Corporations going overseas (split from Senator Wyden...)

[mykidslovedogs]

Mykids,

Change is constant and all who fail to adapt to it are setting themselves up for an unpleasant future.

Hi Wahoo,

I agree with you about change being constant and needing to adapt, but the question you asked me about unemployment due to corporations going overseas is a whole 'nother subject that probably doesn't even belong in this forum. But.....since I am the kind of person who likes to have the last word....(and I promise not to say anything else about this after this post...)...

The liberals have created this problem by imposing minimum wages on large employers. If employers could keep up with costs and increase productivity by staying in the USA instead of going abroad, they would. But with mandated minimum wages, the corporations have no choice but to go elsewhere in order to remain profitable and productive. On a good note, however, increased productivity created by eliminating menial work creates ALL KINDS of new opportunities for the people who lost jobs.

On the other hand, if you take away the kinds of jobs that the HAA would be taking away, those jobs are not going to be readily replaceable, and you will lose a big chunk of the money that was originally going to subsidize the low income people's health insurance.

 

[REWahoo]

The liberals have created this problem by imposing minimum wages on large employers. If employers could keep up with costs and increase productivity by staying in the USA instead of going abroad, they would. But with mandated minimum wages, the corporations have no choice but to go elsewhere in order to remain profitable and productive.

Just think of how well employers could have kept up with costs and improved productivity had we not abolished slavery!

 

[Nords]

Just think of how well employers could have kept up with costs and improved productivity had we not abolished slavery!

I think we're supposed to blame that on the liberals too.

 

[mykidslovedogs]

I think we're supposed to blame that on the liberals too.

The market will pay what the job is worth. When you impose minimum wages, all you do is create inflation, and make the costs of living higher for the very people you are trying to help.

 

[brewer12345]

I think we're supposed to blame that on the liberals too.

Damn Republicans! Abolishing slavery - just another example of their corrumption...

 

[Nords]

all you do is create inflation

MKLD, you have a tendency to overuse sweeping generalizations like "all you do", "everyone will want", and "have no choice" to support your arguments.

Instead of supporting them, however, I think it makes them more suspect. The minimum wage concept is much more complicated than you appear to appreciate, which means that you're either missing the point or deliberately oversimplifying it to make your own points.

That's especially true, in my opinion, in situations where you ascribe to politics what could be merely due to financial greed & stupidity.

 

[brewer12345]

MKLD, you have a tendency to overuse sweeping generalizations like "all you do", "everyone will want", and "have no choice" to support your arguments.

Instead of supporting them, however, I think it makes them more suspect. The minimum wage concept is much more complicated than you appear to appreciate, which means that you're either missing the point or deliberately oversimplifying it to make your own points.

That's especially true, in my opinion, in situations where you ascribe to politics what could be merely due to financial greed & stupidity.

Yeah, but you have to love yet another rendition of RNC talking points...

 

[Nords]

Yeah, but you have to love yet another rendition of RNC talking points...

See, now I'm confused-- is this stupidity, financial greed, or politics?

 

[brewer12345]

See, now I'm confused-- is this stupidity, financial greed, or politics?

Yes.

 

[mykidslovedogs]

MKLD, you have a tendency to overuse sweeping generalizations like "all you do", "everyone will want", and "have no choice" to support your arguments.

Instead of supporting them, however, I think it makes them more suspect. The minimum wage concept is much more complicated than you appear to appreciate, which means that you're either missing the point or deliberately oversimplifying it to make your own points.

That's especially true, in my opinion, in situations where you ascribe to politics what could be merely due to financial greed & stupidity.

OK - Let me give you a specific example. I think I usually give pretty specific examples in my posts, but I'm sorry I didn't in this one. The other day I went to Wendy's to buy lunch for me and my kids. It cost $5.00 more than it usually does. When I thought outloud and said, "Oh, the recent minimum wage increase in our state must have caused the prices increases", the lady at the counter replied "You are exactly right. We had to raise our prices to compensate for the wage increases." So now, all of the people who work at Wendy's are going to have to pay more for their hamburgers and probably a lot of other consumer items that they buy. The increase in their cost of living is going to offset the benefit they get from higher wages.

 

[brewer12345]

OK - Let me give you a specific example. I think I usually give pretty specific examples in my posts, but I'm sorry I didn't in this one. The other day I went to Wendy's to buy lunch for me and my kids. It cost $5.00 more than it usually does. When I thought outloud and said, "Oh, the recent minimum wage increase in our state must have caused the prices increases", the lady at the counter replied "You are exactly right. We had to raise our prices to compensate for the wage increases." So now, all of the people who work at Wendy's are going to have to pay more for their hamburgers and probably a lot of other consumer items that they buy. The increase in their cost of living is going to offset the benefit they get from higher wages.

