Manufacturing declining, no hope for the future

[Kulindahr]

Capitalism is horribly inefficient at ensuring a stable and fair outcome for all people to live at the same standard. I said the previous statement incorrectly... Capitalism's efficiency at removing excess to get to the lowest cost is a base reason for poverty.

The foundation of any effective economic system is the efficient identification of needs and/or wants and the supply of those needs. That's the only thing that can be called efficiency on economic terms.

What you're talking about OTOH is effectiveness, the ability of an economy to provide the basics for everyone and the measure of accomplishing that.

BTW, having "all people to live at the same standard" as a goal is the best prescription known for making an econom neither efficient nor effective.

 

[Kulindahr]

Wake up, Dude. If massive immigration ever happens in the US, I reckon we’ll be sure to visit its potential effects. Until then it’s just an imaginary perturbation, much like the fears promoted by soon-to-be-former-Congressman Allen West.

Yep. Even counting illegals, the immigration rate barely replaces the indigenous birth rate which we no longer have because people are having fewer children.

 

[JayHawk]

The foundation of any effective economic system is the efficient identification of needs and/or wants and the supply of those needs. That's the only thing that can be called efficiency on economic terms.

What you're talking about OTOH is effectiveness, the ability of an economy to provide the basics for everyone and the measure of accomplishing that.

BTW, having "all people to live at the same standard" as a goal is the best prescription known for making an econom neither efficient nor effective.

Okay... we'll use your words if it makes you feel better about it.... Capitalism is inefficient at being effective for equality.

Ahhh but is that not the expressed desire of those who lament that the quality of life in country x,y or z? Or even better isnt that the goal of many different groups in America to ensure employees have all the same benefits and supports systems?

 

[maxpowr9]

Depends where you start -- if you calculate from JFK's time, the minimum wage today should be almost $20.

Nope. Federal minimum wage in 1961 was $1.15 in today's dollars would be a mere $8.90.

I took 1970's fed minimum wag which was $1.60 and it would be $9.54 in today's dollars.

If you actually chart the minimum wage(x) for today's dollars , the peak would be in 1968 at $10.54.

I spent undergrad doing this shit.

 

[Kulindahr]

Okay... we'll use your words if it makes you feel better about it.... Capitalism is inefficient at being effective for equality.

Ahhh but is that not the expressed desire of those who lament that the quality of life in country x,y or z? Or even better isnt that the goal of many different groups in America to ensure employees have all the same benefits and supports systems?

All most people want is enough to be comfortable; that everyone should have the basics and a bit more. I believe that soon we'll have the capability of arranging the first, thanks to robotics (though we need a better energy source).

 

[JayHawk]

That is the key... energy. All things great and small come down to that one key ingredient.

 

[Kulindahr]

Nope. Federal minimum wage in 1961 was $1.15 in today's dollars would be a mere $8.90.

I took 1970's fed minimum wag which was $1.60 and it would be $9.54 in today's dollars.

If you actually chart the minimum wage(x) for today's dollars , the peak would be in 1968 at $10.54.

I spent undergrad doing this shit.

I got my figure from an economics blog. They operated on estimates of actual inflation, not government figures. I know government figures come out to $9 or $10 per hour, but government figures have consistently run on the order of 1%+ low. That adjustment gives a minimum wage of about $14.50. In my judgment, from much I've read in financial magazines, that's a conservative adjustment in the inflation rate; for example,many believe that the government's figure right now is 2% or more low (for last year).

 

[DonQuixote]

Well, I'm glad to see my e-mails actually do garner some active discourse, even if it's not on the back channel!

This is even better. I don't have the time/energy to post all the stuff I share back channel on here, so I'm glad somebody is doing it.

It's obvious from reading some of the posts on here that some people haven't kept abreast of the World Economic Situation, and are preferring to play pedantic politics, instead.

China and the EU are our two largest trading partners, not to discount Canada or Japan. The EU is in the toilet, economically, and China is having a deuce of a time keeping their engine running, too. THAT is why, at this point, the US economy is so sluggish to recover. (Well, Congress behaving like a bunch of spoiled 2 year olds hasn't helped, but . . .).

