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Thoughts on outsourcing to foreign countries

Kornphlake

Turbo Monkey
Oct 8, 2002
2,632
1
Portland, OR
I'm not really an economist but I've had conversations with a few people lately and I think I've decided that sending labor to mexico or china or korea or wherever is actually beneficial to the united states economy. Maybe I'm being a redneck republican but here's why...

Foreign labor allows domestic manufacturers to sell more products at lower prices for greater profit, manufacturers in turn pay their employees more money so they can purchase more goods. I work for a manufacturer with 20 something million in annual sales, our assembly personnel make around $8.00/hr, their entire paycheck likely goes to pay utilities, gasoline, rent, interest payments, food, etc. The majority of our assembly workers drive a small imports, mostly hondas and toyotas, they most likely shop primarily at places like wal-mart and purchase goods produced by companies based in Asia. On the other hand our salried employees drive american made cars, even more so as salry increases, they own homes and pay for services such as plumbing that hourly employees who rent wouldn't, salried employees participate in sports such as scuba diving or hunting that require expensive gear that is primarily sold by small domestic manufacturers, although there are foreign knock offs most don't risk the dodgy quality of foreign goods because the results of poor quality can be life threatening...

I guess as I move up the corporate ladder I see myself in a position to put more back into the economy. Our company can significantly cut costs by outsourcing our manufacturing to Mexico, we're fortunate to be limited not by what we can sell but by what we can produce, our products are in a market that has few enough competitors and we have enough demand to exceed our practical produciton capabilities. If we can cut our labor rate in half, we can produce twice as much product for the same cost which means we'll need to hire more engineers and more buyers and more middle level management to be able to keep up with the increased capability. That means more people with upper level incomes putting more money back into our domestic ecomonmy. Our material cost for manufactured goods is in most cases 10 times the cost of labor, so long as the materials come back into the country for distribution I don't see a significant portion of the companies wealth leaving the country.

Can anybody find a hole in my logic? Like I said I'm not an ecomonmist, bit looking at the numbers, I can't see how we're hurting the economy any by cutting back the lower paying positions in favor of higher paying positions.
 

face

Monkey
Sep 14, 2005
209
0
northern utah
Kornphlake said:
Foreign labor allows domestic manufacturers to sell more products at lower prices for greater profit, manufacturers in turn pay their employees more money so they can purchase more goods.
but if its all outsourced they wont have many employees at all. they'll all be in asia. did you ever hear of remainderband those people that made the knockoff livestrong bracelets. they made bank and sold like 2 million bands but it was all out of my little old town cause the guy outsourced everything to china so he hardly had any payroll but its probably different with your company
 

Kornphlake

Turbo Monkey
Oct 8, 2002
2,632
1
Portland, OR
face said:
but if its all outsourced they wont have many employees at all. they'll all be in asia. did you ever hear of remainderband those people that made the knockoff livestrong bracelets. they made bank and sold like 2 million bands but it was all out of my little old town cause the guy outsourced everything to china so he hardly had any payroll but its probably different with your company
I'm not saying outsource everything, just the minimum wage production labor. You stop paying the minimum wage employees that don't really contribute to the economy because the majority of the money they earn is spent on goods manufactured by foreign companies where 100% of the money spent leaves the country. With the money the company saves on production labor they can afford to pay a few more employees higher salries, these employees would spend some percentage of their money on goods and services that will keep the money in the country.
 

Kornphlake

Turbo Monkey
Oct 8, 2002
2,632
1
Portland, OR
Just to clarify, I'm not trying to convince everybody I'm right, rather I'm looking for reasons to oppose foreign labor. I'm having a hard time of it knowing what our company spends buying custom spec'ed products from local vendors. For example our cost for one particular part in our flagship product cost over $300, the total in house labor cost for the completed assembly in the shipping carton is less than $200, this is for a product that we in turn sell for several thousand dollars. The labor cost is a small percentage of the total cost of the product. So long as we continue to purchase materials from domestic sources outsourcing labor doesn't seem like it would really make much differance to our national economy.

Do economists have any real data on where each dollar goes or how quick its recycled into the economy. The examples I've given are just my observations, not really facts.
 

Reactor

Turbo Monkey
Apr 5, 2005
3,976
1
Chandler, AZ, USA
Oi Vey.

