Bottom falls out of US manufacturing wages
From The Economic Populist: Along with the loss of -3.3 million Manufacturing jobs over the last seven years, a report just released by the BLS shows average hourly compensation for US Manufacturing jobs fell from the world’s 4th highest in 2000 to the world’s 14th highest in 2006. Japan’s Manufacturing jobs were the 2nd highest paid in 2000 but plunged to rank only 16th in 2006.
Germany, which had the world’s highest-paid Manufacturing workers in 2000 fell to second place behind Norway in 2006. Manufacturing jobs in the Euro-Area countries as a group paid far less than in the US and Japan in 2000 but paid far more in 2006.
The BLS data is in $US dollars at exchange rates current for each year.
I don’t think this is anything new to workers. Not only have the wages not kept up with other nations but haven’t kept up with “real inflation.”
You can’t have consumers constantly refusing to pay prices with taxes and compliance costs hidden in them when they can buy imports at much lower price.
Our goods and services could be as much a 20-30% lower with tax and compliance reform.
When you tax business, you force consumers to choose between higher priced U.S., tax included goods, and foreign goods with much lower prices even after shipping the stuff half way around the world, adding 2 or 3 more middlemen and adding all the markups along the way.
Bottom line is that with socialist nations in Europe cutting taxes on business, we can’t even compete with nations with higher wages like those 13 ahead of us.
All the gripes about, “we can’t compete with low wage nations” is lost when you can’t even compete with nations that pay more. No wonder democrat Charlie Rangel says we need to cut taxes on corporations.
Now you see why Romney says we are headed for a “France” type nation.
Instead of that stupid stimulus “package”, the money should have gone into a US toy manufacturing plant to supply safe toys for our children and jobs to our CITIZENS (only those who actually belong here).
We had those toy plants here and U.S. consumers wouldn’t pay the prices necessary to have safe toys and good wages because the taxes and compliance cost for collecting taxes from us through business tax, added 35% to their price.
Why would a consumer want to pay 35% more for a “safe” toy when they can buy a “cheap” toy they think is safe because they bought it in a U.S. store?
When you have consumers that only focus on price and even buy the competitor’s products even when it competes with the company they work for, you aren’t going to get business back here safe or not.
Are you kidding me? Kids today have more toys than they could ever play with and lead causes permanent neurological damage.
Obviously, you do not have grandchildren. We built a dollhouse and painted it ourselves and my husband made the furniture. 35% more for a US made toy would have been a no brainer.
That is because you are a concerned parent. The majority in this nation aren’t that concerned over anything but price. Those companies were here. They left. They are gone because they couldn’t sell enough to stay in business.
Most people think a toy they buy at Kmart, Target, or any other store in the U.S. is safe. They don’t even look to see where it is made. When is the last time you saw people looking a the “made in” label on a toy. Their kid brings it to them and says “buy” and they buy because the kid wants it.
Do you know how few people even know lead is in some paint. For that matter we still have cities with lead pipes in their water systems and they don’t have the money to find them and replace them.
You are dealing with a population that doesn’t have the common sense needed to even stay out of debt to such a degree they can’t live a month without help from the government.
This isn’t about safety as much as a nation that doesn’t care enough to educate themselves on anything important. How can they make decisions on safe toys when the don’t even look at the labels of where they are made. Or will buy the competitors products of the company they work for or re-elect politicians that they know are corrupt because they “bring home the bacon.”
Until this nation hits bottom, voters are not going to do anything that jeopardizes “self,” and asking government for more and more instead of educating themselves and protecting their families from many things, not just lead in paint.
Screw the toys!
I would rather have had the government INVEST the $168 billion in energy research.
He who controls the energy controls the future. Our nation lacks a comprehensive energy policy and it’s about to bite us in the ass.
Up here in Alaska we had a representative from Sinopec present a natural gas project to our legislature this past week.
The representative told the legislators that Sinopec will build the pipeline, the natural gas liquification plant, 20 tankers to transport the LNG. He said that Sinopec is not interested in owning or managing any of these assets after they are built. Alaska can run the operations, employing Alaskans. All Sinopec wants is a contract that gives them rights to purchase 100% of the natural gas (minus a small amount for Alaskans to use domestically). They even agree to pay whatever the prevailing fair market prices are. This approach would mean NOT transporting this natural gas down to the lower 48 (through Canada).
