The American Worker

Discussion in 'General OFF TOPIC' started by Dr.Evil, Sep 16, 2010.

  1. Dr.Evil

    Dr.Evil Junior Member

    I did not want to continue to hijack the other thread so I have started this one.

    Originally posted by (Blindrage)

    "American companies just cannot match the foreign labor.

    In foreign markets the labor is cheaper, but that is not the biggest factor. All the extras like paid time off, unemployment payments, healthcare, etc. cost a decent company a large amount over what shows as your hourly wage or salary. Then add in costs to meet OSHA regs, inspection fees and fines, EPA regs, land costs, property taxes, and lots that I am leaving out.

    I can only give good numbers for software developers, so here they are.

    American Developer - total cost for a year runs in the 120k range for everything all totaled.

    Indian Developer - total cost for a year runs about 50k.

    I imagine it is worse with labor intensive jobs in dangerous job with environmentally unfriendly work, say experienced machinist for tight tolerance sports car engines. With all the costs associated with chemical hazards, physical hazards, injuries (back pain that goes on for years, crushed limbs, or just metal filings), Union headaches, and pension plans I am betting they end up with a total cost per overseas worker at less than 30% what they end up paying here. Along with being able to build anything and anywhere they want, work people hours slaves would balk at, and ignore the environment and citizen environmental protectors (Greenies) there is no incentive at all to bring work back."

    I have to dissagree with some of this.

    An American Tale. by Dr.Evil

    American workers are not the problem. It is the greed of the management that is the problem. The company I work for went through bankruptcy and restructured. All of the new directors and upper managers received large sums of stock options as part of their compensation. Shortly after emerging from bankruptcy, our stock price went from $14.0 to $0.75. In order to raise the stock price they had to put cash back on the balance sheet, so they hired specific managers to come in and cut, slash, and burn everything. My department made 15 million net per year and was cut along with everything else. Our designer of 15 years was fired, and her work was sent to our India facility. No one asked if this was even a good idea, they just did it. Not only did a valuable, hard working, American loose her job, but our productivity in design was cut by 90%, for a 60% reduction in pay. You see, every time we take 12 months to train a new Indian, he then quits and takes another job for higher pay. This has happened twice now.

    In the meantime the stock has been pushed back up to $12.0 a share. Now lets go and take a look at the insider trading of our stock. All the directors and high level managers are dumping their stock options for millions of dollars in bonuses, and for what? For doing a great job? No, for raping a good company and firing half its employees. That’s not management, its just stupid greed. Along the way they froze our pensions, for most of us at about 15%. They are closing my facility and merging it with an Ohio facility. My wife can not relocate so I am out of a job of 23 years. But not all is lost, if I stay until some undisclosed mystery date, I will get 5 months severance.

    So what do we do as American workers? We are the ones that design and build the products while our leaders, use us up, throw us away, and take all the profits. Does this make us work harder? Do we even care any more?

    History tells us that no great empire can stand for ever.

    For an even better understanding of how greed will ultimately destroy us, go watch “Enron, The Smartest Men In The Room”
  2. Blindrage

    Blindrage Member

    I totally agree with what you said. My post was specifically about labor rates, and all the extra costs associated with workers and business in general here in the US.

    That said, the stock market was the worst thing to ever happened to business. The original idea of getting people to invest their money in a company they believed would do well was not a bad idea, but the way they set the system up was terrible. Instead of people becoming tiny silent partners in the company they instead became the focus of the company. The stock price became more important than the product, talent, management, or anything else about the company.

    Did your company make a profit? Great. Did it make less of a profit than some analyst thought it should? Sorry, hang on for the big drop. Want to bolster the bottom line to look good on paper? Lay off workers because the savings are instantly applied to the books instead of being hidden deep in the report.

    Upper management pay and incentives have become insane. It is a small group of people that just keep getting recycled between companies, and new members to the club are like dogs with AKC paperwork. The new members get checked to make sure they have the right last names, body types, and went to all the right schools. Do they know the right people, drive the right car, speak the Politically Correct language of business, and can they keep the dirty secrets of the company?

    So what would fix all this? First thing is to modify the investment laws to let companies do things that cause investors to lose money in the short run, but build the business in the long run. Second is to change management practices so there are fewer managers doing "strategic" planning to each worker actually creating product, and tie management pay to real world results with limits based on average worker salary. I am not saying government should impose these laws, I am saying shareholders and workers should fight for this. Next thing would be for laws to be in place to make it unwise to move development and production off-shore or change US laws so they can compete with development and production done here on-shore. No more golden parachutes, stock options instead of pay, or hidden benefits. Last would be to stop the manipulation by foregin governments, and I mean China keeping its currency low to help exports and things like that with this.