There are a lot of problems with you scenario. One is that other countries, that you would outsource to pay much less. If a worker in Mexico is making 2 bucks an hour, he's not going to be able to buy much. Loss of tax revenue and increased unemployment will cost you and I more money in Taxes, increase the crime and drug usage rates.

There are various reasons people in third world countries work for less than Americans. First is that most are still semi agrarian and they don't need to buy the type and amount of stuff a typical American does. Most don't have SUVs, for example; Or fancy electronics, computers, cable TV. Lots of things most Americans don't need either, although you can't convinve them of that. For them a job isn't always as important as you would like.

Another reason is the lack of labor laws allow conditions you or I would probably see as cruel, including child labor that borders on and even passes over the line of slavery. Yet another is lack of environmental laws....why do you think most American companies manufacture Carbon fiber products over seas? Is it ethical to produce products where you are harming people and the environment?

On a simple level, outsourcing always hurts the American economy. Because any outsourcing deal sends more dollars overseas than it brings back. The manufacturer isn't going to spend 100% of the money you sent them to buy American products. While you might be increasing the wage base in their country, which is where they are going to spend most of their money, you are putting people out of work in your country. Maybe you hire a few sales people and a manager, but you fired a lot of lower level employees, you are driving wages here down.

Ethically, I think you should build your product in the country you sell most of it in. Be that America, Canada, China.
 

Kornphlake

Turbo Monkey
Oct 8, 2002
2,632
1
Portland, OR
Okay, ethics aside, does foreign labor really take more money out of our economy than it brings back? Say I pay my buddy John $2 to assemble a widget and sell that widget for $8, that means I give my buddy john $2 and I keep $6 for myself, then my accountant says that I have to pay 40 cents in taxes, 30 cents for raw materials, 25 cents for the accountant's pay and I'm left with $5.05 to keep to myself. John goes and buys a slurpie with his $2 and the Indian guy who owns the 7-eleven (not trying to be racist or stereotype here, just trying to illustrate a point) sends $.05 to headquarters and his profit of 1.95 to his uncle in the middle east. I on the other hand buy a slurpie and that money is lost but I also buy an orange grown in florida and pay for my wife's hair cut. More of the money that I spend stays in the country.

Now if I fire John and hire Juan in Mexico to do the same job for $.50, and sell the same widget for the same amount of money, I've then got an extra $1.50 to spend on a car wash, sure I'll still spend $2 on a slurpie and that money will go overseas, but now I've put an extra $1.50 back into the economy that otherwise wouldn't have been in the economy at all. Hopefully John will get a new job doing my wife's hair because with my new found wealth my wife is going to think she needs a lot more hair cuts.

Are my numbers really that unrealistic? Do low income individuals purchase more domestic goods than I give them credit for?
 

face

Monkey
Sep 14, 2005
209
0
northern utah
well who are the low income people. highschool kids and college kids what do they spend their money on? the same stuff you do bikes, food, housing and school i dont know how much stays in the states but i dont feel like im just giving my dollar to japan cause i make 8 less dollars an hour then the manager at your company ya know.
 

DirtyDog

Gang probed by the Golden Banana
Aug 2, 2005
6,598
0
I outsource programing to contractors around the world. The results are great for all parties. I get the work I need cheaply, quickly, and without attitude. My contractors are enthusiastic workers who appreciate the work and get the job done to specification and on time.

I was once criticized on another forum for specifying that I was looking for foreign labor. As a result I thought I would try a good ole boy from the US of A for a change. And guess what. ****ing jackass took my money and couldn't get the job done. On top of that he had a holier than thou attitude.

People in this country are spoiled brats. Everyone thinks they are entitled to the World and shouldn't have to sacrifice for anything. If people in this country could do the work for what is was worth, then we wouldn't be outsourcing. It's that simple.
 

ohio

The Fresno Kid
Nov 26, 2001
6,649
23
SF, CA
Reactor said:
Ethically, I think you should build your product in the country you sell most of it in. Be that America, Canada, China.
I disagree. There are numerous examples of companies that went bankrupt because they refused to send their manufacturing overseas. They could have cut a third of their workforce, moved production overseas, become extremely profitable which would have allowed growth, potentially to the point of returning to where they started. Instead they went under, and instead of a third of the workers being laid off, ALL of the workers were laid off, shareholders lost everything, the name was bought up by a foreign company, and ALL the operations were moved overseas. Schwinn springs to mind.

