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threlayer
07-13-2010, 10:35 AM
I don't want to exacerbate any conflict, but from my new point of view from south of the border there is a huge and I mean HUGE gap between the standard of living associated with 'real' poverty and the standard of living provided to Americans who are officially defined by the gov't to have incomes below a gov't 'poverty level'.

From your perspective in a near third world country, I certainly see your point of view about how actually good most of the US poverty people have it. Gone to Haiti lately?

But is this an outlier argument?

Melonie
07-13-2010, 01:39 PM
^^^ ultimately I don't think this is an 'outlier' argument. In point of fact it is a 'moral hazard' argument. Put simply, Americans are de-facto guaranteed to achieve a gov't defined 'minimum acceptable standard of living' that is far above that of 3rd world countries - whether they are actually working or not. However, the world market value of the unskilled and semi-skilled labor that such Americans can offer ... as defined by the world market cost of somewhat similar unskilled and semi-skilled labor that 3rd world countries can offer ... even if adjusted for per person productivity differences ( i.e. Chinese unskilled labor may be 1/4th as productive as American unskilled labor, but the cost is only 1/10th that of American minimum wage plus mandated benefits ) ... remains both non-competitive on a global basis as well as insufficient to actually finance that US gov't defined 'minimum acceptable standard of living' they are being provided with via direct or indirect US gov't subsidies.

In essence this is creating an underclass of permanently unemployable Americans. It is also creating a steady demand for illegal immigrants who are willing to work in America at (illegally) low pay rates nearer to the actual world market price of such unskilled and semi-skilled labor. But more to the point, a 'moral hazard' situation has been created where legal minimum wage jobs are disappearing in America, as well as a 'moral hazard' situation where unskilled Americans are better off not working to preserve their eligibility for social welfare benefits and other subsidies !

eagle2
07-13-2010, 03:36 PM
Again you're making things up based on your ideology. You continue to ignore the fact that the high unemployment rate is due to the financial crisis and not high wages. We were at full employment a few years ago, and we will be at full employment again. If anything, there is going to be a major labor shortage here withing the next decade, when baby boomers start retiring in large numbers.

Melonie
07-13-2010, 06:36 PM
You continue to ignore the fact that the high unemployment rate is due to the financial crisis and not high wages

Try telling that to the unemployed American Samoans - where their non-diversified economy makes for a textbook example of the relationship between gov't mandated rising labor costs, employer reaction to those higher labor costs, and consequences of the employer reaction !

(snip)"One of the most noticeable things here in Pago Pago is the fishing industry. There are many tuna fishing boats, a large-boat service yard, and several tuna canneries in the harbor. However, the industry is not what it used to be. There is only one cannery currently operating - the Starkist plant. The Bumblebee Tuna plant closed several years ago, the Chicken of the Sea plant closed a year and a half ago, and word is that the Starkist plant won't make it through next year. As these plants leave, so does the primary source of income for the island.

We visited the tuna plants and spoke to several workers and managers. We asked why the plants are closing. The answer is unanimous: the minimum wage.

In 2007, the US Congress attached an amendment to a bill that gradually raised the minimum wage in American Samoa until it would reach the minimum wage in the mainland US. Wages before 2007 were around $3.25 per hour, while the minimum wage in the US is $7.25 per hour.

Support for the minimum wage is low in Samoa. According to a report by the Government Accountability Office (GAO), the unemployment rate has risen from 10% to 30%, and real incomes have dropped 6% as a result of the job losses. The tuna companies that have closed have shifted their operations to Thailand, where they face wages of under $1 per hour.

What has occurred is a phenomenon covered early in introductory economics. The diagram above is known as a Supply and Demand graph, which represents the relationship between the quantity and price of a good for both consumers and suppliers. The supply curve is upward sloping (indicating a positive relationship between price and quantity supplied), while the demand curve is downward sloping (indicating a negative relationship between price and quantity demanded). The intersection of these two lines is the resulting open market equilibrium.

The minimum wage is known as a 'price control.' The price of labor is set above the market equilibrium price. Employers demand less labor at this higher price while additional suppliers of labor (workers) enter the labor force (those choosing to seek a job, new immigration, etc). The quantity supplied exceeds the quantity demanded. This difference represents a surplus of labor (e.g. unemployment)."(snip)

http://3.bp.blogspot.com/_BjtuzAGG1U8/TByX6JU01II/AAAAAAAAJ9Q/PBLG1w0Tv3Q/s320/COS_unemployment-712169.jpg

(snip)"For more information on the minimum wage in American Samoa, see the June 1, 2010 Wall Street Journal editorial entitled "The New Cannery Row; Congress wants $18 million to offset the jobs it destroyed in Samoa." (snip)

from

The reference to $18 million in US taxpayer grant money involves attempts by the Samoan gov't to receive economic development grant funds in an effort to locate some industry - ANY industry - that is willing to employ unskilled Samoans at $7.25 an hour plus mandated employee benefit costs plus employer SSI taxes. Let's see ... $18,000,000 divided by 6,000 or so lost jobs = an additional cost to US taxpayers of $3,000 per lost job ! And of course we haven't even mentioned the additional cost to US taxpayers for unemployment checks and social welfare benefits !

And, if anything, total tuna sales are higher today than they were before the Samoan minimum wage increase law was passed as customers shift their taste in fish downscale to dirt cheap tuna to minimize weekly grocery budgets.

(snip)"A $20 million investment in marketing last year helped drive StarKist's share of the U.S. tuna sales by volume up from 29 percent at the end of 2008 to 35 percent now, said Mr. Binotto, allowing the company to stake a claim again as the market leader. He thinks Starkist's marketing push helped the entire tuna industry, playing a role in raising overall consumption in the range of 4.5 percent to 6 percent in the last year.

StarKist's annual sales of $550 million to $560 million in late 2008 have grown to between $650 million and $670 million (snip)

Read more:

Thus, in contradiction to your claim, the 'financial crisis' had absolutely nothing at all to do with Samoan tuna canneries closing and laying off workers due to poor business conditions i.e. 650M / 550M represents a 20% GROWTH rate for tuna sales. The employers moving production to Thailand, Korea etc. was purely a function of newly mandated American Samoan labor costs rising so far above competitive world market levels that the employers were faced with a choice of losing business / money to foreign competitors or offshoring their production to lower labor cost countries !!!

~

Melonie
07-13-2010, 06:55 PM
and a more recent update that the last remaining tuna cannery in Samoa is now ready to lay off more workers and transfer production to a 3rd world country ...

(snip)"PAGO PAGO, American Samoa (AP) ― American Samoa's last remaining tuna cannery announced it is cutting its work force in the U.S. territory by an additional 600 to 800 people to keep up with global competition.

Pittsburgh-based StarKist Co. said Thursday in a news release that the layoffs over the next six months will shrink its American Samoa work force to less than 1,200 employees, down from a high of more than 3,000 in 2008.

StarKist President and CEO Don Binotto said in the release that it is difficult to compete when workers' wages are nearly 10 times those of StarKist competitors in Thailand and other countries.

"This decision was not made lightly or without lengthy consideration of every option. We have exhausted every possibility to reduce our costs to remain competitive," Binotto said. "Our competitors have been using a model that moves the labor-intensive fish cleaning process to low-wage countries."

Binotto and other company officials arrived here Wednesday to meet with territorial government officials.

The territory's tuna industry has been hit hard by a 2007 federal law mandating an increase in minimum wages for workers in 18 industries until the federal minimum wage of $7.25 an hour is reached.

The cannery workers' current minimum wage of $4.76 an hour is set to increase by 50 cents on Sept. 30, and reach $7.25 per hour by 2014.

Chicken of the Sea closed its cannery in American Samoa last year, citing the minimum wage law.

"This is a terrible situation for American Samoa, especially after we had a loss of more than 2,000 jobs after COS Samoa Packing cannery closed last September," (snip)

For perspective, American Samoa's total labor force is slightly less than 18,000 workers !!!

eagle2
07-13-2010, 08:23 PM
Closing a few tuna canneries in Samoa isn't what caused the unemployment rate to go from below 5% to 10% in 2-3 years.

Melonie
07-14-2010, 02:57 AM
^^^ as I already pointed out, American Samoa's non-diversified economy makes it a valuable 'example'. Obviously the mainland US economy is still highly diversified, and as such the direct 'in your face' relationship between rising costs of labor and rising unemployment rate that is so obvious in Samoa is far less obvious on the mainland. However, this does not mean that the same relationship doesn't apply !!!



(snip)"economist David Neumark of the University of California, Irvine, wrote on these pages that the 70-cent-an-hour increase in the minimum wage would cost some 300,000 jobs. Sure enough, the mandated increase to $7.25 took effect in July, and right on cue the August and September jobless numbers confirm the rapid disappearance of jobs for teenagers.

