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Of particular note - even though GM reduced wages for its new hires to $14/hr., same work, same productivity is being done in Mexico for $7/hr.
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This is not a hypothetical. Steven Rattner, who helped restructure the automobile industry, tells the story of getting a new General Motors plant online in Michigan by bringing management and unions together. "The unions agreed to allow 40% of the new plant to operate at $14-an-hour wages," he says, "which is half of GM's normal wages. The management agreed to invest in this new plant. But here's the problem: workers at GM's Mexican operations make $7 an hour, and today they are as productive as American workers. And think of this: $14 an hour translates into about $35,000 a year. That's below the median family income. The whole experience left me frightened about the fate of the American worker."
And India has produced a midget car costing $2,400.
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Two weeks ago, for example, I sat in a Nano, the revolutionary car being produced by Tata Motors in India. It's a nice, comfortable midgetmobile, much like Mercedes-Benz's Smart car, except that rather than costing $22,000, it costs about $2,400. Tata plans to bring it to the U.S. in two to three years. Properly equipped with air bags and other safety features, it will retail at $7,000. Leave aside the car itself, whose price will surely put a downward pressure on U.S. carmakers. Just think about car parts. Every part in the Nano is made to global standards but manufactured in India at about a tenth of what it would cost in America. When Ford orders its next set of car parts, will they be made in Michigan or Mumbai? (Watch TIME's video "Owning a Nano, the World's Cheapest Car.")
Fareed says
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America needs radical change, and it has an 18th century system determined to check and balance the absolute power of a monarchy. It is designed for gridlock at a moment when quick and large-scale action is our only hope.
I do think 60 Minutes is a good start. Just have to keep repeating and repeating and repeating the message. Structural unemployment, significantly lower wages going forward, people need help.
What exactly do you want us to do?
What exactly do you want Washington do to (realizing there are armies of PhDs and MBAs working on this now)?
Answer:
Fix the nation's economy and job market. Increase the number of solid middle class jobs and restore ladders of upward mobility. End the H-1B and L-1 visa programs which displace Americans from knowledge-based, college-education-requiring jobs. Raise tariffs to end foreign outsourcing, bringing manufacturing jobs back to the U.S. and implement a policy to end the foreign outsourcing of white collar jobs. End all immigration and deport the illegal aliens. This will end the displacement of lower class Americans from slave wage jobs and remove the downward pressure that mass immigration places on wages.
Also, end the health care crisis by eradicating our current system and adopting first world socialized medicine which has proven to be much more efficient and far less expensive than what we have now. (The U.S. spends about 17% of its GDP on health care while having tens of millions of uninsured and under-insured people and hundreds of thousands of medical cost-based bankruptcies every year while also having a terrified populace and heavily burdened businesses. In contrast, other nations spend much much less than 17% of their GDP on health care while having 100% coverage, zero medical bankruptcies, and a business climate unburdened by health care concerns.)
Increase taxes on the super wealthy and especially on classes of people who earn far more money than what they actually deserve such as overpaid CEOs and investment bankers.
I'll def. check out 60 Minutes. Thanks for the "heads-up".
The future is a bit scary..work in the "New" America doesnt pay well and the Tea Party, which is growing in numbers is committed to eliminating SS and Medicare and all Government benefits. Where does that leave Joe Average?
Totally rational. But since our politicians are in bed with the corporations, profits will always rule and Joe Average - whether here, China, Mexico or India - doesn't count except to the degree he can be exploited. In your words, Bhaalspawn - Global Labor Arbitrage is here to stay.
What she wants short-term is an additional tier of 20 or more weeks added to the current Emergency Unemployment Compensation legislation for those who have exhausted all benefits, with a long-term fix to follow.
Seeing as how this unemployment problem is structural and will never be less than 8% going forward and we are looking at 9-10% unemployment into 2012-13 at least, a better solution would be that unemployment benefits long-term should last as long as it takes to get these people employed or into make work programs or old enough for Social Security. Any of those options leaves those affected considerably poorer than when they worked, but at least they wouldn't be totally destitute.
I, fortunately, have escaped the problems - but only because I am of retirement age. Many in their late 50s and early 60s are losing or already have lost an entire lifetime of work - homes, retirement funds, everything - with very little chance of regaining even a small part of what has been lost. Not young enough to be hired, too young to collect Social Security.
This is a very serious problem, with unprecedented long-term social consequences for this country, of a magnitude most people don't want to seriously contemplate, including our politicians, and it is NOT going away for a majority of the long-term unemployed but instead becoming the new normal.
Fix the nation's economy and job market. Increase the number of solid middle class jobs and restore ladders of upward mobility. End the H-1B and L-1 visa programs which displace Americans from knowledge-based, college-education-requiring jobs. Raise tariffs to end foreign outsourcing, bringing manufacturing jobs back to the U.S. and implement a policy to end the foreign outsourcing of white collar jobs. End all immigration and deport the illegal aliens. This will end the displacement of lower class Americans from slave wage jobs and remove the downward pressure that mass immigration places on wages.
Also, end the health care crisis by eradicating our current system and adopting first world socialized medicine which has proven to be much more efficient and far less expensive than what we have now. (The U.S. spends about 17% of its GDP on health care while having tens of millions of uninsured and under-insured people and hundreds of thousands of medical cost-based bankruptcies every year while also having a terrified populace and heavily burdened businesses. In contrast, other nations spend much much less than 17% of their GDP on health care while having 100% coverage, zero medical bankruptcies, and a business climate unburdened by health care concerns.)
Increase taxes on the super wealthy and especially on classes of people who earn far more money than what they actually deserve such as overpaid CEOs and investment bankers.
Well it seemed too much like a puff piece and didn't really seem like the hard hitting news reporting that 60 mins used to do. I was disapointed, but it was a start and the first time the 99er's have even dented into mainstream news.
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