Microsoft's Wilsonville Jobs Are Going To China, Underscoring Travails of Domestic Tech Manufacturing (oregonlive.com) 149
An anonymous reader tips us a story: Just two years ago, Microsoft cast its Wilsonville factory as the harbinger of a new era in American technology manufacturing. The tech giant stamped, "Manufactured in Portland, OR, USA" on each Surface Hub it made there. It invited The New York Times and Fast Company magazine to tour the plant in 2015, then hired more than 100 people to make the enormous, $22,000 touch-screen computer. But last week Microsoft summoned its Wilsonville employees to an early-morning meeting and announced it will close the factory and lay off 124 employees -- nearly everyone at the site -- plus dozens of contract workers. Panos Panay, the vice president in charge of the Surface product group, traveled from corporate headquarters in Redmond, Washington, to tell the staff that Microsoft was moving production to the same place it makes all other Surface products. Though workers present say he didn't disclose the location, Microsoft has previously said it makes its other Surface computers in China. The company hasn't explained, in public or to its Wilsonville employees, why it gave up on domestic manufacturing so quickly and didn't respond to repeated inquiries for comment. But the only thing surprising about Microsoft's decision is that it tried to make its computers in the U.S. in the first place.
Outsourcing vs. Protectionism (Score:5, Informative)
When someone can pick up a plant from China and plop it down in WA, pay the same wages, follow the same work rules, dispose of their waste in the same manner, THEN you can say outsourcing is a fair thing to do.
The fact is that you can't. And you can't for reasons that most people agree are reasonable...health and safety of the workers, environmental protection, workplace environment rules, etc. Most people would agree that these rules are in place for what they might call moral reasons, or, it's the right thing to do.
But for some reason, it's no longer the right thing to do when that plant is in China or other third world places. Somehow, what is considered immoral pollution here is not immoral pollution in China. Intolerable work environments here are some how perfectly fine in the third world. But, US consumers and manufacturers are more than happy to take advantage of the low costs of product even when that is only possible in a factory that would be sued out of existence were it in the US.
Outsourcing to China and other places isn't "competition" it's exploitation. But try and do anything about it and you will be called a protectionist or worse.
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To a large degree these differences have been shrinking. Wages have risen in the Chinese coastal areas and the pollution standards in China have been becoming increasingly more tight. The main issue I think is lack of inspections in China. Plus the fact that these factories have more economies of scale because the production is concentrated there. I doubt it would be much more expensive if Microsoft moved the line to the USA. Other companies have been able to do it.
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When someone can pick up a plant from China and plop it down in WA, pay the same wages, follow the same work rules, dispose of their waste in the same manner, THEN you can say outsourcing is a fair thing to do.
The fact is that you can't. And you can't for reasons that most people agree are reasonable...health and safety of the workers, environmental protection, workplace environment rules, etc. Most people would agree that these rules are in place for what they might call moral reasons, or, it's the right thing to do.
But for some reason, it's no longer the right thing to do when that plant is in China or other third world places. Somehow, what is considered immoral pollution here is not immoral pollution in China. Intolerable work environments here are some how perfectly fine in the third world. But, US consumers and manufacturers are more than happy to take advantage of the low costs of product even when that is only possible in a factory that would be sued out of existence were it in the US.
Outsourcing to China and other places isn't "competition" it's exploitation. But try and do anything about it and you will be called a protectionist or worse.
Well, if that idiot industrial toady that Trump appointed to be head of the EPA, Scott Pruitt, has anything to say about it (and unfortunately, he does), maybe those pesky environmental laws that make us "non-competitive" will all be repealed, and we'll all be on the way to Make America Great Again!
[/sarcasm]
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Just do it as much as you can. If you need something, check to see if anyone makes it in the US. Then, if not the US look for other first-world countries (where living and environmental standards should be decent). If not, look for anywhere *but* China. Only buy stuff made in China if that is truly the only option.
I try to do this as much as possible, though a number of things I buy (especially tech stuff) are still only made in China.
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The problem becomes how does an American company compete against a foreign company that is not abiding by the same standards?
We aren't supposed to compete on prices for labor-intensive manufacturing. We are supposed to out-innovate to a degree that creates wealth that flows. But for that we need safety nets for people with lesser means and to reduce the personal risk involved in going solo/entrepreneurial. And we need a systematic approach to cultivate our human capital, to develop a workforce more educated than other competing countries have.
