Dramatic Shifts In Manufacturing Costs Are Driving Companies To US, Mexico 233
hackingbear writes: According to a new Cost-Competitiveness Index, the nations often perceived as having low manufacturing costs — such as China, Brazil, Russia, and the Czech Republic — are no longer much cheaper than the U.S. In some cases, they are estimated to be even more expensive. Chinese manufacturing wages have nearly quintupled since 2004, while Mexican wages have risen by less than 50 percent in U.S. dollar terms, contrary to our long-standing misconception that their labors were being slaved. In the same period, the U.S. wage is essentially flat, whereas Mexican wages have risen only 67%. Not all countries are taking full advantage of their low-cost advantages, however. The report found that global competiveness in manufacturing is undermined in nations such as India and Indonesia by several factors, including logistics, the overall ease of doing business, and inflexible labor markets.
Growing pains. (Score:5, Insightful)
Chinese manufacturing wages have nearly quintupled since 2004
They're going to have growing pains. Developing a middle class and shifting from expendable factory workers to knowledge workers doesn't happen overnight. We had our own struggles during the era of the robber-barons. I hope they have an easier time of it.
Re:Growing pains. (Score:5, Insightful)
Good point, and I don't think they will benefit from lessons learned elsewhere. America has had to compensate for lack of a cheap labor force by implementing technology. It took a while, but regulations now protect the workers (and consumers).
China, on the other hand, has always had plenty of cheap labor. They have solved problems with brute force instead of applying technology.
As that culture changes for China, they will make the exact same mistakes the other industrialized countries have made. China's water and air conditions are miserable ... a condition that is reminiscent of the 1900s in the US.
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China's water and air conditions are miserable ... a condition that is reminiscent of the 1900s in the US.
...and they have almost 18 times the population of 1900 America.
Re:Growing pains. (Score:4, Interesting)
ROFL,
posts like this don't really make sense.
China, on the other hand, has always had plenty of cheap labor. They have solved problems with brute force instead of applying technology.
So had the USA 150 years ago.
As that culture changes for China, they will make the exact same mistakes the other industrialized countries have made. Very unlikely as their management of their currency and the investments in third world countries show.
China's water and air conditions are miserable ... a condition that is reminiscent of the 1900s in the US.
True and false at the same time. Pollution is bad in China, but they are working on it, just 5 years after it became a majour problem they are trying to fix it. The USA had the same pollution levels into the 1970s!!! not 1900. And they needed decades to even consider fixing the problem. Astonishingly a guy who no one had thought had any clue at all was one of the spear heads of the clean air acts and other legislations: Ronald Reagan!
Re:Growing pains. (Score:5, Funny)
Re:Growing pains. (Score:5, Interesting)
Unfortunately, without the democratic framework that the US had in its own gilded age, I'm not sure there's an available set of tools for the populace to push into a progressive era, like the US had, where super corrupt elements of the government(like unelected senators) were run out, and labor was given some basic respect under law.
Wages only do so much for social stabilization. Some changes have to come into power structures.
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Wages only do so much for social stabilization.
In China, they already have their own class of the ultra-rich. I imagine that can't be of great help when it comes to social stabilization.
Labor unions aren't bad, all things considdered (Score:5, Interesting)
Re:Growing pains. (Score:5, Insightful)
I gather that there is a countervailing trend, in the form of reformers in the government. China's version of "communism" is pretty far removed from anything visualized by the early social theorists, and it was plagued by a lot of outright insanity for decades, but it always had collectivism at its core. Mao was one of the great mass-murderers of history, but he wasn't corrupt, merely deranged.
I wouldn't call it a benevolent dictatorship, but I was put in mind of it by your mention of the unelected senators. They still had to campaign; it's just that they ended up stumping on behalf of the legislators-cum-electors. The most prominent example was the Lincoln-Douglas debates: they were running for the Senate but really trying to get legislators to vote for their party. It meant that national issues often trumped local issues, and the state legislature suffered for it.