This should be sounding alarms in everyone’s heads. The race is on to secure energy reserves, and it won’t end peacefully.
The federal government just held the Chukchi Sea lease sale this past week. Federal program managers expected the top bid to be somewhere around $60 million. The top bid came in at $2.66 BILLION. The energy shortage is on, and most nations know this (even if the citizenry doesn’t).
Not going to happen until we hit bottom. The “not in my back yard” crowd will fight it.
China is building 40 nuclear power plants over the next 15 years. The projects have already started. They know what you are saying is true.
Author after author is warning the U.S. of what you just said and yet, they are quibbling over polar bears who population has risen, not fallen.
Is there risk with energy production? Of course there is. But, there is also no economy without energy and we better wake up soon to that fact.
Wheat prices are hitting record highs as more people moved to plant corn because of the previous run up in it due to ethanol demand. The Canterell oil field we depend on in Mexico is in double digit decline. China, by the way, has also offered a similar deal to Canada to go from the Pacific coast into the oil and gas producing regions of Canada.
80% of the oil reserves are now in “state controlled oil fields of nations like Russia and Venezuela and Iran. Somebody better wake up pretty soon.
Lefthook
That looks like a great website. Lots of good links. Thanks!
Most welcome. I forget how I stumbled across it, but you’re right, it’s a keeper.
Manufacturing workers in the U.S. need to look to the French.
Fed up with the boss? Take him hostage
Hey! Maybe that is what Romney meant in his CPAC speech when he said
quote:
… I am convinced that unless America changes course, we will become the France of the 21st century – still a great nation, but no longer the leader of the world, no longer the superpower.
Source
France is losing a millionaire a day to lower tax nations. Will that happen here too? Will or investors and business entrepreneurs go somewhere with a better business climate? Many already have, so why not more if we continue this trend that has been going on since the 50s.
Mfg. was 30.4% of GDP and now it is about 14%. This is the long slide Romney referred to. It is hard to believe French workers don’t understand that it is their own demands on government that has led to this until you see the same thing going on here.
Romney is full of crap. Maybe he meant that the U.S. will now focus on manufacturing cheese and wine?
As a businessman, Romney did nothing to strengthen the manufacturing base of this nation. In fact his LBO, and capital investment activities did just the opposite. They put pressure on U.S. manufacturers to cut costs (labor), or liquidate their assets.
For all his blathering about the American culture, he fails to identify that the heart of modern American culture is greed. In a market-driven economy the desire for increased wealth forms the basis for all activity (for good or for bad).
Romney was and always will be a rich man’s candidate.
And at the same time as we look at these graphs, we should look at the trend in CEO salaries. It’s the reverse! The CEO’s are so handsomely rewarded that they gladly sell out the “folks” and the Nation to continue receiving their largess!
Capt. Menace, the point isn’t Romney but that finally we have somebody that told the truth. As you know we have been in decline for several decades and moving more toward a democracy like France where so many social policies are decided at the “central government,” level.
That is why France is in so much trouble and workers so unsatisfied with it. That same thing is happening here. Even if we get out of this current downturn, we still face an economic collapse during the “boomer” years.
There is no way out of this without a lot of pain. That is what he is referring to and correct about. It may be a few more years but, that is what we are facing. We will be a 2nd tier nation because we won’t even have the tax revenues we need for basic services and foreign nations won’t loan us enough to cover the short falls.
quote:
In the private sector, health care jobs have risen rapidly during the Bush administration, and now account for 9.5 percent of all jobs in the country, up from 8.3 percent when Mr. Bush took office. Within health care, the fastest growth of any sector was in home health care, where the number of jobs rose 49 percent over the seven-year period, an average of 5.8 percent a year.
Job Growth Where Bush Didn’t Want It By FLOYD NORRIS
Interesting article on where job growth really was besides the 42% tied to the housing boom.
It is hard on Bush, but he isn’t the only one that experienced problems as the article points out
quote:
One of the weakest sectors was manufacturing. The number of such jobs peaked in 1979, when Jimmy Carter was president, and fell in every administration since, with the exception of a small gain in the Clinton years. The decline in the current administration, at a rate of 3.1 percent a year, is the steepest yet seen.
