This is close to home. Sensata is in Freeport a small town just west of here.
Bain Capital moves 170 jobs to China where workers earn 99 cents an hour 12 hours a day 7 days a week living 3 to a small room
The American flag was taken down at the plant when Chinese workers came for training
http://www.journalstandard.com/news/x1931758668/Sensata-workers-protest-as-time-runs-out
[embed=425,349]http://youtu.be/grQTuIYnreg[/embed]
I don't like to see people lose their jobs, or to see jobs go overseas. I don't like Romney all that much either. But to quote the article "Bain Capital was formerly run by Republican Presidential hopeful Mitt Romney. " (emphasis is mine). I believe it is needless to bash him with this though. Don't see the point at all.
Quote from: MountainDon on October 19, 2012, 09:08:59 AM
I don't like to see people lose their jobs, or to see jobs go overseas. I don't like Romney all that much either. But to quote the article "Bain Capital was formerly run by Republican Presidential hopeful Mitt Romney. " (emphasis is mine). I believe it is needless to bash him with this though. Don't see the point at all.
In addition, Mr. Romney's generous retirement agreement ensures that he continues to profit from the deals and decisions that Bain makes. He owns about $8 million worth of Bain funds that hold 51 percent of Sensata's shares. If Sensata saves money by closing the Freeport plant, that could add money to Mr. Romney's trust accounts, now or after the election. (http://takingnote.blogs.nytimes.com/2012/07/18/bain-never-left-romney/)
Well, just don't complain about profit in any form and a depressed economy. The focus needs to be an expanding GDP, not who's getting what. Want fair? Just go to Haiti---everything's fair there, no one has anything. If someone gets a little extra, all hell breaks loose.
Just how does sending a complete factory and 170 jobs to China increase the US GDP ?
Don't care.
It is hypocritical for any Obama supporter to care as well, considering that Obama has a larger pension, and is also invested in Chinese companies.
So what?
Reference : http://www.politifact.com/wisconsin/statements/2012/oct/17/mitt-romney/romney-says-obama-also-has-investments-chinese-com/
I think a better question is, why is it cheaper to do business overseas? When Obama requires employers to provide medical insurance for every employee, who can afford to stay? When all the red tape and over regulation makes it impossible to business here, who would stay? When the Occupy crowd tries to send a message that profit and industry are bad things, and corporations are evil, why should they stay?
Why don't you start your own business and run it however you want to run it? If you have a passion and a good idea, and can get over all the bureaucratic nonsense, you can hire all the people you want and pay them whatever you want. Build your own castle, don't just tear down someone else's
I WANT a leader that has experience streamlining things. If our government were run more like a private business we would be far better off.
"If our government were run more like a private business we would be far better off"
I tend to agree
The average Politician's usual major selling point is that he can talk- usual alot
the people in charge of a country should at least have the same skill set as a large corperation -
So he has the nessesary skills to at a minimum balance the books !
The UK is in the same sorry state - giving away millions to the latest dictator in africa- supporting millions of the EEC's poorest people- by giving them free housing and money.
The two worst cases recently was a Romanian begger in London - free housing -free money and he has no legs- what exactly did he bring to the country !
Oh and the Tali wack job the bleeding hearts stopped us deporting to you friendly chaps for years costing millions.....his wife lives in a 1.2 million pound house paid for by the tax payers..........sorry she should have left when we finally slung his hook( both of them) ;D
mean while Mr Joe average is footing the bill.
Sadly like the US the government is spending more than it earns..............the house of cards ready to fall
when they check the vaults and find only IOU's stacked up
I think my garage will have have a shelter built under it !
WP---I realized I didn't answer your question, and I dislike it when people do that to me---sorry, I'll answer now, how moving a company overseas can still grow the GDP. (It's funny that no one gives Bain credit for creating Sensata in the first place by the way)
I invested in Nokia. THey build stuff in Finland and sell it in Saudi Arabia, and every dividend I get $10 mailed to me from overseas. The GDP just grew by $10. Most of it will be spent domestically, and it will trickle down to anyone that has something I value more than that $10 in my pocket. Government will take about half of it though, keep most of it for people that run 'programs', and a little bit of that will make it to people who actually need it----far less of it than if I decided for myself who to help with it
I thought Romney divested himself from Bain.
Quote from: Native_NM on October 19, 2012, 10:21:16 PM
I thought Romney divested himself from Bain.
I think his holdings are in a blind trust. In other words he still has them he just doesn't have control of them.
I get so tired of the premis that wealth is bad and people who are successful are demogogued. I think anyone who has the desire and the work ethic can achieve success. I spoke to an electrical contractor yesterday who was complaining about his crew not wanting to get into a muddy ditch. He said he had several workers from a minority that all he had to do was tell them what needed done and they jumped in and got the work done. They were happy to have the work to feed their families and it didn't matter what he asked them to do they did it. He said he just didn't understand why people don't want to work when there are plenty of people behind them that would gladly have their job. I have a high school education and I have achieved a great deal of sucess, but all my life I have worked hard and done things I didn't necessarily want to do but it was what my employer needed done so I did it. I learned a lot about people along the way and I learned how to grow the business I worked in. I could very easily settled for something less and been fine but I wanted more for my self and my family so I worked long hours (still do) and was able to achieve what I consider success. No one can take that from me because I earned it. Why is that a bad thing in some peoples eyes?