My point there is that democracy, while important, isn't a cure-all. It's inherently adversarial, a conflict which has notably ground today's national legislature to a standstill. Even popularly-supported reforms get no traction, much less anything with even a whiff of controversy. And it's too inflexible to stop the largest discretionary component of our budget from pumping many billions to the military-industrial complex: I don't buy the theory that they're manufacturing wars for it, but even without that kind of explicit corruption it's still not as responsive as you'd like to imagine a directly-elected legislature should be.
I'm not an expert in China's structure, but I wouldn't count them out just because they're unfamiliar. Certainly the system is ripe for corruption, and they do need to fix it, but they have managed to reform themselves already even under one-party control. It will be interesting to see where it goes from here. There's much to do.
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My point there is that democracy, while important, isn't a cure-all. It's inherently adversarial, a conflict which has notably ground today's national legislature to a standstill.
I'm going to disagree with your point. The founders of the USA designed gridlock into the system, so that if there isn't agreement on what to do, nothing will get done.
Are you worried about theocrat conservatives? Don't worry; they will never get any of their goals accomplished.
Are you worried about liberals completely turning th
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Weeeeellllll, you have to remember that he said "democratic framework". I was going to call bullshit on that aspect of his post until I re-read it and realized he didn't actually say that the USA was democratic at the time, just that it had the framework for a democracy. One which we could re-enable with relative ease. "Relative ease" still being decades of unrest.
We're not all that democratic right now, all things considered. The two party system both pay lip-service to the polls and their talking points.
Re:Growing pains. (Score:5, Interesting)
super corrupt elements of the government(like unelected senators) were run out
See I always saw that as a misunderstanding by the majority of people as to what Senators really are. The US Federal Senator's job before the 17th amendment was to represent the interests of the State they were appointed by not the people of the State. (We have the House of Representatives for that) So if your senators were corrupt then it meant that your State Legislator/Governor was corrupt. (A very distinct possibility i.e. Illinois) All we have done is taken the part of the Federal government that was supposed to be stable and turned it into the US House of Reps part II.
Also I contend that it is easier to buy a Senator now than it was before the 17th amendment. Now instead of buying off the majority of a State Legislator you would only have to buy off one man. Of course given supply and demand (There are more State Legislators than Senators.) the price of buying a Senator may be such that it isn't any different.
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It might be cheaper to buy a senator, yes, but the totality of the ownership is radically limited by the "must have this much approval rating to ride" principal.
Before the 17th, you could just ask your pet senator for something, and they'd do it.
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That sure is a generalization that doesn't even make any sense.
Guess what? Society affects you. Yes, you. No you're not special. People interact, and some of those interactions are coming your way, no matter how fiercely independent you pretend you are on online posts.
Re:Growing pains. (Score:5, Insightful)
"Social stabilization" is just a way of saying "the direction of the herd."
Not really. Social stability is actually an important goal no matter your economic/government form. You can push people around and abuse them quite a bit because frankly they're mostly concerned with their own daily activities. Once you cross the line and get them all riled up with nothing more to lose though, look out because here come the pitchforks and guillotines.
"The public is like a sleeping dragon, do whatever you want as long as you don't wake them up." --source unknown
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A lot of people who complain about government are people who would like to terminate most, if not all, labor protections. They bury that desire in ideological ruminations, and have convinced vast legions of rubes that the only good government is a non existent government, and somehow the magic of market forces will protect workers.
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The word "sheep" is a sure-fire bet that someone is experiencing cognitive dissonance. Either that, or you're just out of substantive ideas. Either way, game over.
It's a bit like "you won't buy into my absolutist ideology because you're a mindless follower" as if absolutist ideologies didn't attract exactly that sort more than anything else.
Re:Growing pains. (Score:5, Informative)
We had our own struggles during the era of the robber-barons.
Umm, wrong transition period, that was the Agricultural to Industrial changeover not the Industrial to Service one.
Re:Growing pains. (Score:4, Interesting)
Yeah. And we're still in the second transition.
If we want to make analogies, it's worth considering that industrial workers' rights didn't really happen until the 1930s, over 50 years after the beginning of the industrial revolution in America. Most service workers still have no unions, or anything similar (not sure what it would be), to claw back profits from investors and executives. Which is why wages are flat even though American wealth continues to sky rocket.
