The salaries of CEO's and higher management have climbed disproportionately over the last 60 years at the expense of worker wages and opportunities. There needs to be a much larger share of the pie allocated to worker wages. Most corporations could continue to operate in the US if they brought corporate compensation down to what it is was in the 1950’s; CEO-To-Worker Pay Ratio has Ballooned 1,000 percent since 1950. How much as minimum wage gone up in this period?
quote:
The Dodd-Frank financial reform law aimed to make it easier for the public to know how much CEOs are getting paid in comparison to their workers. The law includes a provision requiring public companies to disclose their CEO-to-worker pay ratios, but nearly three years after the law passed, the Securities and Exchange commission still hasn’t put the rule in place, thanks in part to business opposition to the proposal, according to ABC News.Sen. Robert Menendez (D-N.J.), who authored the provision told ABC last year: “It might embarrass some companies to reveal that they pay their CEO in the range of 400 times what they pay their typical worker.”
It can be especially embarrassing when the CEO doesn’t perform. Former J.C. Penney head Ron Johnson, whose compensation was 1,795 times the average worker pay, according to Bloomberg, was recently ousted from his post after failing to turn around the struggling company.
http://www.huffingtonpost.com/2013/04/30/ceo-to-worker-pay-ratio_n_3184623. html
Most of the savings in labor costs achieved through relocation have gone straight into the pockets of higher management and shareholders. Management and shareholders are not going to want to split these profits with workers if they return to the US. The US government would have to subsidize this move as it has promised to do with Carrier.
Moving operations overseas has allowed companies to not only pay workers less but to take advantage of the multiple resources a worker's family has to meet household costs. Many of these companies are based in rural areas and so the daily cost of living is supplemented by keeping small farms. Wages in these areas only make up a percentage of what a worker needs to support a family.
US workers have to be given a wage that would cover a much higher proportion of household expenses. To give the average worker a chance to make a living wage and support a family minimum wage would have to be in the $35 range. This again would have to be subtracted from corporate wages.
I agree with your assessment on where the profits have gone with outsoucing and overseas operations. And I agree with what you state has happened over the last several decades in terms of CEO vs average worker pay. I know where you are coming from and I'm not too far away from it, although I am generally against higher minimum wages or mandated living wages. I want the process to happen naturally...as in more jobs chasing fewer workers. When more opportunities exist than can easily be filled by the existing labor pool wages will rise organically in a supply - demand of labor equation.
But let me ask you a question, you say increasing average worker pay would have to come from corporate wages (CEO and management). And you also say that the corporation isn't going to accept less profit to pay more in wages.
So then how do you do it? I mean how does it happen?
Let's just say that Washington passed some high wage requirements...ok it is law of the land. What is going to happen? It would only accelerate and expand outsourcing as corporations look to escape the new higher wage requirement to the extent they can. Right, wrong, or otherwise I understand the motives of the corporation and their shareholders. You don't just think that CEO's and upper management willingly will take less pay?
I really think the first step in the process has to be rewarding companies who stay or invest in facilities and people here. And then we must penalize those who take advantage of foreign labor and lower overhead costs to bring their goods and services to market here in the US.
Once that is achieved, and every company who wants to sell product in our market is truly on a level playing field I think the impact on wages will be dramatic. Not in this one-off Carrier example. I'm talking about Samsung building appliances here. I'm talking about more autos being made here. Everything that can be built or assembled here. The opportunities for labor would be outstanding.
Free traders like to say "the world has x number of people and we are only y% of that world population, we can't just buy and sell among ourselves we must sell to the world". Great in theory, but how many of the world population can actually buy our "stuff". How many people in Central America or Africa or even Asia, how many of those people have the income to buy things made here? And who is to say that just because an American company can sell into that market, where is that stuff made? Are we talking about an Apple iphone, made in China and sold globally? Are we talking about Cat earth moving equipment? Because Cat actually employs more people globally than they do in US and their product is built in plants all over the world. Are we talking about a Chevy Cruze that when sold abroad does not get exported from the US production plant, instead it is built in several plants around the globe to satisfy world-wide sales. I mean, there are certainly substantial stuff we export, and in some trade adjustment process I speak of, some of those people may be hurt by new trade law. However, I think as a nation and for our population in general the postitives far outweigh the negatives on balance.
When more opportunities exist than can easily be filled by the existing labor pool wages will rise organically in a supply - demand of labor equation.
This labor pool right now is very large and many of them have antiquated skills. Most of these workers will require some retraining. What I suggest below is a way to give companies an incentive to retrain them and then give them good paying jobs by increasing the value of the goods they produce.
But let me ask you a question, you say increasing average worker pay would have to come from corporate wages (CEO and management). And you also say that the corporation isn't going to accept less profit to pay more in wages.
So then how do you do it? I mean how does it happen?
If you look at most of Trump’s Cabinet, they became billionaires largely by screwing people. Capitalists have never been nice guys and gals. It would seem that this group would never voluntarily ever give anything up for the workers. The best bet would be to demonstrate how workers as consumers can actually function as assets. This type of a system is called Fordism and many see it as a catalyst that helped create the US Middle Class.
Only a short time ago there was a special cachet for goods made in the USA. I lived in Mexico in the eighties and whenever I went back to the US friends would order Levi Strauss jeans, transistors and other products that were made in the USA. I would point out that most of this stuff was available in Mexico at much cheaper prices. They would respond but it’s not made in America and point to the deficiencies of the other products.
