View Full Version : NY Post - Don't Get That College Degree ... it's not worth it !
Gia2608
07-24-2009, 01:40 PM
I live near Chicago, and unfortunately I'm seeing companies offer an even lower salary, and expecting more. Places think nothing of offering $10 hour for a job with no benefits, yet requesting a bachelors (or even masters) and experience. Doesn't matter whether someone has a degree or not. I have a masters, experience, and many skills, yet I'm not being offered even $30,000 jobs, which here is low, and much less than I previously made.
Not going to lie, I have to. There are many, many jobs here paying $8- $10 an hour, so after taxes, what is that $350 take home a week, a little less? My apartment is $900 a month, and it's a one bedroom, which is pretty typical here. Nevermind my car payment, car insurance, electric, internet, credit card payments, cell phone, groceries and clothing. Obviously if a company has a dress code, you are expected to have said clothes. So even though I have an education and have worked since I was 14 fucking years old I should live with a roomate? I don't fucking think so. I think I will move to Thailand and work as a consultant to the US companies that are sending manufacturing jobs there. What do they speak in Thailand? I will order the Rosetta stone before the last pennies I have in the bank are gone.
Kellydancer
07-24-2009, 01:52 PM
Not going to lie, I have to. There are many, many jobs here paying $8- $10 an hour, so after taxes, what is that $350 take home a week, a little less? My apartment is $900 a month, and it's a one bedroom, which is pretty typical here. Nevermind my car payment, car insurance, electric, internet, credit card payments, cell phone, groceries and clothing. Obviously if a company has a dress code, you are expected to have said clothes. So even though I have an education and have worked since I was 14 fucking years old I should live with a roomate? I don't fucking think so. I think I will move to Thailand and work as a consultant to the US companies that are sending manufacturing jobs there. What do they speak in Thailand? I will order the Rosetta stone before the last pennies I have in the bank are gone.
I don't like it either, but that's how it is right here now. It bothers me because I have two degrees, experience and skills and shouldn't have to make the same as someone with none of that. I've gotten nasty with employers offering me these low salaries. Not just me, everyone I know seems to be in this situation. I know someone with a Ph.D who was a professor who can't find a teaching job. His problem is because colleges are either going to adjunct (part time no benefits) or hiring professors from other countries (my pet peeve).
Earl_the_Pearl
07-24-2009, 02:38 PM
My apartment is $900 a month, and it's a one bedroom, which is pretty typical here. ..., electric, internet, ..., groceries and clothing. ...I should live with a roomate? I don't fucking think so.
What if said roommate paid the above had a key but didn't live there full time? Top shelf adult beverages are included in the groceries if not for you for your dancer friends. :)
Earl_the_Pearl
07-24-2009, 03:12 PM
I've gotten nasty with employers offering me these low salaries.
That is counter productive and does you little good and much harm; they will never consider you for employment if you return when the economy recovers. They offer what people will accept for a new hirer. Most aren't dancers and and don't expect those wages.
Gia2608
07-24-2009, 03:15 PM
What if said roommate paid the above had a key but didn't live there full time? Top shelf adult beverages are included in the groceries if not for you for your dancer friends. :)
I'm a big fan of liquor.
Melonie
07-25-2009, 05:25 AM
It bothers me because I have two degrees, experience and skills and shouldn't have to make the same as someone with none of that. I've gotten nasty with employers offering me these low salaries. Not just me, everyone I know seems to be in this situation. I know someone with a Ph.D who was a professor who can't find a teaching job. His problem is because colleges are either going to adjunct (part time no benefits) or hiring professors from other countries (my pet peeve).
The underlying point here is that globalization is causing downward pressure on the pay rates of all 'professionals', because unlike the unskilled there is no gov't mandate setting a 'bottom' for US wage scales. In the absence of a labor shortage ( of which there currently is no shortage, and in all likelihood there will never again BE a shortage in the US at least ), pay rates for 'professionals' will now be driven by the world's lowest common denominator. If this means that a doctor from Pakistan is willing to come to the US under an H1B visa and work for $100k a year, US medical school graduates will be hard pressed to find any opportunities that pay significantly more. If this means that a software engineer from India is willing to come to the US under an H1B visa and work for $40k a year, US graduates will be hard pressed to find any opportunities that pay significantly more.
The one area where global wage 'arbitrage' has been sidetracked by gov't regulation is at the unskilled end of the scale. In that regard, unskilled Chinese workers being paid $2 an hour must be compared to unskilled US workers guaranteed a $7.50 an hour minimum wage. However, the unintended consequence of the minimum wage is that it compresses US wage rate offerings into a tight range i.e $7.50 an hour for zero skills and zero responsibility, versus $9 an hour for some skills and some responsibility, versus $10 an hour for certain skilled positions requiring a college degree as others have already pointed out. Obviously this seriously kills all incentive to invest years of effort and tens of thousands of dollars in tuition for a net difference in income (after taxes) of less than $100 per week.
minnow
07-25-2009, 08:17 AM
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
College costs (tuition, etc) like healthcare has been rising faster than inflation. Soooo--- will "globalization" reach college tuition costs, resulting in college being relatively more affordable? OR, will the playing field be more like an endless loop Catch 22? It has often been said that the key to increased US competitiveness in the global marketplace is more education/training for citizenry. But, in the past several years, more US $$$, (and jobs) have flowed overseas. So, will the foreign recipients of these $$ be better positioned than US citizen to "bid" (and get) those college slots, thus further exacerbating the trade/brain drain imbalance? Tin foil hatters, grab your umbrellas!!::)
Perry
07-25-2009, 12:21 PM
I'm going to have to agree for the moment. My husband has a BS in mechanical engineering from a top 10 school. He's got over 2 years of work expeirience, graduated on the dean's list and is a very intelligent, confident-but not arrogant, and all around nice guy. So why the fuck can't he get a job?? He's got head hunters all over him - but prograhms keep getting cut due to the nasty economy and sorry state of our sorry ass state. And most of the companies that would normally be desperate for engineers have a hiring freeze.
My dad has a masters in mechanical engineering and is also out of a job. He's gone from making 6 figures to living in a trailer, and his wife has to keep a crappy minimum wage gas station job. He's a bit of a different story, as he's a very unpleasant and stubborn sort of person and I can see why companies would be hesitant to hire him.
Most of our friends in the engineering feild have gone off to Japan to get work. We may be next if things don't improve soon. But engineers aside, I'm amazed by all of the dancers I worked with that had college degrees, but couldn't find work. Not even that dancing pays more (it doesn't always anyway) but that there are just no damn jobs anymore it seems.
Kellydancer
07-25-2009, 12:39 PM
That is counter productive and does you little good and much harm; they will never consider you for employment if you return when the economy recovers. They offer what people will accept for a new hirer. Most aren't dancers and and don't expect those wages.
These aren't places I want to work. Dancing has no connection to this at all because my experience is very extensive. No, these jobs are in the salary range that someone with no college, no experience might make. Say $8 hour. Most college graduates won't take an $8 hour job. Most are places that happened to see my resume online and offered that to me.
Melonie
07-25-2009, 03:58 PM
My husband has a BS in mechanical engineering from a top 10 school. He's got over 2 years of work expeirience, graduated on the dean's list and is a very intelligent, confident-but not arrogant, and all around nice guy. So why the fuck can't he get a job?? He's got head hunters all over him - but prograhms keep getting cut due to the nasty economy and sorry state of our sorry ass state. And most of the companies that would normally be desperate for engineers have a hiring freeze.
My dad has a masters in mechanical engineering and is also out of a job. He's gone from making 6 figures to living in a trailer, and his wife has to keep a crappy minimum wage gas station job. He's a bit of a different story, as he's a very unpleasant and stubborn sort of person and I can see why companies would be hesitant to hire him.
Most of our friends in the engineering feild have gone off to Japan to get work. We may be next if things don't improve soon
If you really want to try and understand the fundamental changes taking place in the US economy, a useful 'history lesson' can be gleaned from FDR policies of the 1930's. Essentially, the purely 'private sector' US businesses are being run out of business. Yet at the same time, certain specific types of businesses remain busy and their employees keep receiving good paychecks. These obviously consist of (unionized) gov't employees, (mostly unionized) employees of companies that are 'supported' by the gov't (either literally or figuratively), and businesses where the gov't mandates a profitable market. If you are able to find work in one of these segments, you're all set. However, if not, you're more or less screwed and are likely to find yourself in an ever growing group of the 'permanently' unemployed.
