Wages vs Buying Behavior

Chickens or Eggs

1. Low Wages caused Buy Cheap Foreign
2. Buy Cheap Foreign caused Low Wages

Jason, Paul and Other more Liberal comments were surprised and somewhat appalled when they finally understood that I believe we may have gotten what we asked for... MP Don't need Higher Min Wage  and MP Tax Payers Subsidize Low Wages

"SINCE 1980 middle class wages have stagnated and buying power decreased"

Exactly... Starting in ~1980, many American consumers decided they liked foreign products that they deemed to be better, more cost effective, more fashionable, etc...

No wonder wages stagnated... American consumers severely curtailed their "Buy American" belief and started spending massive amounts of money overseas... I mean just automobiles were billions and billions of dollars by themselves. Big 3 vs Foreign Graph

And yes American companies also moved production offshore to save money. However most Americans didn't care as long as they got the right good at the right price.

Until this changes back, we will keep sliding the wrong direction..." G2A  

"So it's the financially strapped consumer who is responsible for their own wages stagnating. Good God...." Jason

"Isn't that a bummer...
Did you look at the KOGOD auto index?

Almost every Lexus, Scion, Subaru, Nissan, Infiniti, Mazda, Mercedes, Volkswagen, Audi, Volvo, Porsche, Hyundai and Kia score low on the list. And the imports that are built here are in "right to work" states.

So yes American consumers are gladly choosing to send their money to overseas workers, managers, governments, etc. Instead of supporting American workers and domestic jobs.

Per the graph I shared, the big 3 had ~75% of the car market in 1980 and now they have ~45%.

A question: do you look for the Made in America stamp before buying products, and pay a little extra if necessary to buy them? Or do you just buy low price things that you like?"

"John your buy American wage stagnation arguments make no sense because US economy didn't stagnate, wages stagnated. Since 1980 US GDP has tripled from $5 trillion to nearly $16 trillion. Wages didn't stagnate because people weren't buying American, wages stagnated because employers stopped handing out raises and paying employers good wages. 90% of all the economic growth the US has seen over the last three decades or so has been captured by the top 5% or so of the population. You're ignoring the phenomenal growth in disparity. Your argument assumes that wages stagnated because the money's not there, not true, our economy has grown by more than 300%. The moneys there, it's just not going to labor regardless of who's cars their buying. The growth of the economy is charted here... and elsewhere.

http://www.rcgroups.com/forums/attachment.php?attachmentid=3636109" Paul


"Here is an interesting link.
http://andrewmcafee.org/2012/12/the-great-decoupling-of-the-us-economy/

The reality is that myself and other investors make money whether consumers buy from Ford or Subaru. My mutual funds own both.

Another reality is that few to no American employees are needed to design, test, build, etc that Subaru car, or clean, do accounting, work IT, manage, etc at their corporate headquarters.

Therefore people like myself still get wealthier and buy services, while the number of higher paying jobs at Ford and other USA manufacturers are eliminated. And to make things worse for the American workers, the American manufacturers need to automate or off shore to compete with Subaru.

So yes, what the consumer's choice does matter.

By the way, on the upside my company does sell equipment to almost all of the foreign car manufacturers. So some of those dollar do make it back to the USA, unfortunately most of them stay over there and not in the US worker's pocket." G2A

Now I know we have been through this before...  However any new thoughts?