Free Trade was designed to help bolster two-way trade with other countries, economies - India saw a boon of outsourcing, including all of the "tech support" (read from the chart and don't deviate) centers. "American" companies got a lot of backlash about it, due to the cultural issues that made EFFECTIVE communication possible.

OTOH, as they grew their economies, their people started to demand higher wages - where 25% of US pay scales was once a dream, they have pushed beyond that.

The same thing is happening in China. The state mandated fixed exchange rate of the Ruan to the US$ has come under pressure - the US has filed (over 100?) trade suits against China for unfair trade practices.

All of this is good, long term. China also has to come to terms with pollution control as their own people start to complain, vociferously, about the poisoned air and water.

Viet Nam is an interesting case study - textiles have moved towards them, but so has labor intensive high quality wood craftsmanship.
Stickley Furniture, the Icon of the Arts & Crafts furniture movement, which is headquartered near Syracuse, NY, opened a factory in Viet Nam - http://www.stickley.com/news-popup.cfm?&action=display&pr_id=61

Vietnam Expansion
— MANLIUS, NY, May, 18, 2005


Stickley is expanding its manufacturing capabilities by adding a manufacturing plant in Vietnam. "The new 187,000 square foot factory will provide an opportunity for Stickley to offer a more diversified product line and to open new markets globally," said Edward Audi, a partner in Stickley. The new plant in the Binh Duong Province began production on March 4, 2005.

On March 30, 2005, Stickley Limited International produced its first piece of furniture. The full collection of Antiquities by Stickley will be manufactured in Vietnam. Madison Square by Stickley, a collection of 50 occasional pieces, will also be manufactured in Binh Duong.

Stickley's former plant manager in Manlius is currently overseeing operation of the new factory. In addition Stickley currently employs nearly 200 Vietnamese immigrants in its Manlius plant. Many will take turns returning to Vietnam for short intervals to train the new Vietnamese workers and to reconnect with their families in Vietnam.

Commenting on this expansion, Alfred Audi, president of L. & J.G. Stickley said, "We are very excited and optimistic about the future growth of our company and our ability to compete globally. Throughout our 30 years of owning Stickley, our focus has been to offer great value at the high end. The next couple of years will be both challenging and exciting. Our management team is in place and positioned for this growth."

Other information I have read over time - the Vietnamese workers in Manlius have shifted back and forth between the US and Vietnam, where they can be "home, with family".

The pay rate in Vietnam allows Stickley to produce finely detailed wood furniture, doing the more intricate cut work in Vietnam, then doing the major crafting, assembly, finishing in the Manlius plant.

This is not cheap furniture - it includes their Bungalow collection.

So, not everything made overseas is cheap quality.

And, to ChickenGuy - haven't you seen all the broohaha in the "press" about Apple's Chinese partner in manufacturing, and the employees' dissatisfaction with conditions? That is just the tip of the iceberg - ASUS and Lenovo (formerly IBM ThinkPad) are both made in China, if I am not mistaken - I may be, but I don't think I am.

 

[Telstra]

Actually I think I would have to call you naive because the two countries China is now competing with for higher-tech manufacturing jobs is the United States and Germany... not to mention that while this is a story of decline there is a reason the Chinese manufacturing jobs are going elsewhere... cost has risen along with quality of life. However if you are purely talking clothing then sure it is going elsewhere ... but don't forget the reason. It is not in search of ever lower prices, it is in search of maintaining the low prices. I actually like buying clothing from Vietnam, Cambodia, Pakistan and Afghanistan. I would much rather give them money via purchased product instead of simply paying their governments foreign aid.

So it is all about industrial competition like the Olympic games but in a massive industrial scale.

 

[JayHawk]

I don't know about that Telstra... just that all three countries are vying to have companies build whatever techno fangled hunk of consumer crap we are buying these days... It is what my President was saying during the reelection campaign about training and incentive's for high tech jobs in the US...

Did you know thousands of jobs are currently unfilled in our high unemployment and slow growing economy because of lack of skills? Almost entirely in high tech manufacturing... Essentially China is experiencing the same situation where they have an entire town that used to boom but doesn't have business anymore and the workers dont have the skills to compete.

We could take a large scale ghost town like Detroit and turn it back into a manufacturing mecca with the right incentives. However cheap things like clothing will not be made here. At least not for consumption by the mainstream. I purchase a good majority of my clothes from either US manufacturers or renewable companies like Nau... That is how I chose to make a point is with my feet and my dollar. Not everyone can afford such a choice and it would be cruel to require it somehow.

