Support national industry and go under …

… or outsource labour and stay afloat within you own country? Karl makes a good point, quoting Sanders at the start:

“I call on Mr. Trump to make it clear to the CEO of United Technologies that if his firm wants to receive another defense contract from the taxpayers of this country, it must not move these plants to Mexico,” the senator from Vermont said in a statement.

Why doesn’t Sanders (or Trump for that matter) talk about what’s really going on here?

The media has, accidentally.  They have pointed out that the cost of assembling air conditioners — that is, manufacturing labor — in Mexico is about $3/hour.  Incidentally it’s probably not much more for assembling cars.

There are two options folks:

1. Make it uneconomic for companies to take such an action by causing the cost of labor there to reach effective parity with the cost herein which case the offshoring of labor will disappear

OR

2. Accept a $3/hour wage here in America as the labor rate to assemble air conditioners in Indiana.

The logic and math on this is pretty simple; if a company can have labor performed for $3/hour they will not pay $20/hour.  Nobody in their right mind will.  The problem is that you can always find a third-world ****hole where the rate of labor is $3/hour or less.

As such you either drag your wage rate down to that price or you make it uneconomic for companies to do this sort of thing.

Yes, it’s the old conundrum, innit? Support your own industry, forcing businesses out of business or else keep them afloat through outsourcing the labour.  There’s no escaping this economic reality.

7 comments for “Support national industry and go under …

  1. Mudplugger
    November 29, 2016 at 8:42 am

    If the developed West had only got it right 70+ years ago, we would have been outsourcing ‘donkey-work’ labour to help other nations to develop, rather than shipping the workers here to do it, preserving and growing higher-value work onshore for our own labour-force.

    We now find ourselves in high labour-cost economies with an excess of labour, making it impossible to keep them employed cost-effectively. Indeed, the very fact of being high labour-cost has also driven the impetus for automation, further reducing the labour volumes needed. Had those jobs been outsourced to low-cost areas, automating would not have been attractive, so the remote nations would have had a chance to develop through consistent employment, encouraging their people to stay there and work rather than emigrating.

    The chicken of cheap-labour immigration is coming home to roost both here and in the USA – instead of bringing the workers to the work, it would have been far smarter to have taken the work to the workers, thus avoiding all those issues we now face. Not only is it too late, no-one will even acknowledge that they got it wrong and learn for the future.

  2. Errol
    November 29, 2016 at 11:46 am

    The combination of high taxes and a massive population scuppered any ability to make work pay long ago.

    When so many people exist in the state machine and so few jobs are created in the high value, low volume industries our economy excels at we cannot growth the economy.

    To get around that fact the Left import more people to live in this ‘rich’ country they are making poor.

  3. Flyinthesky
    November 29, 2016 at 4:49 pm

    The illusion of prosperity is going to disappear. Our illusion has been based on what we were led to believe our properties were worth and how much we were persuaded to borrow against them. We must recycle, we must conserve but we should still continue to borrow to consume.

    The net result of the globalised free trade paradigm is becoming apparent. The few cracks appearing now are soon to lead to a catastrophic earthquake.

    Free trade, or to give it its more accurate description: corporate facilitation, is decimating the western world and we still have western governments determined to promote it.

    A fine featured essay at the head of the thread but it can be condensed into four words: Compete, protect or perish.
    Compete, well with our labour and environmental legislation that’s a non starter. Protect, our only hope, is seen in global circles as a dirty word, that leaves us with the final option.

    The winners in this long but soon to be concluded game are the nations with the autonomous capacity to serve their own needs and trade is a bonus. If you have to trade to survive, we can’t even produce enough to feed ourselves for goodness sake, you’re goosed.

    The only chance of levelling the game is tariffs and that’s not going to happen.

    • Ray
      November 29, 2016 at 9:39 pm

      A great comment , well done !

    • Peter Whale
      November 30, 2016 at 7:20 am

      The industrial revolution came about with cheap reliable energy. We need to get our natural gas and other energy sources as low as possible not made more expensive to put subsidies into the few rich rent seekers. If you take robotics and efficiency of well trained well motivated workforce productivity will be increased so that a home produced item will be viable. The real problem is an over bloated state that demands too much.

      • Gregory Tingey
        November 30, 2016 at 7:52 am

        You are the nearest in this discussion to a “correct” answer.
        [ I’m not sure there IS a fully “correct” answer, incidentally. ]
        Not just cheap, reliable energy – & not just from natural gas, either – the cost of renewables is dropping really fast – but semi-AI & increased automation & robotics simply mean that “the jobs” simply are not there.
        Now (or then) what?

        What is the “Over-bloated state” demanding that is “too much”incidentally?
        Perhaps the costs of healthcare – which is LOWER in all those countries that have a state-funded single-payer system than in the USSA & with better results, too?
        Perhaps the costs of regulation, that ensure safe food & drink & clean water – ask the inhabitants of Flint Michigan about that?
        I agree that, in some areas, the state has no business – the entire section of “Culture Media & Sport” dealing with “sport” should be closed down & the fascist crawler Coe, jailed if possible… & the media section devoted, on a much smaller scale to the British Council or equivalent.
        The privatisation of the railways was such a success (!) that I propose that the same should be done for the road system …..

  4. November 30, 2016 at 8:34 am

    Thanks for all those, without exception.

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