If a labor-intensive worker in the US does not have a competitive advantage in terms o
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The problem becomes how does an American company compete against a foreign company that is not abiding by the same standards? Sure, we could enact tarriffs and prevent import of items not meeting some moral threshold, but then we will also not be able to export (either through retaliatory sanctions or competitive pricing) anything either. It's a very complicated issue.
Liberals won't want to hear it, but in the push for "equity", we've made ourselves uncompetitive. Higher minimum wage, union short-sightedness and even the idea that everyone should be entitled to be able to afford every little luxury (thus making cheap Chinese imports desirable) have put us in this position.
But the alternative gives us things like Rivers that catch on fire...
Re: Outsourcing vs. Protectionism (Score:2)
Yes they did. The left championed with the idea that a rising tide raises all boats.
This is what tariffs were made for. (Score:2, Interesting)
Frankly, there needs to be some compromise in the government. Let workers unionize, but also slap 300% tariffs on companies that do this.
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I have a better solution and I could pretty much gaurantee it would work, stop fucking making windows devices at that plant and start making Android ones, I fucking bet it would work and not only would everyone keep their job, I'd bet you could expand the plant but oh no Windows anal probe 10 must invades everyone's privacy. I bet that would sell more surface as Android or even Linux than as Windows bloody 10.
Re:This is what tariffs were made for. (Score:4, Funny)
Fascism it is then.
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Microsoft is not a hardware company (Score:1)
Re:Microsoft is not a hardware company (Score:4, Insightful)
maybe one day they will accept that.
I don't know about that. They've made a lot of money out of the Xbox. Most of their hardware ventures have failed, but that one has been a money-maker for them.
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We have two where I work (Score:5, Interesting)
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At $22000, it better be doing a lot more than that.
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The version from China will cost a fraction of that.
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What this is (Score:5, Insightful)
What this is is a hard landing for "Manufacturing 4.0" advocates and dotcom monkey.
NO mater how much robots you put to screw a screw, you robots can't compete on cost with Chinese.
While labour costs in China are nowhere near being laughable as they were a decade ago, they still outcompete any Western high tech manufacturer. Western manufacturers have no trouble getting orders from DoD to make banal power converters for 10k a pop. Why would they even try competing with Chinese?
Making a top tier factory is a no joke enterprise that takes years, billions, patience, and serious people. You can't simply roll $10 billion USD and have a TSMC-level fab delivered by mail order, nobody in the world will do it for you. It is only possible for an entrepreneur who is ready to spend his life sitting butt naked on an ant pile, building a company along with its technology base - each TSMC fab is a miracle, a work of art, a creation, not something anybody in the world will teach to build or run
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Why do you assume it is the labor costs of running the factory instead of the management? I am sure that the building of the TVs is the easy part, running the rest of it, you cannot do that with spreadsheets.
I have seen more than my fair share of people who cannot even manage their own time, Handle a manufacturing timeline for coordinating parts to be delivered and assembling a product?In this case, the Chinese probably have more practical experience in running a factory, irrespective of the labor costs.
Re: What this is (Score:2)
Yes, cost is certainly not the only thing where Chinese outcompete the West hands down: Chinese managers are raised on assembly lines, and not imported with near zero experience from Ivey league schools right after the graduation
Re:What this is (Score:5, Informative)
>NO mater how much robots you put to screw a screw, you robots can't compete on cost with Chinese.
This is wrong. You can't compete with the Chinese on flexibility and responsiveness in manufacturing. Well you could, but you would have to get a lot better at it and have the government on your side. The Chinese chose to be good at manufacturing and in particular contract manufacturing and they have a large infrastructure dedicated to that. Chinese labour costs are lower than the US, but that only counts for labour intensive manufacturing.
Cost is one thing. Dealing with a million other crappy things is also a differentiator. My wife gets yarn manufactured around the world and imports it to be sold in yarn stores. It is substantially easier in terms of red tape, to get it made in China and import it than it is to get it made in Washington state and delivered to an address in Oregon. Also, the best makers of bamboo yarn are in China so it's not question that we would get that made in China. It's work to get them to manufacture to our packaging standards and in configurations that work for US markets, but that's easy compared to dealing with the tax departments of 50 US states. The highest quality yarn maker in the world is in the UK. Their stuff is costly more due to shipping from the UK than from the cost of manufacture. I've seen their factory floor and from processing incoming unprocessed sheared wool, to spinning to coning or balling involved 4 people.