Where engineers are concerned, the opportunities today that would seem to fall within the FDR 1930's analogy are consultant engineers for gov't infrastructure projects, development engineers for new ( and heavily gov't subsidized) 'green' technology applications, regulated public utility company engineers etc. Engineering opportunities that are NOT likely to be found in the USA are manufacturing engineers, software engineers, basic building design and construction engineers, basic product design engineers etc.
No, these jobs are in the salary range that someone with no college, no experience might make. Say $8 hour. Most college graduates won't take an $8 hour job
not wanting to mix threads, but arguably this mindset is unrealistic in terms of today's 'global' value of skilled labor. A mechanical engineer in Mexico might be paid $25k per year, with a mechanical engineer in India or China being paid even less. Thus in the absence of a shortage of mechanical engineers, any US private sector company who offers to pay a mechanical engineer more than $25k a year is putting themselves at a dangerous cost disadvantage. But the minimum wage mindset cannot be avoided ... nor can the 'moral hazard' it creates. If the gov't guarantees that anybody walking in off the street with zero education, zero skills, and zero experience must be paid $7.50 per hour = $15,600 per year, it's difficult to rationalize that an American with 4 years of college education, proven skills, and proven experience should only be paid an additional $4.50 per hour.
In China, India, Mexico etc. the $12 an hour paycheck offered to an educated and skilled worker is FAR higher than the $2-$3 an hour paycheck offered to an unskilled laborer ... and the educated and skilled worker's resulting standard of living is far higher as well. However, in the USA, the differential in paycheck and resulting standard of living between a $7.50 an hour minimum wage worker and a $12 an hour educated and skilled worker isn't all that significant ... and particularly so when one considers the equivalent cash value of benefits that the minimum wage worker will also be eligible to receive from the gov't.
~
Gia2608
07-25-2009, 04:31 PM
I absolutely will take a job in another country if offered as I'm pretty close to being fluent in Spanish and have decided to take it as a minor towards my BA. If I can make "big bucks" in Costa Rica or some other country where jobs have been offshored and the cost of living is low, then I'm there... if I don't take it someone else will. It's to the point now where I have to rationalize spending on day to day things like full coverage car insurance (taking off some of the coverage which in Fla is a really bad idea) and only running my AC for 3 hours a day max Do you know how hot it is here in July?., to buying nasty frozen fish that is cryo-packed instead of fresh.
But what really burns my biscuits is I DO have professional experience and am willing to work very hard. I will not however accept a job that pays me a wage that is unlivable. And you will not get to me to beleive that it's all these companies can afford to pay, bullshit! They know people are desperate for work right now so they can get away with it. The fact that I will "HAVE" to dance at least one night a week for the forseeable future is a little hard to stomach for me. I always loved dancing and it was always fun, now I have serious burnout and apprehension to even show up there!
Melonie
07-25-2009, 04:59 PM
^^^ on becoming a Costa Rican ex-pat, I've met several. If you like living in South Florida you're likely to love living in the Costa Rican capital of San Jose.
For my own part, Costa Rica is too far south, has too much in the way of leftover 'Hispanic' culture / lifestyle, is too friggin close to potentially 'unstable' neighboring countries, and the banking system and potential citizenship have major question marks. Again for my own part, I now enjoy being a bit farther north, in a country with leftover 'Anglo' culture / lifestyle, more stable neighboring countries, and a banking system and potential citizenship path which are quite secure.
You are correct though that for the same US $1500 a month you are trying to get by on in South Florida, you can live an EXTREMELY comfortable lifestyle in any country in the region. Life can get even MORE comfortable if you happen to live and socialize in an area frequented by very rich European and north American tourists *wink* *wink* ! Also, if structured correctly, your first $91k per year of 'foreign' income is exempt from US income taxes.
Earl_the_Pearl
07-25-2009, 05:02 PM
Obviously this seriously kills all incentive to invest years of effort and tens of thousands of dollars in tuition for a net difference in income (after taxes) of less than $100 per week.
Don't go to college one is protected by the minimum wage. This will open up more spots for foreigners to come into the US of A to do the skilled jobs. The minimum wage is B.S. as illegal works are not subject to that and if a company can save a nickel the job will be done over seas. No American can compete against $2 an hour slave labor in China.
Melonie
07-25-2009, 05:08 PM
No American can compete against $2 an hour slave labor in China
They can if the gov't mandates the existance of their job, and mandates market prices that guarantee that employers can afford to pay the $7.50 per hour. Perfect example is the ever-famous New Jersey gas pumping law, which A. requires that gas stations employ minimum wage workers to pump gas into customers' tanks ( the customers are not allowed to fill their own tanks !), and B. which taxes / price fixes the market price of New Jersey gas at a level where the gas stations can remain profitable ( which is ultimately paid for by New Jersey drivers being stuck paying higher prices for their gasoline fill-ups than they otherwise would have needed to).
threlayer
07-25-2009, 06:19 PM
Essentially the world's capitalistic countries are not ready for globalization. A lot more thought should have gone into how to make the transition and when. Now how can we protect ourselves from seemingly inevitable stiff competition? Because we surely cannot live on $2/hour pay rates -- that went out with World War II.
Melonie
07-25-2009, 07:52 PM
Because we surely cannot live on $2/hour pay rates -- that went out with World War II.
This point actually brings us full circle on the topic of a minimum wage. First let's try and absorb a few 'inconvenient' truths about unskilled workers and the global 'value' of their work product. In point of fact, the 'value' added by a minimum wage US worker is actually much less than the $7.50 an hour he must be paid. In theory the 'value' added by a minimum wage US worker can be no greater than that of his $2 an hour global counterparts.
This difference in actual minimum wage pay rate versus actual 'value' added must be made up from some other source. In the USA that other source is usually more highly skilled workers, whose pay rate now closely matches the 'value' added the worker is capable of producing. In fact, it can be argued that between pay rates, tax rates, and jacked up prices, the higher added 'value' being produced by educated, highly skilled US workers is being diverted to subsidize unskilled minimum wage workers.
While this same sort of subsidy arrangement takes place in Western Europe, it does NOT take place in Asia or 'third world' countries. As a result, uneducated and unskilled workers in Asia and 'third world' countries face a standard of living that actually matches the added 'value' their work is capable of producing. At the same time, the standard of living of educated and skilled workers in Asia and 'third world' countries is now arguably HIGHER than the standard of living of their US counterparts ... or at least those US counterparts that are working in the private sector ( as opposed to those lucky Americans who are 'insulated' from global financial reality via the gov't, a strong union, a gov't regulated marketplace etc. ). The reason for this is that the educated and skilled Asian and 'third world' workers face a much less expensive cost of living ( because 'social' costs and subsidy costs are not tacked on top of local prices ), and because these educated and skilled Asian and 'third world' workers are able to 'keep' the lion's share of their actual earnings ( as opposed to having 20-30-40-50% of their earnings taxed away by the gov't).
In point of fact, the US economy has yet to see the full impact of imposing a $7.50 an hour minimum wage ... which is more than three times as 'expensive' as global 'competitors'. Educated and skilled US workers have also yet to see the full impact of the 'cost shifting' necessary to support a $7.50 an hour minimum wage ... which will begin to materialize in the form of higher prices as well as lower pay rates for those educated and skilled workers. However, once state + federal unemployment benefits start to run out for the 4+ million educated and skilled but unemployed Americans, and they find themselves FORCED to accept jobs that pay $10-$12 an hour working next to irresponsible uneducated deadbeats who are earning 2/3rds as much as they are, things are likely to get 'interesting'.