Given the current world economy, it's naive to try to prevent companies from outsourcing, either by appealing to them morally, or restricting them with legislation. Both are band-aid fixes. Corporations are neither good nor evil... they're amoral, but they MUST compete. What we need is new business models, and MAJOR investments in education for white-collar positions. We're losing what little advantage we have over foreign competitors, and holing up our borders is not going to fix that problem.
 

Silver

find me a tampon
Jul 20, 2002
10,840
1
Orange County, CA
Reactor said:
Another reason is the lack of labor laws allow conditions you or I would probably see as cruel, including child labor that borders on and even passes over the line of slavery. Yet another is lack of environmental laws....why do you think most American companies manufacture Carbon fiber products over seas? Is it ethical to produce products where you are harming people and the environment?
This is the biggest problem I have with outsourcing. I'm not a protectionist, and my personal philosophy is to buy the best product looking at price/performance that I can, no matter where it was built (barring, of course, a product that I know was made in a sweatshop, for example.)

But when you cynically move manufacturing to a place where there aren't any labor laws or environmental protections, that's a problem. You're exploiting the fact that you can externalize those costs. That's going to end up in a race for the bottom, and it's not going to be good for the people in this country, the other country, or the earth as a whole. I don't know what the solution is. I know it's got to be better than hoping Jesus comes back like George does, but the cynical reply of the economist ("In the long run, we're all dead.") doesn't offer anything more.

I guess ideally I'd like to start phasing in stuff like carbon credits, ways that you could put a cost on the environmental damage that we are doing and charge for it. But I doubt that will happen.
 

Silver

find me a tampon
Jul 20, 2002
10,840
1
Orange County, CA
ohio said:
What we need is new business models, and MAJOR investments in education for white-collar positions. We're losing what little advantage we have over foreign competitors, and holing up our borders is not going to fix that problem.
I don't know if that would help. What I think we need to do is realize that globalization means that some countries are going to have a higher living standard, and we are going to have to stop acting like pigs at the trough and adjust downward. The fantasy that we are going to be managers to the world is either a pipe dream or stupidly nationalistic. That guy in Taiwan learned how to weld, and somehow we think he is incapable of learning accounting. That's going to bite this country in the ass, I think.

Barring a technological miracle, of course.
 

ohio

The Fresno Kid
Nov 26, 2001
6,649
23
SF, CA
Silver said:
That guy in Taiwan learned how to weld, and somehow we think he is incapable of learning accounting.
Oh, I don't think he's incapable of learning accounting. I think if we continue to have the best institutions of higher learning, then we will continue to attract the brightest minds in the world, whether they're from Taiwan, India, or Europe. If we continue to have a higher standard of living than they do, and greater opportunities, then they will stay. If they stay, they will continue to create value and opportunity for each successive wave.

Unfortunately, our cutbacks in education and recent protectionist immigration policies have caused a dramatic swing in the last 3 years or so. All of a sudden, we are having trouble retaining those innovators, especially from India. That is a very very bad thing for us, and difficult to reverse now that it's started. It just takes a critical mass of successful innovators to attract more of the same... Folks that used to stay in Silicon Valley are now heading back to Mumbai and Bangalore, because "that's where the excitement is."
 

Changleen

Paranoid Member
Jan 9, 2004
14,335
2,448
Hypernormality
Interesting thread. Of course outsourcing to foreign countries is a part of the model of globalisation, which put very simply (and ideally from a US point of view) would result in America becoming the 'manager' of lesser skilled 'blue collar' workers in other parts of the world. However as has been pointed out, it doesn't take long for the worker to understand the job and the market, and if the first world cannot maintain the highest educational and innovative standards, we are destined not to be the first world for much longer.

There are two responses to that - One, invest in education and actually stay on top. Encourage the brightest minds from around the world to join you and embrace change and innovation. At the same time this results in actual progression for humanity. If this is embraced and managed properly, the results can be the same as one might observe in a small town which is choosen as the site of a new booming industry. Eventually everyone gets richer.