Mitt left Bain Capital several years ago, whether he still profits from their operations, I don't know. He has a blind trust that is controlled external of himself.
I am sorry for their loss of jobs and the tax base that helps the community.
We have a saying among programmers (db and equipment plc controls) that if you ever connect up and make one change to a piece of equipment, it is yours the rest of your life. If anything ever goes wrong, whether you had anything to do with it, you get the blame, automatically. That is why we rarely do programming changes on a Friday! Touch it once and its yours.
We also have a saying that if we broke it, who better to fix it. If President Bush and the conservatives broke it, its apparent that the liberals can't fix it, so let's go with the conservatives and attempt to right the ship once again.
At least it is a 50-50 chance, with the current administration it is going to get exponentially worse.
There are no checks and balances with a second term for this man, I will say this, if he does get re-elected, I would like to buy stock in the company that furnishes his pens/ink.
Quote from: flyingvan on October 19, 2012, 07:23:08 PM
WP---I realized I didn't answer your question, and I dislike it when people do that to me---sorry, I'll answer now, how moving a company overseas can still grow the GDP. (It's funny that no one gives Bain credit for creating Sensata in the first place by the way)
I invested in Nokia. THey build stuff in Finland and sell it in Saudi Arabia, and every dividend I get $10 mailed to me from overseas. The GDP just grew by $10. Most of it will be spent domestically, and it will trickle down to anyone that has something I value more than that $10 in my pocket. Government will take about half of it though, keep most of it for people that run 'programs', and a little bit of that will make it to people who actually need it----far less of it than if I decided for myself who to help with it
"I realized I didn't answer your question, and I dislike it when people do that to me---sorry, I'll answer now"
I think your anecdote about Nokia does not address this issue of 'vulture capitalism' reducing the US GDP at all.
Sensata in Freeport was operating at a profit and had been increasing its sales. Under the current US economy this was clearly a well run company. The closing of the plant and firing of the people that helped create this successful buisiness generated a quick profit for Bain and reduced the US GDP. This quick profit for Bain will not trickle down into the economy at all. In fact a large part of it will probably go to the Caymans or some other off shore haven.
I fail to see how this is a good or ethical thing.
"(It's funny that no one gives Bain credit for creating Sensata in the first place by the way)"
Because Bain did not create anything --- Sensata was formerly part of Honeywell. Honeywell sold this division to Sensata in 2010
Bain Capital bought controling interest of 51% of Sensata in 2011 and announced it would close Freeport factory and move it to China shortly after.
This turns a nice quick profit for Bain and puts 170 people out of work and reduces the US GDP by some 140 million
I have related my company's experience with Saul Steinberg who tried unsuccesfully to control the company I worked for, Spectra-Physics back in the 80's -- 5 years of poor to no raises and stress of wondering if you had a job. Although it was much better than if Steinberg had gotten control -- he would have sold the company real estate, patents, and divisions to competitors and walked away with a nice $15 million -- he told this to Herb Dwight the founder and CEO of S-P
Pulitzer Prise winner, Hedrick Smith discusses some these issues and others in his book "Who Stole the American Dream ?" here:
(sorry it is C-span and b not embeddable) about an hour but worth the time IMO
http://www.c-spanvideo.org/program/Stolet
Blind trust, yeah right
Here in Romney's own words
[embed=425,349]http://youtu.be/HD_sutOpCws[/embed]
Justice Lewis F. Powell
http://reclaimdemocracy.org/powell_memo_lewis/
So did Powell's political views influence his judicial decisions? The evidence is mixed. Powell did embrace expansion of corporate privilege and wrote the majority opinion in First National Bank of Boston v. Bellotti, a 1978 decision that effectively invented a First Amendment "right" for corporations to influence ballot questions.
http://reclaimdemocracy.org/boston_v_bellotti/
Quote from: ChuckinVa on October 20, 2012, 06:22:56 AM
I get so tired of the premis that wealth is bad and people who are successful are demogogued. <snip> Why is that a bad thing in some peoples eyes?
Chuck, thanks for having a good work ethic. We need more folks like you.
It is purely hypocritical. There are way, way too many folks... some represented in this thread, who are perfectly fine with their own financial advances, but are insanely jealous of those who either earn or inherit wealth beyond their own.
Especially if the person who is wealthy has political ideals differing from their own.
The whiners will use products and services from overseas, or from big corporations...Nokia, GM, Monsanto, GE, Pfizer, Apple, Walmart, Samsung, whatever....and then wail about how unfair these corporations are, and how evil the management is. Or they will pick someone successful and will crucify them for being successful. Hypocrisy.