The September teen unemployment rate hit 25.9%, the highest rate since World War II and up from 23.8% in July. Some 330,000 teen jobs have vanished in two months. Hardest hit of all: black male teens, whose unemployment rate shot up to a catastrophic 50.4%. It was merely a terrible 39.2% in July."(snip)


And just as obviously, increasing the minimum wage also has the effect of prompting increasing wages for higher paid workers ... on the premise that a pay rate differential must be maintained between unskilled workers with no experience versus other employees with more experience and higher skills. This results in an increase in labor costs over a significantly broader segment of employees, with a broader effect on unemployment rates.



(snip)"Some 14 states plus the District of Columbia currently have enacted state laws that insure their workers are paid more than the federally-legislated minimum rate of $7.25 per hour.

A Smart Politics analysis of wage and employment data finds that those states that have minimum wage laws higher than the federal minimum rate have an average statewide unemployment rate that is 2.0 points higher than those 36 states where wages are equal to the federal minimum.

(Note: Of these 36 states, 26 have rates equal to the federal minimum wage, five states have rates below the federal wage, and five states do not have a minimum wage. The effective result for all 36 states is a minimum wage of $7.25 per hour).

For those states with wages above the federal minimum rate, the average unemployment rate is 10.4 percent. For the remaining 36 states, the average jobless rate is just 8.4 percent."(snip)

~

threlayer
07-14-2010, 03:39 AM
American Samoa, now that's an OUTLIER.

Eric Stoner
07-14-2010, 08:31 AM
Again you're making things up based on your ideology. You continue to ignore the fact that the high unemployment rate is due to the financial crisis and not high wages. We were at full employment a few years ago, and we will be at full employment again. If anything, there is going to be a major labor shortage here withing the next decade, when baby boomers start retiring in large numbers.

This is one of the few times when I agree more with Eagle than with Melonie. I doubt very much that minimum wage legislation, BY ITSELF, causes unemployment. I understand the argument that a minimum wage retards job growth but from what I've seen and read, the evidence for it is little more than anecdotal.

Here is something that ought to be of greater concern : The "brain drain" of Master's Degree holders and PhD's from this country. Because the quota for LEGAL immigrants with advanced degrees has not been increased since 1990, the MAJORITY of graduates with advanced degrees in the sciences are being forced to return to Latin America, Eastern Europe, India, China and other Asian countries. Some are able to get good paying jobs in their native countries and don't want to stay here. Their native economies are growing and there is a demand for their services.

Why should we care ? Doesn't this just open up jobs for American born engineers and research scientists ? Um, not exactly. Not when as many as half the seats in our Engineering Schools and other Graduate Science programs are being filled by foreign born fannies. Not when as many as half of the new generation of fertile minds that we need to come up with the next generation of inventions and technological innovations is LEAVING.

Wait a minute ! Where did all the American born kids that used to fill these slots go to ? A lot of them got MBA's and degrees in advanced finance and went to work on Wall Street. Who do you think cooked up things like Derivatives and MBS's ?

One of the few things keeping us afloat is our technological edge. If we lose that then the last one off the sinking ship please shut off the T.V. and turn out the lights.

eagle2
07-14-2010, 08:35 AM
Maybe the financial crisis will make Wall Street less appealing and engineering more appealing

eagle2
07-14-2010, 08:41 AM
^^^ as I already pointed out, American Samoa's non-diversified economy makes it a valuable 'example'. Obviously the mainland US economy is still highly diversified, and as such the direct 'in your face' relationship between rising costs of labor and rising unemployment rate that is so obvious in Samoa is far less obvious on the mainland. However, this does not mean that the same relationship doesn't apply !!!

http://online.wsj.com/article/SB10001424052970203440104574402820278669840.html

(snip)"economist David Neumark of the University of California, Irvine, wrote on these pages that the 70-cent-an-hour increase in the minimum wage would cost some 300,000 jobs. Sure enough, the mandated increase to $7.25 took effect in July, and right on cue the August and September jobless numbers confirm the rapid disappearance of jobs for teenagers.

The September teen unemployment rate hit 25.9%, the highest rate since World War II and up from 23.8% in July. Some 330,000 teen jobs have vanished in two months. Hardest hit of all: black male teens, whose unemployment rate shot up to a catastrophic 50.4%. It was merely a terrible 39.2% in July."(snip)


And just as obviously, increasing the minimum wage also has the effect of prompting increasing wages for higher paid workers ... on the premise that a pay rate differential must be maintained between unskilled workers with no experience versus other employees with more experience and higher skills. This results in an increase in labor costs over a significantly broader segment of employees, with a broader effect on unemployment rates.

http://blog.lib.umn.edu/cspg/smartpolitics/2010/06/do_higher_minimum_wage_laws_co.php

(snip)"Some 14 states plus the District of Columbia currently have enacted state laws that insure their workers are paid more than the federally-legislated minimum rate of $7.25 per hour.

A Smart Politics analysis of wage and employment data finds that those states that have minimum wage laws higher than the federal minimum rate have an average statewide unemployment rate that is 2.0 points higher than those 36 states where wages are equal to the federal minimum.

(Note: Of these 36 states, 26 have rates equal to the federal minimum wage, five states have rates below the federal wage, and five states do not have a minimum wage. The effective result for all 36 states is a minimum wage of $7.25 per hour).

For those states with wages above the federal minimum rate, the average unemployment rate is 10.4 percent. For the remaining 36 states, the average jobless rate is just 8.4 percent."(snip)

~

You have no proof that the higher unemployment rates are due to increased minimum wage. Two of those states, California and Nevada were hit the hardest by the foreclosure crisis, and Michigan has high unemployment as a result of the downsizing of American auto makers.

If having a high minimum wage causes more unemployment, why is Canada's unemployment rate lower than the US and why is Canada adding jobs faster than the US?

http://www.thestar.com/business/article/833996--june-jobs-boom-hits-ontario

http://canadaonline.about.com/library/bl/blminwage.htm
(The Canadian dollar is worth $.97)

Melonie
07-14-2010, 09:32 AM
^^^ re Canada job growth, I can think of a couple of reasons ...

- Canada actually CONTROLS its immigration, thus far fewer 'non-Canadians' are present to undercut Canadian workers

- Canadian CITIZENS, rather than businesses, pay for their health care ( via higher tax rates ), which lowers employers 'all in' labor costs.

- A significant fraction of the Canadian economy is natural resource based ( oil, gas, mining, refining etc. ) and economic growth in 3rd world countries has kept demand strong.

- The Canadian gov't is not afraid to spend money, since it actually has an 'income' in the form of natural resource royalties ( as opposed to the US having to borrow money to cover its stimulus spending )



American Samoa, now that's an OUTLIER

Yes, granted ! It was specifically chosen as an example BECAUSE it is an outlier ... where gov't jobs, service sector jobs, professional jobs comprise a tiny part of the local economy and unskilled labor constitutes the vast majority of the local economy.



You have no proof that the higher unemployment rates are due to increased minimum wage.

no but the study proves that the two are linked nonetheless !



Not when as many as half of the new generation of fertile minds that we need to come up with the next generation of inventions and technological innovations is LEAVING.

Wait a minute ! Where did all the American born kids that used to fill these slots go to ? A lot of them got MBA's and degrees in advanced finance and went to work on Wall Street. Who do you think cooked up things like Derivatives and MBS's ?

One of the few things keeping us afloat is our technological edge. If we lose that then the last one off the sinking ship please shut off the T.V. and turn out the lights.

'Moral Hazard' at its best ! And don't forget the attorneys, the lobbyists, the gov't bureaucrats etc. Where engineering is concerned, what young person needs to work in hot and dirty conditions, under significant performance pressure, for a comparatively low pay rate ... when attorneys, lobbyists, bureaucrats, brokers, bankers etc. all get to wear nice clothes, get to work in air conditioned offices, avoid actual performance pressure for the most part, and get paid much more ( net of salary plus perks plus benefits ).

Eric Stoner
07-14-2010, 10:22 AM
Maybe the financial crisis will make Wall Street less appealing and engineering more appealing

Wishful thinking at its best. Wall Street is paying very well. So is lobbying, law and government work.

Eric Stoner
07-14-2010, 10:37 AM
^^^ re Canada job growth, I can think of a couple of reasons ...

- Canada actually CONTROLS its immigration, thus far fewer 'non-Canadians' are present to undercut Canadian workers

- Canadian CITIZENS, rather than businesses, pay for their health care ( via higher tax rates ), which lowers employers 'all in' labor costs.

- A significant fraction of the Canadian economy is natural resource based ( oil, gas, mining, refining etc. ) and economic growth in 3rd world countries has kept demand strong.

