Originally Posted By: Tempest
So day laborers make as much as a PHD's? Do older / more skilled people make more money in most jobs? When machines do most of labor, physical strength is less valuable and therefore less rewarded.
In some cases, yes. An employed day labor makes more than an unemployed PhD. A lot of unemployed PhD actually works part time unskilled labor until they find a job that pays what they are trained for.
So, tell me, are we "valuing" skills that are in no high priced demand like PhD in child education or "day labor" in construction jobs like electrician, concrete, welding, etc?
You'll find that more experienced employees make more money everywhere due to "sorting", those lower skilled ones will work less, that's not a "developed nations" vs "3rd world" debate as you have originally stated.
Also the decision to use machines (or automation or technology) vs off shore grunt labor vs highly skilled labor has a lot more to do with labor cost vs technology cost, than "we are America and we don't do no grunt labor" ideology. Look at autoparts quality between the old (highly skilled labor) and the new (off shored to low cost labor), and you'll see that it is all about cost instead of "for the greater good to the society".
http://en.wikipedia.org/wiki/TX4
Quote:
The troubled maker of famous London taxis has been thrown into further turmoil after it announced plans to recall 400 black cabs and suspend sales after discovering a steering box fault. Manganese Bronze said it had discovered a defect with new steering boxes in its TX4 models, which were introduced in production at its Coventry factory in late February. It warned that the recall and sales suspension would have a "material and detrimental" impact on its cashflow and said it was looking at options for the firm. The news comes as the latest blow to the company, which has been hit by mounting losses and a recent accounting blunder that left it with a £4 million hole in its accounts. Manganese, which suspended trading of its shares earlier in the day, said it was working with Chinese partner Geely to fix the steering box fault. But they said: "Until such time that a technical solution is developed to rectify the fault, the financial position of the group remains unclear and trading in the company's shares will remain suspended." The company has not made any profits since 2008.
Originally Posted By: Tempest
The thing you are missing is, why is the cost of labor higher and how did those nations get wealthy? Nations with high productivity tend to be far wealthier. That is not an accident.
I'm not missing anything. You're missing the fact that the nations the higher cost of living area were in equilibrium of productivity vs cost of living. It is the new market that works are outsourced to that is having sudden change in political climates. These are good changes, that their government realize they can build better nations by opening up and focus on economy. They (Taiwan, Singapore, Thailand, Japan) too will eventually catch up to our living standard and become too expensive vs other new entrance into the world market (like Vietname and Burma).
Tempest, what you are getting confused on, is the textbook utopia of cause and result in an equilibrium of income vs cost of living vs productivity, and the reality of our world in a dynamically changing, non equilibrium of currency manipulation, inflation, political stability, employer and employee leverages, energy cost, artificial barrier to technology (export ban), tax shelter and accounting rules, etc. These dynamic non equilibrium makes US impossible to compete for the same job at the same cost of living with other nations, and pigeon hole our labor into fewer number of higher income jobs at higher cost of entry (thus some unemployed PhD and artificially high day labor cost). We do not intend this as a result, it is a side effect of the reality that is not in equilibrium like the utopia in your textbook ideology.
Originally Posted By: Tempest
Quote:
improving productivity is just a side effect of increase in labor cost,
Partially. As labor costs increase, an employee must have a higher productivity to justify what the employer is paying him, which is why minimum wages and labor regulations price unskilled people out of the market. It is also why businesses must invest in energy using technology to improve productivity of workers.
Ultimately, increasing productivity increases wages. This is provable: There are minimum wage laws in this country, and yet, the vast majority of people that work make more than this. The reason is that their productivity justifies the cost to the employer.
Even without minimum wage and labor regulation our unskilled labor will still be priced out of the market. Our electricity is more expensive compare to Iceland, our food is more expensive compare to Brazil, our fuel is more expensive compare to Saudi. This set the living cost as well as business cost, and indirectly set the minimum wage. The jobs that are outsourced are not minimum wage jobs and they are not all unskilled, so that defeat your argument that minimum wage is killing the nation.
Businesses is not investing in technology or energy unless it returns higher than out sourcing. This is done either because the quality cannot be obtained using unskilled labor and they have to use more costly technology (i.e. semiconductor), or they can use technology to replace multiple unskilled labor with a single skilled labor for the same amount of work. These are the only two ways to justify the cost of technology.
You never mentioned this number difference, but always rave about how technology improve standard of living and how the developed nation are more willing to pay for the premium to equip their work forces and let them make more money. The reality is, this is part of a sorting mechanism that use a combination of the top percentage employees with technology to compete with the lower cost unskilled off shore workers. They are not done so that the employer can hire more people, they are done because it is even cheaper than out sourcing (for the same quality and quantity of result). In order for this to happen some employees have to be gone. So, this cannot be used as a "outsourcing is good for the nation because it forces us to do better with technology, and our employees will make more money as a result" argument as you have stated, because you forgot to mention that "some of you will make more money but the rest of you will be fired".