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Funny that you mention yarn. I live near the NC/SC border, and in SC, there's about 4 or 5 large buildings dedicated to textile manufacturing that have popped up in the past decade or so. Several of them even have foreign owners as shown by the Chinese letters (Keer) and then there's the old mainstays like Springs. Historically the Carolinas had a large textile industry, but it was weird seeing the jobs come back to the area under a Chinese overlord.
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I suspect, without being able to give details right now, that this is related to the byzantine tax and tariff laws the US has on importing. E.G. the tax on yarn short than 6" is very different to importing yarn that is longer. This is because of some protectionist lobbying in the past by carpet manufacturers. That's only one example. It is very, very complicated. Doing later stage processing in the US , lets you import the goods in a different form. Much like assembling foreign components in the US is for c
It's the product not the manufacturing location (Score:2)
This has little to nothing to do with American manufacturing. The product was a joke, I doubt it sold in quantities large enough to make it even worth anything. Nobody is paying $22K for a 55" TV with touchscreen.
I bet the only ones they sold were to cable news channels as that's the only place I've ever seen them.
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And companies are definitely buying this stuff. We have a bunch at our offices, not MS though but I'd imagine they cost about as much.
In any case, it's just over a hundred jobs so hardly important overall when we just heard [cnbc.com] that MS is laying off thousands of employees in other areas, in particular sales. Would be interesting to know what motivated the decision anyway though.
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And companies are definitely buying this stuff. We have a bunch at our offices, not MS though but I'd imagine they cost about as much.
In any case, it's just over a hundred jobs so hardly important overall when we just heard [cnbc.com] that MS is laying off thousands of employees in other areas, in particular sales. Would be interesting to know what motivated the decision anyway though.
This is how US corporations breath. They expand and contract over time, accreting new projects and products and groups. Then the CEO gets a boner for efficiency and all the satellite offices and pet projects and stupid low volume products get axed. Then it starts all over again. Remaining employed in a large US corporation is partly a matter of not being in one of the dispensable limbs when it comes to chopping time.
Moving to China because ... (Score:5, Interesting)
The profit margin on the $22k Surface Hub wasn't quite high enough using U.S. employees.
Don't be fooled by your company's slogans; "profits" not "employees" are the company's most valuable asset. Remember what Veronica said in Better Off Ted (S1 E4: "Racial Sensitivity"), which was refreshingly honest:
"Money before people," that's the company motto. Engraved on the lobby floor. It just looks more heroic in Latin.
[ And, no, I'm not against companies making money, but there's more to it than that. ]
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The issue is probably not labour cost, it's likely supply. If you want to make a device like the Surface Hub, you need a massive LCD panel for a start. So either you carefully ship some massive LCD panels all the way from the factory in China/Korea/Japan or you just assemble the whole thing over there into a handy protective chassis. And if one panel fails QA you just get your supplier to send another one overnight.
It's a cascade failure. Once you get rid of a few key suppliers in one country, it becomes mu
Why is any of this surprising (Score:5, Interesting)
Microsoft tried to make some Surface units in the U.S. because they thought of it as marketing.
Microsoft has ended the local manufacturing because the marketing doesn't seem to be returning the cost of the effort.
In short, Microsoft never actually cared about helping to regain some manufacturing in the U.S. They just wanted to *look* like they cared. None of it is a surprise in any way.
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Trumpsters /say/ "Buy American!" then go shopping at Wal*Mart.
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Why the West Coast? (Score:1)
There are PLENTY of poor American in West Virginia and eastern Ohio who can work cheap.
It isn't the USA that is unaffordable, it is the coasts and cities that are unaffordable.
Capacity issue? (Score:1)
It may simply be the case that Wilsonville's capacity can't meet the demand. You can't even buy a Hub on the Microsoft store right now, and Ars wrote [arstechnica.com] that MS was caught off guard by the popularity.
The tax credit check cleared (Score:5, Insightful)
I'm guessing the factory was built to collect an Oregon tax credit or to otherwise mollify some state-level lawmakers. Now that the tax credit has been cashed in (or related legislative/regulatory policy has been created/averted), it's time to pull the plug.