I'm convinced. Anecdotal evidence from a random stranger on the interweb is all I ever need to be totally convinced. Can you sell me an equity-indexed annuity, too?

 

[mykidslovedogs]

I'm convinced. Anecdotal evidence from a random stranger on the interweb is all I ever need to be totally convinced. Can you sell me an equity-indexed annuity, too?

Ha Ha! Well, I figured I had to keep it simple, so the average person could understand where I am coming from. And, no...I can't sell you an equity-indexed annuity, because I am not a financial planner, and I am not licensed to sell financial products. All I do is sell health insurance.

 

[Nords]

When I thought outloud and said, "Oh, the recent minimum wage increase in our state must have caused the prices increases", the lady at the counter replied "You are exactly right. We had to raise our prices to compensate for the wage increases."

Well, heck, I'm completely disarmed by having to cope with anecdotal economics from the customer-service staff.

I was going to talk about the higher cost of raw materials, higher fuel costs, rising rents & property taxes, the difficulty of attracting quality employees in a time of record-low unemployment, increased health-care premium expenses, or opportunistically capitalizing on media reporting, or merely agreeing that the customer is always right... but, hey, I'm not a food-service professional so I'm probably not qualified to comment on these types of economic situations.

Do you have any studies that consolidate the economic analysis of the nation's counter staff, or any other economists who've looked at the situation in aggregate instead of in isolated anecdotes that happen to agree with your opinion?

 

[brewer12345]

Do you have any studies that consolidate the economic analysis of the nation's counter staff, or any other economists who've looked at the situation in aggregate instead of in isolated anecdotes that happen to agree with your opinion?

You want fries with that?

 

[donheff]

OK - Let me give you a specific example. I think I usually give pretty specific examples in my posts, but I'm sorry I didn't in this one. The other day I went to Wendy's to buy lunch for me and my kids. It cost $5.00 more than it usually does. When I thought outloud and said, "Oh, the recent minimum wage increase in our state must have caused the prices increases", the lady at the counter replied "You are exactly right. We had to raise our prices to compensate for the wage increases." So now, all of the people who work at Wendy's are going to have to pay more for their hamburgers and probably a lot of other consumer items that they buy. The increase in their cost of living is going to offset the benefit they get from higher wages.

Gimme a break. This pathetic example has nothing to do with outsourcing to China. Are we going to order our fast food from overseas? A variety of studies cited in the media recently argue that minimum wage increases do not have a net negative impact of small businesses or on the well being of low wage workers - granted the debate is not settled.

How many jobs that are going overseas would be filled in America by people willing to accept the pittance that is reflected in the minimum wage? Certainly not computer programmers. Definitely not auto workers. Most minimum wage jobs are the short of low end service jobs (e.g fast food, Wal-Mart greeters, cleaning staff, etc) that can't be sent over seas. The higher paid manufacturing jobs and high skilled knowledge worker jobs are not filled with minimum wage employees.

 

[mykidslovedogs]

Ugh,

I've GOT to call it a day. I am sure you will consider this oversimplification,
but I would need another week off to finish this conversation....
I believe all of the higher costs you mentioned above are functions of supply and demand. When supply is reduced, prices go up. This is true for raw materials, fuel, property, healthcare (not enough doctors, etc...In my opinion (see, I said IN MY OPINION), if you attack the root cause of the problem (whatever is causing the reduced supply or the increased demand), then you will have better luck fixing the problem than if you try to fix it by imposing employers to pay higher wages so that people can better afford these things.

 

[brewer12345]

Ugh,

I've GOT to call it a day. I am sure you will consider this oversimplification,
but I would need another week off to finish this conversation....
I believe all of the higher costs you mentioned above are functions of supply and demand. When supply is reduced, prices go up. This is true for raw materials, fuel, property, healthcare (not enough doctors, etc...In my opinion (see, I said IN MY OPINION), if you attack the root cause of the problem (whatever is causing the reduced supply or the increased demand), then you will have better luck fixing the problem than if you try to fix it by imposing employers to pay higher wages so that people can better afford these things.

How exactly do you plan on "fixing" the root cause of higher material prices? The oil and gas fairy? Start up a volcano to create more real estate off the coast of California?

 

[Rich_by_the_Bay]

Isn't minimum wage calculated to take you just over the poverty line, so you lose Medicaid eligibility ?

