Solutions for U.S. Unemployment and the Loss of Manufacturing Jobs:
Solutions for U.S. Unemployment and the Loss of Manufacturing Jobs:
(OP)
Hello all!
I read the following article this morning. I think that many of you will enjoy reading it. Reflecting upon it, I arrive at two major conclusions:
1) The current situation is not hopeless, but represents the largest challenge that our Domestic Industry has ever undertaken. The effort requires an underlying "zeitgeist" of something close to what the USA experienced when building the great "Arsenal of Democracy" in WW2.
2) The solutions discussed in this article are nothing new to the participants of this forum. We have brought to light (in one form or another) every single proposed solution. In fact, the article details something of a precis of a half-dozen threads. The similarities are quite stunning, really. This article is valuable because it corroborates our shared insights and solutions of the past few months.
One last word: Be proud of your intellect, and be confident that we have every capability to solve these problems.
------------------------------------------------------
Source: Industrial Information Resources, Inc.
http://www.industrialinfo.com
Solutions for Unemployment and the Loss of Manufacturing Jobs in the U.S.
HOUSTON--October 20, 2003--Editorial by Paul Laine, Consulting Engineer with Industrialinfo.com (Industrial Information Resources, Incorporated; Houston, Texas). There are two primary reasons for the increase in unemployment in the United States. First is the result of U.S. corporations attempting to compete in the World Trade Organization, while selling commodities to the world market. Commodities are commonly manufactured materials such as clothing, shoes, toys, chemicals, furniture, etc. Most countries (other than third world countries) can manufacture commodities as well as the U.S., but the problem is simply that the rest of the world pays much less for manufacturing labor than the U.S. For example, China and India have manufacturing workers who are happy to work for one dollar an hour.
Furthermore, India and China produce highly qualified engineers who are often better educated than ours and will work for much less. Many U.S. manufacturers answered this problem by laying off employees and relocating their plants to these areas of cheap labor. Blue Jean manufacturer, Levi Strauss & Company is a good example of this, recently announcing plans to close its last five plants in North America. (For details see archived IIR Industry Alert: World's Largest Jean Manufacturer Closes Last Five North American Plants
Other companies, as well, prefer to design products in the U.S. and then send parts to foreign countries for assembly. As a result, U.S. assembly workers become layoff victims.
The second reason for layoffs is the lack of new products coming into the marketplace. New products mean the hiring of new employees and greater job opportunities. If we can manufacture a new and unique product not elsewhere available, there will be a demand for jobs as well as an opportunity for profit. Initially, there will be no competition, and this will allow companies to set prices and control the sales. I can remember when our industries produced a flood of new and unique marketable products. What happened to cause this flood to dry up? The answer: American greed. Stockholders pressured corporate managers for a greater and quicker return on investment. CEOs became bean counters, and to obtain immediate cash they eliminated most or all of their research departments. This does not hold true for the Biotech/Pharmaceutical industry, which is spending billions on R&D and university type campuses for research. The result of this greed and mismanagement was the lack of new products. The fact that we have little research to develop new products forces manufacturers to produce commodities. We cannot maintain our standard of living by producing commodities.
Everyday, news headlines announce plant closures, cutbacks and mass numbers of employees whose jobs have vanished. Articles discussing the economy dismally recite that unemployment is near a high of over 6.2%. On television, we see charity food lines in Ohio a mile long. These people have to stand in line for hours trying to get food. What's wrong with this? This is the United States, not Africa or the Mid-East. I turn off the television in disgust, when I hear that the President has promised $15 billion dollars to Africa for relief. I have American friends in Ohio who should be the primary concern for relief. How does such a sad situation arise in Ohio and other U.S. states?
What are the underlying causes?
1) Manufacturing jobs are leaving the U.S. at an alarming rate.
2) Worldwide competition is growing rapidly in most areas of commodity manufacturing
3) In China, Southeast Asia, and India manufacturing workers are happy to work for one dollar per hour. In the U.S., the average wage is about twenty dollars per hour, and unions are constantly demanding more.
4) Many company executive officers have awarded themselves astronomically high wages and benefits, far beyond their actual worth. Stop this now. It's criminal.
5) Many U.S. companies are moving or building new plants in Asia to take advantage of cheap labor.
6) Most companies have drastically reduced or eliminated their research departments, because of stockholder pressure and quick return on investment. The end result of this is that fewer new and unique products come to the market. Corporations today invest only 10% of sales dollars into research. In the 1960's and 1970's, 40% of sales dollars were directed to research. This was the time when the world beat a path to our door to buy products they couldn't get elsewhere. No more! Now our industrial segment generates few products that can be classified as new and unique. Without research and new product generation, we are reduced to commodity manufacturing, and we will have to compete on the leveling plane of the World Trade Organization.
On the positive side, the advent of new products, born of research, will dictate the hiring of thousands of new employees.
7) Recently, we have heard that some universities are cutting back on their engineering, physics, and chemistry facilities because of a lack of student interest. If this becomes a common practice, our days as a great nation will soon be over.
8) In Information Technology (IT), jobs are being lost at a record rate as companies all over the U.S. have been outsourcing 60% of their work, with much of it going to India. CAD/CAM program work (design) is also being outsourced to India.
Economics forces the need to cut costs. The availability of cheap foreign labor and current immigration laws are creating a serious threat for process control and instrumentation professionals in North America. At risk are jobs ranging from process engineering and control system integration to plant operations and maintenance.
One of the biggest problems appears to be the L-1 Visa, which allows cheap labor without restriction. The more familiar H1-B Visa allows foreigners with special skills to work in the U.S. Few people are aware of the L-1 Visa, which allows U.S. companies with overseas offices to transfer foreign employees to their U.S. operations. According to the New York Times (Oct 1, May 30), the use of L-1 Visas to bring in workers, with a large fraction coming from India, has become a popular strategy among firms seeking to cut labor costs. They are now routinely used by companies based in countries like India and elsewhere, to bring workers into the U.S. and then to contract them out to American companies. Unlike the H1-B Visa, The L-1 does not require employers to pay workers prevailing wages. In addition, there is no cap on the L-1 visas. One estimate says there are 325,000 L-1 visa holders in the U.S. today. This amounts to 325,000 jobs lost by Americans, because of L-1 visa holding foreigners, who work for much less money.
9) We have failed to impress upon our children the importance of acquiring knowledge. Our high schools are graduating seniors that have poor skills in reading and comprehension, in addition to having a lack of depth in math and science. Meanwhile, European and Asian students have a greater appreciation for the value of knowledge, and work harder to achieve academic success. Thus, their ability to comprehend and rationalize exceeds that of American students. Fifty years ago, our schools were the envy of the world. Not now! If we do not correct this problem, there is little chance that we can maintain our leadership in technology as well as our standard of living.
In conclusion, there is a fundamental truth involved here. The U.S. cannot maintain its standard of living and belong to the World Trade Organization at the same time unless we can produce a continuous flow of new products not elsewhere available. We cannot continue to manufacture commodities and maintain our standard of living. Every country can produce commodities. Sales will go to those with the lowest labor costs.
How do we solve this problem?
Here are some of the actions we might consider:
1) Re-establish research as a major function of corporations.
2) Revitalize the school systems to meet the long-term needs of industry by producing highly educated technical employees. Re-establish the idea that learning can be fun and the acquisition of knowledge is of paramount importance to the future of our country.
3) Hire highly educated people to run the research departments.
4) Reduce the pay of the CEO and other executive officers to be consistent with their real contribution to the corporation.
5) Write your representatives in Congress. Explain objectives. Ask their help on issues such as education and L-1 Visas.
A final word: If we can maintain a flow of new and unique products into the world market, we will maintain our position as the world's greatest economy.
Industrialinfo.com (IIR) is the leading provider of global industrial market research. We specialize in helping companies develop information solutions to maximize their sales and marketing efforts. For more information send inquiries to industrialmanufacturing@industrialinfo.com or visit us online at www.industrialinfo.com.
I read the following article this morning. I think that many of you will enjoy reading it. Reflecting upon it, I arrive at two major conclusions:
1) The current situation is not hopeless, but represents the largest challenge that our Domestic Industry has ever undertaken. The effort requires an underlying "zeitgeist" of something close to what the USA experienced when building the great "Arsenal of Democracy" in WW2.
2) The solutions discussed in this article are nothing new to the participants of this forum. We have brought to light (in one form or another) every single proposed solution. In fact, the article details something of a precis of a half-dozen threads. The similarities are quite stunning, really. This article is valuable because it corroborates our shared insights and solutions of the past few months.
One last word: Be proud of your intellect, and be confident that we have every capability to solve these problems.
------------------------------------------------------
Source: Industrial Information Resources, Inc.
http://www.industrialinfo.com
Solutions for Unemployment and the Loss of Manufacturing Jobs in the U.S.
HOUSTON--October 20, 2003--Editorial by Paul Laine, Consulting Engineer with Industrialinfo.com (Industrial Information Resources, Incorporated; Houston, Texas). There are two primary reasons for the increase in unemployment in the United States. First is the result of U.S. corporations attempting to compete in the World Trade Organization, while selling commodities to the world market. Commodities are commonly manufactured materials such as clothing, shoes, toys, chemicals, furniture, etc. Most countries (other than third world countries) can manufacture commodities as well as the U.S., but the problem is simply that the rest of the world pays much less for manufacturing labor than the U.S. For example, China and India have manufacturing workers who are happy to work for one dollar an hour.
Furthermore, India and China produce highly qualified engineers who are often better educated than ours and will work for much less. Many U.S. manufacturers answered this problem by laying off employees and relocating their plants to these areas of cheap labor. Blue Jean manufacturer, Levi Strauss & Company is a good example of this, recently announcing plans to close its last five plants in North America. (For details see archived IIR Industry Alert: World's Largest Jean Manufacturer Closes Last Five North American Plants
Other companies, as well, prefer to design products in the U.S. and then send parts to foreign countries for assembly. As a result, U.S. assembly workers become layoff victims.
The second reason for layoffs is the lack of new products coming into the marketplace. New products mean the hiring of new employees and greater job opportunities. If we can manufacture a new and unique product not elsewhere available, there will be a demand for jobs as well as an opportunity for profit. Initially, there will be no competition, and this will allow companies to set prices and control the sales. I can remember when our industries produced a flood of new and unique marketable products. What happened to cause this flood to dry up? The answer: American greed. Stockholders pressured corporate managers for a greater and quicker return on investment. CEOs became bean counters, and to obtain immediate cash they eliminated most or all of their research departments. This does not hold true for the Biotech/Pharmaceutical industry, which is spending billions on R&D and university type campuses for research. The result of this greed and mismanagement was the lack of new products. The fact that we have little research to develop new products forces manufacturers to produce commodities. We cannot maintain our standard of living by producing commodities.