The second is the approach which seems to be more favoured by the current administration. Desperatly try and maintain the status quo. Of course this is unsustainable in even the medium term. However, they deploy protectionist trade policies, trade only on terms that suits them, ignore agreements that don't suit them, allow educational standards to slip and so on. What happens is fairly obvious. Soon this country becomes irrelevant. The rest of the world moves on. New trading relationships are formed around the regressives.
 

Changleen

Paranoid Member
Jan 9, 2004
14,335
2,448
Hypernormality
Reactor said:
Oi Vey.

There are a lot of problems with you scenario. One is that other countries, that you would outsource to pay much less. If a worker in Mexico is making 2 bucks an hour, he's not going to be able to buy much. Loss of tax revenue and increased unemployment will cost you and I more money in Taxes, increase the crime and drug usage rates.

There are various reasons people in third world countries work for less than Americans. First is that most are still semi agrarian and they don't need to buy the type and amount of stuff a typical American does. Most don't have SUVs, for example; Or fancy electronics, computers, cable TV. Lots of things most Americans don't need either, although you can't convinve them of that. For them a job isn't always as important as you would like.

Another reason is the lack of labor laws allow conditions you or I would probably see as cruel, including child labor that borders on and even passes over the line of slavery. Yet another is lack of environmental laws....why do you think most American companies manufacture Carbon fiber products over seas? Is it ethical to produce products where you are harming people and the environment?

On a simple level, outsourcing always hurts the American economy. Because any outsourcing deal sends more dollars overseas than it brings back. The manufacturer isn't going to spend 100% of the money you sent them to buy American products. While you might be increasing the wage base in their country, which is where they are going to spend most of their money, you are putting people out of work in your country. Maybe you hire a few sales people and a manager, but you fired a lot of lower level employees, you are driving wages here down.

Ethically, I think you should build your product in the country you sell most of it in. Be that America, Canada, China.
Rarely, I disagree too - in principal.

What you have said holds true in extreme examples, but in reality I think most of the serious money going into outsourcing is going to foreign companies who already have a genuine skillset and provide a complete product or service, which in turn forms a small part of the product the local company is selling.

For example, stuff like plastic packaging manufacture, where a large US company will outsource a particular part of it's production to a foreign firm who (based on their own existing skilled management and local skilled expertise) go away and source their design, raw material and labour and return a finished item to the US at a far lower cost than it could be done for locally.

The US company may shed a few lesser-skilled employees, but their product will end up being cheaper to manufacturer and actually increase the profit margin for the local management and sales force. Of course, more management staff may also be needed to oversee and coordinate the remote production - probably not as many as the US blue collar jobs lost, but that's the way it goes. More Americans become managers or skilled workers. In the long run both the local company and the foreign contractor grow richer and more advanced and add more value to both of their local economies and the trickle down continues - hopefully in terms of societal benefits like impoved worker treatment and benefits as well.

Your sceanario is more true when a US company simply builds a remote factory and packs it full of unskilled labour to create a low value, low technology product - clothing and so on. In this case, nothing of real value other than a few $ is added to the foreign economy. No upskilling or need for self improvement. In the long run this is harmful to everyone. None of the locals even get management experience.

As a world leader, the US needs to be moving away from even trying to be profitable in such markets. It is increasingly no longer do-able to pay US managers US wages to oversee foreign workers (or worse, local workers) to make low technology products. You don't need to have been schooled at Berkley to oversee a jeans factory. Mr. Chun-Li can do it just as well as you can with his local populace, and he has cheaper overheads.

This is where the problem of a poorly educated populace comes in. The US has a (comparitivly) high cost of living, but if your populace is not smart enough to work in high tech industry, equally skilled people in countries with lower costs of living are going to undercut you and fvck you over, and you become obslete and very very poor.

Essentially globalisation follows the same rules as any large company outsourcing within traditional markets. The upsides and downsides are simply magnified along with the scale of the operations involved, which brings societal social concerns into sharper view.

You have to stay ahead of the game once you're on top. That's one of the problems with being at the top of the tree. There's a long way to fall.
 

fluff

Monkey Turbo
Sep 8, 2001
5,673
2
Feeling the lag
One flaw in the logic is that companies around the world will almost invariably pay the minimum necessary to employ the staff they need. Any additional profit will not therefore necessarily benefit the economy of the company's home market. If Microsoft outsourced 3000 jobs from US to India Bill would just get a bit richer (along with some other shareholders), not necessarily helping the general US economy and especially not helping the US labor market.
 

