Recent studies have concluded most Americans are overpaid

Ted? Is that you?

 

Your tactics are so cheap. Free trade doesn't hold a patent on global trade. Never has, never will. Free trade doesn't have a patent on nations being friends. Never has, never will. People who know economics all know it is destroying the American economy, it is just a difference between those who are profiting from the old girl's destruction and those who aren't. Those who support one world and those who believe nations should have the power like states over federal.

Go ahead and keep pushing working people's buttons. Globalism is trickle up poverty. Soon the market will be filled with people who went to school for 8 years and are 100s of thousands of dollars in debt. If they default, they owe millions. They will work for pennies on the worthless dollar just to keep from defaulting. All educated people's across every industry will take a hit, even those who think their careers are safe from outsourcing. Teachers making 40k a year will now have a new teacher with even more education willing to work for 20k. Doctors will have newbies coming in willing to work for 20k. New lawyers will take cases for a 100 dollars. No one will have money to spend outside of bills and debt, and all will be living like the middle and working class you despise and say are crazy. The service sector entirely shuts down. YOU SM will be a slave. The only difference, you will have to sleep at night with the realization that you fought tooth and nail for your own serfdom. I will not be afforded that humility. For I will be one of those who died fighting.

 

The failure of the US economy is a failure of demand that is caused by the long term decreasing incomes of consumers. It was easy enough to hide that for a few decades by increasing consumer credit and debt but those days are over.

Decreasing wages is an idiotic idea in a consumer driven economy already suffering from a lack of increasing demand due to lack of income growth. Over the past decade the aggregate income of the bottom 80% of households in the US has stagnated or fallen while all the economic gains have gone to the top. It is impossible to increase consumption in the US by any meaningful degree when the incomes of 80% of consumers do not grow.

 

There are only two options to our situation.

Either we stop all production trade with countries that do not enact our same rules and regulations.

Or we start playing by their rules. We cannot have it both ways.

 

Does that mean we should have to improve our own social safety net to trade with 4 of our 6 largest trading partners who have greater safety nets than we do (Canada, Germany, Japan, UK)?

 

No, compensations are fairly close. Yours are more social, ours are a little more free market.


Average Employment Income : 2005

United States-42,028

Canada- 37,872

Germany- 36,444

 

Ahh...but we're BETTER than those other countries. We DESERVE much more. Isn't that the correct corporate mentality?

 

Why should America make the rules and force other manufacturing nations to abide by these rules? Wouldn't it be better if America adapts to the ever changing global economic climate?

In recent decades America has gone from a manufacturing powerhouse and lent towards service industries. Asia has filled this vacuum America has left.

I'm also wondering if the OP is blaming American workers for the demise of the American economy?

 

Resting on one's laurels is a very dangerous game.

 

Laurels, schmaurels....Screw humanity. Vote Republican. Screw the underpaid.

 

Asia hasn't filled any vacuum unless you mean slave labor. It is the products of western nations being made. If the Chinese take any pride in the process they should be ashamed. Someone supplies you a design and you manufacture it (*)(*)(*)(*) poor as possible while letting your workers be exploited? I see nothing worthy of pride on their end. American's didn't say goodbye to manufacturing, we were sold out by politicians in the pocket of international conglomerates seeking absolute advantage. Easily argued as an anti-trust violation, but just as globalism has allowed corporations to circumvent all labor protections and environment protections, it has also allow them to circumvent any competition protections, and since there is no global government, yet I stress, there is no court to hold them liable. Cutting off their nose to spite their face.

 

Welcome to neoliberal propaganda. Wages are too high. And it is said in every developed country. Welcome to the capitalist reaction.

And conservative, many of them supporting this reaction. While wealth people are becoming richer, they support to lose more. They support have lower wages, less protection... It's funny to see workers defending the capital. Expecting that some day the will form part of that, while the numbers show the contrary, the movility is being reduced every day more.

So, I don't understand how they are able to defend any neoliberal reform.

Neoliberal = Neoconservative in American neolanguage.

 

Well.... almost all of us are overpaid compared to the typical African.

 

Oh dear,, once there's a hit of Asia, the first nation Americans think of is China. You must be shaking in your boots. China this, China that, blah blah blah.

There are other Asian nations with very sustainable manufacturing industires.

 

US wages have not actually increased since the 1970s but American workers have become 20% more efficient.. That means that 4 people now do the work of 5..

Yet CEO compensations have increased 300%.