Everyday, news headlines announce plant closures, cutbacks and mass numbers of employees whose jobs have vanished. Articles discussing the economy dismally recite that unemployment is near a high of over 6.2%. On television, we see charity food lines in Ohio a mile long. These people have to stand in line for hours trying to get food. What's wrong with this? This is the United States, not Africa or the Mid-East. I turn off the television in disgust, when I hear that the President has promised $15 billion dollars to Africa for relief. I have American friends in Ohio who should be the primary concern for relief. How does such a sad situation arise in Ohio and other U.S. states?
What are the underlying causes?
1) Manufacturing jobs are leaving the U.S. at an alarming rate.
2) Worldwide competition is growing rapidly in most areas of commodity manufacturing
3) In China, Southeast Asia, and India manufacturing workers are happy to work for one dollar per hour. In the U.S., the average wage is about twenty dollars per hour, and unions are constantly demanding more.
4) Many company executive officers have awarded themselves astronomically high wages and benefits, far beyond their actual worth. Stop this now. It's criminal.
5) Many U.S. companies are moving or building new plants in Asia to take advantage of cheap labor.
6) Most companies have drastically reduced or eliminated their research departments, because of stockholder pressure and quick return on investment. The end result of this is that fewer new and unique products come to the market. Corporations today invest only 10% of sales dollars into research. In the 1960's and 1970's, 40% of sales dollars were directed to research. This was the time when the world beat a path to our door to buy products they couldn't get elsewhere. No more! Now our industrial segment generates few products that can be classified as new and unique. Without research and new product generation, we are reduced to commodity manufacturing, and we will have to compete on the leveling plane of the World Trade Organization.
On the positive side, the advent of new products, born of research, will dictate the hiring of thousands of new employees.
7) Recently, we have heard that some universities are cutting back on their engineering, physics, and chemistry facilities because of a lack of student interest. If this becomes a common practice, our days as a great nation will soon be over.
8) In Information Technology (IT), jobs are being lost at a record rate as companies all over the U.S. have been outsourcing 60% of their work, with much of it going to India. CAD/CAM program work (design) is also being outsourced to India.
Economics forces the need to cut costs. The availability of cheap foreign labor and current immigration laws are creating a serious threat for process control and instrumentation professionals in North America. At risk are jobs ranging from process engineering and control system integration to plant operations and maintenance.
One of the biggest problems appears to be the L-1 Visa, which allows cheap labor without restriction. The more familiar H1-B Visa allows foreigners with special skills to work in the U.S. Few people are aware of the L-1 Visa, which allows U.S. companies with overseas offices to transfer foreign employees to their U.S. operations. According to the New York Times (Oct 1, May 30), the use of L-1 Visas to bring in workers, with a large fraction coming from India, has become a popular strategy among firms seeking to cut labor costs. They are now routinely used by companies based in countries like India and elsewhere, to bring workers into the U.S. and then to contract them out to American companies. Unlike the H1-B Visa, The L-1 does not require employers to pay workers prevailing wages. In addition, there is no cap on the L-1 visas. One estimate says there are 325,000 L-1 visa holders in the U.S. today. This amounts to 325,000 jobs lost by Americans, because of L-1 visa holding foreigners, who work for much less money.
9) We have failed to impress upon our children the importance of acquiring knowledge. Our high schools are graduating seniors that have poor skills in reading and comprehension, in addition to having a lack of depth in math and science. Meanwhile, European and Asian students have a greater appreciation for the value of knowledge, and work harder to achieve academic success. Thus, their ability to comprehend and rationalize exceeds that of American students. Fifty years ago, our schools were the envy of the world. Not now! If we do not correct this problem, there is little chance that we can maintain our leadership in technology as well as our standard of living.
In conclusion, there is a fundamental truth involved here. The U.S. cannot maintain its standard of living and belong to the World Trade Organization at the same time unless we can produce a continuous flow of new products not elsewhere available. We cannot continue to manufacture commodities and maintain our standard of living. Every country can produce commodities. Sales will go to those with the lowest labor costs.
How do we solve this problem?
Here are some of the actions we might consider:
1) Re-establish research as a major function of corporations.
2) Revitalize the school systems to meet the long-term needs of industry by producing highly educated technical employees. Re-establish the idea that learning can be fun and the acquisition of knowledge is of paramount importance to the future of our country.
3) Hire highly educated people to run the research departments.
4) Reduce the pay of the CEO and other executive officers to be consistent with their real contribution to the corporation.
5) Write your representatives in Congress. Explain objectives. Ask their help on issues such as education and L-1 Visas.
A final word: If we can maintain a flow of new and unique products into the world market, we will maintain our position as the world's greatest economy.
Industrialinfo.com (IIR) is the leading provider of global industrial market research. We specialize in helping companies develop information solutions to maximize their sales and marketing efforts. For more information send inquiries to industrialmanufacturing@industrialinfo.com or visit us online at www.industrialinfo.com.





RE: Solutions for U.S. Unemployment and the Loss of Manufacturing Jobs:
They are not. They might be a part of the solution. But a real solution must be the objective of a PLAN which is believable and achievable.
Step 5, writing and calling congress-critters to urge action on the other items is a key part of the plan. They will do nothing in Washington unless they feel heat from the homefront.
Politicians are not in office for the betterment of America. They are in office for the material benefit of themselves and their families first and their political parties second.
The key problem of course is lack of organization and money. The companies spend lots of money supporting politicians who will support them. Ordinary citizens have nothing comparable. Even our professional engineering societies are largely apolitical. The same cannot be said of legal and medical societies.
RE: Solutions for U.S. Unemployment and the Loss of Manufacturing Jobs:
Jobs are leaving the US for one reason and one reason only.
That reason is that the product can be manufactured elsewhere for less money.
The ONLY way to change this is to manufacture goods and produce services for less labour costs than are being done elsewhere. You can raise productivity, lower labour costs or raise labour costs elsewhere (That is pay a fair living wage to third world workers. This can be along the lines of the fair trade initiative for coffee, tea and chocolate)
It’s that simple.
If research and innovation was the key, then please explain why the Japanese and others are producing many products conceived, invented and designed in the US.
To use tariffs will result in inefficiencies of trade and production that will end up costing the US consumer more money for inferior goods and services. Look at the state of quality control in the US automobile industry in the 70’s compared to Japanese and European manufacturers. This gave those manufactures a head start that is still benefiting them today.
Also remember that it was Ford that taught Japan how to build a quality car in the 20’s and 30’s, they just forgot how to do that themselves in the 50’s, 60’s and 70’s.
Look at the US price of beef. Due to the mad cow scare in Canada the US border is closed to our beef. We now have such a surplus of beef that live animals are not worth the cost of slaughter. Our retail process is down 30% or more since May and US prices are up 50% or more.
While this is not strictly a manufacturing issue it does dramatically show the effect of limiting international trade. Your own beef industry is now making some serious windfall profits. Is this resulting on better beef in the markets? (Don’t think so.)
Restrict trade in manufactured goods and the price will rise, quality will drop and since these tariffs will in many cases violate international trade treaties that the US freely signed the reputation of the US will suffer.
The loss of jobs in the third world will cause some massive social changes towards poverty and despair. Remember that it is poverty that drives a lot of the hatred in this world, why not make some more poverty in the Third World and watch what happens?
Rick Kitson MBA P.Eng
Construction Project Management
From conception to completion
www.kitsonengineering.com
RE: Solutions for U.S. Unemployment and the Loss of Manufacturing Jobs:
Is it really? Gosh, ought to be pretty easy to prosecute then, since the evidence is in each company's annual report. Oh, you mean it isn't criminal. No, like most of the rest of that article it is just meat-headed populist opinion.
Rhodie, you still haven't posted the statistics from a reputable source demonstrating the super-productivity of USAn workers that justifies their high wages. I am particularly interested to hear how USAn engineers using the same tools and processes as me, in the same industry, can justify charging 30-50% more than we do.
Cheers
Greg Locock
RE: Solutions for U.S. Unemployment and the Loss of Manufacturing Jobs:
RE: Solutions for U.S. Unemployment and the Loss of Manufacturing Jobs:
Perhaps not legally criminal, but certainly fits the 4th definition of the word according to Merriam-Webster OnLine (www.merriam-webster.com/cgi-bin/dictionary?criminal).
Best regards,
Matthew Ian Loew
"Luck is the residue of design."
Branch Rickey
Please see FAQ731-376 for tips on how to make the best use of Eng-Tips Fora.
RE: Solutions for U.S. Unemployment and the Loss of Manufacturing Jobs:
One reason for jobs/manufacturing moving overseas that is frequently not mentioned is the simple fact that foreign governments are offering incentives for companies to relocate that cannot be ignored - waver of taxes, free land, sometimes underwriting construction of the entire facility, and the labor to run it.
20 years ago, I worked as a very well known company that was making a high volume consumer computer product. The plant I was at worked hard to bid on production of this product. We applied automation solutions and unique supplier tie-ins that would have substantially reduced the cost of this product, and won the company internal bidding for this product over a company facility in a foreign country. When this happened, the foreign government bought the company facility located there (about 1/2 million square feet in size), and turned around and leased it back to the company for $1 per year. Since the facility was now government owned, the eliminated taxes on production associated with the facility. The product went to this foreign company.
It is not easy to compete with this. Changes has to come from the corporate or government level. The US government has got to decide that jobs in the US are important, and create an environment in which companies will want to stay in the US, or create disincentives for moving out of the country. Unfortunately, 'global economy', 'service ecomony', and 'positive stock price incentives from downsizing' are the norm.
RE: Solutions for U.S. Unemployment and the Loss of Manufacturing Jobs:
Rhodie, you still haven't posted the statistics from a reputable source demonstrating the super-productivity of USAn workers that justifies their high wages. I am particularly interested to hear how USAn engineers using the same tools and processes as me, in the same industry, canjustify charging 30-50% more than we do.
I didn't realize that's the point I was defending. I thought the point I was defending is that US manufacturing is more productive in comparasion to that of most other nations. As far as my response to you, I have not yet posted one because I have not found a source that we could both agree as being "reputable". The difficulty lies in finding a third-party survey of US productivity that translates into more than one industry. Even the UN seems to avoid taking such a measure. Give me time, and I'll find something that we'll be able to bicker over in the future.
Please, don't be offended either. I am not meaning to spew a brand of nationalist rhetoric intended to alienate or make enemies of our foreign partners. On the contrary, I find that the practices of my Government and their "corporate purses" harm the third world and keep it oppressed far more than they improve it.
The USA, like Australia, needs globalization to survive. The problem is that globalization, in it's current form, is serving to destroy my country, not improve it. The fault lies within Corporate Management, not the Chinese or Indians.
No one in the world would benefit from the collapse of the USA, and that very scenario is starting to be played out.
RE: Solutions for U.S. Unemployment and the Loss of Manufacturing Jobs:
When a country makes money its god, it does not live to see the god it created.
The "collapse of the USA" is not new. This has been happening since we started worrying more about our stock prices than our next door neighbor or even our immediate family. We are just now seeing the further step of this progression, or should I call it degression.