Or maybe this was just the minimum time required to figure out and outsource all manufacturing. There's a June 2015 NYTimes article which pretty much said the same when the factory opened (via acquisition):
"Mr. Hix had a downbeat assessment for what would happen to the manufacturing of the Surface Hub if the product took off and the production process was refined. 'Once they get all the problems out of it, it will go offshore,' he said."
https://www.nytimes.com/2015/06/11/technology/microsoft-picks-unusual-place-to-make-its-giant-touch-screen-the-us.html
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Oregon has always been a hub for high tech manufacturing (at least in the past it has) there's a lot of expertise and know-how here. Specifically Wilsonville is where Tektronix used to manufacture a lot of goods (including the Phaser printer) and where Mentor Graphics also spun off from Tek. Nearby Hillsboro is where Intel makes/designs a lot of components as well. Also somewhat nearby (within 2 hours) is where HP-Corvallis manufactured a huge amount of electronics including the HP wristwatch, and most all
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Re:The tax credit check cleared (Score:5, Informative)
Cable News Channels AND NCIS (Score:2)
cable news channels as that's the only place I've ever seen them
and on NCIS re-runs. Investigations into homicides and counter-terrorism; but the show seemed pretty convincing as a career that won't get outsourced, believe it or not.
Why? For the PR (Score:2)
Companies move manufacturing offshore due to labor costs. Less labor cost, more profit. Since the 80s, employees have been considered liabilities or cost sinks rather than assets.
Companies who hype up domestic manufacturing attempts are most likely doing it for the PR. Google did it when they opened the Motorola plant in Texas.
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The way of the world (Score:3)
"Why???"
"Well, Donald Trump wants us to stay, so we've gotta go."
We need some slack in the system (Score:5, Insightful)
Dealing with technical people all the time, it never ceases to amaze me how few understand life outside their little comfort zone. Any time they have to deal with someone who's lower-skilled than themselves, it's an annoyance and they run back to their crowd as soon as they can. Just like a lot of people say everyone should have at least one menial job serving food, working retail or otherwise dealing with the public, I think it would do smart people a world of good to put in some time working in a social services office. Doing so may reveal to smart people that the vast majority of the world is not like them, and may convince them that we shouldn't shoot for 100% optimization if that leaves out a huge swath of the population.
The truth is that we need something at the level of a manufacturing job, that delivers a lower-middle class salary, has regular hours and can be done by people of average intelligence. I know AI is being overhyped now, but the vast majority of white collar corporate jobs are up for replacement next as well. Unless you want society to break down, you're going to need to give people jobs. I grew up in a Rust Belt city and watched every large factory move to the South or overseas, leaving a burnt-out shell of a city. Not Detroit-level, but it's only now coming back. You need employers like this to give work to the masses who can't be big data scientists or work in engineering.
Feel free to call me a Luddite, but leaving some slack in the system will be the only way to preserve it. We're at the point where people can't just move up to the next better job when automation takes theirs. For better or worse, most people are doing the equivalent of factory work, including corporate types.
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Feel free to call me a Luddite, but leaving some slack in the system will be the only way to preserve it.
Why should we want to preserve the system? I would rather have my tax money spent on enabling people to give up meaningless jobs and paint, sing, dance, write, garden, hike, bike, paddle, or do whatever else floats their boat instead.
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The people who still have to work will never allow this. It's a great idea, but only works if everyone doesn't have to work. The second that's not the case, you'll have massive resentment of those who can do their own thing by the ones who are stuck doing a job someone needs to do.
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Easy solution. Everyone work less. Twenty hour weeks and there is work for twice as many.
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This is why a tax on robot labor has been proposed... its not the only way to deal with the problem of wholesale replacement of low skill labor with robots, but its one way
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Ah yes, curse those unions. How dare they lay the standard down for a 40 hour work week, push for OSHA laws that protect your physical safety at work.
Even if you've never worked a union job in your life, you've enjoyed the benefits of the worker protection that is now federal law that didn't exist before they fought for them.
Thanks, Trump! (Score:4, Informative)
Welcome to China! (Score:2)
Supply chain (Score:1)
They weren't wrong. (Score:2)
It is true - It was a harbinger. Just not the way people thought it was.
The new IBM (Score:2)
Microsoft has become like the old IBM. Sell 'reasonably' priced clients, sell lockins to powerful servers to get your work done, 'innovate' exceptionally pricey hardware... But then, there is their XBox division. Hmm...