Changleen

Paranoid Member
Jan 9, 2004
14,335
2,448
Hypernormality
fluff said:
One flaw in the logic is that companies around the world will almost invariably pay the minimum necessary to employ the staff they need. Any additional profit will not therefore necessarily benefit the economy of the company's home market. If Microsoft outsourced 3000 jobs from US to India Bill would just get a bit richer (along with some other shareholders), not necessarily helping the general US economy and especially not helping the US labor market.
But quite probably increasing the value of the Indian economy, especially if those 3000 jobs included management and other support roles which required local (Indian) upskilling. This in turn would make India a slightly more attractive place to trade with for the whole of the US, and hopefully make everyone a bit richer. Don't forget Bill would need some highly skilled and paid managers in the US to oversee the input/output functions of those 3000 with the rest of M$.

I think it's all about sharing the love. It's fine to outsource 'properly' as it all pays back into devloping the global economy in the end but simply turning poor locals into slave labour under your direct control isn't helping anyone.

Of course all this rests on the premis that economic growth can continue indefinatly which is obviously not true unless we get off-planet.
 

Changleen

Paranoid Member
Jan 9, 2004
14,335
2,448
Hypernormality
fluff said:
Bill would just get a bit richer (along with some other shareholders), not necessarily helping the general US economy and especially not helping the US labor market.
Yes, like I was saying the other day there is a problem with the trickle down effect not actually happening as much as it should in countries like the US and to a certain extent the UK now.

Some of the rich are now so far beyond the scope of the general population that adding to their wealth is largely pointless and does not actually result in the spreading of wealth throughout the economy the same way distubuting these profits to middle management would. Bill et. al don't need to spend that money and increasingly (although not so much Bill as he is a good philanthropist) do not.

Money ends up being held in huge personal fortunes that would be for more constructivley used being recirculated back in the economy. I realise that the ultra-rich DO reinvest a lot and hold shares and so on, but again a lot of the time this is invested in ways that simply create more wealth for them which never sees any actual use in the wider scope of the population. The stock market can do as well as it likes, but that doesn't necassarily mean Bill goes on a shopping spree in his local high street, if you get my analogy. What would he possibly shop for?

I feel like in the 80's at least the rich would regularly use the majority of their wealth for starting a mall or a new company or something which would require decent investment in other less rich people and spreading about of cash a bit more, (and of course this is still happening for the most part) but now America especially is developing a class of elite rich who simply are so rich, that even with their investments, a great deal of money just sits (or floats close by them) and does nothing really constructive for society.
 

Kornphlake

Turbo Monkey
Oct 8, 2002
2,632
1
Portland, OR
Changleen, I think you and I see things from a similar perspective. I've visited shops in mexico and seen the conditions there. Sure the workers don't have clothing from GAP or whatever the high dollar trendy store is these days but they don't work in squallor. The factories are clean, well lit, they have the same tools we use in the states, they are paid approximately the same as a person would be paid in our country adjusted for the value of currency in their country. Honestly a person making $6.50 in a factory in the states is no better off than the person making $2.50 in mexico, they are both making a minimum wage doing the same thing. The only differance would be the fact that our government, to a point, compensates for low wages where foreign countries don't necessarily do the same.

There are downsides to industrialization of poor countries like mexico, where jobs become abundant inflation runs wild, in most cases both parents will work, sometimes two or three jobs a piece. With no parents in the home the children do suffer, drugs become more common among teenagers, loitering and mischief are more prevalent... Society is affected, however as job shops continue to gain expertise, and thier employees gain experiance in a given area their quality commands higher compensation from their customers. The economy stabilizes and skilled workers become more competitive in a global economy. The fact is there are more opportunities for skilled labor outside of this country than there are within the country. I'd love to quit my job and go to work in a machine shop as a machinist, but I can't get the training to be a machinist at any university and none of the local shops can afford to pay someone with no experiance, the same goes for any of the industrial arts. We as a nation are becoming less capable of these kinds of skills because we're giving the opportunities to other countries and they are doing a good job of learning to build our products. The only way we'll be able to compete in a global economy is to either give up on job shop types of processes and focus primarily on upper level expertise in engineering, accounting and management, or to put our focus back on the industrial arts and become better and cheaper than our competitors. I honestly believe either is feasable, I just don't know if our society has enough of a work ethic to achieve either.
 

