CNN Business UAW GM Strike Kicks Off
Detroit FREEP GM CEO Compensation 281 time median worker
GM Jobs Pay Well + Great Benefits
Detroit News Comparisons
And then there is that HUGE QUESTION... Are Liberal American Auto Buyers willing to put their money where their mouth is and support these American Union workers? Or will they keep buying their high foreign content cars? Or those made in the Southern lower cost states?
One more thing... Temporary employees are very important in US Manufacturing jobs because of the cyclic nature... My previous employer would be up to ~1000 employees on over time and then would need to scale back to about 600 during slow times. It was not very fun at all...
Detroit FREEP GM CEO Compensation 281 time median worker
GM Jobs Pay Well + Great Benefits
Detroit News Comparisons
"Detroit carmakers are expected to point to the pay gap between them and foreign producers like Toyota and Honda with plants in the United States. With benefits and bonuses included, GM hourly employees make $63 an hour, Ford workers make $61 and Fiat Chrysler workers make $55. Foreign producers spend about $50 an hour for workers in U.S. plants, according to data from the Center for Automotive Research.I have no idea who is more greedy, the Union or the Executives... However as they squabble I am sure their competitors will be happy to steal market share.
From 2014 to 2018, GM's labor costs per vehicle increased 14%, Ford's was up 8% and Fiat Chrysler's was up 42%, according to CAR"
And then there is that HUGE QUESTION... Are Liberal American Auto Buyers willing to put their money where their mouth is and support these American Union workers? Or will they keep buying their high foreign content cars? Or those made in the Southern lower cost states?
One more thing... Temporary employees are very important in US Manufacturing jobs because of the cyclic nature... My previous employer would be up to ~1000 employees on over time and then would need to scale back to about 600 during slow times. It was not very fun at all...
111 comments:
I know I buy American cars, exclusively.
--Hiram
I used to hang out with union types and I was full of sage advice which was always ignored. One thing I talked about is how union workers had to be competitive, that they can't expect consumers to give them a break just because they were union, and/or American. The odd thing now is that this line of thinking is now being rejected by Republicans of all people as they create trade barriers designed to protect American workers from foreign competition. Maybe my union friends were right to dismiss me out of hand and vote for Trump.
--Hiram
I think the tariffs are a lot more effective than Union strikes. It forces the American Consumers to pay more when they choose to "off shore" their spending.
I mean they are getting the products and services that are cheaper since many of those countries do not protect employees, environment, etc. May as well force them to pay some of those savings to the US government to help fund welfare, etc.
Where as Union strikes just hurt a company... which is bad for the company management and employees. :-(
And as I noted above and in the past, it seems that those who scream "support US Unions" the loudest often are the ones driving the Prius, Subaru, VW, BMW car, etc...
I think the tariffs are a lot more effective than Union strikes.
When you are given a tax cut, do you keep it or do you give it to someone else? Managers of businesses aren't there to raise the wages of workers, it's their job to increase profits for their shareholders.
--Hiram
And for the unions, unfortunately, their "job" is to get more out of the company, regardless of harm to the company. Biggest mistake ever was when union leaders became elected and paid WITHOUT being employees of the company or industry they unionized. That meant they had to call a strike every so often to keep their job, even as those strikes caused rank and file workers to lose theirs.
Look at the big demand this time around, that GM RE-OPEN closed factories and ADD workers. They deliberately make the company less competitive, and then demand the company not try to improve productivity, when the other way around, allowing productivity improvements and capital investments, would offer them more pay in a stronger company. Fools. No wonder they vote Democrat.
Hiram,
The Managers job is to keep the company strong with a great stock price.
They always need to try to balance employee and investor engagement.
Unhappy employees are not very effective...
Jerry,
It seems a lot of these idiots voted for Trump last time... Remember all his promises of closed protected markets...
So, these "idiots" who believe that their union leaders did not properly represent their interests by supporting job-destroying strikes, company-destroying demands and Democrats, are out of line?
Just re-read your description of your company. Mine had a similar problem, that the business was cyclical. Their solution was to employ lots of part-time (students, mostly) during the peak summer season. Problem was that the union demanded they join the union and be paid union wages, including layoff pay. Not possible in our highly competitive business and so the plant moved to Mexico. What a great victory for the union! :=/
Jerry,
I do wonder if you will ever acknowledge that Trump is a RINO...
We had some seasonality, but mostly it tied to the economy. (~8 year cycles)
I don't think Trump is a RINO at all. He's a better conservative than any Republican since Reagan. Maybe not a Republican; but it so happens that his practical ideas land on the Republican side of the ideological divide. Were it not so, Democrats wouldn't be in apoplectic overdrive.
And this RINO isn't endangered; his horn doesn't sell for $20000/kilo. He is not Sumatran or Javan, and he's certainly not black.
Our business-- construction, was strictly seasonal and predictable. The business cycle made far less difference. Point is, the union lost everybody their jobs. That they wanted all members to vote Democrat was just a symptom of the larger malady.