Most engineers, being of high moral and ethical character, remember that there are vices in this world. For those of you who don't remember, you may instead recall the movie Seven, which is about the 7 deadly sins. One of those sins is GREED. The degeneration of American society is the root of our problems and the degeneration stems from greed. If you look at the recent problems of US society, you can trace the root cause to greed.
For Example:
Enron --> Greed
Power Outage --> lack of infrastructure improvements --> why? too costly --> greed
Jobs leaving to other countries --> why? cheaper labor --> more profits --> who gets the extra profit --> greed
Stock market makes top news story every day --> greed
SEC finds more and more accounting errors --> why? companies that can't make money, fake money --> greed
Quite frankly, its my opinion that the US needs this Great Awakening, and that's coming from a US citizen. But on the lighter side, the US has historically made great transitions in industry only to grow stronger from it. Granted it takes a long time for the general population to be retrained, but sometimes you have to trim a few limbs to make a stronger tree. I'm sure the US will bounce back, but most likely in an industry that hasn't fully defined itself yet: biotech, biomed, genetics, rapid manufacturing, space. We just have to hold on to the ride.
--Scott
For some pleasure reading, try FAQ731-376
RE: Solutions for U.S. Unemployment and the Loss of Manufacturing Jobs:
The exchange rates plays an important role in why things are the way they are. For example, $1 = 43 rupees (India). If I can buy a cup of coffee here for $1 then the same dollar in India will likely buy 43 coffees in India (not sure of coffee prices in India but you get my point). So you can see why the wages in another country would be lower. Its not that they are less skilled its just the dollars go a lot farther there than here. Look at Japan. When I took some Japanese culture classes I was told that a cup of coffee over there was about $7 USD. If this is still the case, then you can imagine why the US sees so many Japanese tourists, its cheap here for them. Same thing applies to the US and Mexico. The US corporations are capitalizing on this via the high-tech world of communications, etc. Until corporations quit worrying about only the bottom line, then this trend will continue.
I am sure you have noticed the trend in mergers and acquisitions. This is scary to me because of the power and money behind these giants. In the future, I see a company so large that it has more power and influence than the government itself. If it is ran by the same greed that so many companies are ran with today, the US will indeed be a sad place.
Unfortunately, I believe the only solution is for companies to take a hit, sacrifice a little profit (pay US labor costs and increase R&D) for the good of the US. This will not likely happen. And I can't say I blame the corporations because if it cost x dollars to make a product and a company over seas somewhere makes it for x/2 dollars then how can they compete?
Enough of my rambling.
RE: Solutions for U.S. Unemployment and the Loss of Manufacturing Jobs:
Also it is becoming difficult to attract youngsters as they are keen to join software companies and land into US.(Quality of the candidates doubtful or suspect).
Manufacturing is no longer an attractive business proposition in India. China has the edge as it has a closed society with open minds,while we have an open society with closed minds.
RE: Solutions for U.S. Unemployment and the Loss of Manufacturing Jobs:
"The USA, like Australia, needs globalization to survive."
Please, the USA needs globalization to continue to grow at its current rate to please the stock holders. If a company makes 5 billion dollars it won't be happy to make 5 billion the next. It will need to make 6 billion to make it stock holders happy. Do you see the problem? I think someone mentioned a big problem - greed! If everyone in the world had the quality of living of the states the world would collapse on itself. The wealth is slowly spreading around the world and the states doesn't like it but it was the states that made the big push for globalization.
RE: Solutions for U.S. Unemployment and the Loss of Manufacturing Jobs:
I’d like to quote from another well-known movie, Wall Street, where the main character makes the point that “greed is good”. Why should we be penalized for wanting a better life? Hasn’t this been the driving force for our economy since the industrial revolution? Are you willing to make personal sacrifices for the good of your fellow countrymen? How about paying higher taxes? How about giving up some of your salary at work so that the lower paid individuals can have higher wages? How about donating more of your spare time doing community service work for the less fortunate?
We have all personally profited from increased corporate profits, higher stock values, higher property values, higher salaries, higher standards of living, etc. in recent years. This includes everyone from the highly-compensated corporate board member to the lowly engineer. I think the real issue here is that engineers are becoming concerned that their high paying engineering jobs are being exported overseas (just like low paying manufacturing jobs have over the past 20 years). Therefore, engineers are now faced with the reality that they will have to start giving up their high paying salaries, high price cars & houses, their children’s college education, or will have to work longer to make ends meet. And for what … so that some highly paid corporate board member can make more money off of your labor? Welcome to the real world!
Your statement that “the US will bounce back” is somewhat contradictory. Are you expecting that these other industries, biomed, biotech, genetics, etc. will experience a “boom” just like the telecommunications industry did a few years back so corporate profits will rise, employment will rise, salaries will rise, stock prices will rise, etc? Won’t you personally profit from this? Doesn’t this fall under your definition of “greed”? Is it okay for this to happen because you (as an engineer) will be making money along with the highly-paid corporate board member?
To paraphrase what RDK so succinctly stated, if your job can be done more efficiently and more cheaply by someone else (overseas), then it is an inevitable fact that corporate America (driven by profit goals) will see to it that your job is exported. The key for us engineers is to quit whining and stay ahead of this trend by obtaining formal and on-the-job training so that you are indispensable to your employer.
pj
RE: Solutions for U.S. Unemployment and the Loss of Manufacturing Jobs:
Maui
RE: Solutions for U.S. Unemployment and the Loss of Manufacturing Jobs:
http://www.bls.gov/news.release/pdf/prod4.pdf
The table on manufacturing employment shows that in the US it dropped 4.7% in 2000-2001 and another 6.8% in 2001-2002. Any country having that type of drop requires response. There is a lot of other information within the report as well. The BLS site in general has some statistics from other countries but information from closed societies does not seem to be available.
Regards
RE: Solutions for U.S. Unemployment and the Loss of Manufacturing Jobs:
I'm not going to answer all your questions as they seem to me to be mostly rhetorical -- something posted to get the mind working.
I'd like to return the favor by asking a clarification on your first questions. What is "a better life"?
In my opinion, a better life is not neccessarily one with a higher salary. Quite frankly, I was much happier in my youth when I only made $5/week allowance. I knew all my neighbors for over a mile in both directions. I ran freely in their yards and no one sued me for trespassing. We didn't have fences and we all watched out for each other.
A better life to me would be reverting back to those days were people worked hard for their money, were happy with what they made, and made the best of it. A better life to me is not a new plasma TV. A better life to me is a society not measured by material wealth, but by wellbeing. But, that's just me.
I apologize for bringing this thread more off topic. To bring it back on topic, I would have to say as others have above, it is not industry that needs to change its ways. Let the jobs go. It is the engineers that need to change their priorities to accept the changing economy and industry and move on. A really good thread to start would be how we as engineers can change society away from these vices towards a more utopian world.
--Scott
For some pleasure reading, try FAQ731-376
RE: Solutions for U.S. Unemployment and the Loss of Manufacturing Jobs:
What if we in the US, and I mean EVERYBODY, cut our pay in half? At the same time, we dropped the prices of all our goods by half. In essence, our buying power would remain the same so we would have the same standard of living. The problem lies with imported goods and whether or not we could cut their prices in half as well as local goods.
--Scott
For some pleasure reading, try FAQ731-376
RE: Solutions for U.S. Unemployment and the Loss of Manufacturing Jobs:
Labor costs do not represent 100% of the price (and certainly not cost) of an item. Cutting employee pay by half will not enable prices to fall by the same percentage.
Best regards,
Matthew Ian Loew
"Luck is the residue of design."
Branch Rickey
Please see FAQ731-376 for tips on how to make the best use of Eng-Tips Fora.
RE: Solutions for U.S. Unemployment and the Loss of Manufacturing Jobs:
Rhodie,
"The USA, like Australia, needs globalization to survive."
Please, the USA needs globalization to continue to grow at its current rate to please the stock holders.
I never thought in a million years I'd be asked to defend globalization, as I feel that I've one of the more obnoxious opponents of the situation. Frankly, I enthusiastically agree with 99% of what you said, but, if executed properly, "Globalization" is a major component of a stable domestic economy.
Globalization opens new markets, resulting in greater demand.
Globalization promotes foreign investment, resulting in "recession proof" cashflows.
And frankly, Dr. Deming would have been listened to far earlier domestically if globalization had been more of a economic factor in the 40's-50's. As it was, it took 30 years for the US to become aware of the quality situation. American autos are much more reliable now because of direct Japanese competition. Globalization results in better quality products.
It's the damned greed that ruins the practice for everybody:
* Globalization should not result in an outrageously inflated quantity of imports. It should result in a increased quantity of exports.
* Globalization should not result in keeping poor people poor by taking advantage of their predicaments. It should result in raising the standards of living for a qualified few, if not the collective whole.
* And above all else, Globalization should not put domestic employees out of work.
RE: Solutions for U.S. Unemployment and the Loss of Manufacturing Jobs:
I'm glad we mostly agree. However I'm confused by the last bit. If:
* Globalization should not result in an outrageously inflated quantity of imports. It should result in a increased quantity of exports.
How can this work, if one country has increased exports then one country has increased imports there for globaliztion can not work for everyone by this rule, only some (and I assume you want the US to be in the group that makes more and therefore you are screwing some other country)
* Globalization should not result in keeping poor people poor by taking advantage of their predicaments. It should result in raising the standards of living for a qualified few, if not the collective whole.
This statement basically says make the rich - richer and if possible the poor - richer (but not necessarily).
* And above all else, Globalization should not put domestic employees out of work.
Well if you are on the unbalance that will be created by the first statement then it will put domestics out of work.
That's the way I see it.
RE: Solutions for U.S. Unemployment and the Loss of Manufacturing Jobs:
I sense that you're thought process is in the middle of a dichotomy with an outcome where you cannot possibly win.
On one hand, you are an engineer, who is (presumably) on the forefront of technology and developing products for the betterment of mankind. This includes making "things" like plasma TV's that people will buy who believe that it will improve their quality of life. Maybe it will, maybe it won't, however, it is not for us (or anyone else) to say -- we are just providing the service (or product) in response to a market need.
On the other hand, you long for "the good old days" and a more "utopian" world. While these are commendable goals, they are not things that you can solve or directly affect by engineering. They certainly are not realistic in today's society.
So there are several things you can do ... you can continue to do what you are doing and keep feeding the "greed" of this economic machine ... you can couple your engineering degree with a degree in public policy and work within the system to start effecting these changes ... or you could drop out and live your life as a hermit in a shack in the backwoods of Montana.
pj
RE: Solutions for U.S. Unemployment and the Loss of Manufacturing Jobs:
Are you saying we can only engineer things that destroy the environment and not things that save it?
QCE
RE: Solutions for U.S. Unemployment and the Loss of Manufacturing Jobs:
Sorry about the above statement, it was obviously not meant to be answered. However it is statements like:
"On the other hand, you long for "the good old days" and a more "utopian" world. While these are commendable goals, they are not things that you can solve or directly affect by engineering. They certainly are not realistic in today's society."