ALEXIS_DH

Tirelessly Awesome
Jan 30, 2003
6,147
796
Lima, Peru, Peru
well, am on the other side of the outsourcing pool.

i work as a supervisor for an outsourced company. we sell services, not goods, so enviromental issues are aside my experience.

i know the workers on the states got paid around 2000 bucks a month when the company was in California.
here the entry-level telephone operators get paid on average 500-600 bucks a month for 40 hour-weeks. thats about twice what a public HS teacher , or a nurse on a public hospital makes...

that is definately an improvement.. both for the employees (who would have to get lower paying jobs otherwise), and for the economy, that gets all that money dumped into, which in turn raises the demand for labor, which raises the incomes overall...
so basically, its a win-win situation for the country on that side.

i do believe that something is as good as the alternative makes it look. so for me, the idea of the world turning into "US a 100% white collar country" and where all the blue collar workers are in the 3rd world" is "better" (even tough it may not good enough) than the current model of "US white and blue collar" and the 3rd world "70% blue collar and 30% under/unemployed".

the alternative in 3rd world countries to low paying jobs, are not high paying jobs.. the alternative in most places is "NO JOB AT ALL".
 

Changleen

Paranoid Member
Jan 9, 2004
14,335
2,448
Hypernormality
Kornphlake said:
The only differance would be the fact that our government, to a point, compensates for low wages where foreign countries don't necessarily do the same.
Hopefully as Mexico becomes richer it's provisions of state aid will become better.

There are downsides to industrialization of poor countries like mexico, where jobs become abundant inflation runs wild, in most cases both parents will work, sometimes two or three jobs a piece. With no parents in the home the children do suffer, drugs become more common among teenagers, loitering and mischief are more prevalent... Society is affected..[/quote]Yeah that is a problem with overly rapid economic growth nearly anywhere especially in poorer countries whose support industries have to grow from scratch. The government just has to the best job it can of managing it.
The economy stabilizes and skilled workers become more competitive in a global economy.
Yay!

I'd love to quit my job and go to work in a machine shop.... The only way we'll be able to compete in a global economy is to either give up on job shop types of processes and focus primarily on upper level expertise in engineering, accounting and management, or to put our focus back on the industrial arts and become better and cheaper than our competitors. I honestly believe either is feasable, I just don't know if our society has enough of a work ethic to achieve either.
I recon there's always going to be a place for small, high quality engineering shops or speciality products in the US. From stuff like Orange County Choppers, Brooklyn Machine Works, companies that make small high tech and precise components for whatever product should become more prevalent. You can stay in the game as long as you lead the way.

What about the Midwest? How do farmers survive without huge agricultural protection subsidies?
 
What I have seen from the company I work for (#1 industrial automation company in the country, 4Billion in sales) is that they have invested in technology to combat the low labor costs.
In China they make motors by hand winding the stator. We make them by machine winding. We have employed Power Lean to reduce waste. We have not laid-off anyone. We have, however, given them different responsibilities. We have taken people thet were just pressing buttons to operate a machine and sent them to training for programming CNC equipment. In the past 4 years we have put 40 M to our bottom line thru these efforts. Almost all our plants are non-union.

So from my perspective there are 2 ways to operate manufacturing these days (who cares about services, manufacturing is what this country is built on). Invest to make your operation better, or close up shop and open in China. I think the latter is short sighted.

As China goes thru the industrial boom, workers will demand better conditions, better lifestyles, etc. Perhaps Unions will evolve. Costs will go up (we have seen some raw materials from China triple in the last year). Meanwhile the companies that have invested will be poised to gain business as China goes thru workforce and materials struggles. The companies that closed up and went to China will, in a few years, have to consider moving to India or Africa as the cycle continues.