Americans are amazing.. we work harder and take less vacation time than any other industrialized nation.

 

Haven't you heard? Workers are being "greedy" and "lazy" for wanting more paid vacations and more sicks days. Thats socialism!

 

Totally agree with you both.

But it is an universal problem. In Spain workers also are overpaid XD jajaja. When hardly many workers arrive to 1000€, and many of them with careers.

 

NeoLiberal? This problem has been headed our way for 20 years.

 

We are getting off track, people.

If possible, please limit your comments to the original purposeful discussion.

"Recent studies by CNN.Money have concluded most Americans are overpaid.

"Americans are overpaid. For the global economy to rebalance, the pay gap between Americans and the rest of the world must shrink. It's possible to run the numbers to show that U.S. manufacturing workers should take average real wage cuts of as much as 20% to get into global balance."

The fact that most Americans are paid to much is one reasion President Obama's stimulus bill failed by its own standards. In a January 2009 report, White House economists predicted that the stimulus bill would create (not merely save) 3.3 million net jobs by 2010. Since then, 3.5 million more net jobs have been lost, pushing the unemployment rate to almost 10 percent.

If we want millions of good manufacturing jobs that have gone overseas to come back to America, "the pay gap between Americans and the rest of the world must clearly shrink."

Again, please check this out.

 

The time that the neoliberalism rules

 

Do you think that cost can be reduced in other areas of manufacturing to allow an increase in direct labor without forcing increased revenue? SG&A is usually between 5-8% of total direct cost, FOH or Semi-direct around 8-12%, logistics, design, and PE trials approx another 3-4%, and the rest is material and labor. In automotive, material is probably 50-75%. Direct labor fluctuates with automation investment, but will probably be between 15-25%.

All I hear is how a reduction of the lowest expense (SG&A) can allow an increase in the 2nd highest mfg expense without increasing sales prices, and that is just not true unless you are an extremely top heavy company. Sometimes factory overhead is more expensive than direct labor, but the progressives seem to want this to be more expensive as well.

A reduction in the corporate tax rate would be the easiest way to increase salaries. Cutting ridiculous regulations would be a slightly more difficult process, but could potentially have a more positive effect.

Consequently, the wealth gap is driven by government decisions as well.

 

Yes it does. The corporations don't have infinite budgets. Payroll is a part of that. If the CEO is going to be paid more, that must be balanced out somewhere else.

 

Money that Americans don't have. Germany can do that because they have government subsidized education, including university education.

 

True, but how much difference will it really make.

Lets consider a severely overpaid CEO of a rather small business - 1,000 workers total.

If the CEO was to give up a full million dollars a year, each worker would see about a $20 per week raise.

So yes CEO salary does affect the money available, but when everyone takes a piece of the pie, it gets very small really fast.

 

Past reductions in the corporate tax rate have mostly not increased incomes for anyone but top management and shareholders. It is highly unlikely that this behavior would change when you consider that even gains in productivity have not been shared with workers lately.

Hiring is not decided by profits or regulations but by demand and the best way to increase demand is to increase the incomes of consumers or find new ones, like through exports.

Many US manufacturers are unable or unwilling to seek export markets for a number of reasons even though they make products that could easily compete in overseas markets with few changes, the metric system, different voltage and current standards, lack of international certifications for products or manufacturing systems, and a general wariness due to unfamiliarity with how international trade works in general. These problems are not easily overcome.

Wages have declined somewhat precipitously over the past few decades for the average manufacturing worker while worker productivity has steadily increased. This is wrong. Low wages do not attract the best employees and result in high employee turnover which can increase recruitment and training costs so much that expected savings from low wages are not realized.

A company can end up in a trap of low productivity, declining quality, and an increasing need for low level management due to low wage workers who need constant close supervision. Many find themselves unable to raise worker wages to get out of this trap. Some do not even see the problem for what it is. They think even lower wages and more cost cutting will get them out of the trap but that will only make things even worse. They have doomed the company in a typical American management fashion.

Cost cutting is over, US manufacturers have no more fat to cut after decades of round after round of cost reductions. What US manufacturers need now far more than another round of cost cutting is investment in R&D, new plant and equipment, and a big investment in workers to reduce worker turnover and the high recruitment costs of stealing skilled workers from competitors rather than growing them in house.

More US manufacturers need to stop racing for the bottom by trying to compete on price alone and join Germany and Japan in the race to the top where high prices for quality goods still prevail.