quote:

Originally posted by occrider

Alright, I will stick with education would be great, though it needs to be expanded on a massive scale from where we're at in my opinion and meanwhile there are many unskilled workers that continue to be unprepared for transition. I think we're basically in agreement on that. Where we don't seem to agree is I don't think the lowest price possible is necessarily the most efficient price in all cases. While certainly many countries can offer production at a lower rate because of different exchange rates and costs of living, the lowest possible price is continually sought for this production. When you have two countries with equal exchange rates and equal transportation costs, the erosion of worker's pay and conditions can offer a lower cost for production and be more advantageous for business. Even with quotas in place, the overall price of a product takes into consideration the lowest available rate on the market. Textiles would be a specific industry affected by this and while the article you posted does have some good points I will readily admit I was unaware of, it does portray the American textile industry as being sucessful in fulfilling a certain niche within the overall industry and it notes that even though tariffs will not secure the long term existence, quotas are about to eliminated and it is questionable how this will affect the future of the American textile industry. On the Wal-mart model they mention, it is important to note that while they would prefer close suppliers, the company imports an estimated 10% of all the Chinese products that come into this country and more than 80% of Walmart's worldwide suppliers are in China. I'm not so sure that CAFTA will alter that, particularly if there were to be sufficient human rights provisions included in the agreement.

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Originally posted by Capitalizt That would be correct.

While we may disagree ideologically, I commend the lack of hypocrisy in your argument.

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Probably not. I would need to take two minimum wage jobs to support a family, and I would probably be kicking myself for not acquiring the knowledge and skills needed to advance beyond the lowest paid positions in life. It is MY RESPONSIBILITY to earn a living for myself. I have no right to hold my employer at gunpoint and demand he pay me double or triple what others do the job for...nor should the government have the right to do this for me.

Yes, ou would need to take at least 2 minimum wage jobs to support a family. Actually there are many people who do this and actually people earning more than the minimum wage rate are below the poverty line, not to mention that the official poverty line in many cases is not an accurate representation of real poverty. I would respectfully disagree though that the appropriate knowledge and skills are available to all communities or individuals.

This really comes down to another interpretation of what government's role is, where there is clearly a divide among opinions here. My interpetation of the Constitution suggests that government does have the ability to intervene to promote the general welfare. I find this in Article I. Section 8, Clause 1

quote:

The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;

I also find it disturbing that having completely free markets with no government involvement always would ensure a certain portion of the population to be unemployed without any protections as well as a portion working for insufficient wages, even if every single person strived to the best of their abilities. My perception is that this scenario would be negative to the general welfare of the United States and the legislature is granted the power to intervene to help resolve these problems. Also, there isn't any specific economic structure proposed by the document, therefore my interpretation does not show that pure free markets were intended with absolutely no government regulation. Clearly the language is very vague, but maybe this sheds some light on how it is perceived by many that there is an ability to provide a minimum wage.

Lastly, I maintain the stance that if government does set a minimum wage, it should not be simply mandated, it should be done with provisions that allow business to provide the increase. This may be a subsidy, but it promotes what I consider the general welfare while not hindering business or eliminating jobs. Furthermore those earning minimum wage, who would receive the increase would likely be spending the money rather than saving it, therefore increasing trade which also is positive for businesses.

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Last edited by wolverine16 on Mar-24-2005 at 11:13

quote:

Originally posted by wolverine16 Where we don't seem to agree is I don't think the lowest price possible is necessarily the most efficient price in all cases. While certainly many countries can offer production at a lower rate because of different exchange rates and costs of living, the lowest possible price is continually sought for this production. When you have two countries with equal exchange rates and equal transportation costs, the erosion of worker's pay and conditions can offer a lower cost for production and be more advantageous for business.

Let me ask you something. Why do Boeing assembly line workers average $50,000-$70,000 (depending on location) in what's double or triple other manufacturing jobs? Why do automobile assembly lines pay so much more as well than an assembly line job where you make ... simple widgets let's say? Do they do so out of the kindness of their heart? Do other aircraft manufacturers, Airbus let's say, pay their workers peanuts and the only thing preventing the erosion of pay here are trade protectionisms? As a matter of fact, why aren't we all getting paid minimum wage in the corporate cutthroat environment? Simply put, you're completely ignoring the fact that there is a supply and demand for the labor market that determines wages. As such, if you look at free trade between Canada and the US, the reason why you don't see a trend towards serfdom in Canadian and American industries that are in direct competition with one another is because there is a finite amount of skilled (and unskilled) workers that businesses have to pick from and if they want to keep them they better be appropriately competitive in what they pay them.

quote:

Even with quotas in place, the overall price of a product takes into consideration the lowest available rate on the market.