Have you ever noticed, that those who do so, seem to focus their attack on those who are identified as conservatives? For instance, have you ever heard them whine about the billions that Soros has made? Or the wealth of Pelosi, Reed, Kennedy, Edwards, Kerry etc? Nope.
These people who whine also don't have the chops to build their own companies up into wealth. They are either too lazy or don't have the skill set. They may have tried and failed. If so, that just reinforces the fact to themselves that anyone else who succeeded must have been crooked (except successful liberals) because otherwise it would be an admission that they personally don't have what it takes.
The next time you hear someone gripe about the financial success of others, you can bet on two things:
1) The person whining is a liberal.
2) They are bitching about a conservative.
Hypocrisy. The lifeblood of liberalism.
Chuck---I'm with you 100%. I've asked liberal friends the question--If you could make it so the poorest in our country had 10% more, but in the process, the richest had 300% more would you do it? The answer is always 'No!' because you've increased the income gap. The false notion that you make the poor richer by making the rich poorer is a fallacy. Liberals look at overall wealth as a fixed number we all have to greedily grab shares of, and the wealthy grabbed more than their share. In reality, new wealth is made, created, not stolen. Trickle down economics works everywhere except the liberal media, who panned it and convinced people that wanted to be convinced that it failed (Reagans policies led to a boom that continued into the Clinton era)
Here's the easy proof---Why is the GDP higher now than it was when George Washington was president?
ALL profit, regardless of the nation or system, is made through capitalism. The difference is where it's allowed to take place. In a free society, everyone has the opportunity to take a raw material and turn it into something marketable. When we, as a society, hunt down and destroy the very people that are best at this, our economy suffers. When we punish producers to re-distribute it to the non producers, the GDP spirals down and there is less for everybody.
Glad you mentioned China.....Liberals would have you believe most of your income goes there. For every dollar the average American earns, 2.7 cents goes towards products produced in China. Of that 2.7 cents, most of it stays here in retail mark up, shipping costs, and advertising.
Interesting Chart
Note that from 1948 to 1973 or so Wages and productivity tracked very closely
Also note that this time frame was ' virtuous cycle' that lifted the economy and the wealth of everyone especially the middle class
Ever wonder what happened in the mid 70's until the present -- this is not an accident
Hedrick Smith made some interesting discoveries
(http://www.epi.org/files/2012/ib330-figureA.png.538)
Quote from Lewis Powells 'memo'
It should be noted that this was written in 1971. Compare to the above graph
I would agree with his assessment of business and corporations from looking back the previous 20 years from 1971
"The traditional role of business executives has been to manage, to produce, to sell, to create jobs, to make profits, to improve the standard of living, to be community leaders, to serve on charitable and educational boards, and generally to be good citizens. They have performed these tasks very well indeed."
Quote from: Windpower on October 20, 2012, 09:33:48 AM
Ever wonder what happened in the mid 70's until the present -- this is not an accident
That would be plant automation, brought to you by the microprocessor.
Oh... and BTW, your chart is adjusted for inflation. That is a graph showing how much more productive we are using automation. Not how much more oppressed we are. Find a wage graph that is not adjusted for inflation and post that.
"Trickle down economics works everywhere except the liberal media, who panned it and convinced people that wanted to be convinced that it failed "
What a bunch of nonsense!
And when did capitalism become a religion? A a religion so sacrosanct as to be above criticism. When did we give up our rights to question someones business practices if we feel those business practices are immoral, unethical and ultimately distructive to the nations economy?
I'm tired of all the conservatives "whining" about how they can't handle anyone questioning their cult like belief in their political ideology.
I have a masters degree in economics, and have been extremely successful in business. And I find Willards business practices repugnant. Does that mean that I don't believe in the free market or capitalism? Does that mean I'm a socialist for merely questioning if those business practices are ethical, or moral or whether they should be applied to how our gov't operates? I think not.
It sounds to me like the conservatives want to squash the conversation before it gets started because they know what a true examination of Willard's businesses practices would reveal.
I've done a great deal of research into Willard's business background, and I have the education and business experience to understand what he did to make himself rich. It's not a pretty picture. And since he is holding his business experience up as his major qualification for being elected president, why shouldn't we critically examine that business record?
Of course it is adjusted for inflation as it should be
BTW microprocessors weren't in general use until way after 1971 call it 1980's
In fact I worked on instruments made in the late 70's that had to use shift registers -- microprocessors didn't exist yet
and are you implying that there were no automation improvements during the 1948 - 1971 time frame, you may note that the productivity curve is very close to a straight line
Quote from: Windpower on October 20, 2012, 10:50:43 AM
BTW microprocessors weren't in general use until way after 1971 call it 1980's
Wages for hourly workers should exactly track inflation. If they are not contributing to an improvement of a process, and merely reflecting state of the art (at best) they deserve no more. Accelerated pay should go to innovators and risk takers. Those folks are typically not hourly workers.