If and when things get 'interesting' enough, it may indeed come to pass that the US gov't takes a fresh look at the 'moral hazards' it has created by mandating a minimum wage which is so far disconnected from global economic reality. This fresh look will also be motivated by the huge shortfall in federal and state tax revenues that can actually be 'extracted' from educated and skilled US workers. Eventually the financial realities will need to be discussed ... i.e. that the 'minimum acceptable US standard of living' made possible by a $7.50 per hour minimum wage mandate plus social welfare program benefits is financially unsustainable without also dragging down the standard of living of educated and skilled Americans to essentially the same level as their uneducated unskilled neighbors. Arguably, this issue has the potential of turning 'seriously ugly' a year or two down the road - and perhaps much sooner of California goes bankrupt and stops sending out gov't checks.
~
Earl_the_Pearl
07-25-2009, 08:53 PM
( which is ultimately paid for by New Jersey drivers being stuck paying higher prices for their gasoline fill-ups than they otherwise would have needed to).
Got ya; New Jersey has some of the lowest gas prices in the nation and we don't smell like the great unwashed. $2.29 today and I don't have to get out of my car.
I don't understand your fascination with a country you have abandoned.
I give you credit, "America love it or leave it"; like they did in the 60s.
Melonie
07-26-2009, 12:33 PM
^^^ true about New Jersey retail gasoline prices. New Jersey has chosen to augment state and local tax revenues by jacking up property taxes, sales taxes and state income taxes to very high levels rather than hitting gasoline. This places a greater burden on 'rich' Joiseyites than 'poor' Joiseyites versus an outrageous gasoline tax like New York. But this also strongly motivates those 'rich' Joiseyites to pack up and move to lower tax rate states in greater numbers, which will eventually have a profound impact on the state's economy !
I don't understand your fascination with a country you have abandoned.
I give you credit, "America love it or leave it"; like they did in the 60s.
Actually I haven't 'abandoned America / New York. I'm still paying US/NY income taxes ( fortunately subject to a $91k per year 'foreign income exclusion'), and since I still own property in the Adirondacks I'm also paying NY property taxes. I have fervent hopes that the 'tax and spend' pendulum will swing in the opposite direction in the next few years, such that I can 'afford' to spend more than 35 days per year in America / New York again ! But at the moment, being an ex-pat literally means about a $35k annual savings in US/NY taxes on my investment income, as well as an additional $25k annual savings in cost of living. This literally makes the difference between my being able to live as a de-facto 'retiree' south of the border, versus having to work full time in New York !
Earl_the_Pearl
07-26-2009, 04:58 PM
^^^ true about New Jersey retail gasoline prices. New Jersey has chosen to augment state and local tax revenues by jacking up property taxes, sales taxes and state income taxes to very high levels rather than hitting gasoline.
You do know the situation.
A side note about New Jersey;
In the middle of making a hard push for health care reform before the August recess, President Obama is taking a time out to drum up support for New Jersey Gov. Jon Corzine in his race for re-election, where the Democratic incumbent has been consistently trailing his Republican opponent. Corzine is still behind we in New Jersey can smell B.S. no matter what side of the aisle the wind is blowing from.
eagle2
07-26-2009, 05:53 PM
This point actually brings us full circle on the topic of a minimum wage. First let's try and absorb a few 'inconvenient' truths about unskilled workers and the global 'value' of their work product. In point of fact, the 'value' added by a minimum wage US worker is actually much less than the $7.50 an hour he must be paid. In theory the 'value' added by a minimum wage US worker can be no greater than that of his $2 an hour global counterparts.
This difference in actual minimum wage pay rate versus actual 'value' added must be made up from some other source. In the USA that other source is usually more highly skilled workers, whose pay rate now closely matches the 'value' added the worker is capable of producing. In fact, it can be argued that between pay rates, tax rates, and jacked up prices, the higher added 'value' being produced by educated, highly skilled US workers is being diverted to subsidize unskilled minimum wage workers.
While this same sort of subsidy arrangement takes place in Western Europe, it does NOT take place in Asia or 'third world' countries. As a result, uneducated and unskilled workers in Asia and 'third world' countries face a standard of living that actually matches the added 'value' their work is capable of producing. At the same time, the standard of living of educated and skilled workers in Asia and 'third world' countries is now arguably HIGHER than the standard of living of their US counterparts ... or at least those US counterparts that are working in the private sector ( as opposed to those lucky Americans who are 'insulated' from global financial reality via the gov't, a strong union, a gov't regulated marketplace etc. ). The reason for this is that the educated and skilled Asian and 'third world' workers face a much less expensive cost of living ( because 'social' costs and subsidy costs are not tacked on top of local prices ), and because these educated and skilled Asian and 'third world' workers are able to 'keep' the lion's share of their actual earnings ( as opposed to having 20-30-40-50% of their earnings taxed away by the gov't).
Again, you're making things up based on your ideology. The cost of living in Beijing or Shangai is not much lower than the cost of living in New York City, and much higher than most other cities in the US.
http://www.mercer.com/costoflivingpr#top_50
In point of fact, the US economy has yet to see the full impact of imposing a $7.50 an hour minimum wage ... which is more than three times as 'expensive' as global 'competitors'. Educated and skilled US workers have also yet to see the full impact of the 'cost shifting' necessary to support a $7.50 an hour minimum wage ... which will begin to materialize in the form of higher prices as well as lower pay rates for those educated and skilled workers. However, once state + federal unemployment benefits start to run out for the 4+ million educated and skilled but unemployed Americans, and they find themselves FORCED to accept jobs that pay $10-$12 an hour working next to irresponsible uneducated deadbeats who are earning 2/3rds as much as they are, things are likely to get 'interesting'.
That's a mean thing to say about workers doing their best to make a decent living at a low-wage job.
If and when things get 'interesting' enough, it may indeed come to pass that the US gov't takes a fresh look at the 'moral hazards' it has created by mandating a minimum wage which is so far disconnected from global economic reality. This fresh look will also be motivated by the huge shortfall in federal and state tax revenues that can actually be 'extracted' from educated and skilled US workers. Eventually the financial realities will need to be discussed ... i.e. that the 'minimum acceptable US standard of living' made possible by a $7.50 per hour minimum wage mandate plus social welfare program benefits is financially unsustainable without also dragging down the standard of living of educated and skilled Americans to essentially the same level as their uneducated unskilled neighbors. Arguably, this issue has the potential of turning 'seriously ugly' a year or two down the road - and perhaps much sooner of California goes bankrupt and stops sending out gov't checks.
~
As always you're making up your own "facts" that have no basis. The vast majority of minimum wage workers in the US are restaurant workers and retail workers who do not face competition from overseas. Most factory workers make far more than minimum wage in this country. Even in non-union auto-factories, workers get paid $15-$20 an hour plus benefits, and in most years, auto-manufacturers are able to profitably sells these vehicles at the same time they're paying these wages.
Melonie
07-27-2009, 03:57 AM
The cost of living in Beijing or Shangai is not much lower than the cost of living in New York City, and much higher than most other cities in the US.
try factoring in 'after tax' versus 'before tax' ... which makes NYC twice as expensive !
That's a mean thing to say about workers doing their best to make a decent living at a low-wage job.
'doing their best' does NOT equate to living a lifestyle which actually requires 3 times the true 'value' of the work being done to pay for !
As to your last comment about remaining US minimum wage workers being in 'service' industries, it is arguable that this is a RESULT not a voluntary development. The fact is that rising US minimum wage has driven out a lot of former US jobs for unskilled workers, from farm work to textile manufacture to dozens of others. This contributes to the estimated 16% rate of true unemployment, but the unskilled and 'permanently' unemployed are not counted in the official statistic.
threlayer
07-27-2009, 07:13 AM
All this discussion about international wage comparisons is based in a false sense of parity between currencies. Which just ain't there because many countries try to shore up their world-wide evaluations by various tricks. Partly, for the less advanced countries, it's a holdover from the age of mercantilism.
Also wages in such developing countries as China is a result of strongly excess demand from those migrating into industrialized from the areas due to starvation conditions there versus "promised" wages in the city which are largely illusory -- that is, risking deplorable rural conditions versus "promised" but nonetheless explotative and deplorable (sweatshop) urban conditions. In a sense about what was happening to the US workers in the late 1800s.