 

[bankside]

Capitalism is better at making more from less. Prosperity means making more things, better things, consumable things, durable things that raise the standard of living. Capitalism makes more stuff than other systems of economic organisation, like central planning, or oligarchic warrant, or subsistence peasantry, or autarchic socialism, or anarchic barter, or warlording piracy. All crap.

If workers agree that they are not getting a fair share of the stuff capitalism is so good at producing, they need to say so. Nothing un-capitalist about that; they are entitled to a return on their human capital.

 

[Kulindahr]

Did you know thousands of jobs are currently unfilled in our high unemployment and slow growing economy because of lack of skills? Almost entirely in high tech manufacturing... Essentially China is experiencing the same situation where they have an entire town that used to boom but doesn't have business anymore and the workers dont have the skills to compete.

How many here are aware that this shortage is due to two men, Bush I and W. Clinton? Their policies pushed students away from trade and technical schools and into college.

So far Obama has talked about fixing that, but I don't see anything he's done about it.

 

[Kulindahr]

If workers agree that they are not getting a fair share of the stuff capitalism is so good at producing, they need to say so. Nothing un-capitalist about that; they are entitled to a return on their human capital.

Bingo. I was muttering at the tube yesterday when it showed how Walmart is trying legal action to keep their workers from organizing. They were opposing the presence of any union members supporting their striking workers. But their workers have the right not only to organize, but to invite anyone they wish to join them in making their public statement.

Corporations have no right to insisting on workers being isolated atoms. Workers have every right to stand together.

And for the usual suspects, that's not Marxism, it's good sound libertarianism: those workers own themselves, and if they want to exercise their freedom of association and of the very same thing that makes a corporation, freedom of cooperation, no one can say them nay.

 

[cgymike]

Nothing is "Made in USA" anymore and that's a fact pretty much. Even if it says it is - it's assembled in Mexico or some other cheapie labour country.

Ok - now the wolves are going to tear me apart saying I'm wrong. LOL

 

[JayHawk]

Nothing is "Made in USA" anymore and that's a fact pretty much. Even if it says it is - it's assembled in Mexico or some other cheapie labour country.

Ok - now the wolves are going to tear me apart saying I'm wrong. LOL

I wont tear ya apart but I do buy American often or if not American then from another country to support a cause. That stuff does cost more but i choose to do it. Such as with the Nau clothing retailer I mentioned above. The area we excel at on a global scale is tech. Take a look at the world bank figures for high tech exports. The US is third in the world behind China and Germany. Pretty difficult to export something not made in the country it is leaving from....

http://data.worldbank.org/indicator/TX.VAL.TECH.CD

So no not to tear you apart but when you are wrong you are wrong.

 

[cgymike]

Well what is manufactured in the US is usually costing more because of labor costs... or if it is assembled in the US all the parts are made in Mexico, Taiwan and China.

Good point - assembled in usa could mean Made in Mexico etc. But the nub of this issue IS labour costs and why are they so uncompetitive in the USA. Unions must be to blame. The ultimate failure of US collective bargaining GM being the poster child for all that....

 

[JayHawk]

Good point - assembled in usa could mean Made in Mexico etc. But the nub of this issue IS labour costs and why are they so uncompetitive in the USA. Unions must be to blame. The ultimate failure of US collective bargaining GM being the poster child for all that....

Unions have some but little of the overall blame. they simply want a fair set of benefits and wages. look at two very recent examples. hostess run off a cliff into debt by mismanagement. Somehow the initial message is union refuses to budge on 8% pay drop to keep doors open... right? Then come to find out the executives took 6 and 8 hundred percent raises before declaring bankruptcy and they are actually asking for a cut in 40% of their overall benefits. Now currently owing already agreed to benefits of 160 million to the workers.

Then look at Walmart... earning 850 million as CEO and 85 Billion as a company but they can't pay their employees a living wage...

I used to be one of those folks who stood up and said... you know what I sacrificed to get what i have. those folks working minimum wage didnt so fuck them. But it is becoming the situation across America in almost every job.

Long story short I am much less likely to immediately simply assume the unions are the fault. Not off the table that they assume some blame but I need facts first.

