

 

How bout the rest of the post you quoted from...

[TimC]

We should ship all the poor people to Mexico. They are such a burden on our economy.

[detlef]

I'll just go with one thing here. Simply look at the % of the income taxes paid by the top 10% of income earners compared to the bottom 90%. This group pays their "fair share" of taxes.

 

Tax breaks aren't what is causing the fall of the middle class in the US, the whole idea is comical. You can raise the taxes, whether it be through doing away with loop holes or actually raising the rate, all you want and the only effect it will have is to drive corporations away from the US, the goods they sell will become too expensive. At the end of the day, the increase in taxes is going to be factored into the price of the good and ultimately the poor, pitiful, exploited working class is going to have to go without because they can't afford to buy products manufactured in the US... then the jobs go, then the working class becomes poorer and can buy less, then more jobs go...

So, in other words, the entire notion of the middle class is a dream that we've simply been lucky enough to have lived for some time. That the way of things is more feudal. That the rich take what they want and the rest just toil away.

 

I mean, that is the point. That we either allow big business to skirt their taxes or they go elsewhere. Further, that every penny they have to pay in taxes comes out of our hides anyway. This despite astronomical salaries and bonuses that executives are making. They're going to get theirs, so we can either sort of take it in the ass slowly or become a banana republic overnight?

 

I mean, if that's the case, then that's the case. But let's just call it what it is. Don't call it "trickle down" when it should be called "golden shower".

[SEC=UGA]

With regard to who isn't paying taxes, look at the graph at the top of this article and then read the article.

 

There are quite a few things at work here and many of you seem to want to pick on one or two things... "Trickle down is a failure" or "The rich need to pay their taxes."

 

The reality is that we have spawned a huge mess through many decades of bad ideas in industry and government, ideas that are going to have to change significantly before any improvement occurs.

 

I'm not afraid of raising taxes, so long as this is met with a decrease in spending. I have stated before, lower the actual tax rate and remove the loopholes. Lower the corporate tax rate and remove onerous regulations and loopholes. Stop incentivizing US corporations to move operations over seas. The union thing is taking care of itself as can be seen in the SE US auto manufacturing sector but needs to evolve a bit more.

[Ursa Majoris]

remove onerous regulations

What are these onerous regulations? Anti-pollution standards? Making it a requirement to have safety guards on equipment? Not putting 5 year olds up chimneys? What exactly are these regulations that ruin it for business here?

[wiegie]

Matt's example is a good jumping off point...

 

A good number of the jobs shipped over seas have been manufacturing jobs. What did most of these manufacturing jobs have in common... Organized labor. The burdens placed on businesses by collective bargaining, pensions, and hostile employees/employer relationships forced companies to look elsewhere for labor in order to decrease costs in order to provide better returns to their investors and owners.

 

Simply look at the stats for union membership in the private sector in 1970 and today, you will find very quickly that many of the jobs that have moved were from this group.

 

Another major issue is the onerous tax burden placed on companies in the US vs. overseas. You have two things working here, one, US companies are going to move operations and foreign companies are not going to locate here.

 

Further, companies here are regulated to death, why keep operating in an area where regulations are going to cost you an extra, oh 25 to 30% just to start a manufacturing operation?

 

The other issue I see is that the US tax code offers US corporations an incentive to locate operations overseas by not taxing foreign subsidiaries as US companies.

 

You combine all of these things and the picture begins to emerge that the US is a hostile place for corporations to conduct business. YOu then take into consideration that we are becoming a more poorly educated society with a populace that has a huge sense of entitlement with regard to wages and working conditions and what do you expect to have happen, do you really expect for corporations to flock here? Compounding the problem is the emergence of other countries being highly educated and not having the same expectations of lifestyle (also these countries have more industry friendly policies) and the US labor force becomes more and more insignificant.

 

Many will say, well, if the American middle class goes away so do all of those consumer dollars... Not a chance, those consumer dollars are being produced in other countries and they are spending those dollars. We are becoming more and more irrelevant every day. Until there is a shift in tax policy towards corporations and a shift in ideology by the US work force these jobs will remain overseas and people, for a while anyway (next 100 to 150 years) will remain in relatively low paying service industry jobs.

 

You guys can sit around and blame "trickle down" economics all you want, you can blame the mean evil corporations that offshore manufacturing to create value for their shareholders, it isn't going to change a thing until we do some introspection and change a number of policies to make the US more industry friendly.

Just a question--how does Germany fit into your analysis?

