OT: iphone factory life....

[bicycletricycle]

I agree that lower min. wage in and of itself would not magically bring phone assembly plants to the US. (for that matter any manufacturing plants) The cluster of industries required to make that (any) industry work is a large barrier to the transplantation of that industry. I guess what I was trying to say is this. (perhaps even more disturbing?)

The prospect of unskilled, low impact and easy to get 1$ dollar an hour jobs that provide you housing and access to food that you can afford and a little left over for going out on Sunday is more attractive than I might have expected and having something like that here in the US (I guess the wage may be something more like $3 an hour) might not be that bad. (Perhaps we can put a city college right next door?)

I know people who would take that job, I have been in situations were I would have jumped up and down to get that job.

I recently did a back of the envelope calculation of a friends pay in the Navy, when you actually consider the amount of hours he works and the uniform and other expenses that he cannot avoid. It was not much better than this. I also used to live next door to a Navy CB base and it seemed to me that a lot of the people I knew had joined for similar reasons to the people working at the phone factory. They needed shelter and some money, didn't have a lot of skills valuable in the market and just needed a start.


The fast food example is different in some important ways, those jobs cannot be entirely off shored to a different economy with different costs of living and wage expectations. Lowering the pay in fast food doesn't potentially unlock a huge labor market currently in place in other countries.

Higher wages does put more money in the hands of consumers which does in theory feed back into the economy providing more jobs (Some of that money is leaking out to foreign companies who are making the goods that money is being spent on and as an economy we have a hard time getting those dollars back). You are never getting factories back to the US that make products that compete with imported products made by people getting paid 90% less by raising the minimum wage. Perhaps "we don't want those jobs" but then we might want to ask what jobs do we want and were are they going to come from? Just because people want "better" jobs does not make them appear magically.

Originally Posted by alterergo

It is a sensible thing to think and say. It is just not well supported by evidence. As it was mentioned already, frequently, it is not about just iPhone producer, it is about whole industrial clusters, with specialized suppliers, etc. You can see that even in apparel, button producers specialize and locate next to pants and shirts producers, etc. So, lowering min wage might will only help if it induces the whole "cluster" to relocate to the US. That might be a pretty drastic cut.

Moreover, people looked at instances of increases in min wage in the US. It appears that higher min wage associated with higher (!) employment in poor communities. The argument is more disposable income allows to purchase more local goods, benefiting local economy as the whole.

This is, for instance, a classic study:
Minimum Wages and Employment: A Case Study of the Fast Food Industry in New Jersey and Pennsylvania
http://www.nber.org/papers/w4509

[Tony T]

(Apple) FoxConn suicide nets:

[bicycletricycle]

Foxconn employs 250,000 plus people.

Suicide rates among their employees (pre and post nets) is below the general population suicide rates in china and in the USA at the same time.

They payed over minimum wage at the time of the suicides.

They may not be the best place to work but certainly more is made of this than is actually warranted by the facts.

Originally Posted by Tony T

(Apple) FoxConn suicide nets:

[buddybikes]

When I read this stuff, glad I am getting old and almost done. My kids, that's another matter youngest is goind into higher ed so good for her. I do remember vividly in high school school trip watching GM plant assembly line. To me it was like watching prisoners. How they could stand there and screw wheels on for 8 hours without being on drugs/med no idea..

[mistermo]

Originally Posted by johnmdesigner

There was a survey a while back about the cost of a pair of pants.
I think they were about $10 more if manufactured in the US.
The consensus was "no way would I buy that."

Very hard to convince the US public to stop buying imported $5 tee shirts and $10 pants.

Don't blame only the consumer. A different way of saying the same thing would be to convince owners/investors to take $5 and $10 less in profits.

[alterergo]

To be honest, I don't think the US needs lowering of minimum way to "sock up" unemployment. That is only fine if

1) as long as it works and there is not much evidence for that. recall you are not only affecting guys "at the margin" (who are getting a job in the case where they otherwise won't with higher min wage.) but you also lower wages for all workers in this skill/experience category. the "macro" effects still operate (btw, poor people spend very little on foreign produced goods)

2) the only alternative is to kick guys on the street. i don't think that is the most useful way to think about this problem. what about retraining programs? helping people to re-enter workforce by equipping with better skillset? or remove excessive constraints on (or encourage) new small shops to open up, start-ups. That is more of the European approach. It isn't a panacea, but when done properly it has much bigger potential.

My view is that focusing on creating better opportunities (higher paying jobs) in the future for currently unemployed is the way to go. You can do it by e.g. better retraining programs that "upgrade" workers with useful skills in current workforce (programming, etc.) is the way to go, not by lowering min wage.

[Tony T]

Originally Posted by bicycletricycle

Foxconn employs 250,000 plus people.

Suicide rates among their employees (pre and post nets) is below the general population suicide rates in china and in the USA at the same time.

They payed over minimum wage at the time of the suicides.

They may not be the best place to work but certainly more is made of this than is actually warranted by the facts.

I'd be more interested in knowing the rate of suicide at Foxconn as compared to other factories in China and in the USA.

[bicycletricycle]

Originally Posted by mistermo

Don't blame only the consumer. A different way of saying the same thing would be to convince owners/investors to take $5 and $10 less in profits.

Many goods don't have enough margin for that to be an option.

[mistermo]

Originally Posted by bicycletricycle

Many goods don't have enough margin for that to be an option.

Understood and agreed. Point remains, that it's not merely consumer demand for lower priced items that drives production to cheaper sources, but also investor demand for higher margins. These forces work together. Can't place blame one without the other.

