Kerry/Democrat Economic Proposals...

[NoCalMike 0]

Or, they find jobs for people in poor countries and pay them a fair wage in that country.

Well then could you find me a detailed economy report on third world countries, since you seem to be very sure as to what is fair in third world countries.

 

13cents is barely enough for those people to buy food for their family. They aren't fueling their economy with their wages. They are just desperate people willing to take ANYTHING that is thrown their way, oh of course until they prove ungrateful and and even poorer nation starts begging, they don't hesitate to close shop and move on to the next villiage. So I am not exactly sure where you have put together your "fair wage in their country" economic chart.

[NoCalMike 0]

Umm, how is keeping our grocery store stocked with produce, a meaningless job?

How is it worth $5.25/hour? Picking fruit and vegetables isn't worth that at all. And, thus, THEY AREN'T PAID THAT.

-=Mike

never said it was worth 5.25, I just said it wasn't a quote, "meaningless" job. Since having grocery stores stocked seems to be rather important.

It's also a job that --- as Dr. Tom so eloquently pointed out --- you could train a gorilla to do.

-=Mike

well actually you can't, or believe me they would have gorillas out there doing it. I am sure the companies enjoy illegal immigration in the sense they can pay farm workers peanuts, and the neat tradeoff is that it keeps food prices lower, so it would be interesting to see if one day conservatives got their wish and illegals were wiped out, and americans started taking those field jobs, and the minimum wage laws were to come into affect.

[treble 0]

Stocking shelves isn't THAT easy.

[NoCalMike 0]

Stocking shelves isn't THAT easy.

well we weren't referring to the literal act of stocking shelves, moreso, the role the field worker plays in making sure the shelves are stocked.

[Stephen Joseph 0]

Wages become very equalized amongst countries if you account for relative price levels, marginal producitivity of labor (which alot of people seem to forget that our labor is VERY productive), uncertainty and risk elements, etc...

 

Shall I cite the AER for this too? I mean, that is if anyone READ the articles I posted which kinda you know, are pretty robust works. Seriously, adjust NOMINAL wages to the constraints above, which companies take into account, and disparity pretty much goes bye bye.

 

India's labor is 1/3 as productive as the US, approx. They make 1/3 the wages, approx. I see no problem with that. Any differences in the ratios are solved through free market arbitrage, extinguishing any gains to be made

[NoCalMike 0]

Wages become very equalized amongst countries if you account for relative price levels, marginal producitivity of labor (which alot of people seem to forget that our labor is VERY productive), uncertainty and risk elements, etc...

 

Shall I cite the AER for this too? I mean, that is if anyone READ the articles I posted which kinda you know, are pretty robust works. Seriously, adjust NOMINAL wages to the constraints above, which companies take into account, and disparity pretty much goes bye bye.

 

India's labor is 1/3 as productive as the US, approx. They make 1/3 the wages, approx. I see no problem with that. Any differences in the ratios are solved through free market arbitrage, extinguishing any gains to be made

That is fine and dandy, but I am not referring to tech jobs in a nice HP building somewhere in India. That is an entirely different discussion. I am talking about nike factories and wal-mart clothes assembly lines in third world countries.

[Kahran Ramsus 0]

well actually you can't, or believe me they would have gorillas out there doing it.

 

Gorillas are also rarer and more expensive than unskilled workers.

[Stephen Joseph 0]

To NoCal: Do I like the idea of substandard *in our eyes* conditions? No. However, in many instances the safety and conditions of such shops are above the standards before but below ours. We only notice they're below ours.

 

Do you propose we tinker with our economy and pass law preventing this? I'm sure that would help things *sarcasm*

 

The only thing we can do is help bring up these countries economically. As w/r rises, conditions improve. Laws barring practices, trade, and such will only hurt us, and those who had the jobs in the other countries

 

Agree or disagree, I'll cite facts and journals tomorrow. Market analysis is what I do on a daily basis.

[teke184 0]

To NoCal:  Do I like the idea of substandard *in our eyes* conditions?  No.  However, in many instances the safety and conditions of such shops are above the standards before but below ours.  We only notice they're below ours.

 

Do you propose we tinker with our economy and pass law preventing this?  I'm sure that would help things *sarcasm*

 

The only thing we can do is help bring up these countries economically.  As w/r rises, conditions improve.  Laws barring practices, trade, and such will only hurt us, and those who had the jobs in the other countries

 

Agree or disagree, I'll cite facts and journals tomorrow.  Market analysis is what I do on a daily basis.

