More jobs or higher production wages?

[BillyV]

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?

 

[flacaltenn]

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..

 

[BillyV]

So the cost of production has no bearing on where something is made? Is that your observation?

 

[starcraftzzz]

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?

Wages for pretty much most jobs are not keeping up with inflation

 

[flacaltenn]

So the cost of production has no bearing on where something is made? Is that your observation?

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...

 

[BillyV]

So the cost of production has no bearing on where something is made? Is that your observation?

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...

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):

At one of our dinners, Milton recalled traveling to an Asian country in the 1960s and visiting a worksite where a new canal was being built. He was shocked to see that, instead of modern tractors and earth movers, the workers had shovels. He asked why there were so few machines. The government bureaucrat explained: “You don’t understand. This is a jobs program.” To which Milton replied: “Oh, I thought you were trying to build a canal. If it’s jobs you want, then you should give these workers spoons, not shovels.”

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.

 

[flacaltenn]

So the cost of production has no bearing on where something is made? Is that your observation?

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...

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):

At one of our dinners, Milton recalled traveling to an Asian country in the 1960s and visiting a worksite where a new canal was being built. He was shocked to see that, instead of modern tractors and earth movers, the workers had shovels. He asked why there were so few machines. The government bureaucrat explained: “You don’t understand. This is a jobs program.” To which Milton replied: “Oh, I thought you were trying to build a canal. If it’s jobs you want, then you should give these workers spoons, not shovels.”

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.

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.

 

[Wiseacre]

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.

 

[The Rabbi]

There is no trade off. You can have both. You can have neither as well. People get paid for being productive.

 

[flacaltenn]

There is no trade off. You can have both. You can have neither as well. People get paid for being productive.

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.

 

[The Rabbi]

There is no trade off. You can have both. You can have neither as well. People get paid for being productive.

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 the states 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.

Can I get an English translation of that?

 

[TakeAStepBack]

More jobs and a heavy dose of monetary deflation to drive prices down.

 

[The Rabbi]

More jobs and a heavy dose of monetary deflation to drive prices down.

Do you have any idea what you're talking about?

 

[TakeAStepBack]

Yes, do you?

 

[The Rabbi]

Yes, do you?

You clearly do not.
Philips Curve mean anything to you? No fair to Google.

 

[TakeAStepBack]

Yes, it means failed inflation policies that we've seen for decades in correlation with unemployment. We currently have way too much money in supply which fuels prices to go up. it isn't the rate of pay for employees in this instance Im talking about, it's the price of goods and services. Monetary deflation would force down prices. I'm repeating myself.


There are three agencies you mean to cut rabble.....3.....

 

[The Rabbi]

Yes, it means failed inflation policies that we've seen for decades in correlation with unemployment. We currently have way too much money in supply which fuels prices to go up. it isn't the rate of pay for employees in this instance Im talking about, it's the price of goods and services. Monetary deflation would force down prices. I'm repeating myself.


There are three agencies you mean to cut rabble.....3.....

OK, so you actually do not have a fucking clue what you are talking about.
Current Inflation Rates | Monthly and Yearly Chart, Graph and Table: 2002-2012 Data - US Inflation Calculator

I've never seen someone so ignorant of basic econ that wasn't a flaming Obama supporter. Although maybe you are and are just a plant to discredit the Paul-bots. Not that they need much help in that department.

 

[BillyV]

There is no trade off. You can have both. You can have neither as well. People get paid for being productive.

I'd like to hear you expound upon that premise. Given the competititive forces from around the world, how do you get both? You don't believe that, all things being equal, the fact that a worker costs less adds to his productivity? From another section of the WSJ article:

The sluggish wage growth coincides with an impressive burst of rising factory productivity. Output per hour in American manufacturing has increased by 13% in the past five years and 21% in the five years before that.

Aside from capital investment in machines and technology, your US worker is not inherently more productive than a worker in Asia as far as I can see (I know, this is heresy). Yes, Americans work hard and take their jobs much more seriously than some nationalities, but Asians do as well. The only inherent advantage that I can see of American workers over Asian (this from somewhat limited but recent experience in international markets) is the propensity of the American worker to take charge and push forward independently, unlike Asians who will work like dogs once given a direction but will be unsure and tentative without it. That's valuable in a lot of industries, but I'm not sure manufacturing (at the level we're talking about, production) is one of them.

 

[The Rabbi]

There is no trade off. You can have both. You can have neither as well. People get paid for being productive.

I'd like to hear you expound upon that premise. Given the competititive forces from around the world, how do you get both? You don't believe that, all things being equal, the fact that a worker costs less adds to his productivity? From another section of the WSJ article:

The sluggish wage growth coincides with an impressive burst of rising factory productivity. Output per hour in American manufacturing has increased by 13% in the past five years and 21% in the five years before that.

Aside from capital investment in machines and technology, your US worker is not inherently more productive than a worker in Asia as far as I can see (I know, this is heresy). Yes, Americans work hard and take their jobs much more seriously than some nationalities, but Asians do as well. The only inherent advantage that I can see of American workers over Asian (this from somewhat limited but recent experience in international markets) is the propensity of the American worker to take charge and push forward independently, unlike Asians who will work like dogs once given a direction but will be unsure and tentative without it. That's valuable in a lot of industries, but I'm not sure manufacturing (at the level we're talking about, production) is one of them.

You really don't know very much, do you?

 

[BillyV]

You really don't know very much, do you?

Please, educate me. Thrill me with your intellect.