I guess some people over here still believe we need to regress into those conditions because many other countries are still there and/or because they just haven't figured out how to live in a post-industrial age (http://en.wikipedia.org/wiki/Post-industrial_society). It is rebellion (http://en.wikipedia.org/wiki/Free-market_anarchism) against progressivism.
eagle2
07-27-2009, 08:40 AM
try factoring in 'after tax' versus 'before tax' ... which makes NYC twice as expensive !
Once again you're just making things up based on your ideology. Chinese tax rates are higher than in the US. The top tax rate in China is 45%. In China there is a 17% VAT, which is much higher than New York City/State sales tax.
http://en.wikipedia.org/wiki/Tax_rates_around_the_world
'doing their best' does NOT equate to living a lifestyle which actually requires 3 times the true 'value' of the work being done to pay for !
The value of their work is what they get paid. If it wasn't, they wouldn't be hired in the first place. That's how the laws of supply and demand work.
In third world countries, adult entertainers probably make about one percent of what you were getting paid. Therefore, according to your logic, you were getting paid about 100 times the true 'value' of your work.
As to your last comment about remaining US minimum wage workers being in 'service' industries, it is arguable that this is a RESULT not a voluntary development. The fact is that rising US minimum wage has driven out a lot of former US jobs for unskilled workers, from farm work to textile manufacture to dozens of others. This contributes to the estimated 16% rate of true unemployment, but the unskilled and 'permanently' unemployed are not counted in the official statistic.
No it doesn't. The minimum wage was much higher in 1999, in constant dollars, than it was in 2008, and the unemployment rate was much lower. Therefore you're wrong that the minimum wage causes unemployment. We were actually at full employment in 1999 with a higher minimum wage.
Having a higher minimum wage creates jobs. When consumers have more money, they spend more on goods and services, thus creating more jobs.
Eric Stoner
07-27-2009, 09:26 AM
First of all, I support the increases in the minimum wage. The arguments against it while plausible IN THEORY , never seem to be borne out by actual experience. In other words, afaik, unemployment never increases because the minimum wage went up. However, increases in the M.W. have NOT been shown to have the stimulative effect that you claim i.e. afaik it does NOT create jobs.
As to China's tax rates, they are very low on CAPITAL. Corporate taxes are a relatively low 25 % and capital gains and investment taxes are very low.
Melonie
07-27-2009, 09:48 AM
In third world countries, adult entertainers probably make about one percent of what you were getting paid. Therefore, according to your logic, you were getting paid about 100 times the true 'value' of your work.
Now it is YOU who can be accused of making things up as you go along. But you do bring up a very important point. In America or anywhere else around the world, dancers support their standard of living based on money that customers voluntarily choose to spend. In contrast, US minimum wage workers have their standard of living partially supported by the taxation of others ( which funds social welfare benefits for which they are eligible), and partially supported by involuntarily forcing customers to spend more money than they would otherwise need to ( by elevated restaurant meal prices, by elevated Jersey gasoline prices etc.).
Therefore you're wrong that the minimum wage causes unemployment. We were actually at full employment in 1999 with a higher minimum wage.
^^^ a statistic which is totally dependent on the fuzzy methodology of US unemployment statistics ... which don't record people who have been unable to find a job for so long that they have exhausted their unemployment benefits. This statistic does NOT mean that a 4% official unemployment rate equals 96% of people have jobs, as the logic of your comment would require !!!
'Real World' US minimum wage unemployment has indeed increased as a result of minimum wage increases. This is the result of certain businesses / industries simply closing down and moving offshore ( textiles, canneries ), the result of automation ( bank tellers, WalMart checkout clerks, agricutural workers ), the result of consolidation ( 10 former local gas stations became 2 large convenience marts, shedding 6 minimum wage jobs in the process). Again, like Obama's 'saved' jobs, it is impossible to quantify current minimum wage employment levels versus the levels that might have existed had the minimum wage not been increased. But it is possible to find concrete examples, which for whatever reason are usually poorly publicized.
(snip)"The company, COS Samoa Packing, "is disappointed" in the [minimum - sic] wage hikes. and "we expect to work with Congressman Eni H. Faleomavaega and the U.S. government to establish programs that offset this new minimum wage bill and that will make American Samoa competitive internationally," said Jim Davet, senior vice president of operations. Faleomavaega is American Samoa's nonvoting delegate to Congress.
Depending upon the type of job, current [ 2007 - sic ] minimum wages in the territory range from $2.68 to $4.09 an hour. Workers at both COS Samoa, subsidiary of San Diego-based Chicken of the Sea International, and StarKist Samoa, owned by Del Monte Food Inc., currently earn a minimum of $3.26 an hour.
"We want to do right for our employees and the people of American Samoa, but the minimum wage hikes will not allow us to remain competitive and will cause cuts in employment," Davet said. "Short term, the initial 50-cent increase will result in a work-force reduction of just over 200 employees."
He said the company is already paying "five times the international wage to can tuna in American Samoa, and we will be paying six to 10 times the international wage as the new wage increase begins to take effect."(snip)
from
^^^ you can also add 250 ex-minimum wage jobs at StarKist's cannery that will soon be closing ... which essentially ends operations of any cannery businesses in US territory.
threlayer
07-27-2009, 10:26 AM
...In point of fact, the 'value' added by a minimum wage US worker is actually much less than the $7.50 an hour he must be paid. In theory the 'value' added by a minimum wage US worker can be no greater than that of his $2 an hour global counterparts.
This difference...must be made up from some other source. In the USA that other source is usually more highly skilled workers, whose pay rate now closely matches the 'value' added the worker is capable of producing. In fact, it can be argued that between pay rates, tax rates, and jacked up prices, the higher added 'value' being produced by educated, highly skilled US workers is being diverted to subsidize unskilled minimum wage workers. What you're saying is that the USA has higher prices for goods than does China etc. And that these low-value-added workers are subsidized by everyone buying the goods from businesses that they are work in. This is true. It is also true for every other business having minimum wage workers or not. Their 'subsidization' is caused by the consumerism (http://en.wikipedia.org/wiki/Consumerism) that those same businesses promote.
But since it seems everyone wants cheap toys produced at the expense of near-slave labor from other countries, this has been caused by an extreme form of consumerism pressed onto us by those same businesses. And those are the consumer product businesses that import cheap goods from China etc., thus relinquishing their production facilities and skilled/unskilled workers to near-slave labor in order for top management and stockholders to receive greater income. So not only are these equity-holders betraying their former workers and US society in general, for selfish (capitalist) reasons, but they are enabling worker-exploitative foreign countries to flourish at the expense of their native countries.
While this same sort of subsidy arrangement takes place in Western Europe, it does NOT take place in Asia or 'third world' countries. As a result, uneducated and unskilled workers in Asia and 'third world' countries face a standard of living that actually matches the added 'value' their work is capable of producing...The reason for this is that the educated and skilled Asian and 'third world' workers face a much less expensive cost of living ( because 'social' costs and subsidy costs are not tacked on top of local prices ), and because these educated and skilled Asian and 'third world' workers are able to 'keep' the lion's share of their actual earnings ( as opposed to having...earnings taxed away by the gov't).The "subsidization" you are talking about is in actuality the demand-supply inflation caused by the extreme consumerism that is prevalent in the US and many parts of Europe (beyond Western Europe). This commercialism has NOT YET hit the 'developing' countries (China, etc.) in anywhere near an equivalent amount. But when it does finally hit there, because of relaxed government regulations or because industrialization has spread widely, then you will find their cost of living increases, as it has in all developed countries. At that point production may shift to African countries or elsewhere. Yes, there are taxes responsible for SOME of this, and in a lot of countries, a LOT of taxes, but in most cases the greater amount of taxes does produce greater societal good, i.e., a higher and somewhat more uniform "standard of living."
In point of fact, the US economy has yet to see the full impact of imposing a $7.50 an hour minimum wage ... in the form of higher prices as well as lower pay rates for those educated and skilled workers. However, once state + federal unemployment benefits start to run out for the 4+ million educated and skilled but unemployed Americans, and they find themselves FORCED to accept jobs that pay $10-$12 an hour working next to irresponsible uneducated deadbeats who are earning 2/3rds as much as they are, things are likely to get 'interesting'.