Trump is a fricking spend thrift who is mortgaging our children's future.
Please feel free to keep your head in the sand.
"...and he's certainly not black."
The horror!
Moose
Moose, you have a talent for missing the point. The Javan and Sumatran rhinos are the most endangered, and the African black rhino is close behind.
John, if I believed that Trump was in charge of the nation's purse strings, I would be concerned. But I am enough of a Constitutional scholar (unlike Obama) to know that such power belongs to Congress. And that any Republican who dares suggest any sort of fiscal restraint gets hounded unmercifully by spendthrift Democrats.
Like unions believe they should run the company for the good of their members and the exclusion of the stockholders, Democrats believe they should run the country, to the exclusion of the lowly taxpayers.
I know what your point was, but someone who is awake wouldn't have phrased it that way.
"And that any Republican who dares suggest any sort of fiscal restraint.."
Such a person does not exist in our government.
Moose
Jerry,
The spending bill does not become law without the POTUS' signature...
The buck stops with him...
And he also has been proposing big spending increases of his own.
The good thing about Obama and the Congress is that they kept the lid on spending, where as Trump and Congress have blown the lid off it.
And one must not forget that the GOP and Trump had a majority for the first 2 years...
"Obama and the Congress is that they kept the lid on spending"
So explain why the deficit more than tripled in the first year of Obama's term, and didn't come down substantially after that.
Moose, such critters do not exist because they have been driven into extinction by unrelenting attacks by those who believe there is no end to the amount of good that can be done with somebody else's money. Even if it must be borrowed or just "printed" like AOC insists.
Some Facts
According to the US National Bureau of Economic Research the Great Recession started in December 2007 and ended in June 2009. President Barack Obama was sworn in on January 20, 2009, so it had already started before he entered office.
The first thing you notice when looking at the federal deficits from fiscal 2008 (the US government fiscal year ends in September) is that it increased by almost $1 trillion from fiscal 2008 (before Obama was elected) to fiscal 2009 (which was based on Bush’s last budget). It remained over $1 trillion per year for four years and got below Bush’s last years deficit in fiscal 2015. It continued to decrease until Obama’s last year and increased again in Trump’s first year in office.
•Fiscal 2007: $161 billion (next to last year of Bush’s second term)
•Fiscal 2008: $459 billion (beginning impact from the Great Recession)
•Fiscal 2009: $1.4 trillion (Obama’s first year, Bush’s budget and in the teeth of the Recession)
•Fiscal 2010: $1.3 trillion
•Fiscal 2011: $1.3 trillion
•Fiscal 2012: $1.1 trillion
•Fiscal 2013: $680 billion
•Fiscal 2014: $485 billion
•Fiscal 2015: $438 billion
•Fiscal 2016: $587 billion
It is clear that the almost $1 trillion jump between fiscal 2008 and 2009 was due to the Great Recession. Tax receipts fell, expenditures rose and Obama and Congress passed the American Economy and Reinvestment Act to combat the recession.
Trump’s deficits to hit $1 trillion in a good economy
There are components to the federal budget that Trump and Congress essentially don’t have control over, those being entitlement programs such as Social Security and Medicare. However, Trump and Congress (essentially Republicans) passed a tax bill that cut receipts to the government and increased spending, both on the military and various other programs. And to add more fuel to rising deficits the soon to be enacted budget compromise (unless something derails it) will add almost $230 billion in fiscal 2020 and 2021 combined.
Using the May 2019 deficit estimates from the CBO, adding the budget deal and assuming a 3% increase in the amount of additional deficits in fiscal 2022 Trump’s deficits will be just shy of $1 trillion next year and over that figure going forward.
•Fiscal 2017: $665 billion (Trump’s first year of his Presidency)
•Fiscal 2018: $779 billion (9 months of tax cuts being in effect)
•Fiscal 2019: $896 billion
•Fiscal 2020: $990 billion
•Fiscal 2021: $1,092 billion
•Fiscal 2022: $1,250 billion
Comparing Trump’s deficits to Obama’s
Similar to comparing Trump’s job growth during his 29 months in office to Obama’s last 29 months where Trump’s Presidency has generated almost one million fewer jobs, Trump’s federal deficits are projected to zoom past Obama’s when you combine the last four years of Obama’s Presidency to Trump’s first four years. In fact Trump’s could approach doubling Obama’s.
There are a few timeframes that are useful to analyze given that a new President doesn’t really have control the fiscal year they are elected and inaugurated and may have minimal impact the first full year. To account for the time lags, below are three rolling four year timeframes for Obama’s last four years in office and Trump’s first four years.