PLCs of some sort had been implemented in relay type ladder logic for a long time. Formalized in the 60's, and they exploded in popularity in the 70's with the development of MSI and simple processors.
Your chart is a tribute to the efficiency of automation, in which hourly personal were not required as much in terms of production. Nothing else.
Quote from: archimedes on October 20, 2012, 10:47:25 AM
When did we give up our rights to question someones business practices if we feel those business practices are immoral, unethical and ultimately distructive to the nations economy?
When your criticisms are directed
primarily at conservatives. That's when.
As an informed, educated American citizen I reserve the right to exercise my free speech rights any way I chose. I guess we all can't be as "fair and balanced" as Fox News. :o
Quit your whining.
P.S. And when are your critcisms not directed entirely at liberals (whatever that is) I guess it's anyone who disagrees with you.
Quote from: archimedes on October 20, 2012, 02:36:37 PM
As an informed, educated American citizen I reserve the right to exercise my free speech rights any way I chose. I guess we all can't be as "fair and balanced" as Fox News. :o
Quit your whining.
P.S. And when are your critcisms not directed entirely at liberals (whatever that is) I guess it's anyone who disagrees with you.
Well, now you are being downright funny.
Your sentence one, you demand to exercise your free rights
any way you choose.
Your sentence three, you tell me to quit whining.
All in a thread in which I accuse liberals of hypocrisy. Thank you for the reinforcement.
I never said you shouldn't be vocal. I just pointed out that liberals tend to be hypocritical whenever they do so regarding wealth.
When you start vilifying Kerry/Heinz, Soros, John Edwards, and other liberals for being mega-rich, or any liberal for wanting a pay raise, then I'll back off a hypocrisy label.
You won't be a hypocrite any longer, but you'll still be wrong re your stance on capitalism. One step at a time I guess.
I was being facetious because you brought up the whining charge earlier. All you (and some others) ever do here is bitch and whine about liberals. When do you ever offer a balanced critique? Humm? So does that make you a hypocrite? Obviously your own hypocracy completely eludes you.
There is nothing wrong with being rich, by most standards I am rich. Most Americans agree with that statement, even liberals. But [b]how[/b] you made your money does matter. Especially when you are using your business experience as the primary qualifier for you being elected to public office.
Being rich is not bad, but how you attained that wealth matters. It really is quite a simple concept. One you apparently can't or won't grasp.
You seem totally unwilling to accept the concept that people, of good will, could possibly disagree with you.
Anyone who disagees with you must hate the rich, or be resentful, or be a liberal, or whatever pejorative you decide to sling there way.
You want to read a great article about who Willard really is;
http://www.rollingstone.com/politics/news/greed-and-debt-the-true-story-of-mitt-romney-and-bain-capital-20120829
Lessee.... did I start the attack on a liberal figurehead here? Nope. Only spoke up to defend a conservative, and to show that the attack on that conservative was hypocritical by definition.
I think you are confused by the definition of hypocrite. It is not hypocritical of me to defend capitalism or the pursuit of wealth by others. It is also not hypocritical of me to bash liberalism and to point out its many, many flaws. It would be hypocritical of me to pick a specific flaw that is shared by both sides and to only bash liberals for it. I try my damndest to not do that, and if I do, I'll acknowledge it.
Any wealthy person with a large radius of influence is going to have some unpalatable things that have happened within that radius. Every single one. However, that does not mean that person had direct control (or any control) over the situation.
I am not naïve and I also know that plenty of capitalists are dirty and that power is easily taken advantage of. But asserting a person is dirty just because they are a successful business man is wrong. Even more wrong is to only apply that filter to conservative figures and to completely ignore wealthy and successful liberals.
Read that last sentence again.
BTW, that's a slimy trait you displayed... to make a clear statement, get hung on one's own petard, and they to say "that's not what I meant". "I was being facetious."
Yeah... right.
This is but one clip from the Rolling Stone article about Mittens ( as Celente calls him )
one of many examples of a relatively unbiased left/right tone of the article (emphasis mine)
"The private equity business in the early Nineties was dominated by a handful of takeover firms, from the spooky and politically connected Carlyle Group (a favorite subject of conspiracy-theory lit, with its connections to right-wingers like Donald Rumsfeld and George H.W. Bush) to the equally spooky Democrat-leaning assholes at the Blackstone Group."
And here is another clip which dispells the 'all corporations are evil' nonsense
"In the old days, making money required sharing the wealth: with assembly-line workers, with middle management, with schools and communities, with investors. Even the Gilded Age robber barons, despite their unapologetic efforts to keep workers from getting any rights at all, built America in spite of themselves, erecting railroads and oil wells and telegraph wires. And from the time the monopolists were reined in with antitrust laws through the days when men like Mitt Romney's dad exited center stage in our economy, the American social contract was pretty consistent: The rich got to stay rich, often filthy rich, but they paid taxes and a living wage and everyone else rose at least a little bit along with them."