Higher prices definitely will result from the higher minimum wage (which produce no Federal income taxes), but no higher than if the minumum wage had tracked the cost of living increases that salaries worker have experienced; this is because the minimum wage has been restrained for over a decade, while there was no such artificial restraint placed on the cost of living. Minumum wage (http://en.wikipedia.org/wiki/Minumum_wage), though, has this characteristic "Direct empirical studies indicate that anti-poverty effects in the U.S. would be quite modest, even if there were no unemployment effects [of such workers]. Very few low-wage workers come from families in poverty. Those primarily affected by minimum wage laws are teenagers and low-skilled adult females who work part time, and any wage rate effects on their income is strictly proportional to the hours of work they are offered."
Your contention that minumum wage workers are "irresponsible uneducated deadbeats" is ironic to say the least. First, most everyone in the US has a high school level education--which brings up an entirely other topic of discussion. Ironic, because of the nature of this board respresenting an industry where the majority of its workers are young, unskilled (and 'uneducated' to that same level) entertainers whose stock in trade is mostly their ephemeral appearance and artificial (though appealing) personas and whose means of financial demand is entirely based on pandering to the fantasies and misled expectations (assuming no illegalities) of a certain class of actual, productive money-earners. Further many of those stereotyped workers in that industry may well also be supporting such "deadbeats." That said, I believe that comprises a minority of SW members, who are largely the elite of this worker class and are educated enough to be looking beyond a few years of such work. However, for those for whom the description fits, if it weren't for this exceptional and rare type of work, they would also command only minimum wages in another industry. Just strikes me as very funny.
...it may indeed come to pass that the US gov't takes a fresh look at the 'moral hazards' (http://en.wikipedia.org/wiki/Moral_hazard) it has created by mandating a minimum wage which is so far disconnected from global economic (http://en.wikipedia.org/wiki/Global_economy) reality. This fresh look will also be motivated by the huge shortfall in federal and state tax revenues that can actually be 'extracted' from educated and skilled US workers. Eventually the financial realities will need to be discussed ... i.e. that the 'minimum acceptable US standard of living' made possible by a $7.50 per hour minimum wage mandate plus social welfare program benefits is financially unsustainable without also dragging down the standard of living of educated and skilled Americans to essentially the same level as their uneducated unskilled neighbors....
I suppose you mean by "dragging down the standard of living of educated and skilled Americans" that the cost of consumer products will rise by the minumum wage, increased to $7.80/hour, plus a resultant minor increase in scial welfare benefits caused by this same wage escalation. I think it would take a LOT more than this particular minor adjustment to cause our imponderable government to repair the seriously flawed and misdirected system they have produced.
It apears that the minimum wage (http://en.wikipedia.org/wiki/Minumum_wage) system is so entrenched in advanced societies, that a type of restructuring into an improved work incentivation system (http://en.wikipedia.org/wiki/Incentive) likely would be the only thing that the electorate could relatively easily support. How that would be accomplished unfortunately likely would take as much effort as in restructuring our present health care system. Essentially we need a new TYPE of progressivism (http://en.wikipedia.org/wiki/Progressivism_in_the_United_States).
Earl_the_Pearl
07-27-2009, 01:17 PM
These aren't places I want to work. Dancing has no connection to this at all because my experience is very extensive. No, these jobs are in the salary range that someone with no college, no experience might make. Say $8 hour. Most college graduates won't take an $8 hour job. Most are places that happened to see my resume online and offered that to me.
Now I'm confused; this job requires a collage degree and they are offering $8 an hour? Is this a commissioned sales job?
Kellydancer
07-27-2009, 01:42 PM
Now I'm confused; this job requires a collage degree and they are offering $8 an hour? Is this a commissioned sales job?
It's just an office job doing menial work (basically helping the admin assistant) but they are requesting a degree and experience. It's funny because a few years ago I saw a job like this and they required no skills at all.
Earl_the_Pearl
07-27-2009, 01:49 PM
It's just an office job doing menial work (basically helping the admin assistant) but they are requesting a degree and experience. It's funny because a few years ago I saw a job like this and they required no skills at all.
Most business do not hire over qualified people for a job because they will get a better offer and leave. This also makes it difficult for collage graduates.
Could you have been know to this company? Perhaps they were hitting on you.
Melonie
07-27-2009, 02:09 PM
Most business do not hire over qualified people for a job because they will get a better offer and leave. This also makes it difficult for collage graduates.
This is true ... and yet one more reason NOT to invest years of effort and tens of thousands of dollars in tuition / lost income to obtain a non-marketable degree !
jack0177057
07-27-2009, 02:55 PM
Again, the problem is that a lot of you are locked into the myth that you have to find a job. You have been brainwashed into thinking that the only way to succeed financially is by studying hard, getting a college degree, and then finding a corporate job...
There are illegal immigrants here in Texas from Mexico that are making more money than U.S. college grads... They start their own small businesses - landscaping, home improvement, construction, painting, etc. My landscaper charges me only $35 to mow my lawn, but he and his assistant do about 5 or six lawns in an hour. (Despite, how you feel about the immigration debate,... my point is that these people without college degrees, who can barely speak English and have little access to business capital can start their own small business,... why can't you?)
I've met many people who never completed college and make a lot more money than 90% of college grads... They are small and medium business entrepeneurs that forged their own path...
College should not be about turning you into a work robot that depends on other people to give you a job. It should be about making you intelligent and resourceful enough so you can launch your own business.
Traditional jobs are becoming absolete; you have to think like an entrepeneur.
Just one example of financial success by tearing down the job-myth:
http://www.azcentral.com/arizonarepublic/home/articles/0310poles0310.html
The idea came to Blacker, 40, six months into his marriage to Lizz, 29. The newlyweds were living in San Jose, in 2002, and Randy Blacker had lost his job overseeing the production of a high-tech credit card when the company closed. It was the second time Blacker had been laid off in recent years.
The couple were down to his last $208 unemployment check and relying upon Lizz's salary when he was home one afternoon flipping through TV channels.
"I heard the word 'porn,' and it was CNN," Randy Blacker said. The story was about how the porn industry is recession-proof; people buy products when times are good and don't stop when times are bad.
"I'm in," he said. "I want to be in something recession-proof."
A dance pole came to mind, a removable one, because Blacker kept thinking about what his parents would think.
A lifelong tinkerer, he whipped up a $12 prototype and was pitching his business plan to his wife when she got home from work.
"I was pretty hesitant," said Lizz, who has a business degree and is vice president of operations. "I thought, 'Oh my gosh, I'm going to have to tell my dad.' "
Her husband registered the Web site www.stripperpole .com for $35 and secured a patent. Lizz lent her business expertise, and the company was in business.
The Blackers are not the only pole manufacturers around. Others include My Pole, which operates out of Britain. Hollywood-based Peekaboo also sells removable poles. And Platinum Stages, based in Newport Beach, Calif., sells a pole that bolts to the floor.
The Blackers first tried to sell their poles in 2002 at a Los Angeles porn convention. Although it was a harrowing experience for Lizz - men kept asking to take her photo with the pole - the Blackers received plenty of kudos for their idea.
And they were surprised at who bought the poles.
"I really thought my demographic was mid-20s, 30s - hot chicks," Randy Blacker said.
But the first pole they sold there was to a couple in their mid-80s, who said they'd been thinking about installing one in their home for several years. The second was sold to a teen who wanted a pole for his dorm room.
But by the end of the day, only 13 poles had sold.
Success came slowly but sped up when Lizz's father saw Sheila Kelley's S Factor on TV. The company's aerobic striptease and pole-dancing classes are taught through videos and exercise studios and are designed to boost a woman's self-esteem, according to the company.
Randy Blacker met with Kelley, whose program has been featured on Oprah, and S Factor now uses the Lil' Mynx pole in its seven studios nationwide and sells the poles on its Web site.
The Blackers say they haven't spent a dime on advertising. Instead, they turned to Hollywood to hawk their product.
The couple participate in "style lounges," where companies give away free stuff to celebrities during the Golden Globes and Emmys and the Sundance Film Festival.