So day laborers make as much as a PHD's? Do older / more skilled people make more money in most jobs? When machines do most of labor, physical strength is less valuable and therefore less rewarded.
In some cases, yes. An employed day labor makes more than an unemployed PhD. A lot of unemployed PhD actually works part time unskilled labor until they find a job that pays what they are trained for.
So, tell me, are we "valuing" skills that are in no high priced demand like PhD in child education or "day labor" in construction jobs like electrician, concrete, welding, etc?
You'll find that more experienced employees make more money everywhere due to "sorting", those lower skilled ones will work less, that's not a "developed nations" vs "3rd world" debate as you have originally stated.
Also the decision to use machines (or automation or technology) vs off shore grunt labor vs highly skilled labor has a lot more to do with labor cost vs technology cost, than "we are America and we don't do no grunt labor" ideology. Look at autoparts quality between the old (highly skilled labor) and the new (off shored to low cost labor), and you'll see that it is all about cost instead of "for the greater good to the society".
http://en.wikipedia.org/wiki/TX4
Quote:
The troubled maker of famous London taxis has been thrown into further turmoil after it announced plans to recall 400 black cabs and suspend sales after discovering a steering box fault. Manganese Bronze said it had discovered a defect with new steering boxes in its TX4 models, which were introduced in production at its Coventry factory in late February. It warned that the recall and sales suspension would have a "material and detrimental" impact on its cashflow and said it was looking at options for the firm. The news comes as the latest blow to the company, which has been hit by mounting losses and a recent accounting blunder that left it with a £4 million hole in its accounts. Manganese, which suspended trading of its shares earlier in the day, said it was working with Chinese partner Geely to fix the steering box fault. But they said: "Until such time that a technical solution is developed to rectify the fault, the financial position of the group remains unclear and trading in the company's shares will remain suspended." The company has not made any profits since 2008.
Originally Posted By: Tempest
The thing you are missing is, why is the cost of labor higher and how did those nations get wealthy? Nations with high productivity tend to be far wealthier. That is not an accident.
I'm not missing anything. You're missing the fact that the nations the higher cost of living area were in equilibrium of productivity vs cost of living. It is the new market that works are outsourced to that is having sudden change in political climates. These are good changes, that their government realize they can build better nations by opening up and focus on economy. They (Taiwan, Singapore, Thailand, Japan) too will eventually catch up to our living standard and become too expensive vs other new entrance into the world market (like Vietname and Burma).
Tempest, what you are getting confused on, is the textbook utopia of cause and result in an equilibrium of income vs cost of living vs productivity, and the reality of our world in a dynamically changing, non equilibrium of currency manipulation, inflation, political stability, employer and employee leverages, energy cost, artificial barrier to technology (export ban), tax shelter and accounting rules, etc. These dynamic non equilibrium makes US impossible to compete for the same job at the same cost of living with other nations, and pigeon hole our labor into fewer number of higher income jobs at higher cost of entry (thus some unemployed PhD and artificially high day labor cost). We do not intend this as a result, it is a side effect of the reality that is not in equilibrium like the utopia in your textbook ideology.
Originally Posted By: Tempest
Quote:
improving productivity is just a side effect of increase in labor cost,
Partially. As labor costs increase, an employee must have a higher productivity to justify what the employer is paying him, which is why minimum wages and labor regulations price unskilled people out of the market. It is also why businesses must invest in energy using technology to improve productivity of workers.
Ultimately, increasing productivity increases wages. This is provable: There are minimum wage laws in this country, and yet, the vast majority of people that work make more than this. The reason is that their productivity justifies the cost to the employer.
Even without minimum wage and labor regulation our unskilled labor will still be priced out of the market. Our electricity is more expensive compare to Iceland, our food is more expensive compare to Brazil, our fuel is more expensive compare to Saudi. This set the living cost as well as business cost, and indirectly set the minimum wage. The jobs that are outsourced are not minimum wage jobs and they are not all unskilled, so that defeat your argument that minimum wage is killing the nation.
Businesses is not investing in technology or energy unless it returns higher than out sourcing. This is done either because the quality cannot be obtained using unskilled labor and they have to use more costly technology (i.e. semiconductor), or they can use technology to replace multiple unskilled labor with a single skilled labor for the same amount of work. These are the only two ways to justify the cost of technology.
You never mentioned this number difference, but always rave about how technology improve standard of living and how the developed nation are more willing to pay for the premium to equip their work forces and let them make more money. The reality is, this is part of a sorting mechanism that use a combination of the top percentage employees with technology to compete with the lower cost unskilled off shore workers. They are not done so that the employer can hire more people, they are done because it is even cheaper than out sourcing (for the same quality and quantity of result). In order for this to happen some employees have to be gone. So, this cannot be used as a "outsourcing is good for the nation because it forces us to do better with technology, and our employees will make more money as a result" argument as you have stated, because you forgot to mention that "some of you will make more money but the rest of you will be fired".
