“Because labor is cheaper, and the US has the highest corporate income tax in the world...35%”
The main reason is that the cost of employing here is completely out of control.
It’s not just the wages, it’s the huge cost of complying with the myriad of laws, regulations, requirements, government dictates, state regulations, and a “Pandora’s Box” of legal and regulatory pitfalls an employer incurs when hiring anyone.
The money actually paid to an employee is severely affected by these “hidden” costs. When shipping jobs overseas none of these forces apply. That’s why outsourcing occurs...our own government has caused it.
If American employers were to pay their employees in cash, set up a table with multiple other people sitting at it who represented the legal, government and all other costs (including Social Security) and the money removed from the hand of the employee and passed down the table with each “leach” taking their share of it until the original money (what’s left of it) was given to the employee, for the first time ever, they would actually know how bad it really is and have physical proof of what our government is doing to us.
However, our government hides these costs so that employees never see them. Take Social Security matching, Unemployment insurance, and a host of other hidden costs for example.
I’ve been an employer for over 35 years and with each passing year the cost of all regulatory requirements and costs involved with employees continues to grow. On top of that OSHA and other “safety” and insurance requirements continue to be out of control.
Yes, foreign workers work for “peanuts” and the reasons I cite are why American businesses are fleeing the mainland. However, what we call “peanuts” is a decent standard of living over there. I wonder why? Maybe it’s because that the cost of living over there is not affected by a bloated government out of control and a legal system in which you are guilty until proven innocent, not the other way around.
It’s time to give the entire paycheck to the employee and make them responsible for paying their own taxes, Social Security and every other cost the employer incurs due to hire them. Then, the revolution will finally occur to regain our freedoms from the chains of government involvement.
As Ronaldus Magnus so aptly put it, “Government is not the solution to our problem, government IS the problem.”
In much of the 90s I was in manufacturing.
We had some large machines in the die-casting department that used a small amount of glycol. Glycol is made from steeric acid. Steeric acid is rendered from the stomach acids of cows. It's mildly toxic in the sense that it will burn you if it is on your skin and you don't get it washed off for twenty minutes. It is also purely organic and if you pour it out on ordinary leaves it will compost into ordinary everyday dirt fairly quickly.
Nonetheless... mandated waste disposal costs for a small amount something that breaks down harmlessly all by itself exceeded the labor costs, and we paid a good wage.
I wouldn't manufacturer here.
“It’s time to give the entire paycheck to the employee and make them responsible for paying their own taxes, Social Security and every other cost the employer incurs due to hire them.”
That will work with law abiding citizens.
Unfortunately, in Californicator land for decades, when illegals are paid cash, they contribute nothing tax wise. They hide their income, send money to Mexico, go on welfare,
get EBT cards, WIC cards and free health care.
Your suggestion works with the rest of us. After, I took early retirement, I got a high paying consultant gig as an independent contractor, and I had to pay the taxes, social security on both sides.
My wife didn’t understand where our money was going, until I had her write the checks for the various taxes/SS each quarter. Also, she had to contribute to a separate savings account to have the necessary quarterly funds. She figured out that we need to deposit every other check of mine, in that account to have the necessary money each quarter. After 6 months, she knew where our money was going, and she became a tax hawk.
Flash forward a couple of decades, one of our younger male relatives’s wife started her own business when their youngest kid started K school. She made good money and was spending all of it. He had her sit down with my wife and the CPA used by both families. After the first quarter, his wife saw the light, deposited every other week’s income into an escrow savings acct and paid the quarterly taxes. She, like my wife became a tax hawk, and went from mushy lib/mod to conservative.