To me this says, that engineering can not change the direction of the world and if a person thinks that engineering can, that they are being unrealistic.
Well I would like to say for all the engineers out there that think that they can change the world:
"Keep up the good work! Engineering has been changing the world for 1000's of years and will continue to change the world in the future."
QCE
RE: Solutions for U.S. Unemployment and the Loss of Manufacturing Jobs:
The US wants to experience the benefits of globalization without giving consideration to the ramifications. If the "average" US citizen buys the cheapest product they will most likely be buying a foreign produced product. If that person is truly the "average" person, he likely works making the product that is the competitor to the product that he bought. That system is going to benefit those citizens up until they lose their jobs because all the other "average" people are also buying the foreign made product.
The bottom line is that you cannot enjoy the cheapest products and the highest standard of living in the world and not have some rationalization to the system over a period of time. Either the US will make itself competitive in the world market by manufacturing things cheaper, or the rest of the world will do it for them.
Dave
p.s. And all the while the unions are crying that the $25/hour for manual labour is not enough!
RE: Solutions for U.S. Unemployment and the Loss of Manufacturing Jobs:
I agree, the "average buyer" is contributing to our industrial demise and probably will continue until we have reached the bottom.
As far as your "Union" comment goes; I don't have a problem with the folks doing manual labor making a living wage, In California $25/hr isn't really all that much. I would prefer that CEOs and all upper level management get paid reasonably for their non-manual contribution --- if in fact there is really any contribution by them at all.
Manual labor is what makes the things happen that we dream up or design. Give credit and pay where it is due.
RE: Solutions for U.S. Unemployment and the Loss of Manufacturing Jobs:
Indeed, it is likely to become as self fulfilling prophecy. I know I am much more conscious of the price I pay for things now - looking harder for bargains than I did when I was first out of school. Facing the reality that I'm currently training people who make 1/3 my salary to do my job, I find that I'm already trying to adjust to the impending threat of a lower standard of living by lowering my standard of living.
As a result, I become less of an economic engine, which puts more pressure on the companies, which leads to more cutbacks.
The reality is still that America is the major economic engine that drives the world economy due to a strong middle class that has the confidence in their jobs and sufficient disposable income to buy software, DVD players, new cars, etc.
All those people in India, China, and elsewhere who are taking American jobs are still producing products and services for the American market, not their own, becuase they don't make enough to pay the prices that the companies want for those products and services.
With the way things are going, I can't see how we can have anything but a grand collapse at some point as the American middle class disintegrates and with it, the need for all these Indian and Chinese workers.
Edward L. Klein
Pipe Stress Engineer
Houston, Texas
All opinions expressed here are my own and not my company's.
RE: Solutions for U.S. Unemployment and the Loss of Manufacturing Jobs:
No, I never said that engineering cannot change the world. The statement meant that engineering cannot (directly) change people's values. If someone feels that they can improve their quality of life with material things, it is engineering's role to supply these things.
You cannot engineer human nature. If someone can profit by developing a plasma TV, then he will create and supply a plasma TV. If someone can profit by creating a utopian society, then he will work to create a utopian society. The problem is that there is very little money to be made in creating a utopian society, and therefore very little profit incentive to create one ... although many of us would agree that it would be good to have.
The same argument can be made about globalization. While you might not agree with the moral ramifications, globalization is driven by a profit incentive that is firmly ingrained in our society. Since you cannot change the profit incentive, you need to find a way to adapt to globalization. I'll bet that if you thought hard enough, you could find a way to profit off of the problems from the fallout of globalization ...
pj
RE: Solutions for U.S. Unemployment and the Loss of Manufacturing Jobs:
The one thing that often goes overlooked is the fact that we as engineers have a similar oath as doctors do. We realize that we can't change people, so we change things that hopefully change people, knowing all along that the things were changing are not, in themselves, beneficial to society. (I use the term "all" with caution. As I see it, we are in a technological spiral. We created technological goods with the information we had. After time, we learned more and realized that our initial technology was flawed. So we developed new technology to fix it. And so on and so on and so on.)
So until the world has a second Great Awakening, realizing that money isn't everything, we will continue to persue feeding the greed machine in order to advance in a direction we consider forward.
What do we as engineers do?
1) Get involved.
a) Engineers do wonderfully in local politics. Run for your city council, or at least be a member of their advisory council. (By the way, I'm a write in candidate for 2004 presidential elections... Scott Wertel, tell your friends.)
b) Write letters to your elected officials.
c) Become a member of a national society that covers issues such as these.
2) Spend time with your family.
Teach your children proper values. Show by example. It will take generations to redefine the society's motivation of profit incentive, start now.
3) Continue learning.
A little information and a vivid imagination is a very dangerous thing. Educate yourself on things that you don't think apply to you. After a while, you'll realize they do. Spread to others what you have learned.
4) Keep on open mind.
Change isn't easy on any of us, especially when we're the ones standing in the unemployment line. But what goes down, must come up. Don't dwell on what was or you'll miss what is.
That's all I have for now. Time to get back to the greed machine. (I like that phrase. I think I'm going to use it more often.)
--Scott
For some pleasure reading, try FAQ731-376
RE: Solutions for U.S. Unemployment and the Loss of Manufacturing Jobs:
I think that comment came out wrong. Upper management and CEOs are definitely getting over paid. The unionized toolmaker who works for me, doesn't put in any part of the effort or hours that I do gets paid significantly more than I do. On top of that, when times get tight my company pays the union $3000 each to resign the contract, then eliminates 3000 salaried jobs globally and cuts our overtime pay rates and benefits packages.
Don't get me wrong, I am also bitter at the management, but it is my opinion that over time the union has negotiated such a deal for this facility, that we are going to price our products right out of the market. This is frustrating for someone who is just starting his career. I have no problem paying someone an honest days pay for an honest days work. I also have no doubts that there is alot of manual labour that gets paid much less than they are worth. But when a workforce is getting paid 50% more than someone in the same industry in the same town, there is a problem.
Dave
RE: Solutions for U.S. Unemployment and the Loss of Manufacturing Jobs:
The point of my theoretical brain fodder of cutting salaries and prices by half did not intend to look at costs. More to the point, by cutting prices in half even if the costs hasn't been halved, then profit also goes down. Thus, lower the greed machine because less profit is now acceptable. (Remember when 5% gains in stock prices were awesome? Now 14% isn't enough.)
Granted, if costs remain above the half way mark, then most likely it would be impractical to cut them in half thereby losing money on the product; thus going out of business and everyone is in line again, defeating the whole purpose.
--Scott
For some pleasure reading, try FAQ731-376
RE: Solutions for U.S. Unemployment and the Loss of Manufacturing Jobs:
So what is your point?
Best regards,
Matthew Ian Loew
"Luck is the residue of design."
Branch Rickey
Please see FAQ731-376 for tips on how to make the best use of Eng-Tips Fora.
RE: Solutions for U.S. Unemployment and the Loss of Manufacturing Jobs:
Like it or not the world is a global economy.
Jobs are leaving the US for one reason and one reason only.
That reason is that the product can be manufactured elsewhere for less money.
I believe that we are the cause of the problem and the solution cannot be found in legislation. Any legislation that is developed to solve this problem will favor one working sector of society over another. In the end, no one wins playing this game. You can’t cheat the other guy and pass the savings onto yourself and call that fair.
An analogy is trying to squeeze a large balloon. If squeezed, it will simply budge out in another area. Legislative attempts may appear to solve the problem temporally; however, it will be soon discovered that the problem has been shifted elsewhere.
I have viewed this problem for my entire adult life, over the last 30+ years. I first recognized it in the early seventies when I mentally calculated how many hours of effort went into the goods and services I received each day. It was and is a high multiple of my working hours. I knew that this game could not be sustained. When I work 50 to 60 hours a week and enjoy the efforts of over 200 hours a week from others, I know that I cannot maintain the illusion of my value for long. Nope, I will just enjoy it as long as I can and try to enrich my children’s life.
RE: Solutions for U.S. Unemployment and the Loss of Manufacturing Jobs:
The point is for clarification. Purely academic. It's just a hypothetical situation to see what brainstorming ideas would come of it. I just didn't want to get into too many specifics about the validity of the idea because I know it would be difficult to accomplish at best. I only thought of it because I know Mexico recently revamped their monetary unit, i.e. dropped a few zeros. I don't know how this effected the global economy and the value of the peso versus other moneys. What would happen if the US did something similar?
--Scott
For some pleasure reading, try FAQ731-376
RE: Solutions for U.S. Unemployment and the Loss of Manufacturing Jobs:
So lets twist the viewpoint. For arguments sake I'll say that I believe the main reason that companies are so bottom line driven is because we all want "a ton of cash" in our RRSP's/RPP's/RESP's so we can retire at 55. We (being the NA society at large) dictate what we need (by demanding that our mutual fund investors to make sure we have a payback) and they tell that to Wall Street who in turn dictates the Corporate Strategies.
So we pay CEO's big bucks that meet those strategies so that our RRSP grows faster so we can retire at 55.
So who again is responsible for the greed?
RE: Solutions for U.S. Unemployment and the Loss of Manufacturing Jobs:
Thank you, John, for bringing it back to the root cause. It's funny you bring this up at this time because my company is having its 3rd quarter progress report. It's where upper management talks with all the employees about the numbers for the past quarter and forecast for the remainder of the year. Overall, it's nice that they keep us involved. But, being an ESOP company, it's funny that the main questions that tend to come up in these meetings is how these numbers affect (or is it effect) our stock price (i.e. retirement plan).
--Scott
For some pleasure reading, try FAQ731-376
RE: Solutions for U.S. Unemployment and the Loss of Manufacturing Jobs:
The Lexus and the Olive Tree: Understanding Globalization
by Thomas L. Friedman
In my opionion the communication lines that were once barriers during the cold war and pre-internet/satellite communication era are what has caused this rush to globalization. We have serious issues that need to be addressed and I don't think that cutting taxes for the wealthy did anything for our current situation.
We need a president that is willing to:
REFORM
Healthcare
Labor laws
Trade policy
Tax codes
FBI
Healthcare - Probably the most pressing problem. Americans now DEMAND health care and companies realize that. We need to change our culture from one that goes to the doctor and whips out an insurance card for minor visits to one that has insurance that only provides for emergencies that cost over(lets say) 5000K. This will discourage people from going to the doctor for Zyban to help them "quit" smoking, etc..(why should I pay for a moron who can't quit their dirty habit) Anything under 5000K can be paid for out of the pocket for most americans over a few years. Especially if they are making a lot more money because their salary went up because their employers dropped most of their health care insurance cost.
Tax codes - Tax cuts are fine for businesses as long as they are ear marked for new plant, machinery, and research. Everyone wins that way. Companies get better equipment that puts them on top of their market and more jobs are produced because of this new equipment and research. Also American companies who like to operate off shore in the "free trade" zones need to be brought back into the tax system. This is obserd and we need a president who can take on these people who are ripping everyone off by not paying their fair share of taxes. Just think of what is happening in America now. Bush has strangled our states by cutting taxes and spending all of our money on wars. Has this lowered your tax bill? Probably not. Just like in a company who passes higher taxes onto consumers. The lack of tax revenue was passed on to the states who either cut programs or raised taxes. Neither of which are helping us to stay competitive on the world market.
