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Carrier, a heating and air conditioning manufacturing company, announced plans a month ago to move 1400 manufacturing jobs south of the border. A company spokesman said Mexican workers typically earn about $19 a day, which is less than what many on the American assembly line make in one hour.*
How can American workers complete with Mexican workers without protectionism?
Carrier has had a plant in Mexico for 25-30 years. They have many plants in the US, more than enough to meet the market demand for their product. They have been costing/ combining US plants for the past two decades. Why is this closure a bigger deal?
For the most part, the part manufacturers left the US decades ago. The competition is in Mexico.
Believe it or not, there is a growing market for their product in Mexico, Central America and South America.
Other articles have pointed out the average Carrier wage in Mexico is about 25% of the US wage.
Believe it or not, Payroll taxes are higher in Mexico than the US since they implemented Universal Healthcare in 2011.
It's not all about low wages in Mexico. That Mexico maintains more free trade pacts with the rest of the world than any other country makes a huge difference in their ability to export their products with out tariffs being imposed by the importing country.
Carrier has an obligation to its parent company, thus shareholders to increase shareholder value. That means competing on a global basis and free trade matters.
Guess Carrier could have limited their sales to just 5% of the world's population- the US market and closed all but one US plant and laid off most of their employees.
All candidates for nomination and POTUS make promises they do not keep. Most of those promises are beyond the full control of a POTUS.
Oftentimes Congress will not play ball, even when the majority is aligned by party with the President. Even when there is support, most Congress critters don't give without getting which is why most bills are stuffed with pork. POTUS does not have line item veto power. Other times, POTUS do not attempt to keep all promises.
If by some fluke Bernie Sanders were to win, no way Congress is going to play ball with his agenda, no different than a Ron Paul.
Most of Congress despises Cruz and Trump and the majority of their promises are dependent on Congress. Some of the political noise says it's better to hold their nose and get behind Cruz because he's highly predictable. That does not mean Congress is going to support his positions.
Trump knows the game. He knows that compromise is necessary to any deal. What he promises is not what you will get. The same who will vote for Trump are the same who voted for Congress who opposes Trump.
Then there's Hillary. She serves a purpose for Republicans. If elected, she can be blamed for everything wrong in the world. I have no doubt that most at Fox News and independent radio hosts will all vote for Hillary. Their jobs depend on having someone to blame. Things trended a tad pathetic on Fox and Limbaugh towards the end of Bush's presidency with hosts routinely reminding their audiences of their obligation to support the president.
No doubt there were happy dances when Obama was elected and their ratings soared as MSNBC's declined.
You forgot C. Eurasia, MENA and sub-Saharan Africa... They're at the end of the line but don't forget about them. They're still there and dying to take your lifestyle from you.
No worries, it's not really a lifestyle anyone wants with it having been dreamed up exclusively by white men.
I agree. I can't wrap my head around the arguenent from the right that Americans can compete in global manufacturing when there's no shortage of global workers begging for a chance to make what an American worker makes in an hour. How can you compete with a guy willing to work hard for 19 bucks a day. ? You can't. And for those of you who say that Americans have a lock on service jobs you need to wake up. Businesses want to make money. Why would they ever hire high priced American workers over others? We love our Walmart because it's cheap. Well everything comes at a price.
For the most part, it does not make financial sense to have a manufacturing facility in the USA, when it can be done elsewhere better, faster and cheaper.
How can America (and Americans) compete globally? Right now, I am to understand that we aren't doing such a good job. I hear this preached by conservatives all the time, particularly those on a budget. Politicians are frequently selling us the same line.
What does America have to do to successfully compete? And to what extent should Americans be forced to compete? Can too much competition be a bad thing?
How does England, France, Japan, Germany, Italy, Sweden, Finland, and Norway compete in the world marketplace? All do, and do it successfully.
And in all, the minimum wages are higher, the social security net is wider, and in many, college is free for those who can qualify.
The answer is pretty obvious; there is a place in the market for cheap and shoddy goods, and as much a place in the market for high quality, more expensive, and more durable goods.
For centuries, a manufacturer in any industrial nation could choose whichever path he wanted to take. Cheap or expensive. Because 2/3 of the world had no industry at all.
That has changed radically. All the United States has to do is pull up our minimum wage to the point where a worker can make a living on earned wages alone, from one job. A living consists of enough income to pay for food, power and shelter. With just enough left over to make modest plans for other necessities.
That means the company, large or small, will have to content itself with a 30% to 100% profit on the goods it makes. No more 300% to 1,000% profits. And making a consistent 30% is still enough to find ready financing for company plans, whatever they may be.
In all those other nations, a CEO, COO, or other top head of a corporation makes about 65 to 80% more than the employees. Stockholders expect to make around 3 to 5% yearly dividends on their investments. Compare this to the wages an average CEO makes here, and what the dividends are for all our most solid blue chip stocks.
The United States alone is far out of kilter with our closest competition. Due to factors beyond our control, we can't compete as easily in cheap goods anymore in some areas, but not all. Where we compete the best is in our quality, consistency, and the durability of our goods.
But we are still paying 3rd world wages while all the money congeals at the very top of our most wealthy citizens. There was a time, over 30 years ago, when the minimum wage was sufficient for its basic purposes, but those days are gone forever.
I don't believe in a standard minimum wage for everyone, everywhere. There are states where a $15.00 wage is barely enough to feed the bulldog, while the same wage elsewhere is enough to send a kid to college after all the bills are paid and the bulldog is fat. But even in those states, the minimum wage has to come up.
And the sooner the better, whether it's $11.00 in one state or $18.00 in another. It has to happen. how it happens is up to each state, but those states who continue to ignore the fact will lose their best to another state.
There will always be jobs for ditch diggers, but ever ditch digger needs a direction to where the ditch goes, and that job goes to a better educated person. That one person creates the work for a hundred ditch diggers. When he leaves for a better job and cannot be replaced, the ditch diggers will go hungry.
When a state becomes full of ditch diggers with no direction, the state starts a downhill slide that becomes harder and harder to reverse, as poverty does its work a lot faster than prosperity.
Or, in ditch digger terms, a hole is a lot easier to fall into than climb out of. We all know that.
This is a lesson even the Communist Chinese have learned and are presently struggling with. And India, a democracy, where the struggles are being settled faster than China's. And in Indonesia, where all the cheap labor still resides, but the workers are watching what's going on in the rest of the world.
We continue to ignore the obvious at our own peril.
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