Cumulative rolling four years of deficits under Obama:
•2012-2015: $2,191 billion (last four years of Obama’s Presidency)
•2013-2016: $2,171 billion (last three years and first year of Trump’s)
•2014-2017: $2,471 billion (last two years and first two years of Trump’s)
Under Trump:
•2017-2020: $3.330 billion (first four years of Trump’s Presidency, one year of increased spending)
•2018-2021: $3,757 billion (second to fourth year of Trump’s Presidency, first year after and two years of increased spending)
•2019-2022: $4,228 billion (last two years and first two years of next term)
As you can see the timeframes that use the actual last four years of Obama to Trump’s first four is actually the most favorable for Trump as his cumulative budget deficit is only $1,139 billion more. As time goes by Trump’s are worse by $1,586 billion and then $1,757 billion, respectively.
So Obama cut the deficit he was given by half...
•Fiscal 2009: $1.4 trillion (Obama’s first year, Bush’s budget and in the teeth of the Recession)
•Fiscal 2016: $587 billion
And Trump doubled it.
•Fiscal 2017: $665 billion (Trump’s first year of his Presidency)
•Fiscal 2022: $1,250 billion
And that is we do not encounter a recession. Which would make it worse.
"...those who believe there is no end to the amount of good that can be done with somebody else's money."
Those who believe that collectively we can do great things that we wouldn't be able to do on our own.
Fixed it for you.
Moose
Moose, let me fix that for you. "the collective can do great things that don't need doing at all."
And John, thanks for all the figures but you are not solving the problem. Obviously, getting a different President doesn't solve the problem. Not even changing control of Congress solves the problem. Only solving the problem solves the problem, and we cannot seem to do that with politicians as the supposed problem-solvers.
And back on topic, the problems at GM arise because one side--the union-- has coercive authority over the effective operations of the other. Government has coercive power over the operation of the free market, so here we are.
Jerry,
Don't you get tired of playing the victim?
We the people vote for our politicians.
We the people want lower taxes and more services / money.
There is the problem...
Remember how fast you cried foul when I recommended means testing social security and Medicare benefits... You are as greedy as everyone else. This is not a government or union problem. It is a human nature problem.
"the collective can do great things that don't need doing at all."
I'm glad that you don't think military spending is important, or infrastructure, or education, or police, or firefighters, or...it's a VERY long list...and illustrative of your disdain for the people.
Moose
Moose,
I think the Left and Right are pretty well aligned that national defense, infrastructure, K-12 education, police, firefighters, etc are excellent uses of tax dollars. (well light rail and bike paths may be points of contention)
Mostly it is which citizens get cash or personalized services from the tax payers where they differ... And if they are in some expected to perform, change, improve, etc in exchange for those dollars of assistance?
You will never get me to agree that promoting the general welfare isn't something we should do collectively.
Moose
By "promoting the general welfare"...
I assume you mean taking more from people who learn, save, have fewer children, invest, work, etc so that more can be given to those who do not?
And how again did that turn out during the war on poverty????
Do you think the General Welfare of the poor kids with single mothers has been maximized. :-(
Notice that "promote the general welfare" occurs next to "PROVIDE for the common defense"? It doesn't say PROVIDE the general welfare, and certainly no reading can be construed to say to promote any INDIVIDUAL'S welfare.
And I really don't care what you think government should spend money doing. You can prioritize any way you want. My point is that somehow the amount of spending must be reduced, substantially. And when you set those priorities some things will be reduced or cut, and some people are going to be unhappy that the gravy train no longer stops at their station. Tough. Anything else is magical thinking.
"My point is that somehow the amount of spending must be reduced, substantially."
Well congratulations are in order. Your Führer's new SNAP eligibility rules will save all of $2.5B, a whole .05% of the 2019 budget. Meanwhile, the welfare of real people is negatively affected. Now, if only we could get the SNAP budget to zero, those stupid poor people would finally get it.
Removing environmental protects is the opposite of promoting the general welfare.
Kicking people off health insurance is the opposite of promoting the general welfare.
There a great number of things that Republicans are for that are directly contradictory to the idea of promoting the general welfare, and they have precious little to do with individual welfare.
When people who need money get money, they spend it. When people who don't need money get money, they hoard it. It's easy to see which is better for the economy, and thus better for the general welfare of the entire citizenry.
You are literally on the wrong side of everything.
Moose
I know we need consumer spending...
But we also need investors...
Somebody has to own the office buildings, malls, manufacturing facilities, etc where we all work...
They aren’t needed if the rich are the only ones with money.
Moose
Thankfully most of us Americans have enough money to live happy lives and to buy stuff.
"Meanwhile, the welfare of real people is negatively affected."
Moose, you have a very curious idea about the meaning of the GENERAL welfare. If I tax one person to give to another, how is that the GENERAL welfare? That's a rhetorical question, and the answer is it isn't. More importantly, it is highly contrary to the general welfare of the nation if our government spends us into hopeless debt or prints money so fast that we ALL lose purchasing power. Poor people hit hardest.
You seem to hold this completely backwards notion that wealth transfer is wealth creation. "When people who need money get money, they spend it." So robbing banks is a great way to stimulate the economy? Everything depends on HOW people who need money (which is EVERYBODY) get money.
“If I tax one person to give to another”
That’s not how taxes work.