Agreed, Popick. It's historical precedent that industrial and pre-industrial societies can and will exploit child labor until the point is reached where the work needs a certain level of human capital above being alive.

 

What's happening today in the sweatshops of India and Indonesia happened hundreds of years ago in England and the US and it stopped when it became more profitable to get trained adults to do work instead of masses of untrained workers.

 

 

In fact, I'd say India's starting to get out of this rut considering that their universities are producing a LOT of computer programmers, engineers, physicists, and other professions that are highly trained in fields that are important and, in some cases, are in a severe shortage in the US. (Engineers and physicists are particularly hard to find because most US students tend to avoid subjects that place an emphasis on hard science or lots of math)

[NoCalMike 0]

To NoCal: Do I like the idea of substandard *in our eyes* conditions? No. However, in many instances the safety and conditions of such shops are above the standards before but below ours. We only notice they're below ours.

 

Do you propose we tinker with our economy and pass law preventing this? I'm sure that would help things *sarcasm*

 

The only thing we can do is help bring up these countries economically. As w/r rises, conditions improve. Laws barring practices, trade, and such will only hurt us, and those who had the jobs in the other countries

 

Agree or disagree, I'll cite facts and journals tomorrow. Market analysis is what I do on a daily basis.

don't try to downplay the conditions with the *in our eyes* reasoning though. To any human being with a heart you'd be pretty disgusted with what you see over there.

 

As far as the market analysis, well I can't compete with you if that is what you do on a daily basis, however I will say that I thought we had laws against certain labor violations that seem to get let go in the name of nothing but profit and greed.

[Jobber of the Week 0]

*sigh* Okay, one last time.

 

The minimum wage should be adjusted as to the price of necessary goods to have a decent life as an American citizen, understandng that stuff like basic food and shelter is a necessity.

 

What in the hell is wrong with that statement to you guys?

[Stephen Joseph 0]

*sigh* Okay, one last time.

 

The minimum wage should be adjusted as to the price of necessary goods to have a decent life as an American citizen, understandng that stuff like basic food and shelter is a necessity.

 

What in the hell is wrong with that statement to you guys?

Every time you raise the minimum wage, you raise the cost of inputs into goods which then increase their prices necessitating increasing the wage.

 

*sigh Okay, One last time. We cannot create a wage that the market doesn't create. We cannot create a wage floor and expect for there to be no side effects.

 

The very fact that you, or anyone, thinks they can determine the "just wage" better than the whole hand of the market speaks to ignorance of mathematics, probability, statistics, calculus, do I need to go on? Any attempt at wage and price controls has either reduced a country's economy to rubble, stagnated it, or when relaxed led to massive inflation in the following periods.

 

Invest into education and other human capital goods to raise the wage rate. Do not raise it on an artificial basis. Do not tell an employer to employ someone who only produces $6.00 worth of output for $8.00. Would you do that with your money? NO! Let the employ employ someone for what they are worth to the employer.

 

It has been 225 years since Adam Smith explained the invisible hand of the market. By far and away, it is the longest lasting and most powerful economic concept. Do not pretend that even the smartest and most caring 1000 brains could do better in the long-run than the market left, mostly, alone.

*I caveat that to include whatever laws we deem necessary to prevent unfair competition, price-fixing, and other things deemed nasty by us economists*

 

For those that say we should adjust the minimum wage, do you not expect that if people expect wages to go up, they will adjust their expectations accordingly. Do you not agree that if you expect something to happen, that expectation changes how you act than if you did not know something were to occur?

 

I HIGHLY suggest reading up on Robert Lucas' Expectations' Model, Keynesian 'Efficiency Wage' model, and literature on the NAIRU *that some unemployment is actually HEALTHY*

 

When you can back up your arguments with facts, figures, and numbers, then I'll give it some weight.

[NoCalMike 0]

*sigh* Okay, one last time.

 

The minimum wage should be adjusted as to the price of necessary goods to have a decent life as an American citizen, understandng that stuff like basic food and shelter is a necessity.

 

What in the hell is wrong with that statement to you guys?

Every time you raise the minimum wage, you raise the cost of inputs into goods which then increase their prices necessitating increasing the wage.

 

*sigh Okay, One last time. We cannot create a wage that the market doesn't create. We cannot create a wage floor and expect for there to be no side effects.