[benb]

There was a recent NPR show I heard, and there is a big news article/book somewhere else about it, but basically Alabama has set up an industry almost like the Chinese factories here for the parts supply chain for foreign auto companies that build cars here in the US. E.x. Mercedes-Benz, BMW, Hyundai, Honda, Kia, were all mentioned.

The actual auto assembly plants that are owned by those foreign companies are good jobs and they have good plant safety. But the parts are all farmed out to a supply chain industry where the workers effectively make less than minimum wage, work way more than 40 hours a week, and safety conditions are as bad or worse than China. The supervisors, managers, safety crews, etc.. are all foreigners and they don't necessarily care about their poor American line workers as much as they should.

So it's not like thing are necessarily better here. There was a lot of info in the article about how Alabama actively worked to set this up and looks the other way, even doing things like minimal spending on education to make sure there are lots of folks who have little choice but to go work in these factories. It's very much the opposite of what other parts of the US or European countries are doing, e.x. Germany where manufacturing workers are valued, their opinions on how to run the line are actually listened to, and the whole state + industry works to train them to be highly skilled. The lack of education also means the companies are having to bring in people from out of the US or out of state to do the higher tech jobs like being safety inspectors and knowing how to work on/repair the robots!

Here is one of the articles:

https://www.bloomberg.com/news/featu...-crushed-limbs

[bicycletricycle]

Originally Posted by mistermo

Understood and agreed. Point remains, that it's not merely consumer demand for lower priced items that drives production to cheaper sources, but also investor demand for higher margins. These forces work together. Can't place blame one without the other.

It is easy to try and hang this all on greed but once a competitor moves off shore and can drastically undercut you in the market often times the choice for companies is not stay and make less make money but rather stay and go out of business.

The consumer has the most direct power in this situation.mThe market will provide anything that we demand.

[benb]

There are things we can do as a country to try and prevent that kind of bad behavior... not a big fan of Trump or most of the republican agenda but their "border adjustment" portions of their tax plan actually try to deal with this, maybe it would work, maybe it wouldn't but at least it's an acknowledgement that there is an issue.

For the most part we set up a system under Clinton/Bush/Obama that benefits and favors companies racing to the bottom and shipping as much overseas as possible.

[ftf]

Originally Posted by bicycletricycle

It is easy to try and hang this all on greed but once a competitor moves off shore and can drastically undercut you in the market often times the choice for companies is not stay and make less make money but rather stay and go out of business.

This is what Marx calls the Tendency for the rate of profit to fall, or TRPF. Meaning that countervailing forces of pressure from other competitors and consumers, will both work to destroy the profit margin, and then we will see cannibalization of the public sector, such as education, and state defense to open new sectors for exploitation by the elites. Also consolidation in to monopoly powers, such as banks that are too big to fail.

[ftf]

Originally Posted by benb

There are things we can do as a country to try and prevent that kind of bad behavior... not a big fan of Trump or most of the republican agenda but their "border adjustment" portions of their tax plan actually try to deal with this, maybe it would work, maybe it wouldn't but at least it's an acknowledgement that there is an issue.

For the most part we set up a system under Clinton/Bush/Obama that benefits and favors companies racing to the bottom and shipping as much overseas as possible.

You mean tariffs right, well tariffs for many reasons don't work, please look further in to this, the world bank has a pretty good write up on it. Labor will always follow the path of least resistance, meaning it will always go to where you can produce whatever for the lowest cost. Period. Nothing will change that, as the countervailing forces, which others have alluded to, exist. Competition and market pressures will demand that.

[bicycletricycle]

Yes, lowering min. Wage universally would bring pay down in other min. Wage jobs.

"Retraining" for jobs is something that always sounds nice but I think when you actually think about it it is a little bit of a utopia. If these are free government programs then the chances that they actually train people for something that is actually needed and in a timely manor even a majority of the time seems unlikely. That is why factories used to train people in house, that is why people are willing to take unpaid internships, raising the cost of labor means that companies are less likely to take in untrained labor and invest in them themselves (requiring retraining programs that no one wants to fund and that are unlikely to do as good of a job). Also, a lot of people who have done one job for most of their life can't just be retrained to do something totally different. Your average 50 year old homeless coal miner/contractor/factory worker can not magically turn into a computer coder. People have histories, they have skills and they also have handicaps. How are people going to go from broke to small business owner? Not everyone is an entrepreneur, in fact, very few people are.

The multi generational household used to help get people like this back onto their feet, or at least keep them off of the streets. I don't know if the government or corporations can take its place.

I don't think that moving below minimum wage phone factories to the states is a magical solution to anything, but having some work like this around doesn't seem like it would be the worst thing either.

Originally Posted by alterergo

To be honest, I don't think the US needs lowering of minimum way to "sock up" unemployment. That is only fine if

1) as long as it works and there is not much evidence for that. recall you are not only affecting guys "at the margin" (who are getting a job in the case where they otherwise won't with higher min wage.) but you also lower wages for all workers in this skill/experience category. the "macro" effects still operate (btw, poor people spend very little on foreign produced goods)

2) the only alternative is to kick guys on the street. i don't think that is the most useful way to think about this problem. what about retraining programs? helping people to re-enter workforce by equipping with better skillset? or remove excessive constraints on (or encourage) new small shops to open up, start-ups. That is more of the European approach. It isn't a panacea, but when done properly it has much bigger potential.

My view is that focusing on creating better opportunities (higher paying jobs) in the future for currently unemployed is the way to go. You can do it by e.g. better retraining programs that "upgrade" workers with useful skills in current workforce (programming, etc.) is the way to go, not by lowering min wage.