I never understood conservative opposition to unions. In particular, wage slave, blue collar conservatives. Unions are an effectively privatized way to achieve wealth redistribution. The only alternative is taxation and government programs**, or for society to simply live with increased crime and dislocation.
Unions are the worst way to pursue income equality and social stability, except for all the alternatives.
** There's a strong economic argument that direct wealth transfers through taxation are the most efficient way to accomplish this. But I suspect that American politics in particular is just a tad too corrupt to make this a dependable and fair mechanism. There's too much regulatory capture and various forms of internecine backstabbing (among corporations jockeying for loopholes, among blue collar workers "racing to the bottom", etc). Unions are a nice, distributed mechanism which looks ugly and ineffective at the micro level, but at the macro level seems to work out pretty well in terms of outcomes.
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I never understood conservative opposition to unions. In particular, wage slave, blue collar conservatives. Unions are an effectively privatized way to achieve wealth redistribution.
Well you answered your own question right there. Conservative's opposition is based on observing the practice of today's labor unions, which redistribute wealth from their hard-earned hourly wage to the wealthy unions. It's bad enough having your labor exploited by a corporation. Most people don't want their labor exploited by a corporation and a labor union.
Zooooom! (Score:4, Insightful)
Another race to the bottom.
I wonder if the landing is going to be soft and comfy.
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Or "Trickle Down Economics" as it's been called for a while now.
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This has literally nothing to do with trickle down economics. And I'm saying that as a person who recognizes the absolute uselessness of that concept to any sort of pragmatic economic policy.
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Why? Slowly but surely we're all trickling down, I'd say the shoe fits.
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Literally the opposite of the point of the article we're discussing, but sure. Why not. What a joke. Haha.
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On on Slashdot could an increase in manufacturing jobs be used as evidence of "middle class collapse".
Re:Zooooom! (Score:5, Interesting)
Well, that depends on the amount the jobs pay, doesn't it? Have average salaries for manufacturing jobs (with respect to inflation) increased, decreased, or remained the same over the past 20 or so years?
That's how you can have an increase in the number of jobs while simultaneously collapsing a middle class. You can also convert full-time positions with benefits to part-time positions without, decrease sick and vacation days, require people lucky enough to have health benefits pay increasing amounts for them, etc., not to mention taking actions that simply raise stress in people's lives like making people work more erratic shifts, threatening them with off-shoring or outsourcing, basically any psychological gambit that makes the employee feel powerless - which has the follow-on effect of making them too cowed to asked for a fair share of the company's profits, again leading to less money for what was equivalent or better work. Plus that latter thing makes it less likely that workers would organize as a labor block or politically in their communities - a fine multiple win for the factory owners vs. their employees.
So yes, I can see several ways that a middle class can be hollowed out, even while increasing numbers of even worse, lower-paid jobs are created (and taken). That you don't see how this doesn't make things better for most demonstrates that either you are unaware of how the real world has been working for quite a while or you have some sort of odd ideological ax to grind.
Re:Zooooom! (Score:5, Insightful)
I'm gonna disagree.
This is supposedly a sign that the race to the bottom is actually done. The bottom filled out and is rebounding, and "we" mostly resisted our worst political urges vis-a-vis protectionism and removing regulatory protections that exist for good reasons. An equilibrium has been reached, and all the sacrificing has been mostly of the short term kind.
I know posting anything that isn't a hyper-cynical prediction of doom-and-gloom isn't too popular on slashdot, but this happened with Japan in the early 90s, and it happened with the United States(to the British Empire) in the 1850s. This isn't an unprecedented development. Cheap labor isn't infinite and eventually labor starts to get positively valued again.
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Another race to the bottom.
How is jobs shifting to a higher wage country a "race to the bottom"?
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I think the US middle class has already "landed" in a spot where they can't earn a living wage. Now that the rest of the world has "caught up" with us living on subsistence wages, we might see some jobs returning to the US. Of course, that doesn't mean that wages will rise in the US but at least people will have an opportunity to get a job.
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Watch Republicans campaign again to get rid of the minimum wage.