The goal of companies that manufacture goods in the US should be to make superior goods for both the US market and the fast growing middle class market abroad. The message should be if you want to buy cheap by elsewhere, but if you want quality buy American. It is really not too late to revitalize an image in the global mindset—similar to that which existed in Mexico and many other countries as recently as the eighties--that American made is synonymous with quality and longevity.
The product line from American companies has been cheapened in a number of ways over the last few decades. The first is Hollywood’s production of low end movies. How does one explain the abundance of movies on Netflix that critics on rotten tomatoes seldom score above 25%? Is it really possible that the majority of US movies are that bad? Are we witnessing the slow degradation of one of America’s premier art forms? Or have movie producers ever eager to capitalize on the continued fascination with American culture begun to cater to the low end of the global market. Anyone who has lived abroad knows that in Asia, Latin America and elsewhere workers being paid little more than subsistence wages brighten their lives by going to the movies, and they don’t like reruns. That is a huge market and it is probably where the most money from American movies is made.
This could sound elitist but Hollywood should return to making the kind of movies that Clint Eastwood always produces. Yes, there will not be as many crappy American movies in circulation at any one time, but the stuff that does get released will carry that special aura of being produced in America. American movies should be as awe inspiring as each Apple iphone release. A lot of American culture is sold abroad through movies and if the presentation is cheapened then so will the value of American goods.
Another way American goods are cheapened is by making them about the brand and not where they are made. As an example LL Bean is using America to elevate its brand. The goods though that LL Bean sells are made outside of the US. As the company looks for cheaper and cheaper manufacturing centers the contrast is between what goods are produced in China or Vietnam and which are inferior and which are superior. Any mention of America is totally absent in the new production cycle. Trump, as an example, could announce his ties and clothes will hitherto be produced in the US and will become Trump products exclusively made in the US. He could encourage other companies to follow him. America first, brand second.
Should workers be paid $35 and upward? Henry Ford believed that there was a benefit in giving workers higher wages in that they were then able to become more avid consumers. Workers who purchase American made goods could become advertising symbols for their own companies and for made in American culture abroad. Investing in workers thus becomes a hidden asset for companies who want to expand their range abroad.
One always tends to see India or China as impoverished but both countries have growing middle classes. One of the defining features of the Middle Class is that it is composed of very eager consumers ever ready to purchase items that would elevate their social status. Superior American made goods would fit right into this growing niche.
The bottom strata would still be served by other companies and they would not be deprived of entertainment or clothes by the above targeted system. Perhaps members of this rank would work harder to rise up economically and be able to purchase American made goods.
The salaries of CEO's and higher management have climbed disproportionately over the last 60 years at the expense of worker wages and opportunities. There needs to be a much larger share of the pie allocated to worker wages. Most corporations could continue to operate in the US if they brought corporate compensation down to what it is was in the 1950’s; CEO-To-Worker Pay Ratio has Ballooned 1,000 percent since 1950. How much as minimum wage gone up in this period?
quote:
The Dodd-Frank financial reform law aimed to make it easier for the public to know how much CEOs are getting paid in comparison to their workers. The law includes a provision requiring public companies to disclose their CEO-to-worker pay ratios, but nearly three years after the law passed, the Securities and Exchange commission still hasn’t put the rule in place, thanks in part to business opposition to the proposal, according to ABC News.Sen. Robert Menendez (D-N.J.), who authored the provision told ABC last year: “It might embarrass some companies to reveal that they pay their CEO in the range of 400 times what they pay their typical worker.”
It can be especially embarrassing when the CEO doesn’t perform. Former J.C. Penney head Ron Johnson, whose compensation was 1,795 times the average worker pay, according to Bloomberg, was recently ousted from his post after failing to turn around the struggling company.
http://www.huffingtonpost.com/2013/04/30/ceo-to-worker-pay-ratio_n_3184623. html
Most of the savings in labor costs achieved through relocation have gone straight into the pockets of higher management and shareholders. Management and shareholders are not going to want to split these profits with workers if they return to the US. The US government would have to subsidize this move as it has promised to do with Carrier.
Moving operations overseas has allowed companies to not only pay workers less but to take advantage of the multiple resources a worker's family has to meet household costs. Many of these companies are based in rural areas and so the daily cost of living is supplemented by keeping small farms. Wages in these areas only make up a percentage of what a worker needs to support a family.
US workers have to be given a wage that would cover a much higher proportion of household expenses. To give the average worker a chance to make a living wage and support a family minimum wage would have to be in the $35 range. This again would have to be subtracted from corporate wages.
I agree with your assessment on where the profits have gone with outsoucing and overseas operations. And I agree with what you state has happened over the last several decades in terms of CEO vs average worker pay. I know where you are coming from and I'm not too far away from it, although I am generally against higher minimum wages or mandated living wages. I want the process to happen naturally...as in more jobs chasing fewer workers. When more opportunities exist than can easily be filled by the existing labor pool wages will rise organically in a supply - demand of labor equation.
But let me ask you a question, you say increasing average worker pay would have to come from corporate wages (CEO and management). And you also say that the corporation isn't going to accept less profit to pay more in wages.
So then how do you do it? I mean how does it happen?
Let's just say that Washington passed some high wage requirements...ok it is law of the land. What is going to happen? It would only accelerate and expand outsourcing as corporations look to escape the new higher wage requirement to the extent they can. Right, wrong, or otherwise I understand the motives of the corporation and their shareholders. You don't just think that CEO's and upper management willingly will take less pay?