“wealth transfer is wealth creation”
Funny. It’s the very thing that you consider to be one of the best aspects of capitalism when wages haven’t effectively risen in 40 years, stealing the wealth from the middle class and placing it in the coffers of your precious corporate overlords...the very people whom you’re so concerned about having an extra dollar taken from so that children don’t starve to death.
Moose
The point is: what YOU call wealth creation is actually the greatest transfer of wealth this country has seen, from the middle class to the 1%.
Moose
False. The only real wealth creation is in people working. Capital, the accumulation of past work, allows wealth creation per worker to increase. Simple, fundamental economics.
I point out to you, however, that during poor economic times, those whose income is based on use of capital fare much better than those whose income is based on labor. Therefore, the income gap that I assume annoys you so greatly, increased much faster under Obama than it has during the Trump Presidency, while EVERYBODY is making more, and fewer are dependent on welfare. Terrible, terrible times. :-/
The only FORCED transfer of wealth occurs when government taxes one person to give to another, with NO return from that other. That is, if government buys something from you, you expect to be paid. If government GIVES you a welfare check, you and they both expect to you to take another and that is all. We cannot afford to pay people to not work, just that simple.
And since we are talking basic economic reality and (hopefully) not liberal fantasy, how long can you spend more than you make, before something goes wrong in your personal economic situation?
Moose,
Of course the Liberal philosophy is based on taxing one person and giving it to another. My family pays a much higher rate on our earnings so another family can get free checks and services...
My family learned, worked, scrimped, saved, invested, etc and therefore have more wealth and bigger incomes. One of the consequences is that we pay much more in taxes. It is kind of a backwards system if you want to encourage such behaviors within the citizenry... :-)
How do you think it works?
Moose,
I'll try again... The reason wages have not increased is because consumers are happy to pay less even if it means jobs are sent over seas or unions are destroyed.
I mean I will pick on our friend Laurie again. Now she is pro-union and pro-American worker and yet she chose to save some money and get the car she personally wanted when she bought her almost ZERO domestic content Prius so long ago.
Is she a Corporate Overlord or just an American looking for a good deal?
The unfortunate reality is that me as an investor makes money no matter where Laurie buys her car since I own international stocks in my retirement plan.
Jerry,
You are so funny...
The wealth gap actually follows the stock market and real estate values...
So if the gap grew more under Obama it was because both of them grew faster him than under Trump.
The reality is as long as Moose supports bringing in ever more low cost workers and allowing the consumers to freely buy from the cheapest workers world wide, incomes will stay low for our workers.
Didn't you just prove my point? One of the big problems at GM (and many other companies, like steel) was that the money which MIGHT have gone into capital improvements, raising productivity and wages, was instead spent surrendering to wage demands from the union that were NOT supported by the improved productivity of union workers. Look at the current demands: re-open 4 closed plants that were not producing value-- outdated equipment and work rules.
Yes, the wealth gap follows stocks and real estate-- those things enable "the rich" to prosper during economic stagnation like Obama created. Economic growth, on the other hand, like a rising tide, lifts all boats.
Middle Class decline
<a href="https://www.marketwatch.com/story/americas-middle-class-has-lost-nearly-30-of-wealth-2015-12-09”>Loss of Wealth</a>
Moose
Loss of Wealth
Jerry,
The recession started under Bush, ended under Obama and has continued under Trump.
The only difference now is that $500 billion more of it is being borrowed and will be a huge anchor for our kids and grand kids. At least they will have something to remember you by. :-)
"I remember Great Grandpa Jerry... Isn't he the one who liked a President who stole all our money..." :-)
Moose,
I have no doubt that many people are making less and spending more.
As I said, American Consumers want low prices, good quality, new features, etc and they do not care where it comes from.
Unfortunately folks like you want higher compensation, more work rules, more benefits, more job security, more regulations, more refugees, etc.
This is a BIG Problem...
If you really want to support legal American workers...
- Support import tariffs
- Support deporting illegal workers
- Support immigration policy that attracts doctors, nurses, engineers, programmers, business start ups,etc
- Buy American made even if it costs you more
- etc
John, you're quoting technicalities. The "recession" ended under Obama but real economic growth started under Trump. And as for the subject, the real decline of American manufacturing wasn't the competition from abroad, but the unreasonable demands of unions here making us LESS competitive. Example: at one time, the oldest steel plant in Japan was newer than the newest steel plant in the USA. But the steel workers here were getting much higher pay. That is, until 90-95% of them were laid off because of Japanese competition-- lower cost and higher quality from new processes and equipment prohibited by US unions.
I think my GDP curve disagrees with your opinion.
Please provide a source explaining how growth changed.
Also please remember 500 million dollars a year of that “growth” is being stolen from the opportunities of your children and grand children. :-(
As for comparing against Japan... That is hard since their executive and worker cultures are very different.
The American unions are part of the story... But definitely not the whole story.