How is that?



The quota fixes the supply curve of the foreign market at the vertical line in chart on the left, raising the price of the imported car from point A to point B. This allows the domestic producer to raise its price and quantity from point A to point B (looks like an R) as the demand curve shifts to the right, hence you see a rise in prices. It's the lowest available rate in an artificially influenced market.

quote:

Textiles would be a specific industry affected by this and while the article you posted does have some good points I will readily admit I was unaware of, it does portray the American textile industry as being sucessful in fulfilling a certain niche within the overall industry and it notes that even though tariffs will not secure the long term existence, quotas are about to eliminated and it is questionable how this will affect the future of the American textile industry. On the Wal-mart model they mention, it is important to note that while they would prefer close suppliers, the company imports an estimated 10% of all the Chinese products that come into this country and more than 80% of Walmart's worldwide suppliers are in China. I'm not so sure that CAFTA will alter that, particularly if there were to be sufficient human rights provisions included in the agreement.

Good for walmart. They should take advantage of cheaper goods abroad that satisfy the demand niche of domestic consumers. Cheap prices allow consumers to buy other goods and get a better value for their money.

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quote:

Originally posted by occrider Good for walmart. They should take advantage of cheaper goods abroad that satisfy the demand niche of domestic consumers. Cheap prices allow consumers to buy other goods and get a better value for their money.

I'm running out of peanuts to throw, but something caught my eye. While true this may be good for Walmart, does this example of what Walmart is accomplishing here not conflict with your example of Boeing's assembly line job in reference to supply and demand theory? IOW, how is the supply and demand any different between the two? I think we can both agree that they are relatively similiar, yet the pay scale is, shall we say, a giant crater of a difference? Now I realize that perhaps salary bargaining via unions for companies like Boeing may be somewhat of a differential factor here, but in general I can’t see how one can justify the obvious enormous pay differences between these two examples when the supply and demand are relatively similar between the two.

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quote:

Originally posted by MisterOpus1 I'm running out of peanuts to throw, but something caught my eye. While true this may be good for Walmart, does this example of what Walmart is accomplishing here not conflict with your example of Boeing's assembly line job in reference to supply and demand theory? IOW, how is the supply and demand any different between the two? I think we can both agree that they are relatively similiar, yet the pay scale is, shall we say, a giant crater of a difference? Now I realize that perhaps salary bargaining via unions for companies like Boeing may be somewhat of a differential factor here, but in general I can’t see how one can justify the obvious enormous pay differences between these two examples when the supply and demand are relatively similar between the two.

Different labor markets and industries. The workers in China are making toys, chairs, whatever walmart sells, where hundreds of people are doing simple, manual, laborious tasks. The workers at Beoing are operating extremely complex machinery to build, of all things, aircraft parts ... things that must adhere to the highest quality to ensure safety. Even in industries in direct competition you're not going to see a multitude of laborers in the US operating sewing machines on a mass factory floor like you would see in China unless you went back in time several decades. In the US you would see 1 skilled laborer operating massive machinery that does the work of 50 people. Therefore that one worker would get the pay of those 50 Chinese people because they have that much more productivity per capita.

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quote:

Originally posted by occrider Let me ask you something. Why do Boeing assembly line workers average $50,000-$70,000 (depending on location) in what's double or triple other manufacturing jobs? Why do automobile assembly lines pay so much more as well than an assembly line job where you make ... simple widgets let's say? Do they do so out of the kindness of their heart? Do other aircraft manufacturers, Airbus let's say, pay their workers peanuts and the only thing preventing the erosion of pay here are trade protectionisms? As a matter of fact, why aren't we all getting paid minimum wage in the corporate cutthroat environment? Simply put, you're completely ignoring the fact that there is a supply and demand for the labor market that determines wages. As such, if you look at free trade between Canada and the US, the reason why you don't see a trend towards serfdom in Canadian and American industries that are in direct competition with one another is because there is a finite amount of skilled (and unskilled) workers that businesses have to pick from and if they want to keep them they better be appropriately competitive in what they pay them. How is that? The quota fixes the supply curve of the foreign market at the vertical line in chart on the left, raising the price of the imported car from point A to point B. This allows the domestic producer to raise its price and quantity from point A to point B (looks like an R) as the demand curve shifts to the right, hence you see a rise in prices. It's the lowest available rate in an artificially influenced market. Good for walmart. They should take advantage of cheaper goods abroad that satisfy the demand niche of domestic consumers. Cheap prices allow consumers to buy other goods and get a better value for their money.

