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adios
04-01-2004, 06:50 PM
A dialog from a msg board today:

Poster 1

As far as jobs go I can speak to where they went in manufacturing. Personally I am trying to eliminate every job I possibly can thru automating processes and robotic equip.

I am driven by normal needs to improve but driven with a greater need due to gov. meddling in the emloyment process. When FMLA (Family and Medical Leave Act) allows free in and out privileges and State Disability and Workers Comp. pay bonus tax free wages creating an incentive to not work and mis-report, then workers will use it and abuse it.

Populist legislatures are the real cause and we in manufacturing are cutting with a vengeance. Unskilled high pay union jobs are a thing of the past. I will pay my elect. 80k a year no problem but not a high school dropout.
My industry is not amenable to overseas production but the jobs can still be eliminateed.

Poster 2 in reply to Poster 1's post:

I have a friend who is CEO of a small manufacturing company. Recently they expanded a warehouse and the permitting costs were $200,000 which just gave them the governmental ok to start spending more money. She also has a major problem with worker comp including fraud she is fighting. The issue with workers comp is that her main customers such as petco monitor what they can buy knockoffs for from China so she cannot raise prices to cover costs. She is outsourcing some products in china to stay in business but no hiring. She loves her employees, hire handicapped folks but can't expand payroll without eroding the business.

Poster 1 in reply to poster 2:

I am a fairly large self insured employer but the costs for a small business coverage works out to more than mimimum wage per employee. You can get an entire college trained worker overseas for $6.00 an hr.

Perhaps this is the real reason why business's are slow to hire.

A third poster, Poster 3, wrote this in response to Poster 1's original post:

In absolute agreement with you on this one. Relatively unskilled, high pay jobs are out the window. Also, in my industry, the eyes are finally beginning to gaze at the "skilled" white collar jobs as well. Sure, you can outsource them, but a whole lot can be eliminated by "decision-making" automation. In my industry, a 75% reduction in personnel-related costs would level the playing field with "free" labor & brains in China.

Yes, I'm in involved in making this change happen. Tough topic, but those are the kind of gains in productivity that are required to knock out high cost labor & brains as a competitive disadvantage here in the States.

Insightful, doubt that Kerry or Bush will help this situation.

andyfox
04-02-2004, 01:23 AM
I don't know if there is an answer. I read in a trade paper today that Wal-Mart sells 10% of all men's jeans sold in the USA, JC Penney 8% and Sears another 7%. So 25% are sold in three retailers. There is just no way people will pay what they would have to if the manufacturing was done here at our wage levels compared to what they are where the goods are currently being manufactured.

I run a small business. We have sixty employees. Our business does about twice the volume it did five years ago. Much of our manufacturing is done in China. We have about the same number of people in our L.A. warehouse as we had five years ago. We have added several executive level/ office people.

Our business is quite seasonal. We do about half the volume of business, or even a third, in January and February, for example, than we do in October and November. But we try to maintain the same people in the factory. I'm a softie and don't like to let people go, but there's no question government regulations and problems with potential
lawsuits and workers' comp are considerations. While the loudest complainers are, in many cases, living high off the hog, it is true that here in California, worker's comp costs are a problem for many businesses. Our rates are, if not the highest in the country, right near the top. But the benefits injured workers receive are right near the bottom. We were paying $28,000 a year, with a good safety record, three years ago. This year, with a better safety record, we are paying $148,000.

A very complicated problem which, of course, doesn't lend itself to enlightened discussion in a presidential campaign. Certainly not by the likes of Bush and Kerry.

adios
04-02-2004, 06:19 AM

sam h
04-02-2004, 01:45 PM
Nice post, Adios. Here is the part I think is most important...

[ QUOTE ]
In absolute agreement with you on this one. Relatively unskilled, high pay jobs are out the window. Also, in my industry, the eyes are finally beginning to gaze at the "skilled" white collar jobs as well. Sure, you can outsource them, but a whole lot can be eliminated by "decision-making" automation.

[/ QUOTE ]

While more standard forms of automation are still improving, in some ways blue-collar workers have already taken the brunt of the hit that came with technological change and our adaptation to the new global competitiveness spurred by Japanese production innovation in the 70s and 80s. For white collar workers, on the other hand, the worst may still be yet to come. I'm not sure we've really seen the productivity gains and full applied usage of the computer revolution and the digitalization of information yet. There are many historical examples like the invention of the electric motor that show that actual productivity gains from groundbreaking innovation take a long time to really set in, usually at least several decades and sometimes almost half a century, as core inventions take a while to disseminate, be improved upon, and be put to their most powerful use. So while we look around and see all these computers in offices and think that the bulk of the infrastructure for new productivity must already be in place, it is possible that a substantial chunk of the gains are really yet to come. And its possible that this new productivity may come from further computerized coordination and information processing within firms and between firms, which is real bad news for middle-manager types.

adios
04-02-2004, 02:49 PM
I complement you on your thoughtful post as well.

[ QUOTE ]
So while we look around and see all these computers in offices and think that the bulk of the infrastructure for new productivity must already be in place, it is possible that a substantial chunk of the gains are really yet to come. And its possible that this new productivity may come from further computerized coordination and information processing within firms and between firms, which is real bad news for middle-manager types.

[/ QUOTE ]

I believe software development has only scratched the surface of what is possible in improving productivity.