- The Canadian gov't is not afraid to spend money, since it actually has an 'income' in the form of natural resource royalties ( as opposed to the US having to borrow money to cover its stimulus spending )




Yes, granted ! It was specifically chosen as an example BECAUSE it is an outlier ... where gov't jobs, service sector jobs, professional jobs comprise a tiny part of the local economy and unskilled labor constitutes the vast majority of the local economy.




no but the study proves that the two are linked nonetheless !




'Moral Hazard' at its best ! And don't forget the attorneys, the lobbyists, the gov't bureaucrats etc. Where engineering is concerned, what young person needs to work in hot and dirty conditions, under significant performance pressure, for a comparatively low pay rate ... when attorneys, lobbyists, bureaucrats, brokers, bankers etc. all get to wear nice clothes, get to work in air conditioned offices, avoid actual performance pressure for the most part, and get paid much more ( net of salary plus perks plus benefits ).

Correct on all points except Canada has a very liberal immigration policy. I've seen for myself and my Canadian friends tell me of the huge influx of immigrants from former Commonwealth countries, especially Pakhistan and the Caribbean.

The reason we already have a shortage of engineers is because of our immigration policy. The quota has not increased in 20 years but both our population and our economy have. Another reason is the rise of the American heartland from Texas straight north to North Dakota. Primarily energy based, those states enjoy low unemployment and have job openings for engineers and other technical and skilled jobs. The immediate problem is that is NOT where the research and innovation is taking place. It is where it is being applied and used which is fine but doesn't solve the immediate problem.

Instead we are importing poor, uneducated Mexicans and Central Americans. Obama's ICE Dept. also has a new strategy for dealing with employers who hire illegals. They visit employers and see that illegals are fired. But they are NOT detained or deported. I am NOT making this up. These are called "soft" raids. They do NOTHING to afect either supply or demand for illegal workers.

Melonie
07-14-2010, 02:35 PM
Correct on all points except Canada has a very liberal immigration policy. I've seen for myself and my Canadian frioends tell me of the huge influx of immigrants from former Commonwealth countries, especially Pakhistan and the Caribbean.

I guess my point didn't come across clearly. Canada's LEGAL immigrants work for 'above the table' pay rates that don't necessarily undercut native born Canadian workers. Canada's LEGAL immigrants also pay more in taxes than they consume in social welfare and other gov't benefits / services ( or Canadian local govt's become VERY vocal if this is not the case ). In terms of ILLEGAL immigrants, Canada has far fewer than America does, and actively deports them at the behest of Canadian local gov'ts !

Americas ILLEGAL immigrants work for 'under the table' pay rates that DO undercut native born American workers. Americas ILLEGAL immigrants pay far less in taxes than they consume in social welfare and other gov't benefits / services. Also, Canada doesn't have any 'half-way' immigration policy equivalent to the US H1B visas program as far as I know ( with H1B 'half-way' American immigrant professionals clearly undercutting native born American professionals).

eagle2
07-14-2010, 06:54 PM
^^^ re Canada job growth, I can think of a couple of reasons ...

- Canada actually CONTROLS its immigration, thus far fewer 'non-Canadians' are present to undercut Canadian workers

- Canadian CITIZENS, rather than businesses, pay for their health care ( via higher tax rates ), which lowers employers 'all in' labor costs.

- A significant fraction of the Canadian economy is natural resource based ( oil, gas, mining, refining etc. ) and economic growth in 3rd world countries has kept demand strong.

- The Canadian gov't is not afraid to spend money, since it actually has an 'income' in the form of natural resource royalties ( as opposed to the US having to borrow money to cover its stimulus spending )



Again you're making things up without having the slightest idea of whether or not they're true.

Canada has a higher percentage of foreign born population than any other country, except Australia.

http://www12.statcan.ca/census-recensement/2006/as-sa/97-557/p3-eng.cfm

Most of the jobs recently created in Canada were not in the natural resources sector. From the article I posted earlier:

http://www.thestar.com/business/article/833996--june-jobs-boom-hits-ontario

"There were new jobs in construction, trade, finance, professional services, health care, recreation and food services, primarily in Ontario and Quebec, according to the StatsCan report."

Canada's government is borrowing money to cover its stimulus spending.

http://www.reuters.com/article/idUSN2743062120090127





no but the study proves that the two are linked nonetheless !



No it doesn't. As I said before, Canadian provinces have much higher minimum wages than in the US, but lower unemployment. In addition to Canada, high wage Germany has an unemployment rate of 7.1%, high wage Switzerland has an unemployment rate of 4% and high wage Denmark has an unemployment rate of 6.8%, while low wage Poland has an unemployment rate of 9.9% and low wage Hungary has an unemployment rate of 10.4%.

http://en.wikipedia.org/wiki/List_of_countries_by_unemployment_rate

How do you explain this? It seems that the facts are the opposite of what your ideology would expect. Do you think it's possible your ideology is wrong?

eagle2
07-14-2010, 07:04 PM
I guess my point didn't come across clearly. Canada's LEGAL immigrants work for 'above the table' pay rates that don't necessarily undercut native born Canadian workers. Canada's LEGAL immigrants also pay more in taxes than they consume in social welfare and other gov't benefits / services ( or Canadian local govt's become VERY vocal if this is not the case ). In terms of ILLEGAL immigrants, Canada has far fewer than America does, and actively deports them at the behest of Canadian local gov'ts !

Canada has fewer illegal immigrants than the US because it is much easier to become a legal immigrant in Canada than it is in the US.

Just because someone is in the country illegally doesn't mean they're not paying taxes, and just because someone is here legally, or is a citizen, doesn't mean they are paying taxes.



Americas ILLEGAL immigrants work for 'under the table' pay rates that DO undercut native born American workers. Americas ILLEGAL immigrants pay far less in taxes than they consume in social welfare and other gov't benefits / services. Also, Canada doesn't have any 'half-way' immigration policy equivalent to the US H1B visas program as far as I know ( with H1B 'half-way' American immigrant professionals clearly undercutting native born American professionals).

Not all illegal immigrants work for 'under the table' pay rates, and Americans can just as easily work for work for 'under the table' pay rates as illegal immigrants can. You don't know that illegal immigrants pay far less in taxes than they consume in social welfare. Many illegal immigrants do pay taxes and don't receive any social welfare benefits. Many of them leave their family behind when they come here. This is especially true for seasonal workers.

Melonie
07-14-2010, 07:12 PM
OK if you want the ugly truth, here you go !



(snip)"The Canadian Federation of Independent Business (CFIB)is calling on the Government to revise their immigration policies to allow some low-skilled and unskilled workers to settle in Canada.

The CFIB made more than 50 recommendations on how to improve immigration and minimise red tape for businesses after a study it commissioned found that in some areas of the country more than three-quarters of businesses are suffering from labour shortages.

This has forced some businesses to operate with fewer employees and turn work away due to a lack of manpower, with fears by businessmen that the shortage will worsen.

In its report, Immigration and Small Business: Ideas to Better Respond to Canada's Skills and Labour Shortage, it reveals 91 per cent of small and medium enterprise labour shortages are in non-professional categories, while 65 per cent of economic immigrants are in the professional category.

Allowing low-skilled workers the opportunity to become a permanent resident would be especially effective in helping solve the labour shortage the report argued, as well as making it easier for temporary foreign workers to attain permanent residency.

"The jobs that Canadian employers have in most short supply -- particularly small- and medium-sized firms -- are in that medium-skilled category, in the trades and, increasingly in provinces like this, at the entry level, and the immigration system is not at all geared to bridge that gap," Dan Kelly, CFIB vice-president for Western Canada, told the Chapel Hill News."(snip)



(snip)"As those of you familiar with the workings of Canada's federal Skilled Worker system will already be aware, in order to be eligible for emigration to Canada you need to have had work experience in occupations classed as Skill Level A (professional occupations) or B (occupations and skilled trades), or Skill Type 0 (managerial occupations) on the National Occupations Classifications list to be eligible for a visa.

This means people who only have experience in the aforementioned 'lesser' skilled occupations do not stand a chance of being awarded a federal skilled visa."(snip)

basically the same situation for Germany ...

(snip)Germany is making a greater attempt to encourage highly skilled workers to move to Germany. While low skilled workers will still find it difficult to gain permission to work in Germany, highly skilled workers should find it easier to gain permanent residency. The professions most in need are natural scientists (biologists, chemists, physicists) engineers, professors and scientific personnel in high technology areas. Because of the great difficulty of obtaining work permission for unskilled workers, we only cover the procedure for skilled workers.(snip)

The real deciding factor appears to be that countries like Germany, Switzerland etc. have citizen population growth rates that are below the 'replacement' level of 2.2 children per household. Therefore A. parents ( and generous gov't assistance ) are in a good position to make sure that their child acquires a higher education / high skills, and B. just about any positive economic growth rate will wind up lowering unemployment rates for citizens of these countries. Thus these countries can control their unemployment rates by simply prohibiting the immigration of low skill and semi-skill workers when skill level matched job opportunities are poor.