-Boeing is a company that receives large defense contracts. They also actually relocated their corporate headquarters to here in Chicago as part of a bidding war between cities and have received huge tax breaks for doing so. The latter having a much smaller effect, but the former being a large part of their business that involves heavy lobbying and is not something that is outsourced.

-The price of the import is raised since with quotas only a certain amount of the cheaper product is available, but the cheaper cost of the production at the lower end certainly has an effect on the price being further to the left on the graph. It does have an impact on the graph. It would be like negotiating a contract with someone where one side starts out low and one starts high with their figures and meet somewhere in the middle. Poor working conditions start out the low end's bidding further to the left than would be possible otherwise. Additionally in many cases quotas will be removed in the near future.

-The Walmart point is good for Walmart the company. I'd seriously disagree that it's good for everyone else. This is exactly like the point above, by Walmart providing prices on their products that are much lower than what other companies can offer, it forces other American companies to either find ways to drop their prices to compete with Walmart or go out of business. Walmart's own direct poor labor policies aside, 80% of their products coming from an oppressive country with a horrible labor and human rights record and no ability for workers to voice discontent without the possibility of being thrown in jail is not innovation or efficiency in my opinion. That is a good way to offer low, low prices that other U.S. stores should find ways to lower their own prices compete with? Additionally I'm on the side of less liberal economists that don't think having a massive and countinually growing trade deficit with a country that is also buying our debt is a completely positive venture.

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quote:

Originally posted by wolverine16 -Boeing is a company that receives large defense contracts. They also actually relocated their corporate headquarters to here in Chicago as part of a bidding war between cities and have received huge tax breaks for doing so. The latter having a much smaller effect, but the former being a large part of their business that involves heavy lobbying and is not something that is outsourced.

I was talking about the civilian aircract division of Boeing, but in either which way, Boeing still competes with other domestic aircraft manufacturers which, by your theory, would have just as much incentive to "erode" wages in order to become as competitive as possible to provide the best prices when they vye for the contract. So why is it that these workers make the money that they do? Let's consider something simpler like the automobile industry. Skilled workers in Japan and the US make off like bandits when compared to other workers in the manufacturing industry as a whole. Why aren’t they paid minimum wage if competitive pricing leads to wage erosion? Japanese and US automakers don’t compete in price? Why does wage erosion only enter the equation when a domestic company competes with a foreign company? Why we should set up trade barriers regionally within the US! Make sure the damned South or those loosey goosey Californians doesn’t erode my Northern wage.

quote:

-The price of the import is raised since with quotas only a certain amount of the cheaper product is available, but the cheaper cost of the production at the lower end certainly has an effect on the price being further to the left on the graph. It does have an impact on the graph. It would be like negotiating a contract with someone where one side starts out low and one starts high with their figures and meet somewhere in the middle. Poor working conditions start out the low end's bidding further to the left than would be possible otherwise. Additionally in many cases quotas will be removed in the near future.

The cheaper cost of production at the lower end pushes the price further to the left? Huh? Look that graph isn’t something that I invented, it’s macroeconomics 101. The effect of quotas on a market place of goods results in an aggregate rise in prices. But even assuming productivity entered the equation, firms before the quota would already be producing at the optimal level where marginal revenue equals marginal cost:



If companies could be more productive by producing less (negating economies of scale somehow someway), and therefore be more competitive, they would already be doing so before the quota was put in place. Who suffers? A) Foreign companies subject to the quotas B) American consumers. While there may be some instances of labor violations that afford increased productivity, the price advantages of imported goods such as textiles are not derived from poor working conditions on the aggregate level. There are plenty of other industries that operate under the same working conditions that have no quotas or tariffs levied against them. Why? Because our industry is competitive. It’s only uncompetitive industries that are horribly inefficient, such as textiles, that manage to get trade protectionisms.

http://www.oxfam.org.uk/what_we_do/...60_textiles.htm

quote:

-The Walmart point is good for Walmart the company. I'd seriously disagree that it's good for everyone else. This is exactly like the point above, by Walmart providing prices on their products that are much lower than what other companies can offer, it forces other American companies to either find ways to drop their prices to compete with Walmart or go out of business. Walmart's own direct poor labor policies aside, 80% of their products coming from an oppressive country with a horrible labor and human rights record and no ability for workers to voice discontent without the possibility of being thrown in jail is not innovation or efficiency in my opinion. That is a good way to offer low, low prices that other U.S. stores should find ways to lower their own prices compete with? Additionally I'm on the side of less liberal economists that don't think having a massive and countinually growing trade deficit with a country that is also buying our debt is a completely positive venture.