Exaggerate much? Republicans don't wan to get rid of the minimum wage. Why would anybody campaign to get rid of the minimum wage? It would be stupid to just out and hand the democrats a loaded guy and say "Shoot me in the face!" trying to get rid of the minimum wage.
This republican knows of nobody trying to get rid of the minimum wage and I dare say you don't either.
BUT, that's not to say the democrats are not manufacturing such outrageous claims about republicans (i.e. lying about republicans intent) and
Re:Zooooom! (Score:5, Informative)
Exaggerate much? Republicans don't want to get rid of the minimum wage.
You should try paying attention.
"I think it's outlived its usefulness," said Rep. Joe Barton of Texas. "It may have been of some value back in the Great Depression. I would vote to repeal the minimum wage."
http://www.nationaljournal.com/white-house/can-obama-unilaterally-raise-the-minimum-wage-20131205
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Exaggerate much? Republicans don't want to get rid of the minimum wage.
You should try paying attention.
"I think it's outlived its usefulness," said Rep. Joe Barton of Texas. "It may have been of some value back in the Great Depression. I would vote to repeal the minimum wage."
http://www.nationaljournal.com/white-house/can-obama-unilaterally-raise-the-minimum-wage-20131205
You should use the whole quote too:
It's particularly unpalatable for Republicans, as the majority of them oppose to raising the minimum wage at all. "I think it's outlived its usefulness," said Rep. Joe Barton of Texas. "It may have been of some value back in the Great Depression. I would vote to repeal the minimum wage."
I'd vote to get rid of it it too, but I'm not running a campaign to repeal it. Joe Barton isn't campaigning to repeal it either. You are claiming republicans campaign to get rid of it.
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Wait... Republicans like you (and Joe Barton, Lamar Alexander, the official 2014 Texas GOP platform) would "get rid of it", but aren't "campaigning to repeal it", because it might "just out and hand the democrats a loaded guy (sic)"?
All I understand from this is Republicans will act toward abolishing minimum wage, but won't campaign over it, just in case you're instincts are right and it's actually something most people in the country really care about and might mobilize them in such numbers as to upset GOP
Re:Zooooom! (Score:5, Informative)
I submitted my previous post to soon. You could dismiss one Congressman as not representative of the party.
So here is the official 2014 platform of the Republican Party of Texas.
Minimum Wage Repeal- We believe the Minimum Wage Law should be repealed.
Prevailing Wage Law- We urge Congress to repeal the Prevailing Wage Law and the Davis
Bacon Act.
Workers Compensation- We urge the Legislature to resist making workers’ compensation
mandatory for all Texas employers
http://www.texasgop.org/wp-content/uploads/2014/06/2014-Platform-Final.pdf
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That does not make it a campaign.
So you don't know what a "platform" is? Cool. Have a good day.
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Yes, your Honor, we were both naked, in bed, and I had my penis inside her vagina. But that doesn't mean we were having sexual intercourse.
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I hate both mainstream political parties equally, so don't think I'm some Republican-bashing Democrat. I just wanted to point out that your niggling seems a lot like a no-true-Scotsman informal fallacy. Nobody ever claimed that all Republicans nationwide are actively campaigning for a repeal of the minimum wage. The statement you objected to initially, "Watch Republicans campaign again to get rid of the
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Republicans don't wan to get rid of the minimum wage.
Sure they do, it just doesn't poll well enough right now. Any rational, educated person knows that minimum wages are a policy with significant trade offs. On the one hand a price floor creates oversupply and reduces demand, so effectively it creates unemployment. On the other hand the equilibrium wage could easily be at a level we as a society don't find conscionable, or with sufficient automation technology it could even fall below subsistence levels. Since our society no longer has a frontier with unc
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It would be stupid to just out and hand the democrats a loaded guy and say "Shoot me in the face!"