Not the whole story, indeed. Time was when the Japanese were looking to us for management advice and such, their delegations always came in threes-- company, union and government-- and they cooperatively figured out the best approach to out-compete us. Here we have a three-way adversarial relationship, competing among ourselves rather than against our actual competitors.
And we have 7 times the lawyers per capita that Japan has; surely that is a factor. Ever notice the extensive instructions on products that say things like "do not use toaster in bathtub"?
There is the this belief among liberals that somehow evil corporations are cheating workers and customers and the public at large, at will and at whim. Yet so long as there is competition that simply cannot happen. Unions have monopolies, not competition, and government has a monopoly on force--taxation and regulation. There's your problem.
Jerry,
At least you are consistent...
Blaming 2 of the 3 participants in the conflict.
CEO Compensation by Country
Well, at least you are back to the old canard of CEO pay as being the corporate side of the problem, rather than some nebulous "evil corporation." Your cite does, in fact, more or less fully explain why this is NOT a problem, and makes the US more competitive, rather than less. CEOs tend to be paid based on what they contribute to the company-- productivity, if you will-- while union demands typically are for more pay for LESS productivity. GM's bankruptcy was driven by unsustainable union agreements as much as anything. Now they're at it again.
CEO vs Worker Pay
"Since 1978, and adjusted for inflation, American workers have seen an 11.2 percent increase in compensation. During that same period, CEO’s [sic] have seen a 937 percent increase in earnings."
"CEOs tend to be paid based on what they contribute to the company-- productivity, if you will"
It's laughable to think that CEOs have somehow become nearly 84 times more productive than the workers in this country over the past 40 years.
It's simply remarkable how stupid your comments are.
Moose
Jerry,
I am with Moose here... Our incestuous Executive compensation and Company Board systems have started driving short term counter productive decisions that are often bad for workers, investors and companies.
Well, you are both correct, except Moose always wants to add insult to his otherwise valid point. Yes, executive pay DOES drive short-term thinking, which is why I subscribe to "The Peter Prescription" idea of executive pay. I am also aware that, like everything else, CEO pay is subject to competition. I have several stories, including the personal about deciding NOT to pursue a management track.
The real problem for GM, besides the obvious, monopolistic union and government interference in management decisions, is the forsaking of capital investment to satisfy those external demands and to concentrate on short-term profits.
So yes... There are many reasons why American Manufacturing businesses struggle...
I bought a similar dining room set for about the same price. It was manufactured in Vietnam. I can guarantee this can not be Made in America for the same cost. No matter the capital investment.
"As I said, American Consumers want low prices, good quality, new features, etc and they do not care where it comes from."
John, if you care about quality, you'd buy the stuff made in North Carolina. You're likely not getting the same quality from Vietnam.
Moose
It is a table and chairs... If the chair and table allow me to eat, I am happy.
Also please note that I have almost no say to what furniture, paint or flooring is bought for our house.
The lady of the house seized that control decades ago when I told her everything should be painted antique white... :-)
"If the chair and table allow me to eat, I am happy."
Great. So you're no better than any other American who buys foreign crap, thus killing American jobs.
I'm so relieved to never have to read your sermonizing on the subject any longer.
Moose
So, we allow less expensive wooden furniture to be made in Vietnam, and the US will make the the expensive "craftsman" stuff, plus the metal and plastic stuff with heavy capital investment. I've seen it many times, where the US can compete with anybody, depending on the product, where one US worker with a machine outproduces 20 "cheap labor" people.
Again, the problem is that union and government demands make that capital investment less employed than it could otherwise be, resulting in less competitiveness.
Moose,
Did you forget that I am somewhat of a fiscal conservative and mostly anti-union?
Though I try to BUY American and Buy Local for the good of my friends and neighbors, I am not the one swearing that:
- corporations and rich people are bad for off shoring
- unions, government taxes, government regulations, etc are good
Thus I am not the hypocrite when I buy foreign, send my money to foreign workers, pay foreign taxes instead of US taxes, etc. I am just a financial moderate making the optimal choice for my household.
Moose,
By the way, yes... When I spend my money for high foreign content goods and services, I am sending jobs over seas.
I regret this, therefore I at least think about it as one of my buying criteria. Do you?
Jerry,
For better or worse we live a "disposable product" culture.
If it breaks or goes out of fashion... We toss it and buy another...
If you think the US Manufacturing sector will survive on "Craftsman Products" I think you are sadly mistaken. I just thank heavens for our High Tech sectors like my employer and the medical device firms.
As long as there are countries out there who are willing to pollute their air, water, soil, etc. And let their citizens live in poverty. It is going to be hard to compete.
And remember that most manufacturers are no longer union shops.
Fewer union shops (most unions are now public employees, which tells you something) are because the unions tend to put their employers out of business, or because union workers figure that out beforehand.
But I disagree. People willing to pay high prices for hand-crafted products will buy American because that is part of what they want.
And the beauty of capitalism is that it is the poor countries that cannot compete with US. Want examples?
Jerry,
Yes I would like examples. My guess they will products that are high volume, high tech, lend themselves to automation or have a high cost of transport.