 

The very fact that you, or anyone, thinks they can determine the "just wage" better than the whole hand of the market speaks to ignorance of mathematics, probability, statistics, calculus, do I need to go on? Any attempt at wage and price controls has either reduced a country's economy to rubble, stagnated it, or when relaxed led to massive inflation in the following periods.

 

Invest into education and other human capital goods to raise the wage rate. Do not raise it on an artificial basis. Do not tell an employer to employ someone who only produces $6.00 worth of output for $8.00. Would you do that with your money? NO! Let the employ employ someone for what they are worth to the employer.

 

It has been 225 years since Adam Smith explained the invisible hand of the market. By far and away, it is the longest lasting and most powerful economic concept. Do not pretend that even the smartest and most caring 1000 brains could do better in the long-run than the market left, mostly, alone.

*I caveat that to include whatever laws we deem necessary to prevent unfair competition, price-fixing, and other things deemed nasty by us economists*

 

For those that say we should adjust the minimum wage, do you not expect that if people expect wages to go up, they will adjust their expectations accordingly. Do you not agree that if you expect something to happen, that expectation changes how you act than if you did not know something were to occur?

 

I HIGHLY suggest reading up on Robert Lucas' Expectations' Model, Keynesian 'Efficiency Wage' model, and literature on the NAIRU *that some unemployment is actually HEALTHY*

 

When you can back up your arguments with facts, figures, and numbers, then I'll give it some weight.

Ok well since you seem to be well schooled in this subject, I am just wondering where the line is drawn between cost of production and money in the pocket for a group of shareholders. It seems that is what this boils down to.

 

When a company is making millions in profit here in america, and then decides to ship overseas in order to make a couple MORE millions in profit, yes they are cutting down on production costs, but the brunt of that saved cost money is going directly into their pockets, not to benefit the consumer. As far as helping economies of these foreign countries, that doesn't happen because they are being paid barely enough to buy food, which does not fuel their economy whatsoever.

 

Now as far as how this affects the american worker. I am just wanting to know when good jobs like tech jobs go overseas, what are the workers here replacing those jobs with over here. What NEW industries are being created over here to compensate?

 

I am not really arguing the economic facts and figures of the benefits from outsourcing. I am moreso arguing that violations are going on unchecked abroad, and the notion that somehow "13 cents a day in "insert country here" is a fair wage"

 

When you tell a workforce that their job isn't worth the american minimum wage, then you are basically telling them that their livelyhood and well-being isn't worth a damn to them either.

[teke184 0]

$0.13 per worker a day doesn't mean crap on its own. In order to make a proper move overseas, you have to know a lot of things including, but not limited to:

 

 

A. Cost of substitute goods and the cost of making them

 

B. Proximity of raw goods to your plant and difficulty of moving intermediate goods to next step of manufacturing OR moving finished goods to the marketplace.

 

C. Availability of human capital. This means properly trained workers, or potentially trainable workers, who are within a reasonable distance of where the plant is.

 

D. Actual costs of moving production overseas (Purchasing new land, builing a new factory, moving the machinery there, cost of lost sales from moving the machinery, etc.)

 

E. The X factor of being in a foreign land. This covers wars, revolutions, nationalization of assets, "grease", etc.

 

F. Barriers to trade (tariffs, quotas, etc.)

 

 

I could decide that I wanted to move a GM factory to Sri Lanka but the $0.13 a day per worker would easily be counterbalanced by other costs associated with a move. I'll use the example of a GM wiring harness for a car.

 

The factors listed above would influence the cost as such:

 

1. Getting raw materials wouldn't be a problem because a lot of cheap electronics come from the Pacific Rim, which is right in that area.

 

HOWEVER, a wiring harness is an intermediate good and it would need to go to the next step of the GM manufacturing chain. That means that you'd have to transport the harnesses out of the factory and ship them to the next factory.

 

This alone will mean increased problems in process-management, as you'll have to change your processes to take into accounts longer lags in your supply chain. A wire harness that used to take one week to arrive may take four weeks now.

 

 

2. Shipping equipment, goods, etc. in Sri Lanka would probably be a serious problem, as most third-world countries (and some mid-major countries like Mexico) have serious problems with infrastructure. Need roads and a factory? Well, you're probably going to have to build them yourself. You'll probably need to import all of your construction material as well as key people on your construction crew, as it is unlikely that you'll find skilled construction workers there.

 

 

3. Making a wire harness, while not too hard, still requires a minimum level of education (human capital). The workers must be able to walk around in a factory without hurting themselves or others and must be able to follow instructions, oral or written, to perform their task.