LOL top typo XD
The oblig. quote from Snow Crash (Score:5, Insightful)
When it gets down to it — talking trade balances here — once we've brain-drained all our technology into other countries, once things have evened out, they're making cars in Bolivia and microwave ovens in Tadzhikistan and selling them here — once our edge in natural resources has been made irrelevant by giant Hong Kong ships and dirigibles that can ship North Dakota all the way to New Zealand for a nickel — once the Invisible Hand has taken away all those historical inequities and smeared them out into a broad global layer of what a Pakistani brickmaker would consider to be prosperity — y'know what? There's only four things we do better than anyone else:
music
movies
microcode (software)
high-speed pizza delivery
.
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* Airplanes
* Farming
* Robotics
* Brand management
* Banking
* Manicures
* etc
Some of those are not comparative advantages, not absolute advantages, but that's all you need. The US has a growing manufacturing sector. Look stuff up at least on Wikipedia before posting stupid stuff. In 2013 the US exported $2.3 Trillion worth of stuff, and that wasn't all movies and music.
Also, 'microcode' has an actual meaning and it isn't what you think it is.
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An Italian viewing American pizza would probably have the same reaction as an American hipster going over your CD collection (seriously, any CD collection).
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This is America. People do whatever the fuck they feel like doing, you got a problem with that? Because they have a right to. And because they have guns and no one can fucking stop them.
.
The Real question then is... (Score:3)
Are we in a race to the bottom or the top?
If manufacturing's biggest variable cost is labor, companies will flock to the place where their variable costs are the lowest.
So, the question is, have we started to reach wage parity now by virtue of wage reductions in the USA (race to the bottom) or the fact that wages in places like China have reached parity?
IMHO, it's both. The standard of living here in the USA has stagnated just like the last 6 years of the economy and the demands of labor outside the USA has driven costs up. But we are severely limited in this country because we face a huge increase in energy costs once the economy starts to actually do more than tread water. Manufacturing won't return, not yet.
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Last 6 years? The economy has been stagnated long before that. We had declining job growth since roughly 2005 and wages haven't kept pace for nearly 2 decades.
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Last 6 years? The economy has been stagnated long before that. We had declining job growth since roughly 2005 and wages haven't kept pace for nearly 2 decades.
Not arguing that. But the last 6 have been pretty bad and the only experience most of the readers of Shashdot generally have.
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Last 6 years? The economy has been stagnated long before that. We had declining job growth since roughly 2005 and wages haven't kept pace for nearly 2 decades.
2 decades? More like four. Wages flatlined in the early 70's [wikipedia.org].
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2 decades? More like four. Wages flatlined in the early 70's [wikipedia.org].
That is only for manufacturing wages, not wages in general. Protip: If you want high pay, don't get a job where you compete with a servo motor.
Re:The Real question then is... (Score:5, Insightful)
It wasn't always like that though. Blame globalism if you want; but in the post war years, DETROIT was the richest city in the United States. It did not get that way due to service industries and intellectual property creation. They took raw materials, and made cars. for profit. and did not pay slave wages. The rust belt was bedrock of the American middle class.
I do not buy the argument that manufacturers have to pay shit wages to stay competitive. I think that's an excuse to either inflate managerial / executive salaries; or cover up for failing to invest in increasing efficiency.
Or it's due to the rise of the MBA. Labor is simply an input, a cost to be minimized. There's knock-on effects to selling your workers out in order to slightly lower production costs -- and those goons didn't look at the bigger picture or what we'd lose -- a stable, well functioning, organized society (Look at Detroit/Flint/Gary in 2014)
(In before some libertarian blames government regulation for companies moving production offshore.)
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(In before some libertarian blames government regulation for companies moving production offshore.)
They blame unions mostly. Car manufacturing hasn't really moved offshore (because of regulations, I guess), it's moved to states without unions, where they still pay high wages but don't have to pay union dues.
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How do unions work in the USA that companies have to pay "union dues"?
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Unions dot work. They suck blood from both ends, that's what they do.
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gah, "dot" = "don't"
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In Europe they seem to work very good ...
My question was more how the legislation is, how they interact with workers and companies etc.