 

[Jay_Gatsby]

Here's my historical take on things. Offshoring in the U.S. began with blue-collar workers in the manufacturing sector during the 1970s, and increased significantly in the 1980s and 1990s. Other sectors of the economy soon followed, with such jobs going primarily to East Asian countries such as China, South Korea, Malaysia and Taiwan. As a result, U.S. demand for labor shifted from blue-collar to white-collar workers and from an economy based on manufacturing to one based on services. Despite this sweeping transformation, U.S. companies began looking for ways to lower their labor costs once again, and focused their efforts on offshoring service jobs held by white-collar workers. The white-collar jobs initially offshored were primarily in personnel-heavy, unsophisticated business units such as call centers and back-office processing services. Numerous white-collar jobs in the high-technology sector soon followed in areas such as quality assurance, discrete software component programming, and ultimately software design and development.

The constant in all of the foregoing has been an increase in the knowledge and sophistication of workforces in other countries. As the U.S. offshores jobs requiring a low knowledge base to countries where the cost of labor is less, the only jobs remaining are those requiring a higher knowledge base. Naturally, there are fewer individuals in the U.S. capable of performing the latter types of jobs, thereby triggering the law of supply and demand. This is where education comes into play. The U.S. education system cannot keep up with the demand for high-level talent at a reasonable cost, forcing many U.S. companies to immediately look for new workers overseas, rather than first look for new workers at home.

 

[youbet]

I only wish the Dems would be less hypocritical about their position on the minimum wage. They say they support the concept. They say they want it raised. Then they turn around and propose a pathetically small increase! What's the point? People receiving the new minimum will still be impoverished.

 

[brewer12345]

I only wish the Dems would be less hypocritical about their position on the minimum wage. They say they support the concept. They say they want it raised. Then they turn around and propose a pathetically small increase! What's the point? People receiving the new minimum will still be impoverished.

Last I checked they didn't have a veto-proof majority. Unlike the rethuglicans of the last several years, they have to consider the ther side's wishes to get things done.

 

[Nords]

Gimme a break. This pathetic example has nothing to do with outsourcing to China. Are we going to order our fast food from overseas?

You're scarin' me, man. You're already predicting the future.

Wendy's & McDonalds have been testing call centers to handle their drive-through orders at selected franchise sites. McDonald's has been doing it for nearly two years.

It's only a matter of time until a different sort of Brahmin "Bob" from Bangalore Boston handles your burger order...

(Hey, Astro, how 'bout that literate alliterative reference?)

 

[youbet]

Last I checked they didn't have a veto-proof majority. Unlike the rethuglicans of the last several years, they have to consider the ther side's wishes to get things done.

I don't buy that at all brewer........ The GOP is a lost cause on the minimum wage issue, no doubt. But the Dems seem less honest about it. Instead of just saying they're against it, they support it half-heartedly proposing a modest increase which will leave the recipients impoverished.

 

[brewer12345]

I don't buy that at all brewer........ The GOP is a lost cause on the minimum wage issue, no doubt. But the Dems seem less honest about it. Instead of just saying they're against it, they support it half-heartedly proposing a modest increase which will leave the recipients impoverished.

Right, right, I forgot. Its no longer "all Clinton's fault." Now its that the new Democrats are just plain dishonest, gosh darn it. If only we had Tom Delay back - there was a paragon of (Republican) virtue.

 

[magellan_nh]

Personally, I think the idea that human labor should have a minimum value is a good one. The trick is in implementing it in a way that doesn't distort the market and result in negative side-effects like less jobs.

To me, the problem is that we're trying to jam what is essentially a government mandated transfer payment into the market system. I wonder about the idea of making the minimum wage a tax credit where the government does the subsidy directly through the tax code (like the earned income tax credit). There would be some added reporting on the part of employers (maybe adding hours worked to the W2), but it could be pretty minimal. In the end, taxpayers will pay for it, why not make it more of a direct payment so the market system doesn't get perverted by it.

At the margins, capital and labor can be and are often substituted. If we increase the cost of labor with a minumum wage that's above the market wage, employment will drop as other alternatives (outsourcing/use of automation) become viable.

As an extreme example, while I was doing a volunteer stint in Cambodia, I watched a modern 5 story building go up next to my apartment without a single piece of heavy construction equipment. Every morning, hundreds of workers descended on the building site to erect the structure. I suspect things like concrete mixers and pumps, cranes, and the like were just not worth it when labor, buckets, and shovels could be had for a couple bucks a day. As wages go up, more and more jobs become cheaper to do with machinery rather than human labor.

Anyhow, just a thought...

Jim