In contrast, Eastern european countries have higher birth rates ( meaning that significant economic growth rate is needed just to keep up with an expanding number of new citizen workers ) , and the financial condition of most parents ( and eastern european gov'ts) is often not able to insure that their children acquire higher education / high skills. Also, these eastern european countries are now bound by EU work visa reciprocity, meaning that unemployed low skill workers from Germany ( for example ), a country which has driven out low skill employment opportunities due to high taxes / high mandated employee benefit costs etc., may now be relocating to Eastern european countries where low skill job opportunities ( supposedly ) still exist.

~

eagle2
07-14-2010, 07:24 PM
Again, the US economy was at full employment just a few years ago. There wasn't any massive wave of illegal immigrants that came to this country in the past few years to cause our high rate of unemployment.

Melonie
07-14-2010, 07:43 PM
^^^ there were certainly a significant number of additional illegal immigrants jumping the border on a daily basis. Additionally, illegal immigrants who have been in the US for a while now have children reaching working age. But at the same time the birth rate among US citizens is also fairly high compared to Western European countries at least, and many of their children are now also reaching working age, meaning that a 2-3% economic growth rate in America cannot hold the unemployment rate steady ( whereas it can in Western Europe).

Yes, obviously, economic conditions worldwide are not as good over the past couple of years as they previously had been, and job losses resulted. However, this is not the sole reason that US industries were shedding jobs !!! And unlike previous economic downturns, when the economy recovers US employers will NOT be adding unskilled and semi-skilled jobs back (in the USA at least).

The actual lesson from your example Western European countries is this. If you wish to truly control unemployment, A. heavily tax and otherwise discourage your citizen population from having more than 2 children per household, B. firmly control immigration with an eye toward 'cherry picking' only those applicants whose particular skill levels match particular domestic labor shortages, and C. establish a national policy of driving low skill level industries out of the country. So far America has been working for quite a while on C, and is mounting an assault on A, but isn't doing a damn thing about B.

~

rebecca1974
07-14-2010, 11:29 PM
the question is will the senate pass unemployment next week?

Deogol
07-15-2010, 07:25 AM
Maybe the financial crisis will make Wall Street less appealing and engineering more appealing

Infrastructure is gone and one has to start from scratch. While competing with others with economic advantages. Not going to happen.

Deogol
07-15-2010, 07:27 AM
Again you're making things up without having the slightest idea of whether or not they're true.

Canada has a higher percentage of foreign born population than any other country, except Australia.



Most of the jobs recently created in Canada were not in the natural resources sector. From the article I posted earlier:



"There were new jobs in construction, trade, finance, professional services, health care, recreation and food services, primarily in Ontario and Quebec, according to the StatsCan report."

Canada's government is borrowing money to cover its stimulus spending.







No it doesn't. As I said before, Canadian provinces have much higher minimum wages than in the US, but lower unemployment. In addition to Canada, high wage Germany has an unemployment rate of 7.1%, high wage Switzerland has an unemployment rate of 4% and high wage Denmark has an unemployment rate of 6.8%, while low wage Poland has an unemployment rate of 9.9% and low wage Hungary has an unemployment rate of 10.4%.



How do you explain this? It seems that the facts are the opposite of what your ideology would expect. Do you think it's possible your ideology is wrong?

You both can say these things and be right.

Canada might have a lot of foreigners but that doesn't mean they have no controls. Some industries can make a lot of money with few employees while others struggle along. One cannot equate lots of employment with lots of money. I could go on but I think I make the point.

Deogol
07-15-2010, 07:30 AM
OK if you want the ugly truth, here you go !



(snip)"The Canadian Federation of Independent Business (CFIB)is calling on the Government to revise their immigration policies to allow some low-skilled and unskilled workers to settle in Canada.

The CFIB made more than 50 recommendations on how to improve immigration and minimise red tape for businesses after a study it commissioned found that in some areas of the country more than three-quarters of businesses are suffering from labour shortages.

This has forced some businesses to operate with fewer employees and turn work away due to a lack of manpower, with fears by businessmen that the shortage will worsen.

In its report, Immigration and Small Business: Ideas to Better Respond to Canada's Skills and Labour Shortage, it reveals 91 per cent of small and medium enterprise labour shortages are in non-professional categories, while 65 per cent of economic immigrants are in the professional category.

Allowing low-skilled workers the opportunity to become a permanent resident would be especially effective in helping solve the labour shortage the report argued, as well as making it easier for temporary foreign workers to attain permanent residency.

"The jobs that Canadian employers have in most short supply -- particularly small- and medium-sized firms -- are in that medium-skilled category, in the trades and, increasingly in provinces like this, at the entry level, and the immigration system is not at all geared to bridge that gap," Dan Kelly, CFIB vice-president for Western Canada, told the Chapel Hill News."(snip)



(snip)"As those of you familiar with the workings of Canada's federal Skilled Worker system will already be aware, in order to be eligible for emigration to Canada you need to have had work experience in occupations classed as Skill Level A (professional occupations) or B (occupations and skilled trades), or Skill Type 0 (managerial occupations) on the National Occupations Classifications list to be eligible for a visa.

This means people who only have experience in the aforementioned 'lesser' skilled occupations do not stand a chance of being awarded a federal skilled visa."(snip)

basically the same situation for Germany ...

(snip)Germany is making a greater attempt to encourage highly skilled workers to move to Germany. While low skilled workers will still find it difficult to gain permission to work in Germany, highly skilled workers should find it easier to gain permanent residency. The professions most in need are natural scientists (biologists, chemists, physicists) engineers, professors and scientific personnel in high technology areas. Because of the great difficulty of obtaining work permission for unskilled workers, we only cover the procedure for skilled workers.(snip)

The real deciding factor appears to be that countries like Germany, Switzerland etc. have citizen population growth rates that are below the 'replacement' level of 2.2 children per household. Therefore A. parents ( and generous gov't assistance ) are in a good position to make sure that their child acquires a higher education / high skills, and B. just about any positive economic growth rate will wind up lowering unemployment rates for citizens of these countries. Thus these countries can control their unemployment rates by simply prohibiting the immigration of low skill and semi-skill workers when skill level matched job opportunities are poor.

In contrast, Eastern european countries have higher birth rates ( meaning that significant economic growth rate is needed just to keep up with an expanding number of new citizen workers ) , and the financial condition of most parents ( and eastern european gov'ts) is often not able to insure that their children acquire higher education / high skills. Also, these eastern european countries are now bound by EU work visa reciprocity, meaning that unemployed low skill workers from Germany ( for example ), a country which has driven out low skill employment opportunities due to high taxes / high mandated employee benefit costs etc., may now be relocating to Eastern european countries where low skill job opportunities ( supposedly ) still exist.

~

Sounds like a good idea until they are burning cars (like France) and calling for Sharia law (like in Britain.) They looked at it all economically (fuck scarcity and the benefits that brings to workers) and ended up with countries full of nut cases bring their nut case culture and beliefs with them.

Deogol
07-15-2010, 07:33 AM
Again, the US economy was at full employment just a few years ago. There wasn't any massive wave of illegal immigrants that came to this country in the past few years to cause our high rate of unemployment.

There is such a thing as a critical point. Like a pail on a teeter totter fills up until that last ounce finally sends it slamming to the ground.

(That last ounce being the matching point for what the infrastructure of board weight, board angle, etc. provides. Then the entire system destabilizes and takes a new configuration.)

Eric Stoner
07-15-2010, 08:32 AM
Again you're making things up without having the slightest idea of whether or not they're true.

Canada has a higher percentage of foreign born population than any other country, except Australia.

http://www12.statcan.ca/census-recensement/2006/as-sa/97-557/p3-eng.cfm

Most of the jobs recently created in Canada were not in the natural resources sector. From the article I posted earlier:

http://www.thestar.com/business/article/833996--june-jobs-boom-hits-ontario

"There were new jobs in construction, trade, finance, professional services, health care, recreation and food services, primarily in Ontario and Quebec, according to the StatsCan report."

Canada's government is borrowing money to cover its stimulus spending.

http://www.reuters.com/article/idUSN2743062120090127





No it doesn't. As I said before, Canadian provinces have much higher minimum wages than in the US, but lower unemployment. In addition to Canada, high wage Germany has an unemployment rate of 7.1%, high wage Switzerland has an unemployment rate of 4% and high wage Denmark has an unemployment rate of 6.8%, while low wage Poland has an unemployment rate of 9.9% and low wage Hungary has an unemployment rate of 10.4%.

http://en.wikipedia.org/wiki/List_of_countries_by_unemployment_rate

How do you explain this? It seems that the facts are the opposite of what your ideology would expect. Do you think it's possible your ideology is wrong?