FBI - I'm not sure if this is the appropiate agency but you'll get my point. We need to start a new agency that specializes in prosecuting corporate criminals. I love capitalism and I encourage anyone to make as much as they want. But when these criminals steal from their shareholders by lying and insider trading I think they should be locked up in the same cell as the guy who stole a DVD player from Wal-Mart.
To sum it all up we need to change our culture in America. As long as our culture accepts these problems then nothing will be done.
RE: Solutions for U.S. Unemployment and the Loss of Manufacturing Jobs:
Here in Canada we have a national health plan. This means that everyone (citizen and landed immigrant) is fully covered for most health costs. Exceptions are some specialists (chiropractors for example), out of hospital drug costs, dental and some other incidental costs. In most provinces there is assistance for these costs for those who cannot afford them (i.e. high long term drug costs).
The result is that we spend almost the same portion of our GDP on health as in the US (around 8-9%). Instead of paying for insurance (even if your employer pays for it, it is still part of your compensation package.) we pay for it as part of our taxes. The wealthy pay more than the poor and everyone gets basically the same service.
The difference is that everyone gets some coverage and at least the essentials. In the US with a significant % of the population not covered, those with financial resources or good insurance coverage get better health care than a Canadian while the rest get nothing.
To get on topic what it does do for us is makes job mobility easier. We do not have to worry about being able to switch coverage or being denied coverage for per existing conditions. This helps our economy adapt to the new reality.
As far as taxes we have the same situation here as in the US. My accountant is a very smart individual. He spends all his time reviewing the tax code to find ways to avoid or defer taxes for his clients. If the tax code were simpler and fairer, his talents would be freed up to become productive in terms of creating wealth. Multiply this wasted effort by all the tax accountants and lawyers in the country and it is a significant drain on our economy.
I am a rare Canadian in that I like our GST. (This is a sales tax on most goods and services. Businesses pay it when they buy goods and services and recover the amount. The formula is tax charged less tax paid to others equals remittance to government.) Currently there are two GST rates in effect 0% and 7%. The 0% rate applies to insurance and financial transactions. The 7% rate applies to almost everything else.
This is a simple tax to administer. It is also one that is difficult to avoid. The end tax burden falls on the final consumer and since the road network was created to bring him those goods and used up when he uses those goods that is where the tax should be. There are GST rebates at the lower end of the economic spectrum.
If the tax rate were set to say four or five different rates depending on the type of good, then the tax rate would also be regressive (that is tax speak for a tax that is at a higher marginal rate for the more wealthy and lower for the less economically advantaged.)
For example, raw potatoes could be zero tax, processed potatoes would be at the first step, potatoes served in a restaurant could be taxed at the next step and those part of a expensive luxury meal could be taxed at the higher rate. Cars less than some amount would be less and luxury cars could be taxed at a higher rate. Thus you could eat, drive and do the basic essentials at a low tax rate, if you want some more luxury then you will pay more taxes.
I think that taxes should be for one purpose and one purpose only. That is to raise money for the common goods and services essential to our economy and society. Common goods in economic terms are those, which benefit everyone and cannot be differentiated to individuals. Examples are national defense, the court and justice system, the public roads etc.
Right now the system of income taxes in Canada and the US penalizes wealth creation. We need wealth creation so that the money of individual investors can be pooled to create an investment source for new wealth creating businesses and industry.
Our tax system should not be used, as it is now, a vehicle of economic and social policy. If the government wants to fund something it should do so in dollars out of its pocked rather than in the form of tax cuts which make the real costs of these programs invisible. For example, corporate tax rate varies greatly depending on industry why should the taxpayer subsidize some industries without a real understanding of the actual costs?
As far as corporate crime, it is not seen to be as much of a problem in Canada as in the US. I would hesitate to set up a new agency for it because this would be inefficient and just create turf wars and duplication of effort instead of solving the problem.
Rick Kitson MBA P.Eng
Construction Project Management
From conception to completion
www.kitsonengineering.com
RE: Solutions for U.S. Unemployment and the Loss of Manufacturing Jobs:
I totally agree with you on everything that you said.
I would support some form of Federal Health care in the U.S. as long as it only covered major things and not small visits(unless you were on welfare or had a very low income). The problem is that most Democrats would come up with a plan in a heart beat but the big business backed Republicans(they control the media) have a lot of ignorant people fooled. They tell lies to people and never mention that if we had some form of federal healthcare then anybody could start a business without fear of not having health insurance. Thus promoting the creation of new jobs and economic growth. Also people wouldn't have to worry about getting hurt and losing their house and business. I think they are able to trick so many people so easily because we still have generations of people who grew up during the cold war era and they were around when the U.S. was spewing all the rheortic about how any type of social programs are bad.
The funniest reality is that the U.S. did not win the cold war. If you really look at it most countries are partly communist. Including the U.S.. In my opionion about half of the most capatilist country in the world is part socialist. We may not call ourselves that but if you look at our government and some of the programs we have I say we are.
If you want to see a good movie about some of the problems with American culture I suggest:
Bowling for Colombine
I love the U.S. but sometimes I would pack up and move to Canada if it wasn't so damn cold.
RE: Solutions for U.S. Unemployment and the Loss of Manufacturing Jobs:
You are right, most economies are partially socialist in nature. They have to be so that they provide for common goods. It’s the definitions of what are common goods that determines the limits of how socialist a country is. Canada has chosen to include health care as a common good; the US has not. I happen to agree with the inclusion of health care as a common good.
The US won the cold war simply by out producing the opposition. If you remember the early days of computers there was a text-based game called Hammurabi. The key to winning that game was to find the optimum mix of productivity based on how much land and people you had. You would acquire as much land in the early stages as possible to get through the later stages and maximize your military might.
The same strategy won the cold war. The soviet economy could not sustain the arms race started by Reagan and it collapsed on itself.
The danger to the US economy is now that a lot of the primary wealth building portion of the economy has gone off shore is that is for some reason this was lost to the US (nationalization of the foreign industry, oil crisis pushing up transportation costs or a OPEC like cartel of third world manufacturers for example) the US would be considerably weakened as a world power.
During the cold war the balance of power served to keep small local conflicts small and local. Now with only one superpower the US military might is protecting the world. If the US economy collapses the power vacuum could have dire consequences.
The solution is as I have often said is that the US has to accept a slightly lower standard of living, raise the wages paid to third world countries to be closer to parity to US productive costs and take a more long term view than only next quarter’s stock price. Better to sacrifice some of your standard of living than to sacrifice your son on a distant battlefield.
Rick Kitson MBA P.Eng
Construction Project Management
From conception to completion
www.kitsonengineering.com
RE: Solutions for U.S. Unemployment and the Loss of Manufacturing Jobs:
You get used to the cold. If you end up skiing you might actually like the cold. I personally love the winter.
As for Health Care/Taxes. Everyone has their own opinion, and for the most part people have very solid good reasons why they have them. Personally, I would love to travel and experience everything the world has to offer, but I wouldn't really want to live anywhere but Canada. Universal Health Care is a very big reason why. The mix of social infrastructure and market capitalism is a fine line for any country to walk, and in my opinion, Canada has walked that line well.
If there was one thing that I dislike it's the fact that government organizations are typically quite inefficient. The market takes care of organizations that are not efficient, but there is no such force to correct inefficient governmental organizations. In the end I don't worry too much, it will just kill you early!
Dave
RE: Solutions for U.S. Unemployment and the Loss of Manufacturing Jobs:
The world turns, life moves on.
I guess somewhere in the world they still make steam trains. They did in China long after Britain stopped. Same with cotton and wool and lots of other things.
Each time some industry came to a halt some one lobbied parliament, introduced new taxes or tried to do something about it. Early on it was the ludites breaking the machines that ultimately went somewhere else anyway.
Britain used to produce lots of coal. It doesn't now. It probably should have stopped long before it did.
Hanging on to the past for its own sake is a real handicap when what you should be doing is looking forward to the future and adapting.
As usual with success, when the cruch comes there are a lot of people dependent on an industry who wake up to find coal is imported or replaced by gas, cotton is cheaper from India or China, no body makes steam trains any more, and some one makes ships but fewer and fewer in the UK. It doesn't mean the UK is no longer a maritime power. It may not make many ships, it may not own many or operate many. Ships are going to be dirt cheap from China very soon as Korea, in its turn, loses out to another Asian country. But the Uk is still a maritime power with significant influnce because it uses its 300 yer knowledge in a new way. It makes pretty good money at it. A lot more per person employed than it did when the merchants traded round the world, i would guess. It is tough on the shipworkers. It is always tough on the workers in any industry when it ups stakes and moves somewhere else.
Life is. Things change. Governments never helped anything or anyone, they just meddle and make things worse. If engineering is going somewhere else there isn't too much to do about it. It's some one elses turn to make cotton, or engines, cars or whatever. Sooner or later everyone will have had a turn at making steam engines. Accept and move on.
Personally, i like steam trains, traction engines, clipper ships and so on. I just don't make my living at it.
The best thing we can take from our culture is the learning and put it to a better use.
People want cheap goods. Companies want to make profits. Nothing is going to change that.
Sooner or later those start up skills are shared and there is no longer any exclusivity and there is always someone who can make it cheaper or better. All you can do is make life miserable for yourself and someone else by trying to hold back the tide of change; or you can see if you can work out what the future will be and latch on with both hands or take a hand at helping the world along. There is always something else. The US isn't going to collapse. The UK hasn't. There will just see a lot of unhappy engineers for a while. What's new?
Was it St Ignatius Loyola who said "Let me not try to change those things i cannot change but let me not shirk from trying to change the things i can change and grant me the wisdom to know the difference."?
RE: Solutions for U.S. Unemployment and the Loss of Manufacturing Jobs:
I disagree - major factors above and beyond wages are the environmental restrictions/laws existing in the US. We must work under severe diasadvantage compared to all other manufacturing countries. The environment must be protected EVERYWHERE and not just in the US.
YES GOVERNMENT CAN INFLUENCE --If our govt. would not allow import of any product made in countries where the environmental constraints do not equal ours we might be able to compete on a level playing field. Idealistic I know!!! It'll never happen.
It seems very unfortunate that well meaning special interest groups (environmentalists) are major contributers to the demise of a GREAT and PRODUCTIVE country.
Environmental laws in the US are a major constraint to our engineering and industrial future. While the rest of the world has fewer or NO constraints regarding the environment.
RE: Solutions for U.S. Unemployment and the Loss of Manufacturing Jobs:
Who is the largest polluter in the world?
Answer - USA!
"While the rest of the world has fewer or NO constraints regarding the environment."
Does USA have the toughest environmental regulations in the world?
Answer - No!