Which brings back my point about workers that have spent their entire working life (like me) have not shared the wealth since the 70's as is shown in the graph several posts back and described eloquently by Smith talking about his book "Who stole the American Dream ?"
Quoting from 'Rolling Stone' as an unbiased source???? Next you're going to claim Nancy Pelosi is a moderate.
Fly, you have a very annoying habit of misquoting me
I said "one of many examples of a relatively unbiased left/right tone of the article"
and then pointed out that the author called people in the Blackstone group "spooky Democrat leaning ASSHOLES" ----
and I never even brought the congress-whore Pelosi into the conversation
Quote from: Windpower on October 20, 2012, 09:33:48 AM
Interesting Chart
Note that from 1948 to 1973 or so Wages and productivity tracked very closely
Also note that this time frame was ' virtuous cycle' that lifted the economy and the wealth of everyone especially the middle class
Ever wonder what happened in the mid 70's until the present -- this is not an accident
Hedrick Smith made some interesting discoveries
(http://www.epi.org/files/2012/ib330-figureA.png.538)
Personal computers? duh!
Quote from: Native_NM on October 23, 2012, 06:50:34 PM
Personal computers? duh!
I do not understand
Are you saying that personal computers made Americans stupid ?
Certainly you can't be implying that the very expensive and largely useless personal computers of the 70' s and 80's disrupted the ecomomy
by making workers extremely 'productive'.
In fact the productivity increase in the graph is essentially a straight line. Productivity increased linearly from the end of WWII until 2010
What changed in the 70's was the the wages paid no longer kept pace with the increase in productivity. The middle class was no longer getting its share of the 'profits' from the increase in productivity as they had from 1948 to the mid 70's
The result has been a predictable decline in the middle class and with it the decline of health of the US economy
The question is: what changed and how do we get back to the virtuous economic cycle that worked from 1948 to 1973 where the middle class gained wealth and fueled the economy by buying things it produced and consuming commodities.
What I'm saying is that personal computers allowed the rank/file workers to become far more productive. Tasks that once required large back-office support disappeared, replaced by a computer. The surplus of labor, partially fueled by the large influx of women into the workplace, lowered wages.
My dad's office in the 70's had a dozen people who handled everything from scheduling, travel, typing, dictation, and similar. Today, there's an app for that. We have 300 employees and one admin assistant who handles everything. We book our own travel, fill out our expense reports online, email instead of memos, etc. etc. etc.....
OK, I think you missed my point about the shift in the graph
The abrupt change occurred in the early to mid 70's -- computers were not a factor at that time -- as you point out from your anecdote of your fathers office in the 70's
The other item was that there is no abrupt change in the increase of productivity from 1948 to 2010
There is a steady very linear increase in productivity ---
Workers shared in this increase in productivity with wage increases along with corporations profitability until
(let's call it) 1974 according to the graph.
The rate of increase in productivity fueled the economy because the 'middle class' had a proportionate increase in their relative wages -- which they spent into the economy.
After 1974 the corporations apparently decided the old 'social contract' (as espoused and practiced by Henry Fords Carnegies and Rockefellers et al) of sharing a portion of their profits with the workers was no longer needed.
The predictable result is the failure of the US economy that now seems to be happening.
Business owners / risk takers have always deserved the lion's share.
Think Henry Ford didn't make some serious coin?
Once again, that chart is a tribute to a boom in efficiencies in the 70's.
We are in a global economy. If you think that wages should have followed that same chart, you know nothing about business. Had hourly wages followed that chart, the average hourly wage would be on the order of $53 an hour.
Think we are losing a lot of jobs offshore now? Think how that would have crippled America.
The real threat to the U.S. is the abundance of people with entitlement attitudes, and politicians who put them on the dole in exchange for their vote.
"Think Henry Ford didn't make some serious coin?"
Of course he did -- He also made the decision to pay his factory workers wages that allowed them to purchase the cars they were making. IIRC they were making the then incredible sum of $5 day. this is about $115 in 2012 dollars. Right at $17/hour
Did it 'cripple' the economy
"Once again, that chart is a tribute to a boom in efficiencies in the 70's."
ONCE AGAIN THERE WAS NO BOOM IN PRODUCYIVITY IN THE 70'S
Can you not understand a simple graph that shows a linear increase in productivity ?
If it is linear there was no boom.
"We are in a global economy. If you think that wages should have followed that same chart, you know nothing about business. Had hourly wages followed that chart, the average hourly wage would be on the order of $53 an hour. "
Germany is in the 'global economy' too. They are not shipping jobs to China and India and their economy and their workers are doing very well.
(Well I do have a BS in Business mangement from a real university)
Actually it would be closer to $38/hr by my calculations
So are you implying then that we should race to the bottom in wages with the slave labor from China et al
Quote from: Windpower on October 26, 2012, 10:02:55 AM
OK, I think you missed my point about the shift in the graph
The abrupt change occurred in the early to mid 70's -- computers were not a factor at that time -- as you point out from your anecdote of your fathers office in the 70's
The other item was that there is no abrupt change in the increase of productivity from 1948 to 2010
There is a steady very linear increase in productivity ---
Workers shared in this increase in productivity with wage increases along with corporations profitability until
(let's call it) 1974 according to the graph.