Would you please stop this childish chirping about "ideology" ? You have your own "ideology" too. It causes you to favor factual sources that support your arguments and ignore those with facts that run contrary to your opinions. You have your POV which afaic is legitimate and to which you are absolutely entitled. Unfortunately, like many Libs., you are intolerant of conservative and Free Market ideas.

None of the countries you cite has anything resembling the Immigration Policy (sic) of the U.S. As Melonie has pointed out, it doesn't matter what the Minimum Wage is if we have illegal immigrants willing to work for less and employers willing to hire them. Germany has its own illegal immigrants who take the lowest paying jobs. So does Canada. Neither has anything resembling our illegal immigrant population.

Have you looked at a construction site lately ? Seen many American born workers ? Why do you think that is ?

Even some unions like the SEIU and the Laborers have welcomed illegals into their ranks rather than protect jobs for native born and LEGAL immigrants.

Been to a car wash or restaurant ? See many American college kids working there ?

Know any landscaper who uses LEGAL labor ?

That is the real problem. It's one reason why I don't think that modest increases in the Minimum Wage have any real effect on employment. If employers aren't paying it, it doesn't matter what it is.

Employers like McDonald's and Wal-Mart generally do not employ illegals. They are too high profile and too easy for ICE to get to. Likewise, as I've previously pointed out, it is easy for them to pass the extra cost of moderate minimum wage increases on to the consumer. It's literally a matter of a few pennies added onto a burger or pair of underwear.

Canada and some European countries least affected by the Financial Meltdown have better employment numbers than we do NOW. Canada has certainly benefitted from higher oil and GOLD prices. They never saw anything like our housing meltdown whcih we've already discussed several times. A few years ago our employment numbers were much better than theirs. So were our GDP numbers.

eagle2
07-15-2010, 06:40 PM
Would you please stop this childish chirping about "ideology" ? You have your own "ideology" too. It causes you to favor factual sources that support your arguments and ignore those with facts that run contrary to your opinions. You have your POV which afaic is legitimate and to which you are absolutely entitled. Unfortunately, like many Libs., you are intolerant of conservative and Free Market ideas.


My statement was in response to Melonie's refusal to acknowledge that the current high unemployment rate in the United States is a result of the financial crisis. Instead, she continues to insist, based solely on her ideology, that the reason unemployment is so high is because in the United States, businesses are required to pay workers a livable wage. This is not true. As I have pointed out, there are other countries where workers are paid a livable wage, such as Canada, Germany, and Switzerland, where they don't have the high unemployment rate we have. It seems that the only acceptable solution to Melonie, to fix our economy, is to pay our workers third world pay rates, and change our environmental standards to those of third world countries.

Melonie
07-15-2010, 11:08 PM
the current high unemployment rate in the United States is a result of the financial crisis

for at least the the second time in this thread ... yes, obviously, poor economic conditions stemming from the 2008 financial crisis have caused the loss of US jobs. However, this is not the sole reason for such job losses ... a fact that you are loathe to concede. The real proof of the point will be whether or not those US jobs return of their own accord if and when US economic conditions again improve, versus US companies instead choosing to meet 'recovering' demand via adding jobs overseas / outsourcing etc.



It seems that the only acceptable solution to Melonie, to fix our economy, is to pay our workers third world pay rates, and change our environmental standards to those of third world countries.

This will not be MY choice. Instead it will be the choice of US consumers whether they are willing to pay a 'premium' price for US made products ( to the degree that said products are still actually US made ) that have embedded higher labor costs / worker safety costs / environmental costs, versus whether they will opt to purchase the lowest priced world market alternative whose lower price is possible because these cost components are much lower or non-existant . Checking recent WalMart and/or Hyundai and/or Haier sales figures certainly tends to indicate that low price matters most.

~

TinkerBall
07-15-2010, 11:50 PM
This will not be MY choice. Instead it will be the choice of US consumers whether they are willing to pay a 'premium' price for US made products ( to the degree that said products are still actually US made ) that have embedded higher labor costs / worker safety costs / environmental costs, versus whether they will opt to purchase the lowest priced world market alternative whose lower price is possible because these cost components are much lower or non-existant . Checking recent WalMart and/or Hyundai and/or Haier sales figures certainly tends to indicate that low price matters most.

~

Obviously recent sales will reflect that unemployed and underpaid people will go to the store where the bread is a dollar and the peanut butter is $2 instead of $4. That's what we usually do in a great recession.

Melonie
07-16-2010, 12:13 AM
^^^ yes, but ...

If it is somehow expected that US jobs must be added ... and also expected that those US jobs must carry embedded higher labor costs / worker safety costs / environmental costs versus the options available from foreign competitors ... then it must also be expected that peanut butter is going to cost $4 instead of $2. You can't have it both ways forever !!!

TinkerBall
07-16-2010, 06:19 AM
^^^ yes, but ...

If it is somehow expected that US jobs must be added ... and also expected that those US jobs must carry embedded higher labor costs / worker safety costs / environmental costs versus the options available from foreign competitors ... then it must also be expected that peanut butter is going to cost $4 instead of $2. You can't have it both ways forever !!!

Not all of us want it both ways. Walmart sells different lower quality versions of TV's etc. You don't see to many 'well to do' people shopping there. For a sample of people that shop there look at the 'people of walmart' web site. Have you heard about the poisonous toys that China produces? Are you advocating us going back to how it was 100 years ago when there were child laborers, no safety laws, barely subsistence wages, numerous injuries in factories. Don't worry we are becoming a third world and that should help your stocks. I actually like to see people treated fairly but thats just me.

Melonie
07-16-2010, 10:58 AM
Are you advocating us going back to how it was 100 years ago when there were child laborers, no safety laws, barely subsistence wages, numerous injuries in factories

Vitriol aside, what has actually happened is that America has 'exported' all such jobs to 3rd world countries ... where sensitive Americans don't have to see the child labor, unsafe working conditions, 75 cent an hour wages, injured and/or disabled 3rd world workers etc. Logically speaking, it's probable that just as many such problems are occurring now in China, India, Vietnam etc. that happened in America 100 years ago - and will continue to do so as long as a significant number of Americans choose to purchase imported goods from China, India, Vietnam etc. because their costs of production are so much lower.

So in the final analysis, the enactment of US child labor laws, worker safety laws, minimum wage laws, etc. have not eliminated ANY child labor, worker safety hazards or subsistence wages on a GLOBAL basis. All that has really happened is that these things have been eliminated for US workers, but with US workers having fewer jobs as a result. Arguably, Chinese / Indian / Vietnamese workers now experience all of these problems / working conditions that you cited for America 100 years ago ... but without the vast majority of American consumers being aware that these problems exist ( because they can't see it for themselves and because mainstream US media can't / won't cover the issue).

Circling back to the earlier point, I understand that you want to see people treated 'fairly'. However, actually accomplishing such a thing in this context would mean sealing the US border to foreign products that rely on child labor, unsafe working conditions, subsistence wages etc. But an immediate consequence would be that substitute products that do NOT utilize child labor, which are made under 'safe' working conditions, in an environmentally responsible manner, paying 'first world' minimum wage or higher, are going to have to sell for a price that is significantly more expensive than the '3rd world' foreign products they replace.

So we're right back to 'the jar of peanut butter selling for $4 instead of $2' and 'you can't have it both ways forever'. The US congress floated a potential Chinese goods tariff where some liberal think tank calculated that a 27% tariff would need to be added in order to cover some reasonable portion of the embedded cost differential stemming from child labor, unsafe working conditions, subsistence wages etc. in Chinese products. So what you are REALLY talking about is increasing the price of every product imported from a 3rd world country by 27% in order to actually make an impact re child labor, unsafe working conditions, subsistence wages etc. on a global basis.

However, where you may be able to afford such a price premium, a huge number of Americans would be screaming / filing bankruptcy if their wages or unemployment checks or social welfare benefit checks are unchanged but the prices they must pay for all goods imported from 3rd world countries rise by 27%. This was the basis of my point about having it both ways ... hypocritical Americans SAY they want the worker safety, the environmental responsibility, the 'fair' pay rates. But the same Americans don't want to see their standard of living drop by 27% by being forced to actually pay the 'price' that goes along with worker safety, environmental responsibility, and 'fair' pay rates.



You don't see to many 'well to do' people shopping there. For a sample of people that shop there look at the 'people of walmart' web site.