Actress Kate Hudson installed a pole in her bathroom. The Blackers gave one to Las Vegas TV series actor Josh Duhamel and to Roger Cross, who plays special agent Curtis Manning on Fox's 24. "He calls me all the time," Randy Blacker said. "He's like, 'Dude, I love this thing.' "
The goal is that celebrities will talk about the poles, as performer Carmen Electra did when David Letterman asked her on his show what she got for Christmas.
The growing fitness aspect of dancing has helped business, too. Classes are increasingly popular in places such as Los Angeles and the Bay Area.
The couple who started the company have watched sales surpass $2 million, added employees and hobnobbed with celebrities.
Melonie
07-27-2009, 03:23 PM
There are illegal immigrants here in Texas from Mexico that are making more money than U.S. college grads... They start their own small businesses - landscaping, home improvement, construction, painting, etc. My landscaper charges me only $35 to mow my lawn, but he and his assistant do about 5 or six lawns in an hour. (Despite, how you feel about the immigration debate,... my point is that these people without college degrees, who can barely speak English and have little access to business capital can start their own small business,... why can't you?)
Well to be as economically viable as your illegal alien entrepreneurs, all the US citizen's new business needs is to follow the same economic paradigm ...
- operate a cash only business which does not report its existance to the IRS, and as such does not have to pay federal or state business income taxes
- operate an undocumented business which does not report its existance to the DOL, and as such does not have to bear worker safety / environmental compliance costs
- pay your 'employees' in cash under the table, and a such avoid having to pay state mandated workmen's comp or disability insurance premiums , avoid having to pay the 'employer's' share of Social Security and medicare taxes
jack0177057
07-27-2009, 04:29 PM
Well to be as economically viable as your illegal alien entrepreneurs, all the US citizen's new business needs is to follow the same economic paradigm ...
- operate a cash only business which does not report its existance to the IRS, and as such does not have to pay federal or state business income taxes
- operate an undocumented business which does not report its existance to the DOL, and as such does not have to bear worker safety / environmental compliance costs
- pay your 'employees' in cash under the table, and a such avoid having to pay state mandated workmen's comp or disability insurance premiums , avoid having to pay the 'employer's' share of Social Security and medicare taxes
A lot of small businesses start off this way... They refer to their employees as "independent contractors" to avoid having to pay workmen's comp, the employer's' share of Social Security and medicare taxes, etc... Obviously, its not the ideal... My point is... that, if they can do it, there is no reason why a U.S. college grad (or any intelligent U.S. person, for that matter) cannot start a small business... I've had a number of small business ideas and I have actually tried a few of them (I haven't knocked any homeruns, yet, though)...
One idea that I've been entertaining for a while, but haven't gotten around to -- is a mobile erotic dance studio. In Houston, they have S-Factor and several other strip-tease and pole-dancing studios that seem to be doing quite well. But, out in the suburbs, the soccer moms would have to commute for an hour into the city to participate. I've though of renting (until I can buy my own) a big party bus with stripper poles and offering a dance studio on wheels that reaches out to suburban moms wanting a sexy workout or dance routine... I'll need two former dancers as business partners. (By partnering up with them, I won't have to pay them up front, but we'll split the revenues when the business becomes profitable... I also won't have to pay state mandated workmen's comp or disability insurance premiums, employer's' share of Social Security and medicare taxes) Eventually, we can create a model from which to launch a national franchise.
Kellydancer
07-27-2009, 04:32 PM
Most business do not hire over qualified people for a job because they will get a better offer and leave. This also makes it difficult for collage graduates.
Could you have been know to this company? Perhaps they were hitting on you.
That's true. Most places know someone overqualified won't stay. It's possible someone knew me. Hadn't thought of that but you never know. Maybe it was a former regular.
threlayer
07-27-2009, 08:23 PM
Well to be as economically viable as your illegal alien entrepreneurs, all the US citizen's new business needs is to follow the same economic paradigm ...
- operate a cash only business which does not report its existance to the IRS...
- operate an undocumented business which does not report its existence to the DOL...
- pay your 'employees' in cash under the table....
Yes. Become a stripper!!!
This is true ... and yet one more reason NOT to invest years of effort and tens of thousands of dollars in tuition / lost income to obtain a non-marketable degree !
So, we should dumb ourselves down and flip burgers, change oil and tires, and become healthcare workers to work for Indian/Chinese doctors. Perhaps we should develop and pass laws that would redefine treasonous activities into crimes also fitting corporations.
eagle2
07-27-2009, 09:00 PM
Now it is YOU who can be accused of making things up as you go along.
I was using approximates since I have no way of knowing how much money you were earning as an adult entertainer. One percent is probably low, but there is no question that you earned a significantly higher amount of money as someone doing similar work in a poor third-world country. Since you're basing the value of the work of unskilled Americans on what people in poor third world countries earn for similar work, there is no reason not to base the value of your work on what poor women earn in third world countries for doing similar work.
But you do bring up a very important point. In America or anywhere else around the world, dancers support their standard of living based on money that customers voluntarily choose to spend.
US minimum wage earners support their standard of living on what their employers voluntarily choose to spend. Employers are free to not hire workers.
In contrast, US minimum wage workers have their standard of living partially supported by the taxation of others ( which funds social welfare benefits for which they are eligible), and partially supported by involuntarily forcing customers to spend more money than they would otherwise need to ( by elevated restaurant meal prices, by elevated Jersey gasoline prices etc.).
Again, you're making things up based on your ideology rather than facts. Prices are based on supply and demand, not the pay of workers. I've been to McDonalds in third-world countries where wages are much lower than in the US, and there is not much difference in the price of meals. In-N-Out Burger, a fast food chain in western states, pays their workers $2 to $3 above minimum wage and they are able to successfully compete with other fast food chains that pay their workers minimum wage.
http://www.businessweek.com/magazine/content/09_16/b4127068288029_page_2.htm
"From its start, In-N-Out paid employees more than the going rate. (Associates always made at least $2 to $3 above minimum wage.) As of February 2008, In-N-Out was paying new part-time associates $10 an hour"
Again you are proven wrong that businesses can't pay decent wage and be competitive.
shinysugar
07-27-2009, 09:12 PM
A woman with no education is almost always dependent on a man.
Strippers are the exception, of course.
as strippers we are not dependent on a man, we're dependent on many men
Earl_the_Pearl
07-27-2009, 09:37 PM
as strippers we are not dependent on a man, we're dependent on many men
I do the best I can. :wave:
Melonie
07-28-2009, 03:29 AM
Since you're basing the value of the work of unskilled Americans on what people in poor third world countries earn for similar work, there is no reason not to base the value of your work on what poor women earn in third world countries for doing similar work
Well to lay this line of discussion to rest, two of the highest earning 'road trips' I ever did were to South Africa and to Macau (part of China). The flaw in your argument is that I was marketing myself to the small percentage of very rich men in these countries ... and those very rich men are arguably richer in a 'third world' economy than they would be in a 'first world' economy ! But in fairness, it was probably possible to purchase full service from a local girl for a price of US$20 or less. This goes back to the former point that the potential market and pricing structure for the selling of upscale 'luxury' items is entirely different than the potential market and pricing structure for a 'commodity' product. And attempting to steer back to the topic of this thread, these days most degrees are a 'commodity' item subject to global competition ... either in the form of outsourcing of work, or in the form of 'imported' H1B visa based 'low cost' workers of arguably equal qualifications.
US minimum wage earners support their standard of living on what their employers voluntarily choose to spend
No way the word 'voluntary' can be used, when the option is to go out of business, sacrifice past personal investment of huge amounts of time and money (business investment) etc. The word 'extortion' is arguably more accurate.