Which country is trying to stop most world wide environmental agreements?
Answer - USA!
RE: Solutions for U.S. Unemployment and the Loss of Manufacturing Jobs:
And economies run on confidence. If the job loss situation makes the American consumer nervous spending will drop and the whole world could end up in recession. It happened in 1929 and it can happen again. Globalization means everyone's in the same boat.
RE: Solutions for U.S. Unemployment and the Loss of Manufacturing Jobs:
Where do you get your information? I suspect that such a broad statement like "The USA is the world’s largest polluter" is not based on fact. I assume you are thinking specifics and making generalized statements.
Are you saying that when considering all sources of pollution that USA creates more than any other country? Is this on a per pound basis, or based on some weighted harm to the environment index?
Or, are you saying per capita or per acre, USA creates more pollution.
Or, are you are referencing greenhouse gases and potential harm indicated by the dubious global climate computer models. I remember the global cooling scare a few years back being promoted by many scientists who are now yelling global warming. Scientists do not get grants from government agencies by saying we don’t know what we are talking about.
QCE, have you been outside of a hotel room in any major cities in a third world country?
From my personal first-hand observation, USA has cleaner air, water, and land than most countries in the world.
Sorry eng-tipsters for being off topic; however, I cannot let the greenies continuously emit misinformation. I believe it pollutes the truth.
RE: Solutions for U.S. Unemployment and the Loss of Manufacturing Jobs:
I have only expressed an opinion based on observation of, primarily steel, our companies could not afford to upgrade their older mills and remain competitive worldwide -- so they closed. Thus cheap steel from elsewhere.
Per-Capita we are not the worst polluter in the world.
Lumber we cannot even cut our own forests responsibly - until recently not even to prevent fires in known fire suceptable sreas -- no thinning allowed. Thus lumber from elsewhere.
As stated above just my humble opinion --- guess everyone has one. I have no oficial sources to refer you to other than the daily news -- CNN has frequently covered these issues as have discovery and history channels
Your statements are very confident and pointed as if you have the ability to substantiate them --- Please share your sources, maybe I can learn something new. Maybe a comprehensive web site covering these issues.
Would you also say that we participate in allowing sweatshops, child labor, and prisoner labor in the USA. Maybe we are worse in those areas also --- My opinion: I THNK NOT.
We should do away with all international agreements where we are bearing the ultimate share of the load or we should place penalties on importers who are not willing to comply with agreements that they sign with us. Get rid of NAFTA and WTO and quit underwriting the success of other countries with our tax dollar.
Make the playing field level ---- Bring the JOBS BACK.
Thank you for your comprehensive comments
ietech
RE: Solutions for U.S. Unemployment and the Loss of Manufacturing Jobs:
My main point is:
"While the rest of the world has fewer or NO constraints regarding the environment."
Does USA have the toughest environmental regulations in the world?
Answer - No!
You were the one that made the general statement that is inaccurate. I'm sorry but I think you will have to find another scapegoat for job losses. I'm thinking you should be looking at greed.
CRG, you can call me a greenie and I can call you a redneck but what would be the point? Name calling usually comes up when someone can't back their arguement.
RE: Solutions for U.S. Unemployment and the Loss of Manufacturing Jobs:
He gives an example of an artificial Christmas tree manufactured in China for 10 $ and sold to a trading company for 12$booking a profit of 10%(very reasonable). Trading company sells to retailers who put it on their shelves which fetches them 120$.
Now my question is who has made the money? Not the Chinese manufacturer or trader, but the American MNC.
RE: Solutions for U.S. Unemployment and the Loss of Manufacturing Jobs:
Due to your response I assume you were unable to substantiate your views or at least state your opinion more thoroughly.
Thanks for unilaterally deciding that this is not the place to express ones views about this thread, kinda fits.
Not a general statement --- just my opinion related to possible solutions to the job problem. I cannot validate these thoughts with study results since I haven't found any, other than the daily news occasionally covers these issues.
The title of this thread is: Solutions for U.S. Unemployment and the Loss of Manufacturing Jobs. In my humble OPINION some possible solutions are, as stated in my posts --- environmental laws should be relaxed or all countries should be required to meet the same constraints as the US.
Countries using child labor, prisoner labor or allowing sweatshops should be banned from importing products to the US.
NAFTA and WTO should be ended.
US government should ensure a level playing field for the Engineers and, yes all working folks in the US. If manufacturing is gone so is a major part of the engineering.
I agree with your statement that greed is a contributor to the problem. That's one problem I personally don't have a clue how to solve. I don't think we can pass a law against greed, although it would be nice, even if it wouldn't be enforceable.
I am a border line isolationist and will be until I see our government try to give the US a fair shot at competing by ensuring that all countries play by the same rules.
Thanks for your point of view,
ietech
RE: Solutions for U.S. Unemployment and the Loss of Manufacturing Jobs:
Sorry --- American MNC???? What's that?
Good point but only part of the story.
Don't forget the export fees the Chinese gov't. places on the product before it is shipped, Oh yea how about the shipping costs, the warehousing costs, marketing costs, distribution costs, and others before it gets to the consumer. By the way $120 is a pretty high end tree. I purchased a six foot Chinese produced tree last year for $69.00/US. Looked for an American made one to no avail.
Thanks
ietech
RE: Solutions for U.S. Unemployment and the Loss of Manufacturing Jobs:
I personnally belief that we can take care of the environment and have jobs.
My information is from university lectures and not from bias news agencies. (People can save their breath by writing in and saying that university lecturer's are biased as well.) Can you find a more redneck and rightwing source for your news?
Greenie Guy
RE: Solutions for U.S. Unemployment and the Loss of Manufacturing Jobs:
Thank you for responding.
ietech
RE: Solutions for U.S. Unemployment and the Loss of Manufacturing Jobs:
RE: Solutions for U.S. Unemployment and the Loss of Manufacturing Jobs:
This way USA would help in :
1. Imparting world class education to its own students.
2. Also help in other countries retain their students and open up venues and areas which could be mutually beneficial.
3. Refrain from these foreign students staying back to work out of USA after the education. (some of them find ways by getting married to USAn's or people from their own countries having valid visas, which should be stopped)
If the student inflow and inlux is reduced and stern rules laid out, there would a econmical rebounce and stability, which would help USA and countries like India and China which are primary / principal business partners to USAn companies
RE: Solutions for U.S. Unemployment and the Loss of Manufacturing Jobs:
It is, however, greedy and selfish and egotistical -- and therefore IMO sinful.
I believe that somehow exec remuneration should be tied to corp assets and profits. The special "golden parachutes" and term contracts etc not available to all other non-contract employees should be illegal. There are probably many other fixes which do not come immediately to my hurried and frazzled mind right now.
The progressive income tax was a good idea which helped mine the very wealthy for more government dollars. Its a simple concept: The more one makes, the more non-essential "discretionary" income they have. This is income that can be taxed at a high rate without causing a hardship on the taxee.
But what has been going on for the last 20 years? Leveling of the income tax, making it less progressive, and pushing for a FLAT tax - ie fully regressive!
That trend needs to be reversed. It only benefits those who need govt benefits the least. Probably because the Congress-critters have managed to maneuver themselves into those high-income categories.
I have more sympathy for rattlesnakes. They can't help being what they are.
RE: Solutions for U.S. Unemployment and the Loss of Manufacturing Jobs:
This logic seems flawed to say the least.
1) Attending a US university is competitive - only the best foreign students make it in.
2) Once admitted to our university system these students study extremely hard and excel. The discipline required in making it to college, the higher cost of attending college, and the knowledge that this may be their "one chance" are great motivating factors.
3) They come to the US because the quality of the US educational system at the post-secondary level is recognized all over the world as being exceptional. The best professors are teaching them.
4) They graduate as some of the most disciplined motivated students taught by the best professors in the best post-secondary educational system. They go on to earn high salaries, engineer new products, invent new technologies, start businesses and generally outperform less motivated graduates.
....So which of you guys wants to send them home?
We need the MVPs on our team.
-colin
RE: Solutions for U.S. Unemployment and the Loss of Manufacturing Jobs:
You might or might not be correct in your opinions about foreign students. But the FACT remains: every slot taken by a foreign student is one less US student being educated.
Now, this might be OK for privately funded schools. That is their prerogative in a free society. However, I DO have a problem with publicly funded schools accepting a significant number of foreign students since they are supported by tax dollars which IMO should be used for Americans. Actually, even private schools get significant govt money, which weakens my first sentence.
I believe our Constitution was written to provide for the welfare of US citizens not the whole world.
Cheers,
RE: Solutions for U.S. Unemployment and the Loss of Manufacturing Jobs:
Now, if USA'n graduates are afraid/unable/unwilling to compete with, or make use of, these people, well, that says something to me.
If you gave me a boatload of engineering graduates who had the guts to get on that boat in the first place, and the ability to get into an advanced degree, then I could think of a hundred things to do with them, and the future prosperity of Australia Inc would be enhanced, not reduced.
Cheers
Greg Locock
RE: Solutions for U.S. Unemployment and the Loss of Manufacturing Jobs:
#1 britain outsourced its handgrenades to switzerland, and in the run up to the gulf war 2, switzerland refused to supply them as they said they were only for defensive purposes only. There bloody handgrenades
Similar goes for tank rouunds, scotland produced a self burning disposalbe sabot and shell case that when fired the casing burns in the chamber. The order was given to a south african firm, who had not produced it, but guarenteed they could come the war the tanks were woefully short of rounds, and had to be supplied with inferior products that caued damage to hun barrels.
now what happens if your country is buying critical components from outside its borders and relations turn suddenly sour. who supples you then?
RE: Solutions for U.S. Unemployment and the Loss of Manufacturing Jobs:
I am reproducing the total annual cost of education per annum in different countries as published by Canadian Educaton Centre
a) Canada 18641$ b)United kingdom 32045$ c) USA 43451$ d) Australia 21417$ and e) France 15472$
This low cost of international education makes it attractive
for the less talented students to get an international degree. Colleges conduct fairs and seminars to attract students and on the spot admissions are offered. This makes international education a commodity which can be accessed by those who have the money power.( I am sending my son to Canada next year for BS Engg program)
The barriers for entrance are drastically reduced, virtually making a mockery of education. In India the exceptionally bright students get admitted to IITs. These are the best talent pool available at no cost to USA. It is unfortunate that 90% of them leave India for better career opportunities to USA.
The others who come to USA for education are really not of much concern to us and in a way solve our employment problem..
RE: Solutions for U.S. Unemployment and the Loss of Manufacturing Jobs:
http://businessweek.com/smallbiz/content/dec2003/sb2003...
To think this fool thinks he has really stumbled upon the "solution" to lost job is absurd. All he is doing is amplifying the problem as we accelerate the US's "Race to the Bottom."
RE: Solutions for U.S. Unemployment and the Loss of Manufacturing Jobs:
I share your angst. BUT, let's look at both sides.