    Pie in the sky, wishful thinking, etc. But more of what we are doing now is just going to make the hole deeper. There needs to be some major changes all done at the same time across many fronts for anything to actually work.
  3. dbmg

    dbmg Guest

    I agree with you 100% DR Evil. I have had a similar situation in I lost my job 3 years ago. Prior to my dismissal there was a lot of talk as how owners were building million dollar homes and the managers bonuses have been the best ever. I was never given a proper reason other than the right to work statement I have a right to work for said company and they have a right to let me go. So here I am after 8 years in my late 40's a wife 2 kids and no job. Fortunately for me my wife was working part time.
    I have said for a long time that the ruination of the working man will be the way companies sell their services to the highest bidder and only take care of those who run them. All sense of integrity and decency toward the working man have eroded to the point of compromising safety and a persons life. Look at the recent news of oil rig explosions and natural gas line explosion or miners killed in mine do to explosions. These events happened due to corporate greed and cutting corners to maximize profit. The bottom line they do not care. So this is why there is outsourcing. Maximize profit. So the challenges ahead are going to be great for the response to the financial failures and all the other events since then, has not made corporate America wake up and start to conduct business with integrity and ethics. There is still a huge amount of disregard and not caring and doing what is right for the working man and our country.
  4. kemo

    kemo R.I.P

    People blame labour and unions for high costs. I have to disagree. We get flyers in our mail from large retailers. They will offer something for 75% off. Do you really think that they are losing money on this item. I doubt it, how much money do retailers make. On parts that I buy from a wholesaler there is usually a msrp price that is double what I pay. Often though I can buy retail cheaper then I can buy wholesale.
  5. Blindrage

    Blindrage Member

    Markup depends on the item. Here are a few examples.

    Jewelry - ranges from about 1000% - 5000%. Yes that means you typically pay more than 10 times what the store did for the item.

    Computer Equipment - 45%-65%

    Clothes if bought at full price - 100%-300%

    New Cars - 15% on average. That is accounting for the real invoice price not the one they are willing to show you. The one they will show you is inflated so the bank will loan more money on the vehicle and includes dealer holdback.

    Those are the items I have some personal knowledge of, and do not reflect every store and every item of that type they sell.

    So I agree that labor unions are not the problem. Taxes are not the problem. Currency differences are not the problem. The problem is simple greed, and it is from the CEO, Board, upper management, stock holders, and everyone else. My first post was not to excuse the moving of everything off shore, and in fact I think it has been and will continue to be the biggest threat to this nation. My post was just to show why they do it, and having to deal with labor unions and the threat of walkouts and strikes is all part of what a business does not want to deal with.
  6. Dr.Evil

    Dr.Evil Junior Member

    I would love to believe in a free market economy, but our Corp Directors and Politicians have proven time after time that they can not be trusted to do the right thing.

    The question is , what is HD doing right now? Are that telling the dealers to fight every claim? Have they lost touch with their customers? How many accountant are sitting in high level positions?
  7. Porter

    Porter Junior Member

    I know this is going to sound weird, but may I suggest a book to read?
    Henry Hazlitt : Economics in One Lesson. ( I think I spelled his name correctly).

    I know the last thing just about anyone wants to do is read a book on economics. But it is a paperback and was written 1979. It really changed how I thought about the market, the stock market, unions, tarriffs, taxes, etc. It is a short book and you can go to individual chapters to look up specific things like for instance "Rent Contol".

    Anyway, the book not only explains what you think you know about a topic, it also explains the backside, that most don't talk about in VERY EASY to understand language. We all usually give anecdotal experiences, becasue that is what we see first hand, but this book adds in all the angles.

    For example, another country could have the same labor cost as the U.S. to make a particular item, but the U.S. sells the raw material to the foreign country for cheaper than you can get it in the US, through tax payer subsidy and trade agreemennts. So in the end, for that item, you the individual may pay less for the foreign item, since those that pay taxes are picking up some of the tab. But in the end, assuming you are a taxpayer, you still pay for it at some point.

    I can't say enough about this book. To me it explains exactly why we are, where we are. This book and ensuring you can calulate/understand compound interest are two things I believe every child in America should know.
  8. Blindrage

    Blindrage Member

    Thanks for the suggestion. I am tracking down a copy since I love a good book that can explain difficult topics in more or less basic terms.
  9. DakotaRob

    DakotaRob Active Member

    I can throw in my two cents on the software development offshoring, since I've experienced it first hand. A lot of US companies have gotten burned. After dealing with language barriers, time zones, and software full of defects, some have learned that offshoring isn't any cheaper in the long run. Another factor is that the middle class is growing in India and other cheap labor countries meaning that rates for offshoring are going up. The position I have now was created after offshoring failed and the company had to hire locally.

    Funny story that happened at my company: We were short staffed, had a big project and needed some temporary software developers. Management brought in a couple temps, who were Indian. The first guy was just out of college, barely 22 years old. It was his first trip out of India. He literally got off the plane and showed up at our office. This guy was a vegetarian, his contract agency was too cheap to give him a rental car (although I doubt he could even drive). He had to walk two miles each way from his hotel to the office. We are in the heart of midwest beef and pork processing around here... the poor guy about starved to death. He lasted two weeks and was on a plane headed back to India.

    Guy number two lasted a month, he had been in the USA a while, but didn't know a thing about the software we were using. When he missed all his deadlines, they showed him the door. We are pretty sure the temp agency had one guy do the phone interview, then sent this guy in for the job.
  10. Jack Klarich

    Jack Klarich Guest

    Too bad there is so much fear now of the value or lack there off of the dollar