So it’s not good for everybody who shops there and buys cheaper things? If wal-mart satisfies a consumer niche and consumer desires than so be it. Obviously any labor infractions should result in punitive damages. But largely, consumers should make the choice as to what they value, cheaper foreign goods or a store that has more stringent controls when it comes labor laws. It certainly happened to Nike in the 90’s.

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quote:

Originally posted by occrider I was talking about the civilian aircract division of Boeing, but in either which way, Boeing still competes with other domestic aircraft manufacturers which, by your theory, would have just as much incentive to "erode" wages in order to become as competitive as possible to provide the best prices when they vye for the contract. So why is it that these workers make the money that they do? Let's consider something simpler like the automobile industry. Skilled workers in Japan and the US make off like bandits when compared to other workers in the manufacturing industry as a whole. Why aren’t they paid minimum wage if competitive pricing leads to wage erosion? Japanese and US automakers don’t compete in price? Why does wage erosion only enter the equation when a domestic company competes with a foreign company? Why we should set up trade barriers regionally within the US! Make sure the damned South or those loosey goosey Californians doesn’t erode my Northern wage.

So the defense contracts that Boeing and other U.S. suppliers receive have nothing to do with meeting the demands of their unions?

You said yourself that other factors also come into play, such as skill and location, so that comes into play in the auto industry, not to mention that, although weakened, the UAW still exists and government has passed significant amounts of legislation over the years to keep many of the jobs that are still here. Michigan lawmakers have a significant interest in doing so.

Are you really arguing that there aren't changes occuring in the auto industry as well and countries like Mexico aren't making inroads?

quote:

Mexican Auto Industry Forecast Autoparts Report, Jan 19, 2000 The following article is provided by Infoamericas, a leading Latin American market intelligence and strategic consulting firm with offices in Mexico City, sao Paulo and Toronto. See the company's web site for more information (www.infoamericas.com) Mexico's automotive industry is only a few steps away from joining a seamless North American industry. The NAFTA has yielded profound effects on Mexico's auto sector. By exposing itself, through the NAFTA, to the most competitive autoparts region of the world (Canada and the USA), Mexico's pace of reform over the next 9 years will be startling, some of it to the detriment of Mexico's existing suppliers. Beyond the NAFTA, the world's auto industry is globalizing and consolidating at all levels from auto assembly to 2 nd- and 3rd tier autoparts makers. Terminal assemblers are increasingly seeking globalized 1st tier suppliers to ensure greater economies of scale and simplified supply logistics. Assemblers have embraced the concept of one plant for the global market. Volkswagen's new "Beetle" production in Mexico, as an example, ships product worldwide. Auto Assembly - For Mexico, consolidation of vehicle assembly is a positive move because Mexican based assembly plants can source parts from all over North America duty free. Mexico is a proven competitor in sub-compact, compact and light track assembly. VEHICLE PRODUCTION BY TYPE Units Produced Segment 1995 1998 Compact 532,328 618,470 Light Trucks 230,684 464,911 Sub-Compact 160,215 60,708 Sport & Luxury 6,769 73,731 Source: SECOFI The Big Three U.S. auto assemblers have led production growth in Mexico since 1995. These companies had the flexibility to retool for exports when demand shifted from the domestic market to the export market. Before the collapse of the domestic market in 1995, the production leaders were Volkswagen and Nissan, in that order. In 1995, Mexican car consumption dropped 70 percent from the year before. Mexico's integration in the North American auto industry coupled by dazzling flexibility on behalf of the big three ensured that Mexico's auto assembly dropped only 17 percent. In 1999, domestic consumption is just now returning to 1994 levels. Auto production, on the other hand, recovered quickly from the down turn and by 1996, Mexico was recording historic levels. Each year since has marked a new record. Mexico's blazing export growth leveled off in 1998 as a world supply glut relieved market demand in the U.S. As the U.S. market slows over the next two years, auto imports from Mexico will stop growing or even shrink slightly. What will drive Mexican production until 2004 will be domestic demand. Mexican car consumption has long suffered from handicaps that have led to the development of an aging vehicular park and sub-optimal car ownership levels. The most important factor is a lack of financing options. Lending rates in Mexico today stand at 25 percent, onerous to anyone and not even offered at those rates to most middle class or working class Mexicans. When carmakers last forayed into subsidized lending as a way to boost sales in 1994, consumption shot up to record levels. Another factor has been protectionist policies surrounding the autoparts industry that produced a costly industry and raised prices for consumers. COPYRIGHT 2000 International Trade Services COPYRIGHT 2001 Gale Group