Microsoft's Motto: (Score:2)
Always Be Evil(sm)
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Regarding obesity you do realize that the US is not in the TOP 10 list of the most obese countries, second countries like China are climbing up that "obesity" ladder real quick, and third obesity is measured by BMI which makes basically everyone who lifts weights "overweight".
T is doing it wrong [Re:No Worries.] (Score:5, Insightful)
Large trade imbalances are a problem; not just for jobs, but because the financial imbalances it causes, and a host of other risks. For example, if we gut our manufacturing base, we could have insufficient manufacturing facilities during an extended war. Venezuela's problems have a Yuuuge lesson: don't put all your economic eggs in one basket. Variety is a backup system, even if it causes short-term inefficiencies.
BUT, Trump is doing it wrong; or at least not in a coordinated way.
An imbalance penalty tariff should be applied to trade with a level based on the imbalance amount: the bigger the imbalance, the bigger the penalty. We'd have to tell the WTO to shove it, though; or get them to change the rules.
However, the penalty shouldn't suddenly be applied in full, but gradually ramped up to give the country and companies time to adjust. We don't want to shock the system. Trump doesn't have the patience for gradual ramp-ups; and the full effect may outlast a presidential term even. It would have to be a coordinated political effort.
Re:T is doing it wrong [Re:No Worries.] (Score:5, Insightful)
Penalties are the wrong way to go about it, period. You don't get an industry that's healthy by shielding it from competition. I can't believe I, as a liberal, have to explain this. All you get from erecting barriers to competition is lazy, complacent industries that offer no benefit.
Foreign competition *is* good competition. Any competition is good as it increases the incentive for improvement.
If you want to prop up your local industry in some area (and I'm agreeing that is a worthy goal), the most economically efficient ways to do that is worker training and infrastructure development. A business that's able to setup shop, hire the needed workers and have all of the communications, transportation, logistics and property protection will locate itself there. The price difference of wages is peanuts on their balance sheet.
Want to know why people locate to Shenzhen? Go there. The actual wages there are pretty damn high actually and the cost of living rivals most of the US. But if you have an idea for a gadget or product, you're up and running in easily 1/10th of the time it takes in the US and to ramp up production to the millions? That ain't happening anywhere in the US.
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Penalties are the wrong way to go about it, period. You don't get an industry that's healthy by shielding it from competition. I can't believe I, as a liberal, have to explain this. All you get from erecting barriers to competition is lazy, complacent industries that offer no benefit.
To many on the left, you are not a liberal if you believe that.
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Actually, I speak to many liberals. I also watch many liberals speak to each other. And I see many liberals proclaim that others are not liberals based on statements such as the one I responded to.
Maybe you need to speak to more liberals.
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This is the problem with using a label to try to break down everyone's views. The Democratic party, at least, were far more along Clinton's moderate pro-market liberals beliefs. But there are definitely hard-line liberals who hate that moderate position and view it as "you might as well be Republican".
What I've noticed is a sort of sea change in US politics lately. What *should* be conservative values such as free trade have become the demons to rail against. Trump was merely the manifestation of these chan
Re:T is doing it wrong [Re:No Worries.] (Score:4, Insightful)
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The D's have had the most free market President in the past 2 decades though. Especially compared to who has an (R) next to his name now....
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Want to know why people locate to Shenzhen? Go there. The actual wages there are pretty damn high actually and the cost of living rivals most of the US. But if you have an idea for a gadget or product, you're up and running in easily 1/10th of the time it takes in the US and to ramp up production to the millions? That ain't happening anywhere in the US.
I don't believe that wages and costs of living are even close to parity. This US government site [commerce.gov] says that even though Chinese wages are indeed increasingly much faster than in the US, US wages would still be 4 times higher even three years from now, i.e., there is currently about an order of magnitude difference in wages. Costs of living comparisons from just about any online cost of living website show that living costs in Shenzhen are about half of the costs in the cheapest US cities.
There is probably
Re:T is doing it wrong [Re:No Worries.] (Score:5, Informative)
I said Shenzhen. Not China. The thing people even in the US can't grasp is just how *vast* China's population is.
You can hop on the high-speed rail, cross 150 miles (in about 40 min) and go from bustling metropolis (Google for housing prices in Shenzhen, it's about comparable to San Diego) to a dirt-poor village. The income and cost of living difference can easily be 10-100x.