[SEC=UGA]

So, in other words, the entire notion of the middle class is a dream that we've simply been lucky enough to have lived for some time. That the way of things is more feudal. That the rich take what they want and the rest just toil away.

 

I mean, that is the point. That we either allow big business to skirt their taxes or they go elsewhere. Further, that every penny they have to pay in taxes comes out of our hides anyway. This despite astronomical salaries and bonuses that executives are making. They're going to get theirs, so we can either sort of take it in the ass slowly or become a banana republic overnight?

 

I mean, if that's the case, then that's the case. But let's just call it what it is. Don't call it "trickle down" when it should be called "golden shower".

 

Yes, we were lucky enough to live it for some time, a time when we were ahead of the rest of the world technologically and intellectually.

 

Society has always been based on the precept above, what you refer to as a quasi "feudal" system. There is not a nation in the world that does not operate on the premise that the rich, the powerful, the elite receive the lions share of the resources while the populace "toils" to eek out an existence. There has not been a society, on a large scale, throughout history that has not worked on this premise. The problem is that the US over the past hundred or so years has been able to achieve a middle class the likes of which the world had never seen and now that things are seemingly unraveling (and also through a lot of political grandstanding) their is an issue with the fact that Americans are, on average, some of the most affluent people in the world.

 

Also, a great deal of this income disparity you are being fed is a bit misleading. The presentation of the information makes it appear that Tom who worked at the Chrysler tranny plant in Kokomo, IN hasn't had a raise in the 26years that he has been employed there. This is not the case. What is the case is that Tom's grandson that just got hired on is at the same wage that his daddy made when his daddy started at the plane in 1990. These stats do not account for income mobility, they simply account for an average pay rate.

 

Further, I am not saying that we should allow businesses to skirt their taxes. Businesses should definitely pay taxes, but the US needs to set a tax rate on businesses that is relative to other industrialized nations to which operations are being moved AND businesses of US origin, if they do locate in Indonesia/India/China etc... need to pay US income taxes on these activities. If you make these changes you will see more US comapnies staying put and more foreign companies coming to the US.

 

And, Det, you should know better than anyone that an owner wants to maximize his/her revenue. You could easily pay your wait staff 10 to 12 bucks an hour, but you probably pay the prevailing wage that most restaurants pay. You could really affect a change in their life style by offering this rather than padding your pockets so you could buy a BGE.

[SEC=UGA]

Just a question--how does Germany fit into your analysis?

 

Well, Germany has one of the most highly advanced manufacturing sectors in the world with regard to manufacturing/assembly line equipment, machine tools, etc... They have found a niche, a highly technical niche in which no one has really caught up with them yet (they will be caught and we are seeing it come from China, India ad S. Korea right now. For example lets look at something as simple as wood working tools. Germany makes some of the best lathes, planers, jointers, CNC machines in the world and they are $$$$$. There is a shift currently in the production machines, we are seeing more and more of these machines coming out of ASEAN nations. THese machines are less expensive, exponentially at times, and perform within tolerances that are mere hundreths of inch to the specs of the more expensive German and Austrian products. Eastern Europe is starting to catch up as well) It is much like the US of the past, where when we were manufacturing goods that others couldn't competitively manufacture we were able to enjoy the spoils of this competitive advantage. We have very few sectors in which we still maintain that competitive advantage.

 

Do I need to go into the cultural aspect of their nation, as well?

[detlef]

Yes, we were lucky enough to live it for some time, a time when we were ahead of the rest of the world technologically and intellectually.

 

Society has always been based on the precept above, what you refer to as a quasi "feudal" system. There is not a nation in the world that does not operate on the premise that the rich, the powerful, the elite receive the lions share of the resources while the populace "toils" to eek out an existence. There has not been a society, on a large scale, throughout history that has not worked on this premise. The problem is that the US over the past hundred or so years has been able to achieve a middle class the likes of which the world had never seen and now that things are seemingly unraveling (and also through a lot of political grandstanding) their is an issue with the fact that Americans are, on average, some of the most affluent people in the world.

 

Also, a great deal of this income disparity you are being fed is a bit misleading. The presentation of the information makes it appear that Tom who worked at the Chrysler tranny plant in Kokomo, IN hasn't had a raise in the 26years that he has been employed there. This is not the case. What is the case is that Tom's grandson that just got hired on is at the same wage that his daddy made when his daddy started at the plane in 1990. These stats do not account for income mobility, they simply account for an average pay rate.