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The cheaper cost of production at the lower end pushes the price further to the left? Huh? Look that graph isn’t something that I invented, it’s macroeconomics 101. The effect of quotas on a market place of goods results in an aggregate rise in prices. But even assuming productivity entered the equation, firms before the quota would already be producing at the optimal level where marginal revenue equals marginal cost

Go back to the auto industry. Aren't most Japanese cars of similar make in comparison to American models cheaper? Their lower price doesn't have any impact whatsoever on the price of American automobiles in a competitive marketplace? It works the same way with industries frequented by poor labor conditions. Quotas don't completely resolve that and they are in many cases being erased anyway. Also, I want to be clear with your charts & graphs, I am not stating that I disagree with the equations at all, I disagree with where the numbers come from that are plugged in.

quote:

If companies could be more productive by producing less (negating economies of scale somehow someway), and therefore be more competitive, they would already be doing so before the quota was put in place. Who suffers? A) Foreign companies subject to the quotas B) American consumers. While there may be some instances of labor violations that afford increased productivity, the price advantages of imported goods such as textiles are not derived from poor working conditions on the aggregate level. There are plenty of other industries that operate under the same working conditions that have no quotas or tariffs levied against them. Why? Because our industry is competitive. It’s only uncompetitive industries that are horribly inefficient, such as textiles, that manage to get trade protectionisms. http://www.oxfam.org.uk/what_we_do/...60_textiles.htm

You don't think American workers suffer at all? Again, still nothing siginificant actually being done to aid them in transition to other jobs. Maybe that's why some of these industries get protections in addition to lobbying, because there are constituents that have jobs at risk. I'm not talking about producing less of anything. I'm talking about the standards used.

From your linked article:

quote:

The textiles and clothing industry represents a vital source of income for developing countries. Although working conditions are often precarious, the industry provides tens of millions of jobs, particularly for women.

Just like the minimum wage issue I think this thread should be left to and a separate one created for this, it's about the quality of jobs in my opinion, not just providing jobs.

quote:

So it’s not good for everybody who shops there and buys cheaper things? If wal-mart satisfies a consumer niche and consumer desires than so be it. Obviously any labor infractions should result in punitive damages. But largely, consumers should make the choice as to what they value, cheaper foreign goods or a store that has more stringent controls when it comes labor laws. It certainly happened to Nike in the 90’s.

The core of the issue right here. American consumers need jobs in order to consume. Walmart's prices ARE directly the result of poor labor standards and are unrealistic if you believe that such practices are unethical. I'm not arguing it isn't cheaper, I'm arguing it comes at the cost of exploitation.

quote:

1. To employ to the greatest possible advantage: exploit one's talents. quote: 2. To make use of selfishly or unethically : a country that exploited peasant labor. See synonyms at manipulate. 3. To advertise; promote.

80% of the world's largest company's production comes from a totalitarian country with little regard for worker's rights and we readily take advantage of that to produce low costs, but that's not exploitation of their plight? To me that's an unrealistic price that is being provided not greater efficiency. Otherwise what's really the argument against having child labor and the poor labor standards we used to have in this country during the Industrial Revolution. It certainly helped lower manufacturing costs, so it would have to be more efficient. Otherwise if we maintain it is unethical for our own workers to match Chinese working conditions, Walmart and other companies' low prices help force many other companies to resort to stay competitive.

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Last edited by wolverine16 on Mar-24-2005 at 21:21

Good god, this page is full of references to micro-economics. Somebody shoot me. My least favorite class ever. Moreso than orgo.

I only have a brief amount of time to respond until later tonight so I’ll have to make this quick.

quote:

Originally posted by wolverine16 So the defense contracts that Boeing and other U.S. suppliers receive have nothing to do with meeting the demands of their unions?

Why would the defense department be involved in Boeing’s union arrangements? It’s not like the military is going to micromanage how Boeing interacts with its unions or other internal affairs before it awards them a contract. The only thing the defense department cares about are the price and the quality of the product Boeing is trying to sell. Perhaps you are confusing that with tax breaks offered by states to lure Boeing or other defense contractors to set up shop in their state?

quote:

You said yourself that other factors also come into play, such as skill and location, so that comes into play in the auto industry, not to mention that, although weakened, the UAW still exists and government has passed significant amounts of legislation over the years to keep many of the jobs that are still here. Michigan lawmakers have a significant interest in doing so. Are you really arguing that there aren't changes occuring in the auto industry as well and countries like Mexico aren't making inroads?