Again you are proven wrong that businesses can't pay decent wage and be competitive
Again I would make the point that this depends on what the business must compete against. Fortunately for fast food as well as more upscale restaurants, there is no way to 'import' a dinner prepared in a foreign country that could be sold at 1/3rd the price. In your example, all fast food businesses in the same US state are subject to the same energy costs, the same property and business taxes, the same mandated worker benefit costs ( comp / unemployment / SSI etc.), and similar 'raw material' costs of fresh food. You are correct that in that scenario local market prices can be increased across the board so that everyone can remain somewhat profitable despite paying a $7.25 an hour minimum wage. However, imagine what would happen to all of these businesses if it were possible to 'import' steak dinners from overseas which could be profitably sold in the US at a price of $5.00, because the foreign 'manufacturer' faces far lower labor, energy, tax etc. costs. You can't attempt to apply a 'closed' local economy to the global economy, and food service is one area where the local economy is indeed 'closed' due to the freshness / personal service component. But the 'closed' local economy exception does NOT apply to any foreign product which can be 'maufactured' under a much lower cost foreign economic structure then packed, shipped and sold in the US at a later date (i.e. canned tuna). Again steering the topic back on track, a 'closed' local economy exists when, for example, the US gov't mandates that engineering for a stimulus project must be done by a 'local' engineering firm. But the same is not the case when, for example, a new privately owned commercial building must be designed ... and the engineering work can be 'outsourced' to India.
I've been to McDonalds in third-world countries where wages are much lower than in the US, and there is not much difference in the price of meals
I've been to McD's in foreign countries as well, and they are primarily viewed as a 'tourist attraction' by the locals. This is the reason that they are able to charge prices that are 3 times as high as 'local' food vendors ... but as you say on par or higher than US McD prices ! Your attempted point is terminally faulty.
shinysugar
07-28-2009, 08:20 PM
I do the best I can. :wave:
and we love you for that:-*
eagle2
07-28-2009, 08:41 PM
Well to lay this line of discussion to rest, two of the highest earning 'road trips' I ever did were to South Africa and to Macau (part of China). The flaw in your argument is that I was marketing myself to the small percentage of very rich men in these countries ... and those very rich men are arguably richer in a 'third world' economy than they would be in a 'first world' economy !
There are many parts of South Africa that are no different than any other 'first world' country. The white population in South Africa, which numbers in the millions, are on average, wealthier than people in most 'first world' countries. Macau is a tourist destination where many wealthy Asians go to gamble. Macau's gambling revenue exceeds Las Vegas. I wouldn't consider either place to be typical of third world countries. If you went to a village in rural China or a poor underdeveloped African country, your results would have been much different. I'm sure you would do better than the local girls, since you would be a novelty, but you would not make anywhere near as much as you were making in the US.
But in fairness, it was probably possible to purchase full service from a local girl for a price of US$20 or less. This goes back to the former point that the potential market and pricing structure for the selling of upscale 'luxury' items is entirely different than the potential market and pricing structure for a 'commodity' product. And attempting to steer back to the topic of this thread, these days most degrees are a 'commodity' item subject to global competition ... either in the form of outsourcing of work, or in the form of 'imported' H1B visa based 'low cost' workers of arguably equal qualifications.
Again, you don't understand that cost is not the only determining factor in decisions about purchasing and hiring. There are many other important factors.
There is a significant difference between a college degree from a top US university and a degree from a second or third rate college in India or China. Of the top 20 rated universities in the world, over half are in the US. Only one is in Asia (in Japan).
http://www.topuniversities.com/worlduniversityrankings/results/2008/overall_rankings/fullrankings/
Designing and engineering a 400 seat airliner or 100 story skyscraper takes a great deal of engineering skill and experience. You can't just hire any engineering graduate from any college anywhere in the world. Education and experience are much more important than desired salary. So is the ability to speak and communicate in English, something a number of foreign engineers can't do very well. All engineers do not have arguably equal qualifications. A McKinsey Global Institute study last summer found that only 10 percent of Chinese engineers and 25 percent of Indian engineers were even considered employable by human resources managers in multinational companies, compared to 81 percent of American engineers. (from Foreign Policy magazine July/August issue)
No way the word 'voluntary' can be used, when the option is to go out of business, sacrifice past personal investment of huge amounts of time and money (business investment) etc. The word 'extortion' is arguably more accurate.
It is voluntary. Employers have a choice to hire or keep workers at that rate. You don't seem to understand, if consumers don't have money, businesses will have nobody to sell to. Why do you think almost all of China's growth has come from selling products to the US and other western countries, rather than its own citizens?
Again I would make the point that this depends on what the business must compete against. Fortunately for fast food as well as more upscale restaurants, there is no way to 'import' a dinner prepared in a foreign country that could be sold at 1/3rd the price. In your example, all fast food businesses in the same US state are subject to the same energy costs, the same property and business taxes, the same mandated worker benefit costs ( comp / unemployment / SSI etc.), and similar 'raw material' costs of fresh food. You are correct that in that scenario local market prices can be increased across the board so that everyone can remain somewhat profitable despite paying a $7.25 an hour minimum wage. However, imagine what would happen to all of these businesses if it were possible to 'import' steak dinners from overseas which could be profitably sold in the US at a price of $5.00, because the foreign 'manufacturer' faces far lower labor, energy, tax etc. costs. You can't attempt to apply a 'closed' local economy to the global economy, and food service is one area where the local economy is indeed 'closed' due to the freshness / personal service component. But the 'closed' local economy exception does NOT apply to any foreign product which can be 'maufactured' under a much lower cost foreign economic structure then packed, shipped and sold in the US at a later date (i.e. canned tuna). Again steering the topic back on track, a 'closed' local economy exists when, for example, the US gov't mandates that engineering for a stimulus project must be done by a 'local' engineering firm. But the same is not the case when, for example, a new privately owned commercial building must be designed ... and the engineering work can be 'outsourced' to India.
Again, there are a lot more factors in deciding who to hire than the desired salary.
I've been to McD's in foreign countries as well, and they are primarily viewed as a 'tourist attraction' by the locals. This is the reason that they are able to charge prices that are 3 times as high as 'local' food vendors ... but as you say on par or higher than US McD prices ! Your attempted point is terminally faulty.
No it isn't. It shows that restaurants set their prices based on how much they can sell their product for, not how much they pay their employees.
threlayer
07-30-2009, 02:25 PM
...Designing and engineering a 400 seat airliner or 100 story skyscraper takes a great deal of engineering skill and experience. You can't just hire any engineering graduate from any college anywhere in the world. Education and experience are much more important than desired salary. So is the ability to speak and communicate in English, something a number of foreign engineers can't do very well. All engineers do not have arguably equal qualifications. A McKinsey Global Institute study last summer found that only 10 percent of Chinese engineers and 25 percent of Indian engineers were even considered employable by human resources managers in multinational companies, compared to 81 percent of American engineers. (from Foreign Policy magazine July/August issue)
I'm tired of all the pessimistic dogma; here are some FACTS.
It is most certainly true that large or complex projects require more than a few persons with degrees in Engineering (or pollution control etc). In the US a professional engineer (PE) is required to have requisite training, pass the EIT (engineer in training) tests and be working under a licensed PE for a number of years, depending on just how each state defines this. Further those evaluating engineering firms for such large or complex projects evaluate VERY carefully the experience of the main project engineers, the training and experience of most important 'lesser' engineers, not only billing rates and the proposal. These often are very competitive firms, several of which probably would be able to complete the work successfully. Innovation of approach, efficient use of resources, cost structure etc are additional factors. If that firm has not completed successfully several similar projects, or at least the principals in the firm have not, they will not get the contract. Finally, engineering firms have to know, inside and out, the well-tested standards and practices accepted by US corporations and governments; these are critical both legally and for success. Got news for you----they don't. (You go out on a limb and you'll certainly lose a lawsuit.)
In the case of design/build projects (all large projects are this) the engineering firm has to be very familiar with supplies and components and their operating, reliability deliverability, and cost factors. These are supplies and components which are required to be purchased, tested, installed onsite, and qualified in a very timely manner. A major cost of a project is the time value of invested money while the project is under construction and qualification. For a big project taking several years, this becomes a real cost factor that has to be considered when evaluating alternatives. Further the government typically has even stricter rules than private enterprises. Additionally the principals would have to be onsite a large portion of the time for many projects for inspections, supervision, and coordination meetings.
