Friar Bijou wrote:
If I follow you logic properly, gbaji., unions are an acid for producton in America.
Depends on how the union is structured and operates, but by and large, yes. You hadn't figured this out from the hundreds of posts I've made over the years about the harmful economic effect of unions?
Strangely, there are many states "*cough* South Dakota *cough* which are largely anti-or-passive union. Why not have the manufacturing jobs sent to these states instead of overseas? I'll tell ya why.
Does you explanation include an example like what happened when Boeing attempted to open a manufacturing facility in a non-union state just as you are saying they should?
Even though they could hire plenty of folk in states such as mine for barely over minimum wage (with folks glad for the jobs) it is simply a profit multiplier to send them out-country where the companies can get people for $7 a day instead of $7 an hour.
Nope. Ever think maybe you're missing something? I'll give you a hint: Wages alone aren't really that much of a factor when considering the total cost of opening up a plant in one location over another. Um... And unions are only part of the problem. Tax rates. Over the top environmental regulations. Mandates and regulations regarding employment in general. Construction costs. Power costs. Shipping costs. There are dozens of factors involved.
It's not a simple all or nothing equation. It's a matter of degrees. Each of those factors are weighed when a company makes a decision like that. Each thing counts, but only to the degree that factor affects that particular decision. That's why some companies will move operations across state lines based on certain factors and some will move them across national lines. That's why sometimes a union presence has a major effect, and sometimes it doesn't.
If your argument held water, then there should be absolutely zero jobs in the US at all which could be done elsewhere unless the government stepped in and forced companies to employ people here. Yet, that's clearly not the case. There are millions of people who are employed in the US doing jobs which could be done in another country if the only factor to consider was the cost of the labor itself. And a whole hell of a lot of those companies are not required to do so by the government.
This isn't a union driven off-shore mess. There are plenty of states that would welcome the work, but profit demands borderline (or pure) slave labor to make the shareholders happy.
No. Profit demands that the company generate the most revenue while spending the least amount of money. The cost of labor is only one factor. It has an effect, everything else staying the same. But it's not the all-or-nothing effect you seem to be claiming it to be. It can't be.
How do you not see this?
I do see that. I also see the bigger picture though. I happen to know first hand, for example, that while the labor cost in a location like Hydrabad is less than that in the US, the cost to ship materials and maintain them is greater. Also, power is less reliable, and communication isn't as good. I might put a call center there, but I'd be hesitant to put a data center that serves some kind of globally accessible applications there. I might put some engineers and some remote access equipment there so they can do design work remotely, but I'd put the bulk of my engineers and the equipment itself somewhere else.
I know this because I've seen the cost sheets for these sorts of decisions. And guess what? Labor cost is only one factor, and it's hardly the most significant one.
Is California blinding you from seeing the rest of the country?
California is leading the country in terms of making the sort of mistakes the Dems are trying to push. We're a great example of just how bad a job market can get if you push a big government agenda. Do you know that there are nearly zero manufacturing jobs at all in California? And guess what? That's not about labor costs either. It's about over the top environmental regulations. It's about import and export taxes. Why do you suppose that the biggest industries in California are based on intellectual property? It's because there's no physical objects being built, or imported, or exported. That's why we make movies, and tv shows, and do bio-research, and develop computer chip and cell phones, and write computer programs.
That works out "ok", but we've driven pretty much everything else out of the state. Which means that our revenue is reduced as a result. What do you suppose happens when the liberals who run this state decide that it's time to more heavily tax intellectual property creation as well? If history is any indicator, those industries will move out of the state as well. Heck. we're already seeing large portions of the film/tv industry move away. Very few films are actually filmed in LA anymore (cept porn I suppose). The folks who produce them live there, and often keep their business addresses there, and they have the premiers there, but most of the actual work is done elsewhere.
The clear pattern is that when government attempts to take a bigger slice of some economic activity, that activity will move elsewhere. It's hardly controversial to point this out, right? It's kinda obvious. Any rational person would do their business where they'll make the most money. And this is *not* always about labor costs. That's a factor, but not the whole picture.