I really think the first step in the process has to be rewarding companies who stay or invest in facilities and people here. And then we must penalize those who take advantage of foreign labor and lower overhead costs to bring their goods and services to market here in the US.
Once that is achieved, and every company who wants to sell product in our market is truly on a level playing field I think the impact on wages will be dramatic. Not in this one-off Carrier example. I'm talking about Samsung building appliances here. I'm talking about more autos being made here. Everything that can be built or assembled here. The opportunities for labor would be outstanding.
Free traders like to say "the world has x number of people and we are only y% of that world population, we can't just buy and sell among ourselves we must sell to the world". Great in theory, but how many of the world population can actually buy our "stuff". How many people in Central America or Africa or even Asia, how many of those people have the income to buy things made here? And who is to say that just because an American company can sell into that market, where is that stuff made? Are we talking about an Apple iphone, made in China and sold globally? Are we talking about Cat earth moving equipment? Because Cat actually employs more people globally than they do in US and their product is built in plants all over the world. Are we talking about a Chevy Cruze that when sold abroad does not get exported from the US production plant, instead it is built in several plants around the globe to satisfy world-wide sales. I mean, there are certainly substantial stuff we export, and in some trade adjustment process I speak of, some of those people may be hurt by new trade law. However, I think as a nation and for our population in general the postitives far outweigh the negatives on balance.
When more opportunities exist than can easily be filled by the existing labor pool wages will rise organically in a supply - demand of labor equation.
This labor pool right now is very large and many of them have antiquated skills. Most of these workers will require some retraining. What I suggest below is a way to give companies an incentive to retrain them and then give them good paying jobs by increasing the value of the goods they produce.
But let me ask you a question, you say increasing average worker pay would have to come from corporate wages (CEO and management). And you also say that the corporation isn't going to accept less profit to pay more in wages.
So then how do you do it? I mean how does it happen?
If you look at most of Trump’s Cabinet, they became billionaires largely by screwing people. Capitalists have never been nice guys and gals. It would seem that this group would never voluntarily ever give anything up for the workers. The best bet would be to demonstrate how workers as consumers can actually function as assets. This type of a system is called Fordism and many see it as a catalyst that helped create the US Middle Class.
Only a short time ago there was a special cachet for goods made in the USA. I lived in Mexico in the eighties and whenever I went back to the US friends would order Levi Strauss jeans, transistors and other products that were made in the USA. I would point out that most of this stuff was available in Mexico at much cheaper prices. They would respond but it’s not made in America and point to the deficiencies of the other products.
The goal of companies that manufacture goods in the US should be to make superior goods for both the US market and the fast growing middle class market abroad. The message should be if you want to buy cheap by elsewhere, but if you want quality buy American. It is really not too late to revitalize an image in the global mindset—similar to that which existed in Mexico and many other countries as recently as the eighties--that American made is synonymous with quality and longevity.
The product line from American companies has been cheapened in a number of ways over the last few decades. The first is Hollywood’s production of low end movies. How does one explain the abundance of movies on Netflix that critics on rotten tomatoes seldom score above 25%? Is it really possible that the majority of US movies are that bad? Are we witnessing the slow degradation of one of America’s premier art forms? Or have movie producers ever eager to capitalize on the continued fascination with American culture begun to cater to the low end of the global market. Anyone who has lived abroad knows that in Asia, Latin America and elsewhere workers being paid little more than subsistence wages brighten their lives by going to the movies, and they don’t like reruns. That is a huge market and it is probably where the most money from American movies is made.
This could sound elitist but Hollywood should return to making the kind of movies that Clint Eastwood always produces. Yes, there will not be as many crappy American movies in circulation at any one time, but the stuff that does get released will carry that special aura of being produced in America. American movies should be as awe inspiring as each Apple iphone release. A lot of American culture is sold abroad through movies and if the presentation is cheapened then so will the value of American goods.
Another way American goods are cheapened is by making them about the brand and not where they are made. As an example LL Bean is using America to elevate its brand. The goods though that LL Bean sells are made outside of the US. As the company looks for cheaper and cheaper manufacturing centers the contrast is between what goods are produced in China or Vietnam and which are inferior and which are superior. Any mention of America is totally absent in the new production cycle. Trump, as an example, could announce his ties and clothes will hitherto be produced in the US and will become Trump products exclusively made in the US. He could encourage other companies to follow him. America first, brand second.
Should workers be paid $35 and upward? Henry Ford believed that there was a benefit in giving workers higher wages in that they were then able to become more avid consumers. Workers who purchase American made goods could become advertising symbols for their own companies and for made in American culture abroad. Investing in workers thus becomes a hidden asset for companies who want to expand their range abroad.
One always tends to see India or China as impoverished but both countries have growing middle classes. One of the defining features of the Middle Class is that it is composed of very eager consumers ever ready to purchase items that would elevate their social status. Superior American made goods would fit right into this growing niche.
The bottom strata would still be served by other companies and they would not be deprived of entertainment or clothes by the above targeted system. Perhaps members of this rank would work harder to rise up economically and be able to purchase American made goods.
_______________________________________________________________________________________
Another regurgitation of the left-wing talking points and factually wrong as in your line "If you look at most of Trump’s Cabinet, they became billionaires largely by screwing people"
From the loading dock down at the garbage dump that mat be your outlook but demonstrates your lack of experience and understanding of the real world.