Actually, sales figures show that WalMart is permanently 'stealing' some number of US middle class customers from more 'upscale' supermarket chains like Kroger's, from more 'upscale' retailers like JC Penneys etc. ... based strictly on the fact that with rising state / local / sin taxes, rising energy costs, rising insurance costs etc. versus stagnant or falling incomes, some number of US middle class families must squeeze every possible dollar re their weekly budgets. Imposing a 27% price premium on WalMart's 3rd world imports, from TV's to T shirts to tomatoes, in order to actually reduce child labor, unsafe working conditions, environmental damage etc in 3rd world countries, would be the functional equivalent of forcing these Americans to continue shopping at Kroger's , at JC Penneys etc. This is something which these US middle class customers have already deemed to be economically 'impossible' while still maintaining their existing standard of living.

~

eagle2
07-16-2010, 11:24 PM
for at least the the second time in this thread ... yes, obviously, poor economic conditions stemming from the 2008 financial crisis have caused the loss of US jobs. However, this is not the sole reason for such job losses ... a fact that you are loathe to concede. The real proof of the point will be whether or not those US jobs return of their own accord if and when US economic conditions again improve, versus US companies instead choosing to meet 'recovering' demand via adding jobs overseas / outsourcing etc.


It is the sole reason for the dramatic rise in unemployment over the past few years. The unemployment rate went from 4.1% in 2006 to over 10% in January 2010. There wasn't any mass exodus of manufacturers to overseas, over the past 3 years. What happened was, people stopped spending money. 2008 was the worst year for auto sales in decades. There wasn't any mass movement of auto production overseas. People just weren't buying cars. The same goes for housing. The construction industry was one of the sectors with the most job losses and 100% of houses/buildings in the US are built in the US.





This will not be MY choice. Instead it will be the choice of US consumers whether they are willing to pay a 'premium' price for US made products ( to the degree that said products are still actually US made ) that have embedded higher labor costs / worker safety costs / environmental costs, versus whether they will opt to purchase the lowest priced world market alternative whose lower price is possible because these cost components are much lower or non-existant . Checking recent WalMart and/or Hyundai and/or Haier sales figures certainly tends to indicate that low price matters most.

~

Low price doesn't matter most. Quality is a major factor. Most Hyundai cars sold in America are made in America by high wage American workers. There isn't much difference in pricing. When I was recently shopping for a car, Hyundai prices weren't much different than other brands. The reason why Hyundai has been so successful lately, is because they quality of their vehicles has dramatically improved. If low price was what mattered most, Yugos would be the best selling brand in the US, not Toyota or GM.

eagle2
07-17-2010, 12:06 AM
Vitriol aside, what has actually happened is that America has 'exported' all such jobs to 3rd world countries ... where sensitive Americans don't have to see the child labor, unsafe working conditions, 75 cent an hour wages, injured and/or disabled 3rd world workers etc. Logically speaking, it's probable that just as many such problems are occurring now in China, India, Vietnam etc. that happened in America 100 years ago - and will continue to do so as long as a significant number of Americans choose to purchase imported goods from China, India, Vietnam etc. because their costs of production are so much lower.



You don't know that. I doubt there are many American manufacturers employing children overseas, given the bad publicity it would give them. Kathy Lee Gifford had her name badly tarnished when it was found out her clothing line was being made with child labor. Nike got a black eye when it was publicized how bad the working conditions were in their factories. For China's government, finding employment for all of the adults in China is a major concern. I doubt very much they're encouraging factories to hire children.

In addition, many prosperous countries today, including the US, started out as low wage countries. Just because a country has many low wage jobs today doesn't mean they always will. South Korea was a low wage country 20-30 years ago. Today the average annual household income there is over $40,000. In China, wages are currently increasing. What's happening the real world is the exact opposite of your ideology. Instead of poor countries bringing down wages and the standard of living in the US, poor countries are becoming richer and their wages and standard of living are increasing.

Melonie
07-17-2010, 04:52 AM
There wasn't any mass exodus of manufacturers to overseas, over the past 3 years

Technically speaking, yes the US based manufacturing company may still be located in the USA. However, and increasingly so, high 'value added' actual manufacturing has been transferred overseas - leaving the company's remaining American """manufacturing""" jobs as actually being low 'value added' assembly jobs and/or glorified '''warehouse''' jobs. Even the AFLCIO concedes this point ... .

And while this trend certainly began far more than three years ago, indeed over the past 3-4 years the actual plans stemming from earlier corporate decisions to bypass high US costs became a reality. From auto component manufacture, to appliance manufacture, to computer equipment manufacture, to tire manufacture, this meant that offshore component suppliers, that offshore manufacturing facilities etc. were finally ready to 'take over' former US high 'value added' manufacturing operations.

http://www.clevelandfed.org/CFFileServlet/_cf_image/_cfimg584348373785387883.PNG

This chart clearly shows that, from a relatively constant level of nationwide US manufacturing employment after 'post/9/11' 2003 up to 2006, another major downward change in manufacturing employment began in 2006 and accelerated through 2007 and 2008. Thus the case can clearly be made that loss of high 'added value' manufacturing jobs LED the recent recession ( not the other way around as you assert )



Most Hyundai cars sold in America are made in America by high wage American workers.

Horse puckey. Hyundai cars are ASSEMBLED in America ... with engine / transmission components shipped in from Korea and with less critical components shipped in from China. This business model is repeated for most other 'foreign' car companies that assemble vehicles in America. The fact remains that a large number of high paying high 'value added' manufacturing jobs once necessary to produce engines / transmissions and other sub-assemblies in the USA are now 'history'.



I doubt there are many American manufacturers employing children overseas

Actually, child labor probably built your new I-Pod !



In China, wages are currently increasing. What's happening the real world is the exact opposite of your ideology. Instead of poor countries bringing down wages and the standard of living in the US, poor countries are becoming richer and their wages and standard of living are increasing.

You're confusing percent change versus absolute value. Yes China just implemented a major percentage increase in their minimum wage ... from US ~$0.55 an hour to US ~$0.75 an hour !!! I'm sure that such a huge percentage of Chinese labor cost increase will convince a whole bunch of US based companies to consider moving jobs back to the USA at a cost of $7.25 an hour ( plus another $2-$3 an hour in mandated employee benefit costs ). Real world, indeed !



What happened was, people stopped spending money.

What REALLY happened was that American people stopped EARNING money ( or as much money ) soon after Bill Clinton opened up the 'global economy' options via NAFTA, 'most favored nation' trading status for China. Americans then attempted to substitute the spending of borrowed money in place of only spending money actually present in their paychecks ( to the tune of 6% per year through the mid-00's ) in order to preserve their apparent standard of living. In other words, in the mid 00's many Americans did what the American gov't is now doing ... employing deficit spending of borrowed money in order to postpone the eventual 'day of reckoning' where their actual personal economic reality must be faced. Your reference to people stopping their spending in the last couple of years actually refers to their inability to borrow yet more money to spend beyond what their paychecks can actually sustain, i.e. that 'day of reckoning' finally arriving !

I will also restate the fact that this 6% per year of 'deficit spending' by American individuals created an 'appearance' of economic prosperity ( and resulting US employment ) that was 6% above the actual sustainable level. Even if nothing else changed in regard to the US economy that 6% ( and resulting US employment ) is now 'gone forever'

~

eagle2
07-17-2010, 02:07 PM
Technically speaking, yes the US based manufacturing company may still be located in the USA. However, and increasingly so, high 'value added' actual manufacturing has been transferred overseas - leaving the company's remaining American """manufacturing""" jobs as actually being low 'value added' assembly jobs and/or glorified '''warehouse''' jobs. Even the AFLCIO concedes this point ... http://www.aflcio.org/aboutus/thisistheaflcio/publications/magazine/0903_amjobs.cfm .


Your article doesn't have a date, but it appears to be 5-6 years old, which shows this didn't all happen in the past 3-4 years.



And while this trend certainly began far more than three years ago, indeed over the past 3-4 years the actual plans stemming from earlier corporate decisions to bypass high US costs became a reality. From auto component manufacture, to appliance manufacture, to computer equipment manufacture, to tire manufacture, this meant that offshore component suppliers, that offshore manufacturing facilities etc. were finally ready to 'take over' former US high 'value added' manufacturing operations.

http://www.clevelandfed.org/CFFileServlet/_cf_image/_cfimg584348373785387883.PNG

This chart clearly shows that, from a relatively constant level of nationwide US manufacturing employment after 'post/9/11' 2003 up to 2006, another major downward change in manufacturing employment began in 2006 and accelerated through 2007 and 2008. Thus the case can clearly be made that loss of high 'added value' manufacturing jobs LED the recent recession ( not the other way around as you assert )


Your chart isn't displaying.




Horse puckey. Hyundai cars are ASSEMBLED in America ... with engine / transmission components shipped in from Korea and with less critical components shipped in from China. This business model is repeated for most other 'foreign' car companies that assemble vehicles in America. The fact remains that a large number of high paying high 'value added' manufacturing jobs once necessary to produce engines / transmissions and other sub-assemblies in the USA are now 'history'.