 

The first condition mentioned is probably more of a problem than you realize. A lot of third-world farmers would have serious problems if they tried to walk into a factory because they wouldn't know what does what and would be a danger to themselves or others.

 

The second condition could be countered by simplifying the job as much as possible. One way it's done now is to color-code the wires and connections on the harness so that the worker knows that they need to connect the blue wire from the blue connector on A to the blue connector on B.

 

 

4. In order to have a plant in Sri Lanka, you'd need to buy land for a factory and build it, as well as taking all steps needed to do business in that country. That may involve several payments to the local government to get building permits, work visas for key employees, etc.

 

 

5. If you chose to buy new equipment to make this plant, you just spent a shit-ton of money to get this sweatshop off the ground. If you're transporting the existing equipment, you've put yourself out of the wire harness business temporarily and you'll either need to stockpile harnesses before you move the plant (overtime to workers) or you'll need to buy harnesses from a vendor (which costs more than normal).

 

6. Productivity- What used to take you one worker in the US may take you 10 workers overseas. On top of that, quality control costs are more likely to increase at the new plant because the workers typically aren't going to be able to do the same job that the US workers did before.

 

 

7. Weird rules of doing business in foreign countries- This could range from regular "grease" payments to kidnapping-for-ransom to terrorist activity to a revolution. If you are in a foreign country that is not particularly stable, your entire investment can disappear overnight.

 

Even if there is some stability, there is always the chance that one of your key employees will be kidnapped and held for ransom or that you'll be the target of a terrorist attack because you're a US company.

 

 

 

 

That's not everything that's involved, but it's certainly enough to make a point. That point being, of course, that moving jobs overseas takes more into account than the cost of individual workers.

 

Anybody who decides to move jobs overseas solely for the cost of labor is an idiot.

[NoCalMike 0]

So what displays anything appealing about moving overseas as shown by what you just laid out in that diagram?

[teke184 0]

So what displays anything appealing about moving overseas as shown by what you just laid out in that diagram?

The main appeals to moving overseas would be if you happened to find wonderful human capital and had minimal costs in transporting work to them.

 

Example- Customer service lines and computer programming in India

 

India has decent population that is highly trained and capable of performing customer service jobs and programming computers. Since long-distance calling is at a minimum these days, especially when purchased in bulk, and computer programs can be transmitted over the Internet, it's very easy to get trained personnel to work and show results with a minimum of costs.

 

 

A call center and a computer programming office are perfect examples of something that can be moved easily to a country like India.

 

A call center mainly requires that the individual be computer-literate, speak an intelligible form of English, and be able to follow a scripted program to resolve problems. The only costs involved are finding a building, stocking it with phones and computers, then keeping it operating.

 

 

A computer programming office is very similar to a call center except that the programmers don't necessarily need to know English. They just need to be able to follow instructions that have been translated for them into Hindi or whatever language they speak.

 

They are not required to program in English, as they're able to use Hindi versions of Visual Basic, C++, and other computer languages. (The compiler only cares about machine instructions, NOT the format of the programming language used).

 

 

 

Most other jobs moved overseas are typically sent to mid-major countries like Mexico which have semi-skilled populations compared to the Third World, have some stability to their government, and have some proper infrastructure.

 

The wiring harness jobs I mentioned earlier went to Mexico because the plants were close enough to the US that it did not cause process-management problems, the workers were trained to do somewhat easily because it was only connecting color-coded wires, etc.

 

 

Many other jobs that move overseas are ones where the entire process is moved out of country and only the finished products arrive in the US.

 

In my earlier example, the best way of explaining it would be if all the primary parts for something came from South America, they were turned into intermediate parts in Central America, they were assembled into a finished product in Mexico, then were sold to consumers in the US.

[Guest MikeSC]

*sigh* Okay, one last time.

 

The minimum wage should be adjusted as to the price of necessary goods to have a decent life as an American citizen, understandng that stuff like basic food and shelter is a necessity.

 

What in the hell is wrong with that statement to you guys?

Then why guarantee everybody $1M/year? That is even MORE just.

 

Increasing the minimum wage is hardly an impactless move. It drives up prices, which does a bang-up job of snuffing out the worth of the "raise". It causes other employees to demand raises. And it reduces the number of jobs available.

-=Mike

[Stephen Joseph 0]

Teke knows his shit

 

I have nothing further to add.