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Detroit got fat and lazy, and as a result foreign automakers ate their lunch. Japan in particular had cheaper, harder-working workers, coupled with more focus on efficiency and -- eventually, after they built enough capital and experience building cheap crap cars -- design and build quality. Detroit didn't believe they could lose, either the management, or the unions. In order to stay competitive, both would have had to make serious changes... almost certainly including some reductions in labor costs and so
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Well partially, Japanese makers were able to externalize their health care costs and (caveat: AFAIK) pension/retirement costs by having a government that actually has a functional social safety net. They also greatly benefited from things like CAFE standards. (When the core of your business is SUV's and large sedans, CAFE disproportionately affects you, and forces you to create compliance models with shitty reliability.)
The US makers are coming around, I believe Ford and GM are now both profitable, and as
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Re:The Real question then is... (Score:4, Insightful)
Which isn't to say they don't need workers: there is a shortage of skilled workers who know how to weld, or drive heavy machinery, etc.
Re:The Real question then is... (Score:4, Insightful)
IMHO, it's both.
Yep. And, frankly, it was and is obvious that it would be. I've been saying for years that globalism was ultimately a good thing, though in the short term it was going to be painful for the wealthy countries, as standards of living equalize. If this article is correct, the pain may be much less, and much shorter, than I'd expected. Not that there isn't still pain ahead, but if we're already getting to the point where overseas labor costs have risen enough to be offset by domestic education and infrastructure, then the future looks pretty good.
At the end of the day, though, I'm no more entitled to my job than some programmer in China. If he can do the job as well and will do it for less money, then he should have it. Cost of living differences make this painful in the short term, but if we just keep competition open, the field will level -- some of that leveling may come from decreases in my standard of living but most of it will come from increases in his. That's too bad for me, but great for him, and it's fair because he's no less a human being than I am.
Good for China, goods for us (Score:2)
The socially corrosive mentality that one class of jobs, usually technical and electrical engineering, can be mercilessly outsourced needs to stop.
Lower-value service jobs like accounting, lawyers and notaries are immune to this phenomenon.
It's also good that more Chinese can earn better wages and hopefully benefit from the technology they are actually building.
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Outsourcing is probably less of a problem going forward than automation, which is increasingly replacing white collar jobs as it has done blue collar jobs previously. Even lawyers' work is being automated these days, especially profitable work that requires you to be a lawyer but is otherwise low-skilled.
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Well, another corrosive idea is that we keep being told how productive we are and how powerful our technology is, but we see very little benefit except for the top layer of society.
I just wonder how we were able to reduce our work week back in the 19th century with steam engines, but now we can't reduce the workweek again?
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hmm... people in low-cost countries should start studying US law, so they can give cheap legal-advice :)
Not flat. (Score:5, Informative)
US wages are not flat. They're declining. Adjusted for inflation and the cost of living increases, your effective purchasing power is 1/3rd of that of your grandparents.
Your parents and grandparents were able to buy a house, two cards, and send 2 children to college on a single income. You can't. You can't even with you and your spouse working full time with decent jobs. Your children will need loans to go to college and you will need to fork out a lot of money for childcare while you both work. You should probably pay for private tutoring too, to make up for your lack of time with your children you spend working. (Parental involvement in education is key to educational success. THE number one factor. It's why lower income people stuck working 60+ hours a week with 3-5 part time jobs have children with bad educational outlooks)
Point is, you're getting screwed. The income gap between the wealthy and poor has increased exponentially in the last 30 years. And it's no accident. There are people working hard to make sure you and your children grow up stupid, in to a life of perpetual debt and poverty.
Re:Not flat. (Score:4, Insightful)
Your parents and grandparents were able to buy a house, two cards, and send 2 children to college on a single income. You can't.
I think there are two main factors driving this:
- Up until about the 70s, there was no competition for labor...the US was its own market and very few people ever even left the country for extended periods.
- The labor/management balance has shifted dramatically in favor of management.
The other component of your nostalgia moment was that your parents or grandparents were typically employed either for life by the same company, or by a small number of companies. Jobs were stable and employers invested in their employees, who in return had more loyalty. In the case of factory work, unions kept management in check and ensured their members got a decent middle class wage. I know this because I grew up in a Rust Belt city in the 70s/80s, and saw exactly what happens when this support structure is kicked out from under employees.