No they're not. Honda and Toyota manufacture transmissions in the US and 70-80% of their components come from the US/Canada. Hyundai manufactures transmissions in Korea, but 40 - 45% of their components come from the US/Canada.

http://www.bankrate.com/finance/auto/cars-built-in-alabama.aspx

http://www.bankrate.com/finance/auto/cars-built-in-kentucky.aspx

97% of the parts for the Honda Civic come from North America.

http://world.honda.com/CIVIC/basiccarfortheworld/

As bad as things are here, you greatly exaggerate and make things sound much worse.




Actually, child labor probably built your new I-Pod ! http://gizmodo.com/5481832/apple-reports-discovery-of-child-workers-in-their-factories


The workers were 15 years, which I hardly consider child labor, and there were only 11 of them. When I was 15, I spent my summer working, mowing lawns. According to the article, the child laborers are no longer employed.



You're confusing percent change versus absolute value. Yes China just implemented a major percentage increase in their minimum wage ... from US ~$0.55 an hour to US ~$0.75 an hour !!! I'm sure that such a huge percentage of Chinese labor cost increase will convince a whole bunch of US based companies to consider moving jobs back to the USA at a cost of $7.25 an hour ( plus another $2-$3 an hour in mandated employee benefit costs ). Real world, indeed !


Companies are reconsidering China as a result of rising labor costs.

http://www.philly.com/philly/business/98157269.html?cmpid=15585797

(snip)
Wham-O Inc., which created the Hula Hoop and Slip 'N Slide, decided to bring half of its Frisbee production and some production of other items back to the United States.

At the other end of the scale, some in research-intensive sectors such as pharmaceutical, biotech, and other life-sciences companies are also reconsidering China for reasons including costs and incentives offered in other countries.

"Life-sciences companies have shifted some production back to the U.S. from China. In some cases, the U.S. was becoming cheaper," said Sean Correll, director of consulting services for Emptoris, based in Burlington, Mass.

(snip)

China's cost advantage isn't going to disappear overnight, but it will continue to get smaller. The same is happening in other countries. From the same article:

(snip)
Makers of toys and trinkets, Christmas trees, and cheap shoes already have folded by the thousands or moved away, some to Vietnam, Indonesia , or Cambodia. But those countries lack the huge workforce, infrastructure, and markets China can offer, and most face the same labor issues as China.
(snip)




What REALLY happened was that American people stopped EARNING money ( or as much money ) soon after Bill Clinton opened up the 'global economy' options via NAFTA, 'most favored nation' trading status for China. Americans then attempted to substitute the spending of borrowed money in place of only spending money actually present in their paychecks ( to the tune of 6% per year through the mid-00's ) in order to preserve their apparent standard of living. In other words, in the mid 00's many Americans did what the American gov't is now doing ... employing deficit spending of borrowed money in order to postpone the eventual 'day of reckoning' where their actual personal economic reality must be faced. Your reference to people stopping their spending in the last couple of years actually refers to their inability to borrow yet more money to spend beyond what their paychecks can actually sustain, i.e. that 'day of reckoning' finally arriving !

I will also restate the fact that this 6% per year of 'deficit spending' by American individuals created an 'appearance' of economic prosperity ( and resulting US employment ) that was 6% above the actual sustainable level. Even if nothing else changed in regard to the US economy that 6% ( and resulting US employment ) is now 'gone forever'

~

On average, Americans continued to earn the same amount of money, although it didn't increase, and their federal taxes fell. The problem was, their spending did increase. Americans started buying bigger houses and bigger and more vehicles, that they could not afford. If Americans lived within their means (including the American government), we wouldn't be having the problems we're having now. I recently read that the mortgage default rate for homes costing more than a million dollars is higher than homes for middle and lower class Americans.

threlayer
07-17-2010, 07:39 PM
Wishful thinking at its best. Wall Street is paying very well. So is lobbying, law and government work.

YES

and absolutely disgusting !!!

threlayer
07-17-2010, 07:48 PM
Companies are reconsidering China as a result of rising labor costs.

http://www.philly.com/philly/busines...cmpid=15585797

(snip)
Wham-O Inc., which created the Hula Hoop and Slip 'N Slide, decided to bring half of its Frisbee production and some production of other items back to the United States.

At the other end of the scale, some in research-intensive sectors such as pharmaceutical, biotech, and other life-sciences companies are also reconsidering China for reasons including costs and incentives offered in other countries.

"Life-sciences companies have shifted some production back to the U.S. from China. In some cases, the U.S. was becoming cheaper," said Sean Correll, director of consulting services for Emptoris, based in Burlington, Mass.

(snip)

China's cost advantage isn't going to disappear overnight, but it will continue to get smaller. The same is happening in other countries. From the same article:

(snip)
Makers of toys and trinkets, Christmas trees, and cheap shoes already have folded by the thousands or moved away, some to Vietnam, Indonesia , or Cambodia. But those countries lack the huge workforce, infrastructure, and markets China can offer, and most face the same labor issues as China.
(snip)

The fastest gun in the West was always on the lookout for someone who wanted to take over his reputation and was willing to put his gun to the task.

Businesses may learn, someday, that there will always be a cheaper labor market until the cheapest market eventually is exploited, maybe in a century or two. No matter where you put your factory investment cash, that decision will only be good for a short time compared to the lifetime of the factory. So to me, it is better to put limited "eggs in the basket" and do so only when the long term consequences and costs are considered. American industry has not done that for some decades now.

I cannot imagine the depth of the folly of manufacturing medicines in China. You think we have problems with the pharmaceutical industry now (recalls etc), just wait until that crap hits the fan of commerce. That's the stuff that nightmares are made of.

Melonie
07-17-2010, 09:53 PM
Your article doesn't have a date, but it appears to be 5-6 years old, which shows this didn't all happen in the past 3-4 years

... which reinforces my basic point ! With the onset of NAFTA / 'most favored nation' status for China / economic 'globalism' in the 90's, all US corporations began evaluating what these then new developments might mean to their future operations and bottom line. At about the same time the dotcom bust plus post 9/11 slowdown caused US corporations to cut back existing manufacturing levels ( which were mostly domestic ). However, when economic conditions began to again improve circa 2003, many of those US corporations chose not to increase domestic operations. Instead they met any rising 'demand' via new offshore facilities / outsourcing etc. - which was the actual result of the 'global economy' evaluation process that had begun several years earlier. It was during this time period that the AFLCIO article was written.

From 2003 to 2006 US manufacturing employment levels remained more or less constant in the face of further increases in demand. The logical explanation for this was that US corporations were in the planning stages to expand offshore facilities / outsourcing etc. to meet demand growth ( at lower cost ) while implementing as little expansion / modernization as possible in their ( higher cost ) domestic operations. In searching for a manufacturing employment graph that would actually 'work', I managed to locate this graph which also includes 'trade balance' cash flow

http://images.huffingtonpost.com/2010-02-26-mfgtrandempl8909small.JPG

The obvious take-away is that from 2006 forward US manufacturing employment begins dropping like a stone ... while at the same time the US manufacturing 'trade deficit' with other countries begins growing rapidly. This confirms the fact that post - 2006 US manufacturing job losses are not just the result of deteriorating US economic conditions reducing demand, but the result of a deliberately planned substitution via ( low cost ) foreign manufacturing facilities / foreign sources based on the very same 'global economy' corporate planning that commenced nearly a decade earlier finally being implemented. It can also be argued that changes in US gov't policy increasing US 'costs of doing business' resulting from the 2006 election provided these US corporations with even stronger motivations to accelerate foreign manufacturing / foreign sources, but in terms of this thread topic that particular point makes little difference.

The 'talking heads' argument towards future US manufacturing employment, of course, is that every US economic slowdown can and will be used as a plausible explanation for the closure of more remaining ( high cost ) US manufacturing facilities and the elimination of more ( high cost ) us manufacturing jobs, while behind the scenes new foreign manufacturing facilities / foreign sources are being readied to deal with the next cyclical increase in demand as economic conditions once again improve. This arguably constitutes a 'stairway to hell' for US manufacturing.



No matter where you put your factory investment cash, that decision will only be good for a short time compared to the lifetime of the factory. So to me, it is better to put limited "eggs in the basket" and do so only when the long term consequences and costs are considered. American industry has not done that for some decades now

Agreed in your context of Korea versus China versus Vietnam for labor cost reasons. But also true of foreign companies investing in US facilities for benefit cost reasons. In other words, Honda corporately plans a 20 year life for US assembly plants which more or less matches the duration of their tax exemptions / US state and local subsidies, and which also lowers the probability of US employees being able to work long enough to qualify for company funded retirement benefits before their plant will close. It can also be argued that the true reason that foreign companies invest in US auto assembly facilities is not purely economic, but is largely due to the US tariff structure on imported vehicles plus rising US currency exchange rate volatility (i.e. corporate profitability is far less risky if the 'price' of the finished product and the 'cost' of producing that product are both denominated in the same currency ). But again, in terms of this thread topic, that point makes little difference.