The rate of increase in productivity fueled the economy because the 'middle class' had a proportionate increase in their relative wages -- which they spent into the economy.
After 1974 the corporations apparently decided the old 'social contract' (as espoused and practiced by Henry Fords Carnegies and Rockefellers et al) of sharing a portion of their profits with the workers was no longer needed.
The predictable result is the failure of the US economy that now seems to be happening.
Actually the computer revolution did begin in the 70's.
Check this chart. Compare an average across decades for both. See that an average productivity line is up and to the right and that the average # of jobs is flat and then declining? Boom in productivity.
http://www.intellectualtakeout.org/library/chart-graph/us-manufacturing-output-vs-jobs-january-1972-january-2009
Output vs. Jobs : "Employment from the BLS (via Economagic), monthly from 1972-2009. In the last 37 years, manufacturing output in real dollars has more than doubled, while manufacturing employment has dropped by more than 26%."
Your hourly wage calculations are off.
What sort of math are you using?
Here is a reference to the average hourly wage in the US as of Sept 2012 = $23.58
http://ycharts.com/indicators/average_hourly_earnings
Using your graph, if hourly compensation had tracked productivity and grown at the same rate, then
$23.58* (254.3/113.1) = $53.02 per hour.
Also, your argument that Henry Ford's employees made more is full of holes.
That $5 a day relating to $17 an hour now? Nope. The UAW rates are way, way higher. Heck, even the AVERAGE rate in the US at $23.58 is way above $17 an hour. What was your point? That they are getting paid less per hour now? Wrong.
Think they had nice, juicy benefits back working for Ford? Pensions? Healthcare? Vacation time?
In 2006, the average UAW worker had hourly compensation including benefits of almost $40 an hour. Rougly $28 per hour rate plus $10+ in benefits.
http://answers.yahoo.com/question/index?qid=20070924073107AAuGk8O
Which, of course, is why that industry is pretty much out of the country or going bankrupt. Or in the case of GM, both.
Hey... I have a cool idea. Mortgage your house, put your life savings into a startup company, and pay your employees at $53 an hour. Let us know how that goes a year from now.
Your chart is a productvity chart. Not a wage repression chart.
Let's hope Romney can bring profit like that to the US. We'd all be better off.
P.S. Depending on which bit of reporting you believe, the auto manufacturers say that the rate including benefits is more like $70 an hour, primarily that the pension benefit adds about $30 in burden alone. I'm not sure I buy this, so I used the more conservative $10 per hour that liberal reporting likes to use.
http://www.heritage.org/research/reports/2008/12/uaw-workers-actually-cost-the-big-three-automakers-70-an-hour
$5/day = 0.63 per hour. Year: 1914
Fast forward 100 years. At 2.5% inflation = 1.025^100 = 11.81 x $0.63 = $7.44 per hour. Sounds about like minimum wage.
At 3.5% inflation, 1.035^100 = 31.19 x $.63 = $19.65 per hour.
Depending on which numbers you believe, the long-term inflation rate is between 2.5% and 3.5% over the last 100 years. Assume 3.5%: $5 a day then is about the same as $19.65 an hour now. Now compare that to the average hourly UAW rate today.
Remember that the $5 did not include healthcare, pension, or even FICA match.
Suggest you revisit that argument....
"Cumulative Percent Change Since 1948"....That graph gets lots of forwarding even though it doesn't stand up to scrutiny. Lawrence Mishel produced it to bolster his own point in his own article. --"Source: Author's analysis of unpublished total economy data from Bureau of Labor Statistics, Labor Productivity and Costs program and Bureau of Economic Analysis, National Income and Product Accounts public data series". The article was later rejected by peer review, since his data came from 'unpublished' sources.
Lawrence Mishel is president of The Economics Policy Institute, a liberal think tank devoted to trying to convince people liberal economics work, even though they fail all over the world. Mishel has been caught playing fast and loose with data in the past. Can you provide an unbiased source showing an increasing gap between hourly compensation and productivity? How much of that productivity falls on machines now instead of manual labor? How is productivity quantified?
Van, you nailed it.
I'm guessing the answer to your first question is no.
Quote from: flyingvan on October 26, 2012, 05:45:53 PM
Can you provide an unbiased source showing an increasing gap between hourly compensation and productivity?
Yes.
http://www.bls.gov/opub/ted/2011/ted_20110224.htm
Thanks for sharing that---it IS a good source, and contradicts the other chart by a very significant margin. The first chart shows productivity up 250% since the 70's and compensation up 113%. The one you posted shows "Average Annual Percent Change" as 2.5% and 1.1% respectively. I'd still like to know if we're comparing apples to apples and couldn't find data--Is productivity measured by number of units produced? If so, the 'gap' would arise due to more efficient production lines and less individual effort needed to produce whatever it is you are producing.