 

Further, I am not saying that we should allow businesses to skirt their taxes. Businesses should definitely pay taxes, but the US needs to set a tax rate on businesses that is relative to other industrialized nations to which operations are being moved AND businesses of US origin, if they do locate in Indonesia/India/China etc... need to pay US income taxes on these activities. If you make these changes you will see more US comapnies staying put and more foreign companies coming to the US.

 

And, Det, you should know better than anyone that an owner wants to maximize his/her revenue. You could easily pay your wait staff 10 to 12 bucks an hour, but you probably pay the prevailing wage that most restaurants pay. You could really affect a change in their life style by offering this rather than padding your pockets so you could buy a BGE.

For the record, I have always paid better than the prevailing wage. Buys me peace of mind and keeps turnover low. Ultimately, I'm not sure if, financially, it's worth it, but I enjoy my life more this way.

 

Something, btw, that the top slice might want to consider. People are only going to take so much of hearing about how the AIG top brass just got fat bonuses or some of these bailed-out companies just had record high earnings. There will be a tipping point and "investment" in the populace in the form of not trying to squeeze every penny they can (or maybe can't) get away with, may end up saving them plenty.

 

Would you rather pay your fair share by not trying to buy policy that makes it possible to skirt taxes, or would you rather pay later in the form of some desperate man putting a gun in your face? Prison is prison, including being afraid to leave one's gated community.

[wiegie]

Well, Germany has one of the most highly advanced manufacturing sectors in the world with regard to manufacturing/assembly line equipment, machine tools, etc... They have found a niche, a highly technical niche in which no one has really caught up with them yet (they will be caught and we are seeing it come from China, India ad S. Korea right now. For example lets look at something as simple as wood working tools. Germany makes some of the best lathes, planers, jointers, CNC machines in the world and they are $$$$$. There is a shift currently in the production machines, we are seeing more and more of these machines coming out of ASEAN nations. THese machines are less expensive, exponentially at times, and perform within tolerances that are mere hundreths of inch to the specs of the more expensive German and Austrian products. Eastern Europe is starting to catch up as well) It is much like the US of the past, where when we were manufacturing goods that others couldn't competitively manufacture we were able to enjoy the spoils of this competitive advantage. We have very few sectors in which we still maintain that competitive advantage.

 

Do I need to go into the cultural aspect of their nation, as well?

So, in other words, Germany does NOT fit into your hypothesis that organized labor and regulation are what has killed manufacturing in the US.

[Ursa Majoris]

So, in other words, Germany does NOT fit into your hypothesis that organized labor and regulation are what has killed manufacturing in the US.

Didn't Germany specifically put union representation on company boards and foster a sense of shared commitment between management and workers such that both sides work towards a common goal?

[bpwallace49]

Didn't Germany specifically put union representation on company boards and foster a sense of shared commitment between management and workers such that both sides work towards a common goal?

 

And doesnt Germany recognize the value of himan capital, so it subsidizes companies to reduce hours (and then have unemploymnet make up the rest) in order to keep jobs in Germany and also keep retraining and outsourcing low?

 

[Pope Flick]

Trickledown works and unions are to blame.

Edited May 9, 2011 by DMD

[SayItAintSoJoe]

Your reading it wrong. Union membership has decreased do to their jobs being shipped overseas due to the onerous burdens that unions created for the companies that employed their workers (the management got sick of dealing with the union's BS.) For this reason it became much cheaper, and an easier decision, to move manufacturing overseas. The unions could have kept the middle class in tact to a great degree if they hadn't continually pushed for more, more, more, creating a hostile environment between the employer and employee.... They needed to do a better balancing act. There has recently been a push by auto manufacturers to locate in the SE US, these people are making good middle class wages (albeit lower than what they were making in the Midwest) and there is little to no Union involvement.

 

Manufacturing jobs go overseas when it becomes cheaper to do so. The lower wages and the lack of regulations alone tip the scales too much in the favor of foreign countries. Add to this the manipulation of the Chinese currency and we simply cannot compete. The trade deficit with China alone is serving to bury our manufacturing jobs.

 

http://www.americanmanufacturing.org/china...s/read-report#0

 

The pressure to lower production costs by America's largest retailer Walmart almost serves to guarantee that manufacturers that want to do business with them produce their goods overseas.

 

"WE" as consumers demand lower prices and no longer give a chit where the products are made, deserve blame as well. Of course a lot of the consumers have crappy paying jobs which means that price is almost always the deciding factor when shopping. That has created a dangerous cycle that I don't know if we can ever get out of.

[Azazello1313]

what was that about germany?