As far as losing jobs, it will force the worker that is unskilled to become skilled to find a job. They will be better off as a result. We are in the midst of an awakening in the US. Soon the days of unskilled workers making 70K/ year at a union plant will be gone. Unions were developed as a result of unsafe labor and generally bad conditions. They have bullied the auto industry and taken advantage of them.
This is what I see at the plants that I work with (American Axle, Dunlop, Ford, GM and Delphi). Having to wait 1 hour for an electrician to plug a light in to a wall. Maintenance crews putting jobs off until the weekend so they can get overtime pay. The LOWEST paid person at one of these plants is not a college graduate, works in shipping and receiving and makes $26/ hour. LOTS of people sitting around doing nothing. Retiring at 55 with 90% of your pay for a pension.
The large Delphi plant (3800 employees) is on the verge of closing here. They have filed for bankruptcy. Management has offered the union a decrease in pay and health benefits to keep the plant open. The Union has accused them of trying to bring in 3rd world pay scales and that it is managements fault for working so closely with GM. This is what I know...you cannot make the changes you need to to improve technology and reduce waste at large union facilities.

More to rant about but my 3 year old just threw up in her bed.
 

MMike

A fowl peckerwood.
Sep 5, 2001
18,207
105
just sittin' here drinkin' scotch
We're looking at having some parts made in China instead of where we currently buy them.....in Pennsylvania somwhere.....

The "american worker" (when I say American, I mean north american...Canadian union dudes are lazy sacks of crap too), has just priced themselves out of the market. Hard to pity them....
 

fluff

Monkey Turbo
Sep 8, 2001
5,673
2
Feeling the lag
MMike said:
We're looking at having some parts made in China instead of where we currently buy them.....in Pennsylvania somwhere.....

The "american worker" (when I say American, I mean north american...Canadian union dudes are lazy sacks of crap too), has just priced themselves out of the market. Hard to pity them....
Do they earn more or less than you?
 

fluff

Monkey Turbo
Sep 8, 2001
5,673
2
Feeling the lag
MMike said:
Most likely they earn less. I'm worth every cent though. You should see me in my new jeans.
I'd rather not...

Seriously, do you consider yourself grossly overpaid and wealthy? Perhaps people do not so much price themselves out of the market so much as desire a better standard of living in a country where living is not necessarily cheap.

Pricing oneself out of the market depends also on how much profit a company needs to make...
 

MMike

A fowl peckerwood.
Sep 5, 2001
18,207
105
just sittin' here drinkin' scotch
fluff said:
I'd rather not...

Seriously, do you consider yourself grossly overpaid and wealthy? Perhaps people do not so much price themselves out of the market so much as desire a better standard of living in a country where living is not necessarily cheap.

Pricing oneself out of the market depends also on how much profit a company needs to make...
You don't know what you're missing.

But if someone is a professional...i dunno... nut tightener, and a miachine exists to perform the exact same task, why should the company feel guilty?...let alone giving the guy guaranteed yearly raises (regardless of how good a nut tightener he is)......
 

fluff

Monkey Turbo
Sep 8, 2001
5,673
2
Feeling the lag
MMike said:
You don't know what you're missing.

But if someone is a professional...i dunno... nut tightener, and a miachine exists to perform the exact same task, why should the company feel guilty?...let alone giving the guy guaranteed yearly raises (regardless of how good a nut tightener he is)......

That's a slightly different question but if I had been a top-notch nut-tightener (not too tight, not too loose, that's how I like my nuts) for a company for 10 years whilst they had made billions of dollars profit on the back of my nut-tightening (amongst other things) and they then dumped me for a nut-tightening machine to add 0.5% to their profits I reckon I'd feel a little hard done by.

So, if companies are to behave like that who can blame the workers for trying to screw every penny they can get out of the companies when they have the chance?

And if you think you look so good in your new jeans perhaps you should post a picture here for some feedback, eh?
 

Reactor

Turbo Monkey
Apr 5, 2005
3,976
1
Chandler, AZ, USA
Kornphlake said:
Okay, ethics aside, does foreign labor really take more money out of our economy than it brings back? Say I pay my buddy John $2 to assemble a widget and sell that widget for $8, that means I give my buddy john $2 and I keep $6 for myself, then my accountant says that I have to pay 40 cents in taxes, 30 cents for raw materials, 25 cents for the accountant's pay and I'm left with $5.05 to keep to myself. John goes and buys a slurpie with his $2 and the Indian guy who owns the 7-eleven (not trying to be racist or stereotype here, just trying to illustrate a point) sends $.05 to headquarters and his profit of 1.95 to his uncle in the middle east. I on the other hand buy a slurpie and that money is lost but I also buy an orange grown in florida and pay for my wife's hair cut. More of the money that I spend stays in the country.
This is completely unrealistic. First you are trying to justify a macro-economic point with a micro-economic example. Let me change it to make it more realistic.