Of course, on a pure average level, China as a whole is still well behind the US in terms of income and cost of living.
But most companies who setup shop in China for at least skilled work (and there's a lot, increasingly more) are doing so in large cities with comparable costs of living to the US. And there's a reason they locate there. It's so easy to setup shop.
Also, I never mentioned regulation when it comes to "setting up shop". Because for the most part, regulations are a 2nd order effect. Companies will live with more or less regulations unless they're insane ones.
The biggest draw of Shenzhen is infrastructure and talent pool. We don't have enough mid-skilled tinkerers in the US. It's either poorly trained grunts or highly trained (and highly paid) professionals. You want basic CAD drawings, a simple business plan or just some entry-level technicians? Good luck hiring enough in the US. And even if you find them in the US, they require relocation packages.
In Shenzhen, you get millions of semi-skilled people traveling 100+ miles one way to go to a job. In less time than a typical Bay Area commute.
Compared to the effect of those, regulations are noise.
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I said Shenzhen. Not China. The thing people even in the US can't grasp is just how *vast* China's population is.
Fair enough. China does have more people, but Americans are also well acquainted with income disparities. :)
So, looking at average annual wages for manufacturing jobs in Shenzhen [salaryexplorer.com] vs. the US [salaryexplorer.com] (assuming a 6.76 RMB to USD exchange rate), the US wages are about $61k compared to $15.5k in Shenzhen or about 4x. Perhaps if you compare the high-end tail in Shenzhen to the low-end tail in the US, the wages might start being comparable.
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I said Shenzhen. Not China. The thing people even in the US can't grasp is just how *vast* China's population is.
Fair enough. China does have more people, but Americans are also well acquainted with income disparities. :)
Your average corporate mid-level manager in the US makes what? 4-8x what a grunt worker would? 30k vs 120k?
Imagine that your mid-level managers in all of those factories make 100x what a farmer only 40min away makes. Or 10-20x what the technician who travels 40 min a day (one way) makes. That's a level of wealth disparity that's common place in every street in Chinese cities but pretty rare in the US.
So, looking at average annual wages for manufacturing jobs in Shenzhen [salaryexplorer.com] vs. the US [salaryexplorer.com] (assuming a 6.76 RMB to US
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Your average corporate mid-level manager in the US makes what? 4-8x what a grunt worker would? 30k vs 120k?
Imagine that your mid-level managers in all of those factories make 100x what a farmer only 40min away makes. Or 10-20x what the technician who travels 40 min a day (one way) makes. That's a level of wealth disparity that's common place in every street in Chinese cities but pretty rare in the US.
Unfortunately, here in Silicon Valley [wordpress.com], 10-20x income disparities are not uncommon at all. :(
Re: T is doing it wrong [Re:No Worries.] (Score:2)
A rare pick and place machine/cnc programmer can make 30k per month, same with welders with specialty, industrial chemists, metalurgists,
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s/liberal/neoliberal/
FTFY
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You're not a liberal, you're a neo-liberal. The essence of globalization is: labor is commoditized as mobile capital is free to roam the globe for the lowest cost labor. In contrast, labor is far less mobile, and unable to shift as fluidly and frictionlessly as capital to exploit scarcities and opportunities. Neoliberalism--the opening of markets and borders--enables capital to effortlessly crush labor. The social democrats, in embracing open borders, have institutionalized an open immigration that shreds
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"The essence of globalization is: labor is commoditized as mobile capital is free to roam the globe for the lowest cost labor."
You forgot to add: and prices go down for consumers. That is, everyone.
However, if you are an average working class American, then your incomes and your throats are being cut by the huge influx of cheap labor. Working class jobs are being destroyed by low income labor at one end and automation at the other, leaving working class voters angry and broke and with no place to go.
That's where the backlash is coming from, and that's why so many upper income people can't see any problem with it. It's the old old problem of the landed gentry and the nobility looking down their noses at all of those stinking whining peasants, all over again.
I don't know what you think "average working class American" really is, but:
http://www.ranker.com/list/mos... [ranker.com]
Seems to indicate plenty of semi-skilled services fields. You are correct that at the very low-end, workers are displaced by open trade and open border. But I suspect those jobs are going to be replaced by automation anyway.
The US simply is a much more service-oriented economy now. And in the coming decades, it'll be even more so.