Appreciate your well reasoned response Swifty - ah an intelligent exchange of ideas in the Whipping Post. It feels good.
I see the retraining issue as a bottle neck, there simply are not enough opportunities in the "new" economy than existed previously for people who were able to attain middle class status in the "old" economy.
I went to automotive trade school with some people who were laid off a Werner ladder manufacturing plant in PA as the production was shifted to Mexico. But new hire auto techs don't get paid what they used to. Why? Because there is an oversupply of qualified applicants trying to get in the field. So much so that alot of old-time techs, the ones with decades of knowledge are being forced out by new hires because they can pay them less and the employer believes they produce similar results. And I have friends and family in teaching and nursing - both fields are saturated with people looking for work in those areas. The gas and oil work was booming here for a while, but that too has fallen on hard times. There are just so many people trying to find that good paying job and it truly is a bottle neck, too many workers fighting for too few jobs. Atleast in my area of NE Ohio and Western PA there just is not enough well paying jobs or even just enough jobs in general in healthcare, education or other service industries, including building or automotive trades.
I know there are new fields of advanced manufacturing that require new skills that some laid off old manufacturing workers could receive. And I know there are opportunities in tech, depending on where one lives. It just doesn't seem like enough is out there, retrained or otherwise.
I just feel that saying "people need retraining" as kind of an easy way to offer a solution to the problem, when in reality, my opinion, by and large it doesn't even begin to solve the issue. Retraining into what? If 1000 people at a manufacturing plant get laid off, what field of employment is lacking 1000 workers that they need to be absorbed into if they get retrained?
I also want to say that LL Bean does make and sell some things in the USA. I am very very in touch with what is or isn't available made in USA to the extent my life almost revolves around it. LL Bean produces some of their boots in the US as well as blankets for beds. Pretty sure they also sell a heavy fabric (almost canvas) material bag, like one might take to the beach or something that is made in USA. You can get your name on it. LL Bean's catalog, as do other catalogs, state which products are USA or some companies use an American flag or something to identify which products are USA as a selling point.
Which brings me to your largest point.
Many companies have realized that advertising and marketing items as Made in USA can be a selling feature which I am very happy about and I even take time to thank some companies for doing so on their websites or catalogs.
But very very few companies, certainly no large companies, are going to market Made in USA over their brand. I might like that, as it sounds you would. But from a business standpoint, growing and promoting a brand name will always be the primary objective. Companies own their brand, it's who they are and they use it to differentiate themselves from the competition. Nobody owns Made in USA, piling money into an ad campaign to promote a companies products that are Made in USA may net positive results, but it isn't the same as promoting their own brand as being the go to source for quality. If two American companies make a boot in the USA, say Thorogood brand and Danner brand...advertising both as made in USA means less because they are both made in the USA. So then these companies are going to use the good will and reputation of their brand to help the sale. The USA feature cancels out.
I know what you are saying that the quality, or perceived quality of a USA made product is what should be promoted. But I'm sure we both know that the USA has no monopoly on quality. I mean, hell, an Oppo DVD player made in China is one of the best DVD/BuRay/Media players on the market period.
So what is better really? Many Japanese products are of very high quality, in some cases better than US. Is a Toyota branded car engineered and made in Japan better than a Ford branded car engineered and made in the USA? Some would say the Toyota.
If we look at electronics, there are still some very high end audio components made in the US and Japan. Most as we know have gone to China, Malaysia, Thailand, Vietnam, etc. Not really even that many electronics coming out of Korea these days that I see. Seems most of the A/V equipment in my lifetime was first made in Japan, then outsourced to Korea, now outsourced to a host of lower wage Asian companies. But I am getting off track.
When it comes to high end electronics there is a huge price difference from say made in USA Triad Speakers vs imported big box store Klipsch speakers. Put Triad and Klipsch in a store at their representative price points and what will sell more?
Put a 6' long metal shelf assembly, the kind you might buy for your garage, made in China for $85 vs a 6' long shelf assembly made in USA for $135 and what will the sales be? Will the USA one be of higher quality, probably, the fitment and quality control will be likely be higher. But will the consumer value that?
I know your example of people in Mexico wanting made in USA, but if you have an American consumer standing in Home Depot wanting a shelf for their garage, which one will sell more? 8 out of 10 consumer I would suggest will buy the cheaper one. Sure maybe they know it may not be as high of quality, but it might be good enough quality for what they need it for. And they can make their dollar stretch further and buy more stuff. Price controls a majority of purchasing decisions. And alot of times it comes down to what people can afford.
Now I've cited many examples where something made in USA is sold for the exact same price as something imported. I actually see it all the time. And in those cases, people are going to buy a brand they know more often than not. Somebody is likely to buy a Stanley hammer vs an off brand hammer if the price is the same irregardless of where it is made. While buying things made in USA has become more important for people, at the end of the day brand and price are bigger driving factors for the majority of people I find.
My friends and family know how much of a USA freak I am, and they all tell me how important it is to them often giving me stories they think I will appreciate. But then I catch them not following their own practices. My Mom just gave me a made in China Christmas card! My Mom! If anyone is more in touch with my country of origin obsession it would be her. Of course I called her on it and she said she forgot to look. A good friend of mine tells me how much he always buys USA, then I see him wearing shoes that are imported. People often say one thing and do another.