Please remember that there are plenty of artisans in the developing world. And they work for 10% of what are artisans earn. :-)
Here is an interesting article.
"The long-running U.S. trade deficits and the emergence of China as a major creditor nation to the U.S. seem to be the result of two major economic forces: (1) the breakdown of the Bretton Woods system, which caused the U.S. currency and U.S. government debts to become the world currency and a global form of liquidity and store of value; and (2) the shifting of comparative advantage in goods production, which caused the reallocation of labor-intensive manufacturing from the U.S. to nations with cheaper labor.
Given this perspective, a trade war with China may not necessarily solve the U.S. trade imbalance problem. There are three likely outcomes from an extended trade conflict with China: (1) Chinese imports will become more expensive; (2) U.S. trade deficits will shift to other countries with similar comparative advantages in producing labor-intensive goods; and (3) U.S. exports to China will become more expensive as a result of China’s retaliation. None of the above is likely to increase U.S. exports and reduce its trade deficits.
Most important, a trade war with China cannot stop declining American manufacturing employment if it is driven mainly by rapid technology progress, such as automation, robots and artificial intelligence. Instead, it may significantly reduce American consumers’ welfare and cause the U.S. to lose its leadership in free trade and globalization.
The U.S. has a long, successful history of promoting public education that has allowed workers to remain skilled and adaptable to a changing world. Therefore, the U.S. may need to more effectively promote education and job training programs that will allow Americans to better compete in a rapidly changing global environment. This policy will not necessarily increase manufacturing employment per se but would train workers for highly skilled manufacturing and services, which are the future of the economy."
"I regret this, therefore I at least think about it as one of my buying criteria. Do you?"
I consider the manufacturer or retailer or grower in the majority of my purchases.
Moose
Example 1: Stamped metal parts. Phillipine labor $0.50/hour, production capacity= 60 pcs/hour, cost per piece = 0.8 cents. US labor $20/hour (plus 100-ton press), production capacity = 1200 pcs/ MINUTE or 72,000 pcs per hour. Cost per piece = 0.3 cents.
"Most important, a trade war with China cannot stop declining American manufacturing employment if it is driven mainly by rapid technology progress, such as automation, robots and artificial intelligence."
But that is exactly what is SUPPOSED to happen when capital investment displaces labor-intensive products. The problem at GM was that this was not allowed to happen, while our foreign competition outperformed us by that same measure. Rapid technical process is supposed to create those additional jobs by a) selling these technologies to the rest of the world, b) servicing and supporting these technologies, and c) moving into service industries. All of these require additional education and skills from American workers. And that is the next problem.
"The U.S. has a long, successful history of promoting public education that has allowed workers to remain skilled and adaptable to a changing world." First of all, comparing US students to the worldwide competition (TIMSS) shows that we not only are not the best, but the longer our kids are in unionized public school, the further down the rankings of international competition they fall. Second, and applicable here, is that unions continue to insist their workers get more money for the same job, and that workers stay on that job even if they become unnecessary through automation, like the railroad union once insisted upon. Even when the companies offer to reeducate workers for better jobs, the unions often refuse.
Moose, Excellent...
What brand and model of:
- Car
- Cell Phone
- Major appliances
did you end up buying?
Jerry,
The American Corporations were egotistical near monopolies who made a choice to stop focusing on their quality and customers. They chose long ago to ignore the wisdom of Deming and paid for it BIG TIME. Where as the Japanese companies welcomed him whole heartedly and near worshipped him.
It was the corporate leadership who made the big mistakes, though the unions sure did not help.
As for eliminating poverty and helping kids...
One more question?
"Example 1: Stamped metal parts. Phillipine labor $0.50/hour, production capacity= 60 pcs/hour, cost per piece = 0.8 cents. US labor $20/hour (plus 100-ton press), production capacity = 1200 pcs/ MINUTE or 72,000 pcs per hour. Cost per piece = 0.3 cents."
Why isn't the Phillipines' company buying the higher speed punch press in your example?
Please remember that China has BOTH lower cost labor and modern machines...
Do you think they are dumber than Americans or something?
the Philippines company does not have access to capital or to the more highly trained operating and maintenance employees required, ALSO a product of capital investment. by trading what they have-very low cost labor-- they will eventually develop a capital base.
China has both low-cost labor and modern machines because they don't have unions, they don't have massive government interference, and in many ways they are better capitalists than Americans are. It would be great if General Motors would just fire every UAW worker and hire only some of them back, but government will not allow that. So here we are.
Oh, and I should relate another story. There was a large Frigidaire plant near Dayton Ohio. Because they were part of GM, they were represented by the UAW. One day some union wizard observed that other autoworkers were making $14 per hour and the Dayton employees were only getting $10 per hour. They went to management and demanded they make $14 per hour; management explained they were in a highly competitive business and simply could not substantially increase wages, so the union went on strike. I'm not sure how long this went on, a few weeks, with no progress in negotiation as the union held fast to their demand. Finally management called in the union negotiators and conceded, saying, "tell you what we can do. We have 14,000 jobs at $10 an hour or 10,000 jobs at $14 an hour. You pick." The strike was over.