On the one hand you have a corp exec with shareholders to satisfy. He is under pressure to off-shore to save a bundle of $$. BUT he believes that there is value in using local folks and is willing to pay a small premium to get them -- over what he would pay overseas. He gets highly trained programmers WHO COULD NOT FIND OTHER WORK AND WERE WILLING TO ACCEPT MUCH LESS THAN THEY HAD BEEN MAKING.
So, one could look at this and say both sides were winners. The programmers wanted more $$, of course, but realized that some $$ was better than no money. And the manager got the local expertise he needed and willing workers.
So, what's the problem?
It's that "race to the bottom" thing -- the programmers making much less than they had reason to expect but could not achieve. Multiplied by tens of thousands, this puts a lot fewer dollars into circulation in the US economy than there had been (but more than there would be if the jobs went off-shore!). That reduces the standard of living for everybody -- with the possible exception of the corporate moguls and tort lawyers. But they will eventually live in a meaner, more squalid America.
So, paying Americans Indian wages is not all bad but it certainly is far from a solution to the off-shoring of American business.
Unfortunately it is probably as good as one can expect in the current economic milieu.
I relate to this scenario personally because, after taking an early retirement package from one employer, I was not able to find new work at a comparable salary without relocating, which I did not want to do. So, I am working but making about $20K less than I was. My next retirement is a L-O-O-O-NG ways off!
RE: Solutions for U.S. Unemployment and the Loss of Manufacturing Jobs:
This free market solution (asking for coders to accept a globally relevant wage) is the correct response - for Heaven's sake, 45k a year is not bad money in a global sense, and the cost of living in the USA is not bad either. This for a job that needs no degree, and no has no professional liability. Is a coder really more valuable than a high school teacher?
So, rhodie, I ask again (third time now), how can you justify paying an American a lot more money for doing the /same/ job as an off-shore worker? It ain't gonna happen, you can either live in a straw house that will come tumbling down when the wind blows, or, preferably, gently deflate people's expectations back to a global level.
Cheers
Greg Locock
RE: Solutions for U.S. Unemployment and the Loss of Manufacturing Jobs:
RE: Solutions for U.S. Unemployment and the Loss of Manufacturing Jobs:
A top level professional working in a MNC earns about 1000-1500$ per month in India. Ordinary folks like me earn half that. Salaries are grossly exagerated due to the presence of MNCs which has set an imbalance in the society.
RE: Solutions for U.S. Unemployment and the Loss of Manufacturing Jobs:
I know if it was me I would rather work even if it means earning less.
In fact, that's exactly what I did. After a 6 month unemployment period, which was precipitated by an employer hiring freeze (Myself and a colleague were on leave of absence to complete our masters and much to our surprise were frozen out when we tried to return to our jobs), I took a job for much less than what I was earning.
I'm still there. I'd much rather have some income than none or government assistance.
My solution to all of this is to use our creativity as engineers and think of other streams of income. For instance, I know some engineers that teamed up to do real estate on the side.
I think small engineering projects on the side could be a very good idea, as long as they aren't a conflict of interest with your main source of employment.
RE: Solutions for U.S. Unemployment and the Loss of Manufacturing Jobs:
Engineering jobs are going.
We know that and we know where they are going.
But is that all engineering jobs?
And what do we mean by “engineer”?
How about we think about different types of engineer and figure out which types are going.
Let me see if I can explain what I mean.
The industrial revolution was not about engineering. It didn’t start with engineering. It was about IDEAS (we are only concerned with ideas that require engineering skills, let other disciplines worry about their own fate). The creative types were the ones with ideas. Sure they were engineers but engineers of the creative, innovative type. Some, I’ve no doubt, were not even that good at engineering but knew enough to know a good idea when it came to them. Thus the best of them were the ones with the original ideas and the engineering skills to recognise the potential, and whatever else it took to turn those ideas into reality.
Even the best idea is only viable if (a) it is valuable and (b) if it can be done.
The next level of engineers are ones who, when presented with the idea or the first working or nearly working model, then went on to trouble shoot the design and make it work. They are also creative but in a problem solving way. They are also the ones who don’t get a mention (Edison didn’t work just by himself, he employed lots of others and every so often added a little bit of a spark).
Now we come to my last group of engineers. These are the guys who don’t innovate, at least, they are not expected to, who don’t trouble shoot and find engineering solutions.
These are the guys to whom you say, design and build me a boiler. These are the specs. These are the codes. Get on with it.
These are the “mechanics” if you like.
If you split the engineering profession down you can bet there will be a lot of “mechanics” out there.
My bet is that these are the jobs that are going fast.
Look at it this way (and I think someone has referred to this earlier on) the decline in engineering has hit the UK hard and is hitting the US hard and a few others. But take a look at the ideas. The UK still accounts for a totally disproportionate number of new patents. Even without Thomas Alva, I guess the US is still doing pretty well. But some countries are proving very good at refining ideas and at highly efficient manufacturing and marketing, but haven’t had a good idea for a 100 years or more. They probably will later on, as they accumulate the depth of knowledge and develop a culture based on that knowledge.
We all know that however much money you pour into R&D, you cannot guarantee, or even expect new “ideas” but give them an idea and they will make it work, if it can be made to work, and they will refine it, time and again.
This might seem like it is suggesting that only a few people have ideas. That’s wrong. I think lot’s of people have ideas. Good, valuable and do-able ideas but only a few put them into practise.
What we have to do is figure out which are the jobs that are going. I would suggest it is the “mechanic” end of the scale that goes first because these are the easiest engineering skills to acquire; the ability to do things the way they are meant to be done.
This is what I meant in my earlier post. Take the skills and the accumulated knowledge and focus those skills on innovation. Reinforce in the culture the aspects of creativity. It is creativity that will count and that will secure the future. Not every one will be saved. But don’t let’s kid ourselves that the world is going to hell in a hand basket. All those years of design and innovation have produced some very good transferable skills. And they are being transferred. To my mind, this is right and proper. It is the big sign of the success of engineering as a profession. But let go of these aspects and concentrate on what is the best and least reproducible part of engineering. Creativity is what keeps you at the front and employed.
Now decide which type of engineer you are or are capable of being.
Of course, the next problem is to decide if the established industries are the right home for those newfound skills. All too often, though they are engineering companies, they are not the home for innovation. They are about manufacturing and the skills they mostly need are the “mechanical” skills. Take the focus away from these companies and take a look at the new small and ideas driven companies, among them are the future giants. Take a look at history and see what has happened to all the great companies. They day came and went and new companies came after them. How old are some of todays biggest companies? Who went before them and who will follow.
RE: Solutions for U.S. Unemployment and the Loss of Manufacturing Jobs:
http://www.alwayson-network.com/comments.php?id=1477_0_...
to see the 10 most overpaid jobs in USA.
(Engineers did NOT make the list!)
RE: Solutions for U.S. Unemployment and the Loss of Manufacturing Jobs:
RE: Solutions for U.S. Unemployment and the Loss of Manufacturing Jobs:
The average full time worker is on 53k total
So the average engineer would appear to be on about 50% more than the average full time worker, in Australia.
Not exactly McJob money is it?
Cheers
Greg Locock
RE: Solutions for U.S. Unemployment and the Loss of Manufacturing Jobs:
RE: Solutions for U.S. Unemployment and the Loss of Manufacturing Jobs:
Let's review some of the dialog in this thread.
Bruce: I relate to this scenario personally because, after taking an early retirement package from one employer, I was not able to find new work at a comparable salary without relocating, which I did not want to do. So, I am working but making about $20K less than I was. My next retirement is a L-O-O-O-NG ways off!
You: how can you justify paying an American a lot more money for doing the /same/ job as an off-shore worker? It ain't gonna happen, you can either live in a straw house that will come tumbling down when the wind blows, or, preferably, gently deflate people's expectations back to a global level.
Dave: I think engineers might earn the most underpaid list! That with fast food workers!
You: Gosh, bad luck. ... the average [US] engineer would appear to be on about 50% more than the average full time worker, in Australia. Not exactly McJob money is it?
So, here is my interpretation of the above:
You are apparently making a LOT more than US$76K since you would not get out of bed for that amount. We are happy for you.
But your harsh dismissal of US engineers who think they should be making more $$ comes across as arrogant and insulting.
Your high salary suggests that you are Management, rather than Engineer. I have long suspected that Management people delude themselves into thinking that they are worth their high salaries, are, in fact, entitled, to them, and that anyone not making such a salary is lazy and/or stupid.
Greg, you have stated that US workers have no right to earn more than engineers in 3rd world countries and need to lower their expectations to a "global level". Apart from its insensitivity, such a statement ignores the differences in standards of living and cost of living. Of course the US or Candian or Euoropean engineers should expect a higher wage than a Sri Lankan. They have to pay bills in the place where they live! That is a major reason that there are large wage differentials even within the US. People would not expect or need the higher salary if they were living in a lower-cost area.
The developed countries -- especially the US -- have elaborate and costly governmental programs and laws which increase the cost of production and the cost of manufactured goods and shipped goods. Think OSHA, EPA, SSI, etc. etc. Licenses, bonds, etc. increase the cost of services. These are costs that are built in to our economies which are much higher than in the less-developed countries.
Companies who off-shore put a double-whammy on the US citizen. First, they escape paying the taxes to provide these programs, and second, they deprive the US citizens of the employment to pay the additional tax burden resulting from item 1.
If US companies continue to off-shore as much work as possible to foreign countries while US citizens are looking for work, it is clear that, at some point in the future, there will no longer be a market for the manufactured goods in the US because low-wage and unemployed people cannot afford them. So, it is a short-range strategy with poor long-term expectations for the US citizen.
The global level you mention would quite likely be below what we in the states call the poverty line. Is that what you think is a good scenario for the future US? Instead of living in nice houses and driving reliable cars, we should return to mud hovels and ride donkeys?
RE: Solutions for U.S. Unemployment and the Loss of Manufacturing Jobs:
I wish I could give you FIVE STARS.
Your post hits the nail on the head in all of the areas you mentioned. There are many more but you have certainly made impressive comments.
Especially:
1)Companies who off-shore put a double-whammy on the US citizen. First, they escape paying the taxes to provide these programs, and second, they deprive the US citizens of the employment to pay the additional tax burden resulting from item 1.
2)The developed countries -- especially the US -- have elaborate and costly governmental programs and laws which increase the cost of production and the cost of manufactured goods and shipped goods. Think OSHA, EPA, SSI, etc. etc. Licenses, bonds, etc. increase the cost of services. These are costs that are built in to our economies which are much higher than in the less-developed countries.
Thanks and MERRY CHRISTMAS
ietech
RE: Solutions for U.S. Unemployment and the Loss of Manufacturing Jobs:
Thanks for the kind words.
Merry Christmas right back at you and to all the other people who contribute to these message boards.
RE: Solutions for U.S. Unemployment and the Loss of Manufacturing Jobs:
You really have got hold of the wrong end of the stick, several times over.