I do not think we are going to get a significant number of US consumers who want to buy on the USA feature first and foremost, at best it may be a 3rd criteria for most people after price and brand. And since I don't see companies abandoning brand promotion in favor of USA promotion, and vast majority of people are always going to buy on price then I don't see your solution being viable. As to the Mexican consumers wanting things made in USA, I'm sure your experience is true. But then I read that people in Korea buy Korean, and in fact there are protests over the importation of US beef that is going to compete with Korean raised beef.
So then, I feel that it can't be left to business to do the right thing and it can't be left to consumers to do the right thing. What is the right thing? The right thing is doing what benefits local communities, states and ultimately the federal government. Financially healthy communities, states and government at the federal level, I feel, is best achieved by having people employed, making good wages with more tax revenue coming in than expenditures going out. Less social program spending as people are more self sufficient.
I believe you and I both want the same net result, we just have different visions on how it could be achieved. I think the only realistic way to achieve my vision is with the hand of the government because I can't see consumers or producers doing what is necessary on their own to achieve the goal.
So what is better really? Many Japanese products are of very high quality, in some cases better than US. Is a Toyota branded car engineered and made in Japan better than a Ford branded car engineered and made in the USA? Some would say the Toyota.
Toyota, Honda, Kia, Nissan, VW, Hyundai, BMW actually all have manufacturing plants in the US (Toyota and Honda each have 4). Sure, they are engineered abroad, but nice to know some of the work and profits go to US workers.
So what is better really? Many Japanese products are of very high quality, in some cases better than US. Is a Toyota branded car engineered and made in Japan better than a Ford branded car engineered and made in the USA? Some would say the Toyota.
Toyota, Honda, Kia, Nissan, VW, Hyundai, BMW actually all have manufacturing plants in the US (Toyota and Honda each have 4). Sure, they are engineered abroad, but nice to know some of the work and profits go to US workers.
Sure they do. An argument could be made that Toyota and Honda are fairly vital to the US economy. And some of the lesser companies who make very limited models in the US an argument could be made they have a net negative impact here. But at the end of the day, I want to get more of these foreign auto companies to build more models here.
In the context we were discussing in terms of made in USA or America representing quality, we can't always claim that. For a couple decades the Japanese have also earned a reputation of quality, unlike the post-WWII perception of Japanese products, which at that time they were more comparable to the China in today's market in terms of quality.
Here is an example of perhaps the Japanese product being of better quality than a US product.
Large tires, the kind that lifted trucks or Jeeps might want to use. Goodyear, Interco, and other US companies make some of these tires with aggressive mud tread. And so do some Japanese companies, such is Nitto (a line of Toyo Tire) and Yokohama tires. The large tires made by US companies are very hard to balance. When it is on a tire balancing machine you can see oscillation in the tread and sides of the tire as it spins. The Japanese tires by comparison balance easier. One reason for this could be the Japanese have better quality molds or they replace their molds more often than US companies.
Swifty said that US companies have let some quality go and that is true with alot of things.
If you can build the bestest highest quality thing possible and priced it accordingly, perhaps nobody would buy it. Perhaps the highest level of quality is overkill if nobody appreciates it and pays for what it costs? Manufacturers try and strike a balance of quality, durability, retail price point and profitability. Some quality may be sacrificed in order to achieve some other goals.
Again, US companies can't be left to themselves to look out for what is best for America. And these companies can't be relied upon to promote the made in USA label as that of the highest quality because frankly these companies have other self interests that do not always align with what the interests our federal government has, or should have.
Appreciate your well reasoned response Swifty - ah an intelligent exchange of ideas in the Whipping Post. It feels good.
I see the retraining issue as a bottle neck, there simply are not enough opportunities in the "new" economy than existed previously for people who were able to attain middle class status in the "old" economy.
I went to automotive trade school with some people who were laid off a Werner ladder manufacturing plant in PA as the production was shifted to Mexico. But new hire auto techs don't get paid what they used to. Why? Because there is an oversupply of qualified applicants trying to get in the field. So much so that alot of old-time techs, the ones with decades of knowledge are being forced out by new hires because they can pay them less and the employer believes they produce similar results. And I have friends and family in teaching and nursing - both fields are saturated with people looking for work in those areas. The gas and oil work was booming here for a while, but that too has fallen on hard times. There are just so many people trying to find that good paying job and it truly is a bottle neck, too many workers fighting for too few jobs. Atleast in my area of NE Ohio and Western PA there just is not enough well paying jobs or even just enough jobs in general in healthcare, education or other service industries, including building or automotive trades.
I know there are new fields of advanced manufacturing that require new skills that some laid off old manufacturing workers could receive. And I know there are opportunities in tech, depending on where one lives. It just doesn't seem like enough is out there, retrained or otherwise.
I just feel that saying "people need retraining" as kind of an easy way to offer a solution to the problem, when in reality, my opinion, by and large it doesn't even begin to solve the issue. Retraining into what? If 1000 people at a manufacturing plant get laid off, what field of employment is lacking 1000 workers that they need to be absorbed into if they get retrained?
I also want to say that LL Bean does make and sell some things in the USA. I am very very in touch with what is or isn't available made in USA to the extent my life almost revolves around it. LL Bean produces some of their boots in the US as well as blankets for beds. Pretty sure they also sell a heavy fabric (almost canvas) material bag, like one might take to the beach or something that is made in USA. You can get your name on it. LL Bean's catalog, as do other catalogs, state which products are USA or some companies use an American flag or something to identify which products are USA as a selling point.
Which brings me to your largest point.
Many companies have realized that advertising and marketing items as Made in USA can be a selling feature which I am very happy about and I even take time to thank some companies for doing so on their websites or catalogs.
