Dear American Companies: Here's How to Fix the Economy (unemployment rate, health care, Clinton)
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They will still charge the $27 or maybe charge $23.99 but still have it built in Mexico
This is the major fallacy why companies outsource labor to 3rd world countries. Not so the can sell it here at cheaper prices (they charge what the market will bear) but to maximize profits.
And if the American consumer refused to buy it and instead bought one from a company that did there manufacturing here the problem would fix itself.
I think the point that the article is making and what was so successful for Ford is evident in the last line of the article...
In short, instead of viewing "shareholders" and "customers" as the only two corporate constituencies that matter, Ford introduced the idea that great companies should also serve a third constituency: Employees.
Actually you failed history class because Ford doubled his employees pay because he was spending so much time re-training employees, that he actually saved money by doubling their salary. The average period of time an employee worked for Ford prior to his new pay rate, 3 months.. After, it was over a year, and in order to qualify for the new rate, you needed to work for 6 months..
Fords SELF GREED encouraged him to pay his employees more so he could stop paying to train new employees constantly.
And if the American consumer refused to buy it and instead bought one from a company that did there manufacturing here the problem would fix itself.
This is true in theory and in some cases but Americans are attached or attracted to certain brands.
A perfect example of this is Levi Strauss. When Levis off shored all of their production outside the US many Americans begged and pleaded to bring back production to the US and even offered to pay a little more for their product. Levis are about $40 a pair now? With inflation thats close to what they cost when they were still made here. But Im sure production costs much less.
Eventually Levis did listen and started making certain jeans back in the US but charges 4 times the price of their off shored jeans so for the same style of jean you can either pay $40 or $178.
Ive seen made in America jeans for $50 so Im sure Levis could produce them here for around the same price but they know people identify with the brand so they will make customers pay for it.
Could people just stop buying Levis and buy the American made jeans? Sure, but Americans love their brands.
Now that, I can agree with but must reinforce "incidental" was the result as that was not his motivation or stated objective. It would also follow that today's corporations would not follow his example because they have no desire to maintain continuity in workforce.
This is a stereotype that isn't true. Does Burger King or Wal Mart care? Not likely but corporations have the same reasons to not do things that will simply create turnover.
Where I work we contracted out some of the pack-out type of jobs. These jobs then of course paid less and turn over increased. Errors increased. We are now transitioning many of these jobs back. They pay less than regular jobs but they include benefits and the ability to move into better jobs.
Very few leave after getting hired so there is no need to address turn over.
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Today's corporations have done the exact opposite for obvious reasons and gone with instituting 'employment uncertainty' instead, as the motivator for todays workforce. Legacy costs and benefits entitlements are kept in check through todays workforce being motivated to think of job security as a bonus instead of a right. The employee is programmed to think in terms of "keep my mouth shut and don't make even reasonable demands lest my next review find a flaw in my performance".
We addressed legacy costs by making ones retirement their own (I love it). When I retire it's all mine. If something happened to the company, it's still all mine. If I lived only 3 more years the money is still there for the family.
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Temporary contracts with a review every three months is the stuff todays young graduates are faced with.
We hire new engineers right out of college every year and they generally stay their entire working careers.
Does my example prove the norm? No, but neither does the generalization otherwise.
They will still charge the $27 or maybe charge $23.99 but still have it built in Mexico
This is the major fallacy why companies outsource labor to 3rd world countries. Not so the can sell it here at cheaper prices (they charge what the market will bear) but to maximize profits.
Somewhat but as Wal-Mart has shown, if someone see's where they can get into the market at $21.99 and still make profit they are going to jump in so a company can't just price something at what the market will bear and take the money to the bank.
This is Capitalism, not the Oligarchy and Voodoo Trickle Down Economics that the right wing advocates for defends and desires to repeat.
Henry Ford also took a delapidated always bankrupt railroad called the Detroit,Toledo,& Ironton [DT&I] and turned it into a profitable on time system.His innovation and vision for this railroad was revolutionary for its day and the Government forced him to sell it do to interstate commerce laws
He innovated on time delivery on what today is called a regional railroad planned an electrified railroad expected you to work keep the road neat and clean with flower beds at passenger stations.Yes the livelyhood this man a capitalist was trickle down economics by creating jobs,empowering them to consume for more trickle down economics....
The government always screws up a good thing Henry Ford was way ahead of his time and what the DT&I could of been and the economic impact that this road would have today for poor rural southern Ohio.
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