"You: how can you justify paying an American a lot more money for doing the /same/ job as an off-shore worker? It ain't gonna happen, you can either live in a straw house that will come tumbling down when the wind blows, or, preferably, gently deflate people's expectations back to a global level.
Dave: I think engineers might earn the most underpaid list! That with fast food workers!
You: Gosh, bad luck. ... the average [US] engineer would appear to be on about 50% more than the average full time worker, in Australia. Not exactly McJob money is it? "
Wrong, that's an /Australian/ survey of /Australian/ engineers.
"So, here is my interpretation of the above:
You are apparently making a LOT more than US$76K since you would not get out of bed for that amount. We are happy for you."
No, my package is rather more than 76k AUSTRALIAN, as do most 43 year old engineers in the Australian automotive industry.
"But your harsh dismissal of US engineers who think they should be making more $$ comes across as arrogant and insulting."
The board of a company has a responsibility to the shareholders to use the shareholders funds efficiently. If the /same/ job can be done by someone else but for less money then it seems to me the board has no choice but to go with it. Therefore, unless US engineers are more productive, or better, or some other synergy, then they should accept that in a global free market they will have to accept the global rate for the job.
"Your high salary suggests that you are Management, rather than Engineer."
No I am management proof. I am technical stream, and will be until they pry my keyboard out of my senile hands. Clue: check my personal profile.
" I have long suspected that Management people delude themselves into thinking that they are worth their high salaries, are, in fact, entitled, to them, and that anyone not making such a salary is lazy and/or stupid."
Whatever, irrelevant
"Greg, you have stated that US workers have no right to earn more than engineers in 3rd world countries and need to lower their expectations to a "global level". Apart from its insensitivity, such a statement ignores the differences in standards of living and cost of living."
I did not say that. Parity with other first world engineers would be a logical level. Erecting straw men is a good debating ploy.
If your economy is not more productive then how can you justify a higher standard of living? Your forefathers created a powerful and profitable economy that could support the highest standard of material comfort in the world. Your generation's job is to continue to excel, if you want to maintain that standard of living.
" Of course the US or Candian or Euoropean engineers should expect a higher wage than a Sri Lankan. They have to pay bills in the place where they live!"
If the Sri Lankan can do the same job as the USAn then in all fairness why should he not be paid the same? I am single, should I be paid less because I don't have children (ie my expenses are lower)?
" That is a major reason that there are large wage differentials even within the US. People would not expect or need the higher salary if they were living in a lower-cost area."
If I can 'black-box' the job then the rate should be the same, wherever the contents of the black box happens to live.
"The developed countries -- especially the US -- have elaborate and costly governmental programs and laws which increase the cost of production and the cost of manufactured goods and shipped goods. Think OSHA, EPA, SSI, etc. etc. Licenses, bonds, etc. increase the cost of services. These are costs that are built in to our economies which are much higher than in the less-developed countries.
Companies who off-shore put a double-whammy on the US citizen. First, they escape paying the taxes to provide these programs, and second, they deprive the US citizens of the employment to pay the additional tax burden resulting from item 1."
At last you make a sensible point.
"If US companies continue to off-shore as much work as possible to foreign countries while US citizens are looking for work, it is clear that, at some point in the future, there will no longer be a market for the manufactured goods in the US because low-wage and unemployed people cannot afford them. So, it is a short-range strategy with poor long-term expectations for the US citizen. "
Correct, so the dollar will drop, then US industry will be price competitive again, and people will get work. As I pointed out above, this is inevitable, given that the prime responsibility of each company is the efficient use of its shareholders funds, in a capitalist country at least.
"The global level you mention would quite likely be below what we in the states call the poverty line. Is that what you think is a good scenario for the future US? Instead of living in nice houses and driving reliable cars, we should return to mud hovels and ride donkeys?"
Well, at the risk of repeating myself, if your economy is no more productive than a third world economy, yes, you'll have a third world standard of living. By what right do you expect more?
Cheers
Greg Locock
RE: Solutions for U.S. Unemployment and the Loss of Manufacturing Jobs:
In fact, they are probably encouraging some jobs out of the country.
Did you ever wonder why Puerto Rico has such a storng pharmaceutical base? or why European governments are paying subsidies to encourage companies to relocate and set up just wher the government wants them? Why did DeLorean set up in Ireland? why do so many of these companies end up in unusal places? Its because the government likes to do things like this. They give subsidies to "help" locations with low unemployment without realising that they're just shifting the problem around. Perhaps they could give some thought to creating an environment where new jobs are developed rather than trying to carry water in a sieve.
I'm not totally convinced governments are a good thing. For one thing, i don't think they have the smarts for anything useful and for another, if they can't win some votes they ain't interested, which is probably abpout the only way to get their attention, it's just they aren't worried about your votes till election time. In the meanwhile they have a hundred other opportunities to win brownie points around the world without realising what a mess these initiatives are cauising at home.
RE: Solutions for U.S. Unemployment and the Loss of Manufacturing Jobs:
Asking publicly held companies to behave otherwise is silly. They would be remiss if they did. Asking privately held companies to forgo offshore sourcing is to ask your neighbor to take a pay cut for your benefit. Unlikely. All of this outsourcing was acceptable to many until it began to affect "professionals". Outsourcing was OK as long as it was the direct labor types. Engineers and IT types are concerned now? The irony is simply too rich.
Greg's arguments are airtight in a purely capitalistic world view with no governmental intervention. We do not live in that world. Trade barriers in the form of quotas, tarriffs, bans and differential policies for trading partners are all part of the current reality. Greg wouldn't have a job without these "barriers". I'm not a racist, so I believe there exists a likely replacement for Greg working somewhere else for less. I'm sure there are many who could replace me for less money.
Wake up and smell the coffee. The solution is a political one. Every country's government should strive to improve the lot of it's governed. If yours doesn't, change it. My government no longer represents my interests. My interests are not necessarily the same as those of NASDAQ or Dow members.
Some globalization proponents seem to believe economic activity is a zero sum game. Hence the belief that the US should "relinquish" wealth to other "oppressed" nations. I do not share these views. Real wealth is created through innovation and inventions that increase man's ability to produce wealth. Not merely produce the same product with cheaper labor.
But the innovations that create wealth and move economies forward are a direct result of perks provided by the taxes and tarriffs on employees and products. The public schools, state colleges, food safety, public health, police, firefighters, roads, bridges and other infrastructure are all provided by tax dollars. Not just yours, but your neighbor's as well. As the jobs leave, so do the taxes and later the services provided by those taxes. Rust Belt? Talk to the police department in Johnstown, PA. Find out what happens when your tax base leaves. Now, think national.
RE: Solutions for U.S. Unemployment and the Loss of Manufacturing Jobs:
There may be a solution. Lean Management using tried and tested engineering principles, but not in a land where CEO's earn more than the President or Prime Minister.
RE: Solutions for U.S. Unemployment and the Loss of Manufacturing Jobs:
http://www.pentonsurveys.com/survey.asp?s=0123419023504...
Regards,
RE: Solutions for U.S. Unemployment and the Loss of Manufacturing Jobs:
The discussion about if a USA engineer needs to earn more than a 3rd world engineer because of cost of living differences really I think is mistaken, look at this facts:
A house in Florida is cheaper than in Lima (my hometown) the Publix prices for food and ordinary household needs are cheaper there than at home, I buy my clothing there because is better quality and cheaper than here (probably made in other part of the world but is besides the point) gas for the car costs less than half of our prices, a car is usually 1/2 the price that we pay here if new and much less if used, what costs more is: everything that has personal labor or attention involved, be it a restaurant, a dentist, a medical bill or a car mechanic, so finally the problem of "cost of living" goes more to HOW YOU LIVE than what the cost of living is, you feel miserable if you don't have a late model car (I drive a 91 Cherokee, which by the way runs flawlessly) the last HD TV, and so on.
The point is that we simply have learned to live on less income even if our bread and butter prices are similar or even higher than yours, so stop saying that the problem is that you need 25$/hr wages to survive in the US.
Just meditate a litl¡tle on that.
Cheer up
SACEM1
RE: Solutions for U.S. Unemployment and the Loss of Manufacturing Jobs:
To get back to the original question of 'Solutions to US unemployment....' then perhaps Enterprise zones might be worth considering if that hasn't already been tried.
corus
RE: Solutions for U.S. Unemployment and the Loss of Manufacturing Jobs:
Also, companies look favorably upon an area with good technical schools. These schools provide newly graduated employees of known caliber through co-op programs and also are useful for continuing education of existing engineers and technicians.
Engineers tend to migrate to where the jobs are and their educations and technical skills allow that.
"Enterprise" zones in the states typically attract mature low tech manufacturing and distribution companies, IMO. The good news is that many of these zones stipulate wages to be paid. But ultimately I think we simply end up shuffling the jobs around and not creating any new ones. At least in the US.
RE: Solutions for U.S. Unemployment and the Loss of Manufacturing Jobs:
In the meantime, only the innovative companies who recognise the importance of long-term research and development will survive. Sadly, I think most companies are investing overseas to reduce cost rather than to improve their products.
Consumers often avoid cheaper goods because of perceived poor quality; take a look at the fashion industry.
RE: Solutions for U.S. Unemployment and the Loss of Manufacturing Jobs:
I am not happy that this is the whole story. It's a bit like War Criminals saying they were only obeying orders.
This is also a great cop-out for companies caught selling drugs nbanned in one country to another country where they are not (yet) banned, for example.
First, the rules by which a company is controlled are prescribed by a variety of legal requirements and obligations. So, option one, modify the law.
Secondly, we tend to forget shareholders have a voice too. Much more vocal of late. In the past many shareholders have been loath to do anything other than let the board get on with it. But we have seen quite a bit of activity regarding "Goldern Parachutes" and the excessive bonuses paid to CEOs even when their stewardship is sending the company down the tubes. We have also seen some quite effective campaigns targetting "ethical" investments.
If the shareholders declare that they don't won't to see jobs going offshore, they can say so and the board is then responsible to follow that directive.
RE: Solutions for U.S. Unemployment and the Loss of Manufacturing Jobs:
corus
RE: Solutions for U.S. Unemployment and the Loss of Manufacturing Jobs:
RE: Solutions for U.S. Unemployment and the Loss of Manufacturing Jobs:
Zapster is right, people vote with their feet. When the going gets tough many shareholders will sell stock to limit the damage. This reduces share price further and the CEO then decides to reduce the R&D budget to try and balance things out.
James Dyson is an example of the exact opposite. A few years ago I had a conversation with one of his engineers. He told me that sales were suffering and profits were falling. So what does James Dyson do to turn things around? He doubles his R&D budget!!!!
I’ve just bought a Dyson Vacuum cleaner for £240. I could have got a similar one for £40 with a bag but they do a poor job. I am more than happy to pay extra for a product that has been driven by an engineer who puts functionality first. It is worth every penny.
Dyson has also moved most of his manufacturing to Malaysia but insists on retaining R&D in the UK. Maybe this is how engineers in the West can successfully compete in a global market, retain product knowledge and outsource some of the manufacturing?