But very very few companies, certainly no large companies, are going to market Made in USA over their brand. I might like that, as it sounds you would. But from a business standpoint, growing and promoting a brand name will always be the primary objective. Companies own their brand, it's who they are and they use it to differentiate themselves from the competition. Nobody owns Made in USA, piling money into an ad campaign to promote a companies products that are Made in USA may net positive results, but it isn't the same as promoting their own brand as being the go to source for quality. If two American companies make a boot in the USA, say Thorogood brand and Danner brand...advertising both as made in USA means less because they are both made in the USA. So then these companies are going to use the good will and reputation of their brand to help the sale. The USA feature cancels out.
I know what you are saying that the quality, or perceived quality of a USA made product is what should be promoted. But I'm sure we both know that the USA has no monopoly on quality. I mean, hell, an Oppo DVD player made in China is one of the best DVD/BuRay/Media players on the market period.
So what is better really? Many Japanese products are of very high quality, in some cases better than US. Is a Toyota branded car engineered and made in Japan better than a Ford branded car engineered and made in the USA? Some would say the Toyota.
If we look at electronics, there are still some very high end audio components made in the US and Japan. Most as we know have gone to China, Malaysia, Thailand, Vietnam, etc. Not really even that many electronics coming out of Korea these days that I see. Seems most of the A/V equipment in my lifetime was first made in Japan, then outsourced to Korea, now outsourced to a host of lower wage Asian companies. But I am getting off track.
When it comes to high end electronics there is a huge price difference from say made in USA Triad Speakers vs imported big box store Klipsch speakers. Put Triad and Klipsch in a store at their representative price points and what will sell more?
Put a 6' long metal shelf assembly, the kind you might buy for your garage, made in China for $85 vs a 6' long shelf assembly made in USA for $135 and what will the sales be? Will the USA one be of higher quality, probably, the fitment and quality control will be likely be higher. But will the consumer value that?
I know your example of people in Mexico wanting made in USA, but if you have an American consumer standing in Home Depot wanting a shelf for their garage, which one will sell more? 8 out of 10 consumer I would suggest will buy the cheaper one. Sure maybe they know it may not be as high of quality, but it might be good enough quality for what they need it for. And they can make their dollar stretch further and buy more stuff. Price controls a majority of purchasing decisions. And alot of times it comes down to what people can afford.
Now I've cited many examples where something made in USA is sold for the exact same price as something imported. I actually see it all the time. And in those cases, people are going to buy a brand they know more often than not. Somebody is likely to buy a Stanley hammer vs an off brand hammer if the price is the same irregardless of where it is made. While buying things made in USA has become more important for people, at the end of the day brand and price are bigger driving factors for the majority of people I find.
My friends and family know how much of a USA freak I am, and they all tell me how important it is to them often giving me stories they think I will appreciate. But then I catch them not following their own practices. My Mom just gave me a made in China Christmas card! My Mom! If anyone is more in touch with my country of origin obsession it would be her. Of course I called her on it and she said she forgot to look. A good friend of mine tells me how much he always buys USA, then I see him wearing shoes that are imported. People often say one thing and do another.
I do not think we are going to get a significant number of US consumers who want to buy on the USA feature first and foremost, at best it may be a 3rd criteria for most people after price and brand. And since I don't see companies abandoning brand promotion in favor of USA promotion, and vast majority of people are always going to buy on price then I don't see your solution being viable. As to the Mexican consumers wanting things made in USA, I'm sure your experience is true. But then I read that people in Korea buy Korean, and in fact there are protests over the importation of US beef that is going to compete with Korean raised beef.
So then, I feel that it can't be left to business to do the right thing and it can't be left to consumers to do the right thing. What is the right thing? The right thing is doing what benefits local communities, states and ultimately the federal government. Financially healthy communities, states and government at the federal level, I feel, is best achieved by having people employed, making good wages with more tax revenue coming in than expenditures going out. Less social program spending as people are more self sufficient.
I believe you and I both want the same net result, we just have different visions on how it could be achieved. I think the only realistic way to achieve my vision is with the hand of the government because I can't see consumers or producers doing what is necessary on their own to achieve the goal.
What I was proposing in my prior example was a model that could be competitive in a new global space where there are three main players. Right now the US is the dominant force globally in most important areas. China and Russia also have global aspirations but they are both only upstarts when it comes to competing in a global economy. China and Russia in different ways both have historical predispositions that will constrain them as they continue to expand.
President Obama was asked the other day about whether Russia was a serious threat and he said that they really only had a few commodities for sale. Besides oil and gas they sold arms, he said. He also mentioned that they don’t innovate. The Chinese are also for the most part not innovators. Neither Russia nor the Chinese have any kind of cultural system that would allow the new middle class to embrace as they climbed the social ladder in their respective countries. The US cultural system which includes visual and musical creations is totally dominant globally. The US is way ahead of the game in terms of culture and innovation, the two things that people prize most dearly.
The US though needs to be more selective in terms of a market.
Free traders like to say "the world has x number of people and we are only y% of that world population, we can't just buy and sell among ourselves we must sell to the world". Great in theory, but how many of the world population can actually buy our "stuff". How many people in Central America or Africa or even Asia, how many of those people have the income to buy things made here? And who is to say that just because an American company can sell into that market, where is that stuff made?
From this any reasonable economist might conclude that the world is too scary and say let’s just create a protected economy which produces and consumes its own goods.