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You mean like what our competitors are doing?
Re: T is doing it wrong [Re:No Worries.] (Score:2)
Yay the market is efficiently moving spending power away from its major market. What could possibly go wrong?
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Look at Britain for an example of that. No real auto manufacturers left. Except for a couple of token plants owned by foreign companies. Which are there because cars have the steering wheel and gas exhaust on the opposite side of nearly everywhere else. Still even Poland has more car factories than Britain. Britain basically survives on North Sea oil and stock market swindles.
Well I'm exaggerating a bit. Rolls Royce still manufactures aircraft engines. Thankfully the Conservative government back in 1971 was
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...and thank God that the UK Government underwrote the bribes to foreign governments - using taxpayers' money - to secure the manufacturing contracts that keep RR going.
Re:T is doing it wrong [Re:No Worries.] (Score:4, Insightful)
The theory assumes proverbial spherical cows. You ignored my war scenario, for one. Going back to the Venezuela example, just because oil is currently your country's Comparative Advantage at a given point in time does not mean it will stay that way. If the bottom falls out of oil, your population starves. There's also the risk of financial bubbles due to uneven exchanges caused by imbalance.
And, tariffs are NOT the end-goal; but rather balance. Tariffs are an encouragement tool. Countries like China may loosen up imports or business regulation that previously made things hard on other countries' businesses. Right now it's too difficult to micromanage the barriers they put up. General tariffs would encourage them to loosen barriers on their own without an army of lawyers needed to sue away each and every barrier.
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OK, since you are willing to step away from academics, let's look at the nitty gritty
In the real world, tariffs lead to trade-wars which lead to real wars, which waste a terrible amount of blood and treasure
Having the middle class decline into poverty can also cause revolutions. Revolutions could also be described as a wasting a terrible amount of blood and treasure. One good speaker could take the anger which has never really been addressed from the 2008 crash and create a revolution. Trump is very mild to how it might have gone. If the middle class continues to decline expect Trump to look mild compared to future rulers.
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Our trade imbalance arguably led to Trump being elected, which is arguably a mini-revolution in that traditional candidates were rejected. Many swing states happened to be in the rust-belt, which has been hit hardest by lopsided trade. Factories moved out en mass. The anger over loss of factory jobs is a big factor in T's election. Had the USA been more protectionist, the rust belt may not have rusted nearly as much.
Perhaps stuff woul
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Hmm, not a very American sounding name, is it...?
Just saying.....
Re:No Worries. (Score:4, Funny)
H-1B.
They couldn't find any Americans to lay off 124 workers.
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What is an "American sounding name "?
The majority of Americans are descended from immigrants from all over the world.
Or are you suggesting they should have been fired by Chief Squatting Eagle ?
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Leave him alone. He's just doing his business.
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Mc O'Brian. Fritzenberg. Dopwrzalkaschulski. Cazzopatate.
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The new coal mines are for the manufacture of steel. Please tell me how to make steel without coal.
According to my Fundamentals of Metallurgy (ISBN 978-1-85573-927-7), metal oxides are most often reduced by carbon monoxide CO, or sometimes hydrogen. The reactions needed to refine iron oxide (iron ore) into iron involve both melting the ore and adding CO. Iron occurs predominantly in nature as hematite, Fe2O3. The reduction reactions include:
3Fe2O3 + CO --> 2Fe3O4 + CO2
Fe3O4 + CO --> 3FeO + CO2
Fe2O3 + 3CO --> 2Fe + 3CO2
Fe2O3 + 3H2 --> 2Fe + 3H2O
FeO + CH4 --> Fe + 2H2 + CO
3F
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Most modern steel mills use electrical arcs to smelt instead of coke derived from coal
You still need a large quantity of either CO or H2 to reduce iron ore into iron. Coal gasification and natural gas reforming are convenient and economical ways to produce these gasses. They are not the only ways, but they may well be the only economically competitive ways at the current time.
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Correct. People scream bloody murder about the offshoring of jobs, and then head to Walmart to buy more cheap Chinese shit.
And every morning they run their Chinese-made American flag up the flagpole while thinking about what a good American they are. The American dream is dead and Americans have no one to blame but themselves, as they enabled ALL of it.
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it's almost as if the free market didn't care for sentimental bullshit like "made in Oregon"...
And yet the CPUs are made in Oregon.
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