This is not a bad thing. When sewing machines were invented, seamstresses protested---they thought they'd be put out of the only work they knew, sewing shirts---they even wanted sewing machines banned. They could, on average, sew one shirt a day. Most people owned two shirts--one for work, one for church. (Bear in mind deodorant wasn't popular yet, too) Once the new technology was embraced though, the same seamstresses produced dozens of shirts per day. The cost of shirts fell to the point everyone could afford a closet full. People that didn't embrace the new technology suffered, but Singer did great, as did J.C. Penney, and the cotton industry. Everyone's standard of living went up. If you graphed the seamstress occupation thus same way, if she made 24 shirts a day instead of 1, it would be a 2400% increase in productivity. A 113% increase in income (more than double!) is a pretty darned good raise.
Quote from: flyingvan on October 28, 2012, 09:53:32 AM
Thanks for sharing that---it IS a good source, and contradicts the other chart by a very significant margin. The first chart shows productivity up 250% since the 70's and compensation up 113%. The one you posted shows "Average Annual Percent Change" as 2.5% and 1.1% respectively. I'd still like to know if we're comparing apples to apples and couldn't find data--Is productivity measured by number of units produced? If so, the 'gap' would arise due to more efficient production lines and less individual effort needed to produce whatever it is you are producing.
This is not a bad thing. When sewing machines were invented, seamstresses protested---they thought they'd be put out of the only work they knew, sewing shirts---they even wanted sewing machines banned. They could, on average, sew one shirt a day. Most people owned two shirts--one for work, one for church. (Bear in mind deodorant wasn't popular yet, too) Once the new technology was embraced though, the same seamstresses produced dozens of shirts per day. The cost of shirts fell to the point everyone could afford a closet full. People that didn't embrace the new technology suffered, but Singer did great, as did J.C. Penney, and the cotton industry. Everyone's standard of living went up. If you graphed the seamstress occupation thus same way, if she made 24 shirts a day instead of 1, it would be a 2400% increase in productivity. A 113% increase in income (more than double!) is a pretty darned good raise.
You're incorrect, the BLS report ties to the previous graph. The graph shows changes since 1948, not since the 70's
I really compared the two and couldn't make 2.5% = 254% no matter how I looked at it. It's a red herring, anyway---among the working, do you believe we work longer hours and suffer a worse standard of living than in the past? Do you think the non working have a higher, or lower, standard of living? From what I can find, compared to the 1940's, we work 11 hours a week to meet the 1940 standard of living, instead of the 40 they had to. Would you agree hours worked/quality of life are better metrics?
Here is a bar graph from the U S Bureau of Labor Statistics (is that a 'better' source for you ?)
Notice that in the time frame 1948 to 1973 wages pretty much kept pace with productivity lagging only .2 % for this 25 year period
(http://www.bls.gov/opub/ted/images/2011/ted_20110224.png)
also notice that starting in the mid seventies wages started to really fall behind productivity at a faster rate
.2 % for six years 1973 - 1979
.9 % for eleven years 1979 - 1990
.6 % for 10 years 1990 - 2000
This is exactly what the other graph shows
And it is exactly what I have been saying: wages/productivity has made a large change for the worse to the middle class since 1974
Inflation:
Let's ask the people that own the money system what the inflation rate is shall we
http://www.clevelandfed.org/research/Data/US-Inflation/inf_calculator.cfm?first=5&year1=1913&year2=2011
$ 5 per day in 1913 equals an inflation adjusted $113.80 per day in 2011 or $14.23 per hour, about twice the current minimum wage
"Actually the computer revolution did begin in the 70's."
and you are correct
But there is a world of difference between "begin" and make any peceptible difference in productivity
The PC world of even 1980 showed world wide sales of about 500,000 units and almost half of those were Radio Shack TRS 80's (or Trash 80's as they were 'fondly' called)
200,000 TRS 80's in the world most certainly did not cause a boom or revolution in worker productivity
(http://ts3.mm.bing.net/th?id=I.4568737905050042&pid=1.7&w=204&h=141&c=7&rs=1.jpg)
What about 1985 (11 years after wages dropped relative to productivity in 1974): About 3,000,000 PC's sold in the world. Again, the impact on averge worker productivity was very small
(interesting history/chronology of PC's here starting with the Hewlett-Packard HP 35 pocket calculator (rumored to be designed to fit Bill Hewlett's shirt pocket) which sold for $395 or about $2150 in 2012 $)
(http://upload.wikimedia.org/wikipedia/commons/thumb/0/0e/HP_35_Calculator.jpg/220px-HP_35_Calculator.jpg)
http://www.islandnet.com/~kpolsson/comphist/comp1972.htm
bottom line: PC's didn't have any noticable effect on worker productivity in the 70's
so yeah, the 'computer revolution' began in the 70's but had no dramatic impact on producivity for a long time -- well into the late 80's and 90's -- 10 to 15 years after corporations decided pay less money for more productivity in the mid 1970's
A legitimate source that shows differing data. But it shows diversion between productivity and wages.... OK......