Jerry,
As long as the Phillipines and China have the rule of law and low cost labor... They can get capital. Multinational corporations have no problem funding world class factories in low cost countries.
I do agree that unions, government, lawyers and welfare are part of the problem.
However if businesses were better they would not have to deal with as many unions, regulations, lawyers, etc.
Unfortunately many managers are greedy and self serving... Therefore they get the burdens they helped to create.
" if businesses were better they would not have to deal with as many unions, regulations, lawyers, etc."
You are going to have to explain that one to me. How does GM not have to deal with a union, or with OSHA, NTSB, EPA, Sarbanes Oxley, etc. etc. etc.?
Have you forgotten one of my favorite sayings already...
"If you have Unions... You probably deserved them."
And why again do you think these were created in the first place?
OSHA, NTSB, EPA, Sarbanes Oxley, etc. etc. etc
So, do the kids of Minnesota "deserve" the Teachers unions? If that is one of your favorite sayings then you must very, very old. Unions have not been useful for well over 50 years. And the fact they now represent only about 6% of private-sector American workers, and 34% of government workers tells us that their principal effect has been to extort and tribulate their employers, unless the employers are the government.
Why do YOU think all those powerful agencies were created to do what unions and law were supposed to do? Wasn't it to "do something" that enlarged government power, accomplished little and made businesses less competitive? And how have these well-intentioned (supposedly) agencies morphed into the monsters they are?
The MN Teacher's Unions are a blessing and curse for MN's Children...
They do tend to shield the few ineffectual teachers and drive an ineffective compensation model.
However their lobbying does ensure that the schools stay well funded which helps all students and keeps teachers entering the field.
Or our schools may look like Mississippi's... :-)
Sorry Jerry....
Unfortunately there are greedy self centered business owners and managers who had no problem skimping on safety, skimping on waste disposal and misleading investors...
Businesses are burden by these organizations to protect workers and us from unscrupulous greedy people.
So, the 90% or so of your fellow citizens who work for businesses burdened by UNNECESSARY OSHA, EPA, etc. regulations are all greedy and unscrupulous? Enron did wrong. So why do the rest of us undergo very troublesome, costly and useless Sarbanes-Oxley audits every year?
Unfortunately even if it is only 1%...
We all carry the burden to protect innocent citizens, consumers, workers and investors from them....
Just like why we all have chips in our credit cards today. Some small number of unethical people were committing fraud, and all of us have to wait for the transaction to clear in a secure manner.
Wouldn't it be nice if everyone was law abiding and considerate of others.
As for SOX, maintaining faith in our market valuations is very important.
It is unfortunate that a few companies ruined that trust for the rest of us. :-(
So, punish those few companies, according to law, and leave the rest of us law-abiding companies alone? No, apparently we need a vast new bureaucracy nit-picking every detail, costing a fortune just to operate an honest business. It's a bulldozer to pluck a dandelion. You are aware, are you not, that the cost of federal regulation is well north of $1.5 Trillion/year?
Jerry,
If you only look at the costs, it may seem silly.
Thankfully it seems there are more offsetting benefits.
It is interesting how these folks neglected to evaluate the benefits of clean air, clean water, employee safety, transparent trustable markets, etc.
Well, those who evaluated the benefits are at best guessing on most of this. What is the benefit of something NOT happening, if it would not have happened anyway?
Sure, some of these regulations, like allowable discharges of proven harmful chemicals, can be reasonable and create a benefit. Though it may be hard to quantify. What is the benefit of having fish in the Cleveland River, where before there were none? For that matter, what is the value of having fish in Red Dog Creek that were never there before, even though the nearby lead mine wildly exceeds EPA standards?
Sometimes there is no line between sensible regulation, cost-effective regulation, and crazy overregulation. To argue there is none of the latter is to believe that big corporations are evil, somehow, and want to kill their customers. I find it far easier to believe that self-inflated bureaucrats regulate for fun and fantasy, and without care for the costs they generate.
WH OMB Report
CEI Rebuttal
I have a simple rule for water quality...
Manufacturing and mining should not be allowed to introduce anything new and harmful into the water supply.
That is just them passing their cleanup costs on to others.
OK, but EPA rules say "heavy metals may not leave the mining site." It is a LEAD mine!! The Natives who operate it care more about their environment than some pointy-headed bureaucrat in DC ever will. The stream nearby now has fish for the first time in memory. Removing the lead actually IMPROVES the environment, EPA wants to shut it down. Less than worthless regulation.
On the other hand, the EPA demands cleanup of a mine in Colorado, takes it over, and dumps a few million gallons of mining waste into the river, killing everything. Examples abound of bureaucratic foolishness, and it all costs money that might be better spent on improving the product and producing jobs.
From your cite: "all estimates presented in this chapter are agency estimates of benefits and costs,..." Fox. Henhouse.