Say a 500M$ project has several huge major components that have to be designed and fabricated by one or more suppliers and subcontractors (typical). By the wrong choice of suppliers or design specs, chosen because of a foreign engineering firm's familiarity with the supplier, the project can succeed or fail, or be in a gray area needing frequent repair/replacement. A boat trip around Cape Horn for a huge, imported hundred million dollar 300 ton reaction boiler or a UHV transformer, or a field repair during qualification, could add months to a project's completion with major associated costs. This is another reason why a very experienced contract engineering firm is needed. That is the value of experience. No Jugdish Patel and Ramakristmani and Co is going to beat out a Bechtel, Foster Wheeler, or CH2M-Hill for a megaproject.
I know all of this because I have worked in these areas many years, writing RFPs and proposals and evaluating proposals, as well as selecting contractors and doing engineering work.
So I fail to see how a new, untested, foreign engineering firm composed of 95% EITs and very few PE's and none with US experience would win many US contracts, even if their EIT billing rates were lower than experienced firms coming from US, Canda, and Europe (I've had experience with multiple firms from all those places).
At this point for important work, except perhaps for software, Asian firms are just not the firms of choice. Ask me again in 20 years if that is still the case (well, better ask me sooner).
You should get back on track here. Software engineering only may fit into your concept here because this expertise does not take a lot of resources or experience to develop. And because there are not enough software engineers in the US currently and cost is a factor there.
BTW, how did you like your last support call to a Chinese tech? How many times did you ask him/her to repeat an instruction?
dlabtot
07-30-2009, 02:39 PM
No it isn't. It shows that restaurants set their prices based on how much they can sell their product for, not how much they pay their employees.
Yeah, it's "Supply and Demand" that determines price, not cost. Something you would expect a self-proclaimed finance expert to understand.
Eric Stoner
07-31-2009, 06:49 AM
Yeah, it's "Supply and Demand" that determines price, not cost. Something you would expect a self-proclaimed finance expert to understand.
Are you saying cost is not a factor in pricing ? Only if profit is irrelevant.
eagle2
07-31-2009, 08:08 AM
Eric,
Cost is not a factor in pricing. Businesses can't sell products above the price that customers are willing to pay for them, regardless of how much it cost to produce. When GM and Chrysler weren't able to sell many of their vehicles above what it cost to produce them, they weren't able to raise prices, which is why they ended up going through bankruptcy. If they based their vehicles prices on what it cost to produce them, people most likely would not have bought their products.
Eric Stoner
07-31-2009, 08:18 AM
Eric,
Cost is not a factor in pricing. Businesses can't sell products above the price that customers are willing to pay for them, regardless of how much it cost to produce. When GM and Chrysler weren't able to sell many of their vehicles above what it cost to produce them, they weren't able to raise prices, which is why they ended up going through bankruptcy. If they based their vehicles prices on what it cost to produce them, people most likely would not have bought their products.
What company or business could afford to operate that way for long ? Temporarily ? Yes but if the company is going to remain viable, at some point it has to recoup the money lost while it sold at a loss. It's odd you mention GM and Chrysler since both were in bankruptcy. If they cannot make a profit now, or in the near future , one or both ought to be defunct. Unless of course, Obama and the Dems subsidize them further.
At some point , costs have to be part of the price equation.
threlayer
07-31-2009, 11:24 AM
Cost IS a pricing factor, as it must be. Here's something about pricing many don't know.
Two a priori assumptions are made before designing begins. Market research determines not only the need for a product that the company can manufacture, but it also determines the Quantity and the Price Level that can be supported by that Quantity / Quality level.
Let's take outdoor furniture. Say a company can manufacture plastic furniture, upholstered metal/wood furniture and premium upholstered teakwood furniture.
Their market research shows that there currently is too much competition for plastic furniture and the distributors are all lined up for years with existing contracts. This has been a viable product in the past, but no longer is due to cheap, less durable Chinese imports. So their extrusion equipment will be up for sale. The research also says that metal/wood outdoor furniture is a fairly viable product, and that there is a strong need for high quality durable all-wood outdoor furniture.
Their design/cost studies show that metal/wood option can be built and that stamping or extruded aluminum with softwood trim and plastic upholstery have sold well at a competitive retail price of from 150 to 200 depending on the specific quality choices and at that price around a million sets can be sold, but if they upgrade with durable fabric and cast aluminum pieces and add hardwood appliques they can sell 200K sets at 250 - 300 retail with the same payback (profit). The cost range is necessary because they have not chosen raw material and tooling suppliers yet. They decide also to consider an upgraded set with fancier fabric and contoured wood appliques which they think could sell about 100K at a higher price of 350 - 400, though the return will be less for that product. But they only have so much floor space for two of those three possible products; renting more and moving equipment is prohibitive. Ig they produced only the cheaper set using all the floor space available they could reduce their cost by 25% and research shows that they could double their profit by reducing retail price to 120 - 150, but the production run would take 6 weeks instead of one month. After that they will be producing completely different products there and have to tool up for that. But their distribution line has always expected a higher quality outdoor furniture line as well at the target time of year.
The premium teakwood set must sell at a very premium price of 800 - 900, but they can only get enough teakwood now to produce 30k of them due to scarcity of quality teakwood and its premium price. They cost out the manufacturing facilities (number of equipment lines, personnel training, lifetime of the cutters, etc) based on the number of units that production line is expected to produce. They know that teakwood wears out cutter blades very rapidly (which take production cutter machines out for a day every week) and although only 2 lines are required for the month-long production run, production costs will be much higher and expanding production lines after the fact, when more teakwood will be available, will be lots higher. Their engineers say they can bypass that teakwood supply problem by using a slightly inferior wood product that also is much easier/cheaper to machine, but ithe product won't last as long even with standard UV-resistant coatings, which they use on the cheaper metal/wood line, but they can sell more and increase profits by 50% for the all-wood line with the same production facilities.
----
OK. These (somewhat realistic) details show how products are costed out. The initial selling cost and quantity estimates determine everything about the product's place in the market. You can't just lower the planned selling price without larger disturbances in production facilities and the operation's viability. As a product is being manufactured over a longer time period, some more cost reductions will become apparent and be taken, but also some production problems will crop up which will increase cost or lower output. You can reduce product cost, but mostly only up front, and cost reductions will reduce product quality, not just "profits."
Eric Stoner
07-31-2009, 12:24 PM
^^^ Nicely done.
Melonie
07-31-2009, 02:05 PM
^^^ agreed, a well presented example .... BUT ...
You can reduce product cost, but mostly only up front, and cost reductions will reduce product quality, not just "profits."
Arguably, it is possible to achieve cost reductions on many levels WITHOUT being forced to reduce product quality. The method of doing this involves using cheaper labor, cheaper but dirtier energy, less expensive or non-existant employee benefit costs, less expensive or non-existant environmental compliance costs, less expensive or non-existant worker safety costs etc. In line with your specific example, those contoured wood appliques are far less expensive to produce if the worker is getting paid $2 an hour, isn't 'hampered' by a mask to stop sawdust, and doesn't require mandatory hourly breaks to minimize varnish fume exposure. Obviously this is not possible in the USA or EU, but it is certainly possible in China, India and other 'third world' countries.
So your US furniture company decides to fire all of it's 'production' workers except for a handful who will be retrained for 'assembly' work. Your US furniture company then outsources all of the chair frames and contoured wood appliques from subsuppliers in Vietnam -
- and has the parts shipped to the company's US factory where the handful of remaining 'assembly' workers screw the components together and shove the finished chair into a box for shipment.
~
eagle2
07-31-2009, 10:16 PM
What company or business could afford to operate that way for long ? Temporarily ? Yes but if the company is going to remain viable, at some point it has to recoup the money lost while it sold at a loss. It's odd you mention GM and Chrysler since both were in bankruptcy. If they cannot make a profit now, or in the near future , one or both ought to be defunct. Unless of course, Obama and the Dems subsidize them further.
At some point , costs have to be part of the price equation.
Costs are part of the equation as to whether or not the business stays in business. If the business is able to keep its cost below their revenue, they will stay in business, if not, they won't. That is what happened to Chrysler and GM. They could not simply raise the cost of their products to make up for the high cost of their labor. If they did, nobody would buy their products. Both companies had to go through restructuring in order to get their costs down to a level where it is does not exceed revenue.