So what is the point of this argument? That pay raises should be MORE than inflation for doing the exact same work?
Why? A sense of entitlement? BS!
If you want to get paid more, take some risk, educate yourself and learn new skills, or work harder. If not, then an inflation raise is exactly where you need to be.
Workers have not changed. The method used by a single person to carry something from point a to point b is exactly the same as it was 10,000 years ago. Factories now purchase capital equipment to assist productivity. Why should the hourly worker be paid more when it is the owner of the factory who is increasing the productivity through capital improvement?
PCs did not effect productivity until later, but they continued to fuel the diversion in the 80's.
What has changed is factory automation. The use of microcontrollers, microprocessors and semiconductor devices built upon the relay ladder logic that was exceptionally expensive.
http://www.jimpinto.com/writings/automationhistory.html
http://en.wikipedia.org/wiki/Automation
From above :
"The term automation, inspired by the earlier word automatic (coming from automaton), was not widely used before 1947, when General Motors established the automation department. At that time automation technologies were electrical, mechanical, hydraulic and pneumatic. Between 1957 and 1964 factory output nearly doubled while the number of blue collar workers started to decline.[2]"
The single biggest contributor to these diverging lines is Moore's law.
I'm curious... is this chart any different in any other flourishing country? It would be interesting to see what Germany's chart looks like, as well as Greece's.
Here. This is interesting. Unit labor costs of some Euro countries compared to Germany. Note that this is total labor, not hourly wages.
Notice anything unusual about Greece?
Source : http://www.levyinstitute.org/pubs/wp_651.pdf
(https://i133.photobucket.com/albums/q46/nm_longshot/BLOK/europelabor.jpg)
I'm still trying to figure out what this has to do with Bain and sending jobs offshore.
If we want to keep jobs here, we have to make it MORE profitable for our companies who are here. Not less. We should celebrate that US businesses experience success while allowing non-exempt employees to make wages that keep up with inflation.
If they want to earn more, we have great post secondary education available to them.
Quotebottom line: PC's didn't have any noticable effect on worker productivity in the 70's
PC may not have, but computerization sure did. I was programming numerically controlled cutting machines in the late 70's. Sure was inprovement from cross slide turntables.
Eric
Of course it was an improvement. There were all kinds of improvements in productivity from 1948 right up to the present. There were tremendous improvements in the US infrastructure l(largely paid for by US tax payers) 4 lane highways, air travel, almost unlimited electric power, education, etc etc all of this helped productivity.
What changed in 1974 is that this productivity increase no longer was shared with 'workers'
the graph shows a continuous LINEAR improvement in productivity from 1948 to 2010 -- there is no big bump or increase from microprocessor controlled machine or anything else that I can see -- just a continuous fairly constant improvement.
What that means is companies increased their profits and workers wages increased as well -- at least until that stopped in 1974.
I find it sad that many people in the US continue to lick the boots of the corporations that are sending their jobs out of the US and sucking the life out of the economy and ruining the future of our children.
Sad
Quote from: Windpower on October 29, 2012, 01:47:40 PM
What changed in 1974 is that this productivity increase no longer was shared with 'workers'
If a company invests in automation that allows the worker to be more productive without working more, why does that company owe the worker any additional compensation?
The PC is only one portion of the semi-conductor revolution. Mainframes increases back-office productivity tremendously. Banking was revolutionized in the 60's and 70's.
Embedded electronics also increased productivity.
Quote
What changed in 1974 is that this productivity increase no longer was shared with 'workers'
If the company is co-op then there may be good reason to share more with workers. If it is a privately or publicly held for profit organization then the owners and shareholders get to share the increased profits. They also get to share in any losses. Hmmm... if the non co-op company looses money should the workers have to pay back some of their salary? ???
Windpower you are clearly clueless! What is your experience in running a business? So, when your competition puts you out of business as your costs are way too high, especially if you are in an area in which you are mobbed into using union employees, do you just close shop or do you look for an alternative? In being consistent and not being a hypocrite, look at the labels of the last 20 things you bought tell me that no less than 10 of them are from China.
In further disproving your hypocrisy, please tell me that if your candidate did not directly appoint a CEO that is moving jobs to China faster than he can hand out food stamps. take a look at your own Obama appointed CEO of GM's in China, please reconcile for me your original comments vs an entity that Romney formerly operated.
http://www.youtube.com/watch?v=Lvl5Gan69Wo
Huge
You seem kinda new here so I will spell this out
I AM NOT A SUPPORTER OF OBAMA
So please don't call me clueless or a hipocrite
The beginning story of this post was that Bain Capital (from which Romney still profits) sent 170 jobs to China closing a company that was profitable and increasing its sales