The problem today is that management is in the drivers' seat, and has convinced labor that they can be exactly like them if they just work harder and complain less. The "job creator" meme is very strong, even among the poor/unemployed, which is surprising. Not every employer is like this, I agree, but enough of them are that it affects everyone. I happen to be very lucky and working for a good employer, but when competitors start putting downward pressure on wages and benefits, it takes a very strong company with a good market position to hold the line.
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Very strong companies with good market positions have reached that spot EXACTLY by screwing their workers until they went boom.
Intel, Microsoft, Oracle, Dell, IBM, you name it.
China itself is offshoring manufacturing (Score:2)
Manipulation of money (Score:4, Interesting)
China, [google.com]
Indonesia, [google.com]
India, [google.com]
vietnam, [google.com]
etc. are but a few.
As long as this is ignored, then manufacturing will continue to stay with those nations that manipulate the most.
What is really helping move this back is NOT so much costs, but the fact that the younger generation are saying no to this and working hard to bring it back. Look at how Target, and Walmart are doing. These are basically front companies for these other locations. They are having no choice but to start bring back North American products.
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They can't manipulate the cost of shipping raw materials and the manufactured output across oceans. That is part of the new focus on insourcing basic manufacturing.
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They are not manipulating their money.
They set a fixed exchange rate versus the dollar, so you can not manipulate their currency!
What About Software Jobs (Score:2)
Outsourcing is Darwinian (Score:2)
This is the inevitable consequence of outsourcing. We've altered the local economies of those countries and the sucking sound is reduced, and so now the "outsourcing" will flow where the vacuum is now strongest... which perhaps just happens to be right here in our own back yards again.
What goes around comes around. Or something like that.
Total BS (Score:4, Informative)
This is complete BS, they come out with nonsense studies like this all the time.
My father works in manufacturing, they don't like going over seas, you have a hard time controlling quality, ensuring design specs, etc...
But there is no way they can stay in business without it.
According to my father, when doing analysis of where to send work The total cost of labor (including benefits an such) are roughly as follows:
US: $15/hr
Mexico: $1/hr
China: 10cents/hr
The minimum wage is mexico is $5/day, so yea...
China has the benefit of the manufacturer paying no benefits at all and the government keeping the employees healthy.
There are added costs like shipping, bribing government officals etc...
But the costs would have to be huge to make up the difference between $15/hr and 10 cents per hour.
Where US workers come into the picture is to save money on shipping. If you can send the product over in pieces, save a ton on shipping and then have the final product assembled here, you can get the best of both worlds.
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And your father's knowledge is broader and more accurate than this report's ..... because?
There was certainly a time when wage disparities were truly enormous, though not that big. But the entire premise of this story is that what we knew to be true just ten years ago is now out of date.
I suspect your father was giving you information that was once correct but no longer is.
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Wrong: http://en.wikipedia.org/wiki/M... [wikipedia.org]
The minimum wage in China is between 1$ and 2$ depending on region.
According to this: http://en.wikipedia.org/wiki/L... [wikipedia.org] Mexico is at 60cents and China at 110cents
Puritanism (Score:3)
And this - with a little help from the One-Percenters - is why there will never be a Star Trek style future, where one works due to passion and not subsistence necessity.
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And this - with a little help from the One-Percenters - is why there will never be a Star Trek style future, where one works due to passion and not subsistence necessity.
So all those Redshirts have a passion for being the first one shot after they beam down, and not because they need the money?
Mexico? (Score:2)
Given the cost of labor, geographical proximity and ease of distribution thanks to NAFTA, I'm surprised more companies aren't setting up manufacturing in Mexico. In one of the more stable states, not the heads-in-a-duffel-bag / threatening to collapse the government states.
Oh wait, I just answered my own question.
Canada? (Score:2)
Canada is better, eh? We don't have worms in our alcohol.
The cycle continues (Score:2)
It's interesting to watch how things oscillate from one extreme to the other. In computers, it's the shift from terminals connected to mainframes, to PCs, to terminals that look a lot like a smartphone, and now a little bit back towards PCs. I'm guessing this insourcing trend will start swinging back the other way once labor here gets too far above the price levels it's at now.