When President Bush took office, nearly 13 percent of American jobs were in manufacturing. In November, that figure fell below 10 percent for the first time ever, and at last measure was 9.95 percent.
==========================
Many have denied we have been in trouble for decades but, if you dig, the evidence is there. Our small burst in “high tech” manufacturing during the Clinton years masked the decline but now, even those jobs are leaving too.
However, as the dollar has fallen some business has found us attractive. Maybe at least that part has hit bottom and starting to recover.
Another good article
Words from the Wise
quote:
Where else does this housing crisis lead us?
It has a lot to go. It still has to drop 20% to 25% to reach more normal levels, or if you prefer, it could wait five years for income to catch up, barring no big recessions. With the housing market gone, people turned to credit cards and with economic times slowing down — whether there’s a recession or not — consumers are going to slow down a lot, are slowing down or have slowed down a lot.
=================
There is a lot of other interesting information in this article.
Don’t Try Catching a Falling Knife
This is basically an article that points to some indicators things are worse than we are told.
If correct, the that means more lays, less tax revenues for cities and states, trouble borrowing, etc.
May not happen and maybe it isn’t Bush’s fault but, guess who is going to take the blame for it. I think this is why McCain is the designated loser for the coming election. Remember, McCain, in the one video, says he doesn’t know much about economics.
So, if the democrats are already trotting that out, I would imagine that if the economy goes bad, the last person they are going to want is person who says he doesn’t know much about economic issues.
Hmmm? More lays? Maybe that should have been “layoffs.” But with time on their hands after the next election, who knows what the GOP will be up to.
Jan, he didn’t tell the truth.
He was desperate for votes and was pulling out all of the stops. I’m sure that by comparing us to France he was hoping to latch on to a few more votes.
Ron Paul is really the only candidate that I have heard who has spoken truth.
You and I agree Jan, the U.S. is screwed. I believe the financial markets crisis alone is enough to put us down for a year or two.
In the not too distant future our government is going to have to start printing money like mad to pay off debt and entitlements… hyperinflation. There is no other exit strategy for our national debt. Same story, different players.
The reference to France was in his dropping out speech
Yes, I agree about Ron Paul. That is why I changed the name of my forum to Ron Paul Tree of Liberty Forum for the campaign.
http://www.phpbbplanet.com/libertytree/
I wanted to give the people on my forum who were mostly supporting Ron Paul a chance to get more of the truth out. I don’t agree that we should drop commitments we have made but we are where we are because of 70 years of foreign policy. Some from no choice due to previous commitments and some that was just plain bad.
But, on economics, Ron Paul agrees we are headed for a very bad time if we don’t make major reforms.
I read economists from a couple different countries and then there is the Von Mises economic articles on this type of expansion. They all agree we are headed for a long and hard period when consumers have to start saving and our nation is affected more by this shift in global power that comes from manufacturing, especially.
But, for those who have heeded the warning of Ron Paul and others over the years, they may find that even during the recession they have the skills and savings and investments to keep doing OK.
The biggest appeal for me with Ron Paul was his economic warnings.
By the way, the other reference was when Romney lost California and realized he wan’t going to win the nomination. But, his finally saying it means it was always there in the back of his mind. Why didn’t he say it?
The main reason is what Obama said when he did. He said Romney was “fear mongering” to scare people into fearing socialism.
Uh, excuse me, Waiter?
Can I get a little perspective over here?
- – - – -
Year of maximum US manufacturing employment: 1979.
No. of Years since 1979 when US manufacturing employment fell:
20 / 29 = 69.0%
No. of Years in previous 28 years (1950-78) when US manufacturing employment fell: 8 / 29/ = 27.6%
Average annual percent change when number of manufacturing jobs is growing:
1950-78: +3.4%
1979-2007: -4.3%
Average annual percent change when number of manufacturing jobs is falling:
1950-78: +1.5%
1979-2007: -2.2%
Conclusion: The economy is transitioning out of manufacturing.
.
- – - – -
Thanks, that’s great.
Which should have been . . .
Average annual percent change when number of manufacturing jobs is growing:
1950-78: +3.4%
1979-2007: +4.3%
Average annual percent change when number of manufacturing jobs is falling:
1950-78: -1.5%
1979-2007: -2.2%
.
Change the + and – signs . . .