Why would I argue that there aren’t changes occurring in the auto industry? Look my entire argument goes back to your point that:

“I don't think the lowest price possible is necessarily the most efficient price in all cases. While certainly many countries can offer production at a lower rate because of different exchange rates and costs of living, the lowest possible price is continually sought for this production. When you have two countries with equal exchange rates and equal transportation costs, the erosion of worker's pay and conditions can offer a lower cost for production and be more advantageous for business.”

To which I referenced numerous examples whereby striving for the lowest price possible does not lead to a continual erosion in worker’s pay and conditions because much like how a company cannot price its products too high, it cannot pay its workers too little otherwise it will price itself out of the market or lose valuable skilled workers that it needs. To which I pointed out the automobile industry where we do not see wage erosion happening despite decades of price competition with the Japanese, to which I pointed out the very well paid Boeing workers where Boeing is in a price competition with Airbus, and then I pointed out domestic industries who are in price competition with each other all the time. So you said, “ two countries with equal exchange rates and equal transportation costs, the erosion of worker's pay and conditions can offer a lower cost for production and be more advantageous for business.” So why does that only apply to two countries? Why doesn’t that apply to domestic competitors? Are you saying domestic competitors do not engage in price competition? I would say that there’s plenty of low price competition domestically, so why haven’t prices eroded to minimum wages in virtually every profession? My argument is that there is no price erosion in a situation where two countries are engaged in unfettered trade, because both countries have labor markets to contend with that play a huge role in dictating wages.

quote:

Go back to the auto industry. Aren't most Japanese cars of similar make in comparison to American models cheaper? Their lower price doesn't have any impact whatsoever on the price of American automobiles in a competitive marketplace? It works the same way with industries frequented by poor labor conditions. Quotas don't completely resolve that and they are in many cases being erased anyway.

Of course their cheaper prices have an impact on the market. A GOOD impact on the market. What does it force American companies to do? It forces productivity and innovation and better products in the marketplace. What should we have levied quotas or tariffs against Japan in the 80’s when they started whooping our asses with a far superior and cheaper product in order to save inefficient American jobs? No, it forced American car makers to modernize by automating and retooling the industry, and shed superfluous jobs that were inefficient and unproductive to the industry. What does that inefficient worker then do? Gain more trade skills until they become competitive in the labor market once again. That’s the cycle of business.

quote:

You don't think American workers suffer at all? Again, still nothing siginificant actually being done to aid them in transition to other jobs. Maybe that's why some of these industries get protections in addition to lobbying, because there are constituents that have jobs at risk. I'm not talking about producing less of anything. I'm talking about the standards used.

Ok so unemployment should be staggering … personal income should be on the fritz! All these poor poor industries must be weighing down the economy! Oh wait … actually the state of the economy has been relatively healthy over the past year …

quote:

Household income from wages and salaries, some 60% of overall personal income, has grown 5.1%, nearly two percentage points faster than inflation. This time last year, wages-and-salary incomes were growing only 3.7%. The difference: More people are at work. In 2003 payrolls made no headway, but in 2004 payrolls appear to have risen by two million workers. In addition, household net worth is also soaring. The Fed's latest data on the balance sheet of Household America show that net worth -- the value of all assets minus liabilities -- rose by $546 billion in the third quarter, capping an increase of $4.3 trillion over the past year. In fact, household wealth is rising at a pace that matches the gains seen in the late-1990s. http://www.businessweek.com/@@eMgnQ...14022_mz010.htm

The manufacturing industry will never be the same with respect to low skilled manufacturing jobs. The world is changing and becoming more innovative and productive. That’s what happens every once and a while and industries unfortunately die out. Just look at the steel industry. Bush tried trade protectionisms but the industry remained inefficient and uncompetitive and simply died out … but not before costing millions in higher prices to US steel consumers.

quote:

From your linked article: Just like the minimum wage issue I think this thread should be left to and a separate one created for this, it's about the quality of jobs in my opinion, not just providing jobs. The core of the issue right here. American consumers need jobs in order to consume. Walmart's prices ARE directly the result of poor labor standards and are unrealistic if you believe that such practices are unethical. I'm not arguing it isn't cheaper, I'm arguing it comes at the cost of exploitation. : a country that exploited peasant labor. See synonyms at manipulate. 3. To advertise; promote.

