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MinnPost How MN Fell Behind Wisconsin
CNN Obama Raises Min Wage for Fed Contractors
MinnPost Ellison Praises Obama Min Wage Action
CNN Obama Boehner and a Brick Wall
Frustrated Democrats Look Beyond Obama
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4 comments:
Here are interesting twists from the MinnPost discussion linked above.
"Let's say that Liberals and Unions are successful in arbitrarily raising the wages in the USA via laws and or collective bargaining. Then let's say that Liberal and Conservative consumers continue to buy the lowest cost / highest quality products and/or services available. (ie typically from low cost labor markets when practical)
How do you see this working?
The Unions and GM thought they could do it... However the American consumers very strongly disagreed by voting with their wallet." G2A
"You confuse "price" with "cost." People buy cars for a certain price which it "costs" them; they don't ay for the wages or pensions that "cost" the manufacturer to produce them. There's no reason to believe that GM or any car manufacturer's prices are higher because of high wages, union or otherwise. The auto industry in this country was founded on Henry Ford's paying the highest wages in the country for manufacturing so his workers could afford to buy the cars they made. I fail to see how it is the fault of unions that GM or Ford or Chrysler is unable to compete against products which are manufactured in countries in which labor and unions enjoy even greater power with better benefits and higher wages.
In a country where everyone s [aid high wages and gets a decent living wage, everybody does better, If Americans are buying fewer new cars these days, it's because the vast majority of them simply can't afford any new cars. That's a depression. It's because people don't have any purchasing power." Jon
Margins Matter
"Do you work in an equipment design and manufacturing firm?
I have 20+ yrs experience and am working at my 3rd one. Though we sell product on "market based pricing". (ie maximize revenue/ profit by balancing price/volume) The difference between that price and the cost is called the margin. This is the money that allows companies to invest in new technologies, better designs, more productive facilities, etc.
As the costs for the American design & manufacturing companies are arbitrarily increased, and those of foreign design and/or manufacturing companies do not, the margin for the American product shrinks. So the American product starts to fall behind over time, then fewer consumers want it and the American firm has to discount further which further shrinks the margin... And so on... Look at Melroe Bobcat, it is now owned by a South Korean firm. Which means now that firm has decades of "American" intellectual property...
By the way, in Ford's time global transportation, communication, time delay and other costs were astronomical compared to today. They provided an excellent trade barrier that let America operate independently of the world. Currently I am managing projects for customers in Europe, Asia and N. America... Times have definitely changed and so have the rules..." G2A
I have a different reading on the subject of why American auto companies failed to compete. I believe it IS the fault of the unions, combined with government overregulation. First of all, unions demanded wage increases and benefit increases that were basically unsustainable, but because of union power companies found it easier to pay the price than to lose share against their US competition, thereby giving foreign competition a toehold. That was labor pricing itself out of the market. The flipside of that is that the higher wages dried up the capital investment needed to raise productivity that would have offset the wage increases and protected these firms from foreign price competition. Government has granted the US unions too much power, and when they seek to impose minimum wage they are exacting the same terrible price from our workers and from our economy as a whole.
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