The company I work for basically the opposite of leading edge -- we do IT services for a very staid, downtime-averse, risk-averse in
What about us, eh? (Score:2)
Move your manufacturing to Canada. We can move parts and products between the U.S.A. and Canada by trains, planes & automob... I mean trucks. Just don't mess around while driving on the highways.
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Re:Is this really good news? (Score:5, Insightful)
Yes it is. Stop viewing it as crushing wages and more a normalization of wages. It takes time to cycle out bad habits from manufacturing companies here int he US (and in some part due to labor unions although unions are not all bad).
For example i've seen plants where people work their way up, as they have more years, and as they gain higher pay, they move to different jobs. But the reality is you shouldn't have a 30-50$/h person driving a fork lift. But due to the way they organize them selves and their people that is what you see.
I'm all for a fair wage for a fair job. But that wage should be based on the contribution to the goals, to the product. And as someone moves up in rake and wage they should be expected to contribute more value.
The mentality that everyone is entitled to an x% wage increase for every year of service for the simple fact of being there doesn't make sense. Doing it because they increase their knowledge and skills that can be contributed back to the organization does make sense.
The off shoring of jobs to 3rd world conuntries for manufacturing due to cheap labor that they could abuse is also a failing of the company, but it is made possiable in part by the 1st world workers not being able to show the value added for the ratesthey command. As this balance equalizes the rates and contribution should also. At that point (and what seems to be happening) is that the offshore people are starting to command more for the value they are giving, and with that there comes the question of if the difference in labor costs justifies the increase in logistics cost. There is a tipping point where the difference will cause the Jobs to move back, and be more distributed.
When it comes to logistics costs, unless you are in extreme high capital investment processes (thing IC Fabrication) normally the Cost of Goods Sold (non-capital) are they moving costs which are lowest when you do manufacturing within the region of sale. By the labor gap closing, the best place to increase margin is to make adjustments to the logistics costs, which means changing how you do business.
But over all this is good, this is a very good thing. the closer all global labor markets are, the more likely the manufacturing will be to distributed so that you are preforming the work in the region of sale. once this happens the supply & demand for any given region should level out, and you should see better balanced net imports/exports. Rather than any single economy being unbalanced. once you get balanced then the life of the average worker will on average get better and more stable.
Again, this is a very good thing, it is a long and ever changing road, but just like the universe this is, as the nature of all things, a move towards less entropy and is natural in any system.
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That's the whole point, they don't pay people 30-50$ an hour to "drive a forklift" they where paying it because the union contract required x% pay increase each year of service, and the forklift guys had been there for 20+ years still driving a forklift (the ~30 ones). the ~50$ was a different plant, where operators who had been there for 20-30 years who could no longer physically do the work required by operations (long standing, heavy lifting, etc.) where assigned to be the forklift drivers as it was a j
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I don't think "exasperated" means what you think it means.
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I used to get paid around $10-12/hour to drive a forklift, with a max pay of around $15/hour (plus overtime when required). It really does depend on how much a company values its workers and the quality of their work. $30-50 seems.. the fuck, because I'd go do that job RIGHT NOW. But as I was saying, a bad fork driver can cost you millions in certain industries. Our forklift drivers had to go through a 2 week certification course, with obstacle courses on several different forklifts that we had in servi
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The mentality that everyone is entitled to an x% wage increase for every year of service for the simple fact of being there doesn't make sense.
Does inflation make sense?
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2nd world is (was) the Communist bloc.
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Have you ever been to a third-world country?
Have you lived there?
Because I think it's quite apparent that you don't have a clue what you're talking about. But here's a quick'n'easy test: Our poor are fat. Their poor are skinny.
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Sometimes even the rich are skinny, because of poor food availability for decades.
One of the reasons Russia and Eastern Europe produce beautiful ladies like there's no tomorrow. In all fairness, they wouldn't have been considered "beautiful" 60 years ago, but tastes change.
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You should walk through a Chinese factory or even an American factory where production volume doesn't warrant the investment in automation.
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That's nice, but you should tell us how you really feel.
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Don't worry, they won't be paid slaves for much longer. Companies are installing robots as we speak!