80% of the world's largest company's production comes from a totalitarian country with little regard for worker's rights and we readily take advantage of that to produce low costs, but that's not exploitation of their plight? To me that's an unrealistic price that is being provided not greater efficiency. Otherwise what's really the argument against having child labor and the poor labor standards we used to have in this country during the Industrial Revolution. It certainly helped lower manufacturing costs, so it would have to be more efficient. Otherwise if we maintain it is unethical for our own workers to match Chinese working conditions, Walmart and other companies' low prices help force many other companies to resort to stay competitive. [/QUOTE]

So what we have here is a failure of government regulation of a company, not a rationale for trade protectionism. If Wal-Mart’s controls were better at weeding out suppliers that violated labor standards, than it wouldn’t be an issue.

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Retro ...

quote:

Originally posted by occrider

-Defense contracts are hardly determined by market value and do not necessarily go to the lowest bidder. The defense lobby is one of the largest in the country and political campaign contributions certainly have influence as well. A company like Boeing considers both its private and public contracts when it negotiates, so its not so cut & dry. In the private sector, there are gains being made by production outside the industry giants, just like the auto industry. It is not an overnight process where everyone wakes up one morning and all the jobs are gone. Globalization is also expanding to more higher skilled industries. Case in point, technical support provided by Indian labor has drastically increased.

-Gross human rights violations are widespread in third world countries and oppressive regimes, if you don't believe that has a significant affect on the lower figure used in the price equation, I don't know what to say. Each passing year when those workers don't receive wage increases to meet inflation, better working conditions, it creates a price more attractive to business who do strive to provide the lowest prices, because the gap between their cost of production and ours increases. What am I supposed to do? Cover every single complex issue involved with trade and show how this is still a factor in the equation? Globalization has not occurred as a one step process, where suddenly a lot of jobs left the country and now there is a new, consistent level of balance.

-While new jobs are created as others leave, the trade-off is not necessarily equal and it does not change the lack of education of unskilled workers. Approximately 30% of older workers affected go unemployed for an extended period of time or take new employment worse than what they previously earned, per AARP figures, this is a negative economic impact. Don't unemployment numbers only include those who are actively seeking employment? Economic numbers that say the overall economy is doing well does not mean that all groups within it are doing well. These are problems that can be corrected, but have not. But I have already stated that more education would be highly approriate to remedy much of this.

-I am agreeing to disagree at this point, because this has nothing to do with the minimum wage and this statement:

quote:

So what we have here is a failure of government regulation of a company, not a rationale for trade protectionism. If Wal-Mart’s controls were better at weeding out suppliers that violated labor standards, than it wouldn’t be an issue.

shows that we're not even discussing the same thing, since I completely agree with that. I have been off the tariffs issue for some time in this thread and it was related to maintaining employment, at least as a temporary solution if nothing else, for the significant number of workers who are not in position for transition, because little is being done to address this in my opinion. I absolutely agree that tariffs will not resolve human rights violations and poor working conditions and collectively governments need to address this to a great extent. Whether that is being addressed and what it's role is on globalization is another matter, which is what I have been trying to argue. I simply think that it is all interconnected and does a play a significant role that affects prices in this country and others, based on much of what I have read and studied on foreign labor, be it on China's labor force, the chronic assassination of Latin American labor leaders, particularly in Colombia, Burmese sweatshops, etc. In my view these are not acceptable characteristics of what globalization is about, I'm not suggesting that we should try to stop the overall process from occuring or that there are not positive aspects beneficial to the U.S. Anyway, back to minimum wage debate...

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quote:

Originally posted by wolverine16 -Defense contracts are hardly determined by market value and do not necessarily go to the lowest bidder. The defense lobby is one of the largest in the country and political campaign contributions certainly have influence as well. A company like Boeing considers both its private and public contracts when it negotiates, so its not so cut & dry. In the private sector, there are gains being made by production outside the industry giants, just like the auto industry. It is not an overnight process where everyone wakes up one morning and all the jobs are gone. Globalization is also expanding to more higher skilled industries. Case in point, technical support provided by Indian labor has drastically increased.