I am not sure I can help you understand why clean fishable / swimmable rivers are an economic and quality of life benefit?
And it looks like the Natives are the one concerned about the emissions from Red Dog Mine…
Red Dog Update
Which cite? The CEI anti-regulation piece or the WH OMB report?
Oh, there is a clear benefit to reducing pollutants, especially harmful chemicals, from the water. But it is difficult to quantify and thus establish a "cost/benefit." And the problem is to identify which quantities and which chemicals and which sources are the contributing factors. EPA rules tend NOT to follow science or economics. Limits on reducing pollution reach that point at which each incremental reduction costs 2-10 times as much as the previous percent, and at which the benefit DECREASES by a similar amount. The point is that EPA regulations are a COST to business that, unless minor or offset by a general societal benefit, hamper US companies in world competition. I claim those costs are excessive. And it isn't just the EPA.
Oh, and about that lead mine. I'm sure if you went there and talked to the natives you would hear a very different story than the official government and environmentalist sources who have never been there.
How again do you justify any manufacturer creating any waste and sending it downstream without treatment?
Or in the case of the mine, an organization freeing millions of tons of chemicals from where they have been buried and reintroducing them into the atmosphere?
How much is okay? Who do you think should decide?
"I'm sure if you went there and talked to the natives..."
If you haven't done so yourself, please do shut up about what you're sure of.
"But it is difficult to quantify and thus establish a "cost/benefit."
The value of our environment is intrinsic. It does not require humans to quantify it or establish a cost/benefit. To do so belies your ignorance and hubris.
Moose
Spill Cleanup
Tribe Concerns Pebble Proposal
This reminds me of the Wind Turbine fight out near the lake...
The farmers who will make money off the Wind Turbine projects are all for them...
The people who make no money and dislike looking at them are against them...
Who should make the call?
"If you haven't done so yourself, please do shut up about what you're sure of." I HAVE done exactly that.
Moose, your statement is naive at best. According to you the value of the environment is not only intrinsic, but presumably infinite. We could NEVER alter one bit of nature and therefore we all die. There must at some point be a tradeoff between the cost of "disturbing" the environment and the benefit to humankind of doing so. For example, are the deaths of thousands of birds caused by windmills worth the benefit we derive from the tiny bit of electricity they produce?
"How again do you justify any manufacturer creating any waste and sending it downstream without treatment?" -- John
Well, I know that waste heat from nuclear power plants in Florida are keeping the endangered manatees alive.
But "any manufacturer" and "any waste" and "without treatment" covers millions and millions of possible combinations, and each has various costs and degrees of effect on the environment. For example, I know that untreated slaughterhouse waste was found to dissipate within 6 miles of the source. I don't think anybody should dump truly hazardous waste, untreated, but regulations ought to be within some reason. Is requiring GM to make electric cars, which require mining, processing (and eventual disposal) of tons of toxic metals, an environmentally friendly regulation?
Yes. As long as the mine manages it tailings and waste water well.
Besides the fact that conventional vehicles also require mining.
Please provide a source regarding the manatees. Though I agree that rarely would heat transfer be a problem.
One more note, thankfully due the cost of mining those nasty materials and our new focus on caring for our world, new vehicles are designed with recycling in mind.
Moose, I am somewhat with Jerry. A chunk of desolate land in Alaska does not inherently have value just because it exists.
Except maybe to the few critters who live there.
So all of this is about balancing costs and benefits for the land owner and other people / animals who will be impacted by a new proposed activity.
That is part of governments primary function.
“A chunk of desolate land in Alaska does not inherently have value just because it exists.“
I don’t think you understand the meaning of the word ‘desolate’. If you’re talking about ANWR, it’s full of life, life that would be endangered and lost if humans used that land for human benefit. It’s value is beyond measure. But hey, I’m just a pro life guy. I guess you and Jerry are not.
Moose
Red Dog Mine Photo
Red Dog Mine Wiki
Alaska Mines Site
Please note... Apparently the Artic National Wildlife Refuge is no where near the Red Dog Mine.
Moose,
So Jerry seems against the EPA's good works.
I am fine with the way things work today... Give and take, negotiation, public meetings, etc.
What do you see as success?
Stop all mining, give up our cars and electronic devices?
OK, you two have it your way. Every penny of the $1.75 Trillion in the cost of government regulation does NOT cost jobs, does NOT reduce economic growth, and magically produces untold tangible and intangible benefits that we simply cannot do without.
But that's really beside the point. I assume you are going to make a similar argument that the GM strike, which damages GM economically, will result in GM being forced to reopen 4 closed plants and the rehiring of all employees at higher wages, will magically be of great benefit to GM in global competition?
BTW, I've been to ANWR, too. It's a vast area and the proposed drilling is in an area the size of a postage stamp on a football stadium. (and the actual drill sites are a tiny fraction of that.) Current drilling at Prudhoe Bay has definitely affected the caribou. The herd is now 4 times the size.
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