First, there are a lot of people in Asia and not all of them are poor. This is from Wikipedia, but there are sources and so you can decide for yourself if it’s credible.
Standard of living in India varies from state to state. With one of the fastest growing economies in the world, clocked at a growth rate of 7.6% in 2015, India is fast on its way to becoming a large and globally important consumer economy. According to Deutsche Bank Research the estimates are nearly 300 million people for all Middle Class.[1] If current trends continue, India's share of world GDP will significantly increase from 7.3 in 2016 to 8.5 percent of the world share by 2020.[2] In 2011, less than 22 percent of Indians lived under the global poverty line, nearly a 10 percent reduction from 29.8 percent just two years prior in 2009.[3]
According to NCAER, India's middle class population would be 267 million in 2016. Further ahead, by 2025-26 the number of middle class households in India is likely to more than double from the 2015-16 levels to 113.8 million households or 547 million individuals.[4] Another estimate put the Indian middle class as numbering 475 million people by 2030.[5] It is estimated that average real wages will quadruple between 2013 and 2030.[6]
https://en.wikipedia.org/wiki/Standard_of_living_in_India
As well,
China’s middle class is on fire. According to a study by consulting firm McKinsey & Company, 76 percent of China’s urban population will be considered middle class by 2022. That’s defined as urban households that earn US$9,000 – US$34,000 a year.
http://www.businessinsider.com/chinas-middle-class-is-exploding-2016-8
For the real purchasing power of the emerging Indian and Chinese Middle Class, one has to factor in remittances from abroad. Over half the applicants to Ivy League schools with really high SAT scores are Asians. The vast majority of them stay in the developed countries to work and they send money back to China and India. These remittances are so prized that India does not tax them.
Atleast in my area of NE Ohio and Western PA there just is not enough well paying jobs or even just enough jobs in general in healthcare, education or other service industries, including building or automotive trades.
I think we need to be realistic about what constitutes retraining. In any major shift you are going to lose people. When offices went from typewriters to personal computers many secretaries lost their jobs. People are close to retirement, they don’t feel like picking up new skills, they have grandchildren to babysit, or they are burnt out. For the Rust Belt to be truly revitalized there needs to be new opportunities that require fresh enthusiastic mindsets and new skills, which may be very different than old skills.
Nobody is going to be able to reproduce yesterday and create a vibrant economy. Trump claims he can but he is either not being honest or he feels he can sweep through the Rust Belt states and captivate them with his continuous campaigning. I see no choice but to go forward. You might be right Nebish
I also want to say that LL Bean does make and sell some things in the USA. I am very very in touch with what is or isn't available made in USA to the extent my life almost revolves around it. LL Bean produces some of their boots in the US as well as blankets for beds. Pretty sure they also sell a heavy fabric (almost canvas) material bag, like one might take to the beach or something that is made in USA. You can get your name on it. LL Bean's catalog, as do other catalogs, state which products are USA or some companies use an American flag or something to identify which products are USA as a selling point.
Most of my clothes are from LL Bean and they are all are made abroad. I have no doubt that some of its products are native. The point I was alluding to was that LL Bean was diluting its brand by trying to appeal to too many markets and this was fragmenting its identity. I was at LL Bean in Maine once and there were two groups--one German and one Japanese—making movies about the place. LL Bean sells itself. It is the American part that people need to be reminded of.
I think your main concern was where would the money come from to pay the workers. $10 an hour is not going to cut it in the US at this time. Will the real rich folk give up their hard earned billions to help men support their families and rediscover their dignity? They might if they can be shown that there is an economic rationale for it.
I believe you and I both want the same net result, we just have different visions on how it could be achieved. I think the only realistic way to achieve my vision is with the hand of the government because I can't see consumers or producers doing what is necessary on their own to achieve the goal.
There is always the invisible hand of the market. American is operating from a position of strength at present. It has a unique identity and people continue to be enthralled by this uniqueness. Middle classes when they first emerge have no real distinctive identity. There could be a match here.
Thanks for the exchange. I've learned quite a bit putting together this economic plan and much of this was trying to respond to your points.
I sincerely appreciate your responses.
Most times we have our positions and aren't going to change another person's mind. What I've always tried to do is to have other people see or understand the reasoning behind my opinions all while also learning the rationale behind those who feel different. It is why I've enjoyed posting here with more people who perhaps feel differently than I do rather than going somewhere for positive reinforcement. I prefer listening to liberal talk radio for the same reasons - I find it much more stimulating...LOL, but true. Your posts responding to mine have been welcomed.
Just to be clear, I do not want to close off the US from the world. I am however cynical about how trading with the world has done more damage to our country and certainly large group of our population through trade imbalances and out sourcing.
You paint the picture of the growing middle class in India and China, which I am not opposed to those people reaching a higher quality of living perhaps with some opportunity to buy American made products. And to be clear, buying an American made product and buying a product sold by an American company are often two very very different things.
I look at China. Our #3 export to them is waste and scrap - as classified by the International Trade Administration. Ag products, Transportation products are 1-2 with drinks and tobacco products being #4. All told we have 10 product categories where we have a trade surplus with the Chinese and 21 with a deficit for a $367b trade deficit in 2015, that was actually the highest defecit in the last 10 years with them.
The trade imbalance with India is $23b in 2015, more than double what it was 10 years ago.
As these countries see a growing middle class, the net trade balance isn't improving for us, it is getting worse.