I'm going to try and circle back on topic while carrying this basic point that US manufacturing jobs are being 'permanently' lost. In this context, there is little or no hope that unemployed manufacturing workers are ever going to find 'replacement' jobs that can provide anywhere near the levels of pay and benefits that their former jobs provided. Therefore the 'talking heads' argument goes that the US federal gov't borrowing yet more money in order to fund yet more weeks / months / years of unemployment checks for unemployed ( and arguably unemployable ) manufacturing workers is counterproductive on several levels. The same 'talking heads' argument goes that extending federal unemployment benefits merely 'kicks the can down the road' toward facing the reality that these jobs are gone forever, that the standard of living of these former manufacturing workers MUST decline radically (in the absence of ongoing gov't subsidies) to reflect the actual 'global value' of their labor, etc.

~

eagle2
07-17-2010, 10:56 PM
http://images.huffingtonpost.com/2010-02-26-mfgtrandempl8909small.JPG

The obvious take-away is that from 2006 forward US manufacturing employment begins dropping like a stone ... while at the same time the US manufacturing 'trade deficit' with other countries begins growing rapidly.


No, the US manufacturing 'trade deficit' shrank dramatically from 2006 forward. In 2006, the trade deficit was over $550 billion. By late 2008, the trade deficit fell below $350 billion.

Melonie
07-17-2010, 11:16 PM
^^^ you're attempting to substitute / intermix the overall trade deficit with the manufacturing trade deficit. The author of this graph covered this 'fallacy' in the linked Huff Post story ...

(snip)"Bonddad makes a number of mistakes in analyzing the relationship between trade and employment. First, he cites a chart from SilverOz that supposedly compared imports of total goods and services with manufacturing employment. However, exports matter too, and for manufacturing, what is most relevant is the manufacturing trade balance, the difference between imports and exports of manufactured goods. The graph reportedly includes imports of both services and non-manufactured commodities, which are clearly un-related to manufacturing. Furthermore, exports sales can support domestic employment, and imports displace employment. You have to look at changes in the manufacturing trade balance to get an accurate picture of the impact of trade on the demand for manufacturing output and labor.

But there are more problems with Bonddad's trade and employment graph. It has a blue line which purports to measure imports of goods and services (measured with a negative sign, which is appropriate). But this series never exceeds $700 billion in imports. However, U.S. imports exceeded $2.5 trillion in 2008. Something is wrong here. It's not the trade deficit either, because that was $-760 billion in 2006. Finally, the story is about manufacturing employment. The graph reports employment in "goods producing industries," which include a number of domestic, non-manufacturing industries."(snip)

however, a partial concession ...

(snip)"In the past, employment and the trade deficit in manufacturing were roughly stable for 30 years from the late 60s through the late 90s.* Then the Asian financial crisis hit in 1998. The value of the dollar soared along with the manufacturing trade deficit. Manufacturing employment fell like a rock, with a lag of about 2 years, as shown in the graph. The manufacturing trade balance did start to improve in 2007, but the big drop in the deficit came in 2008 and 2009, and was caused by the recession. The recession was also responsible for the loss of about 2 million of the 5.7 million manufacturing jobs lost since 1998."(snip)


from

eagle2
07-17-2010, 11:52 PM
^^^ you're attempting to substitute / intermix the overall trade deficit with the manufacturing trade deficit. The author of this graph covered this 'fallacy' in the linked Huff Post story ...


I was strictly going by the graph you posted, and the numbers I quoted were from your graph.

Melonie
07-18-2010, 12:05 AM
Again trying to steer this thread back on topic, the important point to keep in perspective is that ~6 million high paying 'wealth' producing US manufacturing jobs have been lost in the past decade, with ~2 million US manufacturing jobs having been lost in the past couple of years alone. Of the ~15 million currently unemployed Americans collecting unemployment checks , and a 46% figure for 'long term' unemployed ( see ) there are probably 7 million Americans collecting 'extended' federal unemployment benefits. ~2 million of those are arguably ex-manufacturing workers with little to no hope of ever finding another job that will come close to providing a similar level of income / benefits.

Gov't approval of yet more gov't borrowing / money printing in order to provide yet more unemployment checks merely delays the eventual 'day of reckoning' when these Americans must face the fact that their standard of living was out of proportion to the actual 'world market' value of their labor. Arguably, the same is also true of other long term unemployed workers who have similarly small hopes of ever finding another job that provides as similar level of income / benefits to the job they lost - i.e. gov't workers. From this viewpoint, infinitely extended unemployment benefits actually amounts to an 'upper tier' social welfare benefit - which serves as a disincentive for these formerly highly paid long term unemployed Americans to seek / accept a replacement job which is more in line with the actual 'global value' of their labor ... with an accompanying permanent reduction in their standard of living And it also increases the burden on future taxpayers and/or 'steals' from every American via US dollar purchashing power devaluation in order to pay for those extended benefits, which in effect results in a permanent reduction in the standard of living of working Americans in order to subsidize the standard of living for non-working Americans.

threlayer
07-18-2010, 07:18 PM
Once you print a bunch of money, it seems that EVERYTHING you further spend comes under the gun of the Conservatives. There are so many things that such printed money is spent on that could/should be traded off, including the pet projects of such Conservative politicians, to keep the misery index below a disastrous level. Not just because of its getting (or losing) votes, but because it is the right thing to do.

Melonie
07-19-2010, 03:12 AM
Not just because of its getting (or losing) votes, but because it is the right thing to do.

Well this is a question that goes to the heart of the matter. Apparently you think it is 'the right thing to do' to literally give a year's worth of taxpayer funded 'severance pay' to a couple of million long term unemployed union auto workers, union gov't workers, union construction workers etc. via extended unemployment benefit checks. Apparently you think it is 'the right thing to do' for the gov't to de-facto strip away the concept that unemployment benefit checks are part of a 'self-funding' insurance system ( in some ways similar to SSI ) and make them just one more 'entitlement program' paid for out of general tax revenues.

I agree with you that there is potential for gov't spending cuts in many other areas which could be used to fund extended unemployment benefits. In fact extended benefits would already have been passed if Democrats had agreed to make such gov't spending cuts ... but they didn't agree.

threlayer
07-19-2010, 07:54 AM
Point is that these people and their employers did nothing in themselves to lead to their losses. In fact the government did, and by it I mean really the people allowed the government to act (or not act) responsibly. So the government, and with it, the rest of us, are massively culpable. Unemployment laws need to revisited and streamlined to cover such exceptional economic events (as large as 1 or 2 per century).

We need to be just as much concerned with the present as with the future.

Melonie
07-19-2010, 12:24 PM
Point is that these people and their employers did nothing in themselves to lead to their losses

Horse puckey !!! What union auto workers, union gov't workers, union gov't contractors ALL did was refuse to renegotiate their pay and benefit packages down to some 'reasonable' level / cost. What the 'employers' did in turn was to file for bankruptcy. This scenario applies over and over again, from GM to the City of Vallejo, CA. When 'these people' were confronted with a choice of accepting say a 15% pay cut with ongoing employment, versus refusing to accept any significant cuts to their contracted pay and benefits levels at the risk of winding up unemployed, logic says that 'these people' gambled and lost. Infinitely extended unemployment benefits actually forces other US taxpayers to pay off 'these people's 'gambling' debt !

As to unemployment laws, what's really needed is for politicians to allow the 'insurance' based system to function as originally intended ( and funded ) - i.e. employers' insurance premiums are based on average 'turnover', and employee benefits are limited to the 26 weeks actually funded by the employers' insurance premiums.

threlayer
07-20-2010, 01:58 PM
Remember that the financial industry was playing Russian Roulette with so much leveraged money. And the government let them, while knowing about it.

Melonie
07-20-2010, 02:40 PM
^^^ and why not ... the gov't itself was 'cashing in' via Fannie and Freddie. So you are arguing that because constitutent groups in the financial industry gambled and were bailed out, and just because constitutent groups in the auto industry gambled and were bailed out, that the gov't establishing a new de-facto bailout for yet another constituent group who gambled and lost is good policy ? I'll admit that at least it is consistent !

threlayer
07-20-2010, 08:12 PM
I thought Fannie and Freddie were independent corporations.

The auto industry is in the middle of paying back its loans, not so with AIG etc.

What is the "yet another constituent group who gambled and lost "? The unemployed? The unions?

Unions are just workers who are trying to level the playing field against huge powerful privileged corporations enabled by the government (Congress who are largely paid off by those corporations in subtle certain ways).

You have shown a lot of disdain over the years for workers, unionized or independent, even moreso for those who are unemployed. Where do you get that feeling? Why?