More jobs or higher production wages?

Discussion in 'Economy' started by BillyV, May 29, 2012.

?

Preference: More jobs or higher wages?

Poll closed Jun 8, 2012.
  1. I want more jobs even at somewhat lower wage rates.

    2 vote(s)
    40.0%
  2. I want pre-recession wage levels even if it means fewer jobs.

    1 vote(s)
    20.0%
  3. Other - (if both the above, please explain how)

    2 vote(s)
    40.0%
  1. BillyV
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    BillyV Antidisestablishmentarian

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    Flat U.S. Wages Help Fuel Rebound in Manufacturing ​


    The celebrated revival of U.S. manufacturing employment has been accompanied by a less-lauded fact: Wages for many manufacturing workers aren't keeping up with inflation.
    The wage lag is a key factor contributing to the rebounding competitiveness of U.S. industry. A recent uptick in factory employment and the return of some production to U.S. shores from abroad both added jobs that probably otherwise wouldn't exist. But sluggish wages also are squeezing workers' incomes and spending. That, in turn, hurts retailers who target middle-income earners and restrains the vigor of the economic recovery.
    Flat U.S. Wages Help Fuel Rebound in Manufacturing

    So assuming this were a trend, would you rather see more jobs at somewhat lower wages or less jobs but maintaining the pre-recession wage levels?
     
  2. flacaltenn
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    flacaltenn USMB Mod Staff Member Gold Supporting Member

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    We don't get to make this trade-off. The number of jobs and the wages for them are side-effects of folks risking capital to make some darn thing.. There is no way of applying this in manufacturing OR fast food or prostitution for that matter.

    Actually -- lower hooker wages WOULD probably require A LOT more hookers..
     
  3. BillyV
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    BillyV Antidisestablishmentarian

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    So the cost of production has no bearing on where something is made? Is that your observation?
     
  4. starcraftzzz
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    starcraftzzz Senior Member

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    Wages for pretty much most jobs are not keeping up with inflation
     
  5. flacaltenn
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    flacaltenn USMB Mod Staff Member Gold Supporting Member

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    Not cost of production --- that's relevant.. What's irrelevant is actually the number of jobs or the cost of each.. Most of what I've seen about jobs returning to the US is encouraging, but misunderstood.. 21st century manufacturing does not look like the 20th Century. The way to compete is to MINIMIZE the human labor --- PERIOD. That means that to beat the "low cost labor" of the Far East, we CAN compete with factory automation, robotics, advanced supply stream control, etc... And more importantly, protect our proprietary investments by not shipping the build instructions all over the freaking world to be stolen...

    IN FACT --- The Chinese know this. That their "cheap labor" advantage is a flash in the pan and that the FUTURE is in robotics and all that other jazz. For instance FoxConn (assembler of Apple goods in CHina) is bringing over 2 freaking MILLION robotic assemblers in the next few years and investing heavily in development of automation products. They know "human handling" is a weak link and economic liability.

    LABOR in a 21st century "factory" will be there to tutor the robots, repair the infrastructure, and add expansions, new products, perform RESEARCH and Development, product design, etc.. You may not like it, but this creates jobs at ALL LEVELS of skills, but less of them. Especially if you don't have an adequate education.. The sooner the US CAPITAL geniuses recognize what a factory SHOULD look like -- the sooner the US will start generating hard goods again...
     
    Last edited: May 29, 2012
  6. BillyV
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    BillyV Antidisestablishmentarian

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    Well, that is true; automation has been the key to US productivity gains for years and as the cost of labor increases (wages, benefits, legal liability, etc), automation makes increasingly sound economic sense for manufacturers. I don't know whether the Chinese will be able to make that leap in the way the US will; despite their "command" economy where the government can direct the activities of business, they have 1.3 billion people and their options for eliminating the labor force are much more constrained. It reminds me of that Milton Friedman story (attributed to Stephen Moore as printed in the Wall Street Journal in 2009):

    I think the Chinese will have difficulty not only justifying the cost of automation with its large, still relatively cheap labor force, but also in reducing employment in a country of so many.

    That wasn't really the point of this thread, however; I was curious to see whether those on this board would consider increases in employment, albeit at slightly lower wage rates, to be a good thing or a bad thing.
     
  7. flacaltenn
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    flacaltenn USMB Mod Staff Member Gold Supporting Member

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    Well I'm glad that you did this and that you qualified the OP to discuss Manufacturing. Also thankful for your optimism.. Now that I've hedged so much, the answer to your OP is I'd NEVER condone a willful lowering of wages to try to employ more people. The goal should be that we PROMOTE PEOPLE into higher paying jobs.. The idea of sacrificing wages for the good of the workforce didn't work in Europe where they tried to restrict hours to expand jobs either.

    My only optimism about American Manufacturing stems from the observation that Asian leaders KNOW what manufacturing needs to look like. They are not comfortable with just a "cheap labor" advantage. We SHOULD be able to beat them --- particularly in the very high tech areas of semiconductors, pharmaceuticals, nanotech, materials, etc. But the education prep and curriculum choices of our kids has to change. We HAVE to push science, tech, math and fill grad schools with AMERICAN kids in these fields. And we have to REFILL the IPO pipeline with ventures and capital that PRODUCE goods and B to B services.
     
  8. Wiseacre
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    Wiseacre Retired USAF Chief Supporting Member

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    I think the labor supply is so large relative to the demand that you have to create more jobs first, even at lower wages. I don't see any chance of increasing wages for existing jobs when the number of jobseekers is so high.
     
  9. The Rabbi
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    The Rabbi Diamond Member

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    There is no trade off. You can have both. You can have neither as well. People get paid for being productive.
     
  10. flacaltenn
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    flacaltenn USMB Mod Staff Member Gold Supporting Member

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    For MANUFACTURING -- you can no longer have MORE jobs at lower wages.. Simply put -- LOW-tech manuf needs a lot of extra middle/lower salary jobs while HIGH-tech manuf needs much fewer if ANY middle/lower wage jobs. Can't get manufacturing back up in the USA with LOW-TECH manuf. You'd get pummeled. By both cheap labor abroad and competitors who were investing in 21st Century manufacturing tech.

    Almost the same or MORE high wage jobs in high tech manuf. That's the good news.
     
    Last edited: May 30, 2012

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