The government has some pretty good data online for alot of things. You can play around here if you haven't before - http://trade.gov/
The vulnerability for US workers is not limited to those who just work in the rust belt. What if Goodyear decides to close it's Lawton Oklahoma plant, just as an example. Over 2000 people work there. Goodyear has closed US plants before to make tires in other global facilities, which they then bring back to the US to sell on the retail market. What are those people to do in a case like that? It happens quite often, the Carrier example I think highlighted the number of companies currently planning or considering closing down production here in favor of foreign production. And it has happened before in the south with furniture and textile production. I don't talk of trying to save and protect labor in a certain part of the country, I'm trying to do it for everyone nationwide because vulnerabilities exist everywhere on small and large scales.
I see this problem of US companies outsourcing and expansion of foreign companies/countries importing here as such a major problem in the last couple decades contributing to so many of the problems we are facing. Homelessness, drug addiction, crime, shrinking middle class, wealth flowing to the top 1%, state budget crunches, federal budget deficits...the list goes on. I truly see the trade imbalance and trade agreements we have passed as the primary driving factor to all of those problems we try to deal with and fight about here and in Washington. All while we are told by corporate owned members of Congress and higher from the left and right that we need more free trade, more agreements - and the net result is always the same. More trade imbalance with more regions of the world and more suffering here because of it.
As much as I try to be hopeful for Trump's potential to turn the tide, I pray and hope that it isn't just talk. I want to tell you that I voted for Bernie Sanders in the primary because of his views on what has happened with these trade deals. The only two major party candidates to get as far as they did to take the positions of trade and making things in the USA. Clearly there are differences in the approach between these two men, and in Trump's case prior practice, but there is agreement that we have made a very wrong turn down a dark path for our nation. And hopefully for Trump it isn't hot air. Getting Democrats to follow a more nationalist economic plan would be much easier than getting Republicans to do it. So how and if we try and correct it, if we can correct it with the reality of politics being what it is makes one wonder what really will change.
I can't control much. But I try to buy as many things made in USA as I can. I search high an low for US made product. That and I talk on this message board about the importance of getting back to making more things here. My friends and family constantly find themselves in conversations with me about it. None of which make a bit of difference at the end of the day, but it is all I can do to take a stand for something I very strongly believe in. I suppose there is a next step I would have to take to try and really have a meaningful impact. I've thought about trying to open a made in USA retail store locally. Not sure how successful it would be. Many online websites exist with that theme.
Richie Rich the stubby fingered fat boy said there would be "consequences and retribution" for companies that offshored jobs. Anybody heard what the "consequences and retribution" for all those Trump clothing lines made in China, India and Mexico might be ?
He should've ceased the foreign production of his products to align with his political policy position. Gave the opponents a clear and real edge and hurt his own credibility.
Now I would've liked him to do this. But, I have to wonder, if he had brought the production of all his foreign products from foreign countries to the US, wouldn't his critics say he is profiting from his political speech and position, drawing attention to his brand and benefiting from MAGA slogan for his bottom line? It's lose - lose in today's political climate.
He should've ceased the foreign production of his products to align with his political policy position. Gave the opponents a clear and real edge and hurt his own credibility.
Now I would've liked him to do this. But, I have to wonder, if he had brought the production of all his foreign products from foreign countries to the US, wouldn't his critics say he is profiting from his political speech and position, drawing attention to his brand and benefiting from MAGA slogan for his bottom line? It's lose - lose in today's political climate.
Nah, doesn't matter in the slighest. In the grand scheme of things, where Trump makes his products is way down the list of reasons his opponents dislike him. And his fans will make excuses all day long as to why it doesn't matter (he was right when he said he could shoot someone in the middle of 5th Street and not lose any of his voters). In the end it's just politics as usual, and more broken promises that won't hurt him in the end. To his supporters, Trump is a cult of personality and as long as he dislikes the same people that they dislike, that's all that maters.
I've heard 'the supporters' say he is the best President ever...like just recently I literally heard that.
But it might matter. Any or all of this stuff might matter in the end. The die hards on the left and right are one thing, but they don't decide elections right? The far right, or even the mainstream right, isn't what won Trump this election. The people that crossed over and those in the middle, I would think they are watching and their votes will be heard in the future.
I agree, it is just one thing to not like him for, and like you say, it isn't a big reason, but Mark Ramsey brought it up so I addressed my view on it.
I've heard 'the supporters' say he is the best President ever...like just recently I literally heard that.
But it might matter. Any or all of this stuff might matter in the end. The die hards on the left and right are one thing, but they don't decide elections right? The far right, or even the mainstream right, isn't what won Trump this election. The people that crossed over and those in the middle, I would think they are watching and their votes will be heard in the future.
I agree, it is just one thing to not like him for, and like you say, it isn't a big reason, but Mark Ramsey brought it up so I addressed my view on it.
You have a good point. Trump won the election by a thin margin, based on just a few thousand votes in just a few states. Is Trump going to pick up new voters that he didn't win last time? Not likely. Had some Berne or bust voters in a few states not stayed home, he never would have won in the first place. But Trump lovers will never change their mind. All that matters is that he still hates the same people they do, and in some cases that he kept the only promise that matters to them, and that'a appointing an anti-abortion and anti-gay rights supreme court justice. Trump haters are never going to change their mind. Those who reluctantly voted for Trump last time probably won't again, but who knows. The big question is who shows up at the polls. And very unpolular politicans have been reelected before, sometimes due to third party candidates splitting the vote.