That's what I think many companies that pride themselves about having products "made in the USA" do... really only assembled with all the parts from other countries.

As far as unions... well, Germany has a significant manufacturing sector that is enduring quite well and they too have unions. The problem with "made in America" companies is a lack of innovation.

JH, lets keep in mind that even products made here in the US are often made with imported parts. Perhaps companies are starting to see "Made in the USA" may conjure some feelings of patriotism... and could help improve sales (but that's speculation on my part).

Actually the key ingredient that keeps things made in America is ingenuity.

Assembled in America is STILL paying an american wage to assemble parts where the high tech part is made here and the lower tech chassis and such are made elsewhere to keep cost lower.

 

[cgymike]

Unions have some but little of the overall blame. they simply want a fair set of benefits and wages. look at two very recent examples. hostess run off a cliff into debt by mismanagement. Somehow the initial message is union refuses to budge on 8% pay drop to keep doors open... right? Then come to find out the executives took 6 and 8 hundred percent raises before declaring bankruptcy and they are actually asking for a cut in 40% of their overall benefits. Now currently owing already agreed to benefits of 160 million to the workers.

Then look at Walmart... earning 850 million as CEO and 85 Billion as a company but they can't pay their employees a living wage...

I used to be one of those folks who stood up and said... you know what I sacrificed to get what i have. those folks working minimum wage didnt so fuck them. But it is becoming the situation across America in almost every job.

Long story short I am much less likely to immediately simply assume the unions are the fault. Not off the table that they assume some blame but I need facts first.



Actually the key ingredient that keeps things made in America is ingenuity.

Assembled in America is STILL paying an american wage to assemble parts where the high tech part is made here and the lower tech chassis and such are made elsewhere to keep cost lower.

Sounds like you have your head immersed in the "99%" bullshit of the phony OWS movement.. Well come out of that and realise that executives who built those companies or helped build them or grow them often have a perfect right to their millions. The ones who damaged companies, did nothing or committed fraud of course do not like Enron etc. But I bet you are one of those "tax the rich to the max" to solve fiscal problems type of persons. Well you know THAT argument simply doesn't hold water.

Unions aren't totally to blame that's correct but the inefficiency of American Unions is legend and you can't compare them to those in Germany. Different politics and yes unions are POLITICAL entities.
Only the waste in federal government can compare to that produced by unions.

No wonder the same product costs 5% to produce in Viet Nam compared to the USA.

You are just far off base in your assumptions.

 

[bankside]

Yes, everyone has their rights. But that's not the point. Who has how much is really a question about how much something is worth. And that is a question of negotiation.

Coming up with the idea for a company is worth money. But so is working there.

It is clear that owners and top executives of companies are getting a better deal than at most points in history, and there is no reason for the rest of us to let that go on without some renegotiation.

 

[JayHawk]

Sounds like you have your head immersed in the "99%" bullshit of the phony OWS movement.. Well come out of that and realise that executives who built those companies or helped build them or grow them often have a perfect right to their millions. The ones who damaged companies, did nothing or committed fraud of course do not like Enron etc. But I bet you are one of those "tax the rich to the max" to solve fiscal problems type of persons. Well you know THAT argument simply doesn't hold water.

Unions aren't totally to blame that's correct but the inefficiency of American Unions is legend and you can't compare them to those in Germany. Different politics and yes unions are POLITICAL entities.
Only the waste in federal government can compare to that produced by unions.

No wonder the same product costs 5% to produce in Viet Nam compared to the USA.

You are just far off base in your assumptions.

Actually you would be the one way off base in your assumptions. I thought OWS was a ignorant waste of time. It highlighted a huge set of issues but lacked leadership, clear goals and organization. I have been quite clear on that matter. so for you to ASSUME such things... well we all know what assumption does for you.

The thing I refer to is a company that could modernize or change and yet when the opportunity arrives they choose instead to soak the creditors for as much as they can while lining their pockets. There is a reason the judge ordered one dollar a year paychecks for the executives for instance after hostess declared bankruptcy. And it was meant to be punitive because they used the company's credit like a dirty tampon and then held out the mess for the rest of us to clean up.

I wont assume anything about you but you lack of any research before coming to your awe inspiring conclusions is quite telling.