I'm not quite sure what specific argument of mine you are arguing against. It would help if you quoted my specific text that you are addressing because I prefer an argumentative point to point discussion. So with this statement, which of my points are you addressing? That the reason why manufacturing jobs in the aircraft engineering sector pay so well is not because such jobs require high skilled workers but because of "influence" by lobbyist groups? You're saying that the defense department places a priority on what Boeing or Lockheed Martin pays its employees as opposed to the price that they quote? Or that lobbyists simply fleece the government of its money and thus can afford to pay its workers more? Well why not pay its workers less (since it can afford to), embrace cheaper costs, and have even more of an attractive incenctive? And the automobile industry is similar? So how exactly do the market dynamics of that work? The auto industry sends lobbyists to consumers convincing them to ignore price differentials and instead regard how much they pay workers which is the reason why those competetive industries avoid wage erosion and have good paying manufacturing jobs? I'll once again bring up your statement:

“I don't think the lowest price possible is necessarily the most efficient price in all cases. While certainly many countries can offer production at a lower rate because of different exchange rates and costs of living, the lowest possible price is continually sought for this production. When you have two countries with equal exchange rates and equal transportation costs, the erosion of worker's pay and conditions can offer a lower cost for production and be more advantageous for business.”

So how do you explain how competitive and efficient pricing have not resulted in wage erosions in a multitude of industrial sectors, through foreign competition and even domestic competition, such that wages are not continually brought down to the standards of minimum wage?

quote:

-Gross human rights violations are widespread in third world countries and oppressive regimes, if you don't believe that has a significant affect on the lower figure used in the price equation, I don't know what to say. Each passing year when those workers don't receive wage increases to meet inflation, better working conditions, it creates a price more attractive to business who do strive to provide the lowest prices, because the gap between their cost of production and ours increases. What am I supposed to do? Cover every single complex issue involved with trade and show how this is still a factor in the equation? Globalization has not occurred as a one step process, where suddenly a lot of jobs left the country and now there is a new, consistent level of balance.

I would say they play a minor role in the effect on prices. The primary effect comes from the workers' skills in combination of the standard of living. It's not just China that maintains huge export booms to the US but much of Southeastern and Central Asia, and in a variety of industries. Is IT cheaper in India because they're enslaving all those child programmers? Similarly, plenty of textile factories in Sri Lanka, Thailand, Vietnam, and even China subscribe to nominal labor laws. Out of curiosity, what's your ultimate goal? Are you concerned with A) the plight of the people in these developing countries or B) Protecting American industry? If you're concerned with A), you're hardly helping these people by advocating trade protectionisms, they aren't slaves or serfs. There's a reason why China and India are the two countries with the greatest decreases in poverty. If you're concerned with B), the failure of trade protectionism takes slightly longer to manifest itself but it eventually appears. You're not operating in a closed market. Only if every other country/company subscibed to similar moral standards would you be successful in your efforts.

quote:

-While new jobs are created as others leave, the trade-off is not necessarily equal and it does not change the lack of education of unskilled workers. Approximately 30% of older workers affected go unemployed for an extended period of time or take new employment worse than what they previously earned, per AARP figures, this is a negative economic impact. Don't unemployment numbers only include those who are actively seeking employment? Economic numbers that say the overall economy is doing well does not mean that all groups within it are doing well. These are problems that can be corrected, but have not. But I have already stated that more education would be highly approriate to remedy much of this.

Have these figures ever changed? Is this the norm or is this particular situation warranting a genuine cause for concern? I would naturally think that older workers who become unemployed would naturally have a problem finding the necessary tools or eductation to find new employment. Similarly younger workers experience the worst of a recession since their jobs are the first to go ... nothing new about that. What's the change on a year to year basis? The most important economic statistics are all deltas.

quote:

-I am agreeing to disagree at this point, because this has nothing to do with the minimum wage and this statement: shows that we're not even discussing the same thing, since I completely agree with that. I have been off the tariffs issue for some time in this thread and it was related to maintaining employment, at least as a temporary solution if nothing else, for the significant number of workers who are not in position for transition, because little is being done to address this in my opinion. I absolutely agree that tariffs will not resolve human rights violations and poor working conditions and collectively governments need to address this to a great extent. Whether that is being addressed and what it's role is on globalization is another matter, which is what I have been trying to argue. I simply think that it is all interconnected and does a play a significant role that affects prices in this country and others, based on much of what I have read and studied on foreign labor, be it on China's labor force, the chronic assassination of Latin American labor leaders, particularly in Colombia, Burmese sweatshops, etc. In my view these are not acceptable characteristics of what globalization is about, I'm not suggesting that we should try to stop the overall process from occuring or that there are not positive aspects beneficial to the U.S. Anyway, back to minimum wage debate...

Well I agree with you on most of these parts. I may disagree on the overall effects of globalization, but that is another thread in and of itself .

Edit: and any response on my part will be pending my return from ultra at the end of the week

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