Only about 10% of immigrants send money home, and the average is 15% among those that do. Out of the $2 for the slurpie, some money goes to tax, some for supplies, upkeep. Assuming he had 40 cents profit only about 6 cents would be sent home, and only among the people sending money home. So if every 7/11 was owned by an immigrant the average amount sent home from a $2.00 sell would average .6 cents. But since not every 7/11 is owned by an immigrant.

Kornphlake said:
Now if I fire John and hire Juan in Mexico to do the same job for $.50, and sell the same widget for the same amount of money, I've then got an extra $1.50 to spend on a car wash, sure I'll still spend $2 on a slurpie and that money will go overseas, but now I've put an extra $1.50 back into the economy that otherwise wouldn't have been in the economy at all. Hopefully John will get a new job doing my wife's hair because with my new found wealth my wife is going to think she needs a lot more hair cuts.
Actually, given the correction to the scenario above your country is 49.4 cents behind. It might be better for you in the short term, but in the long term you are contributing to an imbalance in trade that will erode the value of your currency.

Also John is going to draw unemployment, and quite possibly welfare and medicaid, increasing your, and everyone else's, tax burden. John may not be able to find a new job being a relatively unskilled worker.

Kornphlake said:
Are my numbers really that unrealistic? Do low income individuals purchase more domestic goods than I give them credit for?
Your numbers are highly unrealistic, giving a discreet example of the worst case scenario. Low income individuals spend all of their income, and the vast majority of it stays in the U.S.
 

valve bouncer

Master Dildoist
Feb 11, 2002
7,843
114
Japan
fluff said:
And if you think you look so good in your new jeans perhaps you should post a picture here for some feedback, eh?
Speaking of nut tighteners, heres the pic of MMike you asked for, he was too shy to post it himself
 

MMike

A fowl peckerwood.
Sep 5, 2001
18,207
105
just sittin' here drinkin' scotch
MAybe I will....

But my sympathy for the "worker" has dwindled over the years. I have encountered very few top notch nut tighteners that would fit into the picture you describe.

And what's more...yes the worker is the guy tightening the nuts...but it's the company has ensures that he has nuts to tighten...They are the one taking all the risk. Everyone is always all "Oooh the evil company is exploiting the worker." But without the evil company, the worker wouldn't have anywhere to be.....

fluff said:
That's a slightly different question but if I had been a top-notch nut-tightener (not too tight, not too loose, that's how I like my nuts) for a company for 10 years whilst they had made billions of dollars profit on the back of my nut-tightening (amongst other things) and they then dumped me for a nut-tightening machine to add 0.5% to their profits I reckon I'd feel a little hard done by.

So, if companies are to behave like that who can blame the workers for trying to screw every penny they can get out of the companies when they have the chance?

And if you think you look so good in your new jeans perhaps you should post a picture here for some feedback, eh?
 

fluff

Monkey Turbo
Sep 8, 2001
5,673
2
Feeling the lag
MMike said:
MAybe I will....

But my sympathy for the "worker" has dwindled over the years. I have encountered very few top notch nut tighteners that would fit into the picture you describe.

And what's more...yes the worker is the guy tightening the nuts...but it's the company has ensures that he has nuts to tighten...They are the one taking all the risk. Everyone is always all "Oooh the evil company is exploiting the worker." But without the evil company, the worker wouldn't have anywhere to be.....
Ah I see, the evil worker is exploiting the company. How would the company get by without the evil worker? Who would tighten your nuts?
 

MMike

A fowl peckerwood.
Sep 5, 2001
18,207
105
just sittin' here drinkin' scotch
fluff said:
Ah I see, the evil worker is exploiting the company. How would the company get by without the evil worker? Who would tighten your nuts?
Underpaid mexicans of course!!

(And I'm aware that I'm using examples that are the extreme opposite of yours...mainly for effect)

In the case of Boeing, (which is my closest experience with unions), I'd have to say that actually yes, the evil union worker is exploiting the company.