New Study Says External Costs Are Primary Competitiveness Challenge to U.S. Manufacturing

NAM.ORG ^ | 12/9/03 | Jim Engelhardt

[independentmind]

Companies currently shift their overhead costs to employees and customers, either through decreased wages, or through increased prices.

Or shrinking profit margins. I just did a little hunting around on Google regarding competitiveness and health insurance costs. Employers seem to think it's a pretty major problem. And they have not been passing all of the increases onto their employees.

[ancient_geezer]

And they have not been passing all of the increases onto their employees.

Actually in the ultimate analysis more than a few do, they head overseas and fire the employees. That's called passing it all on the now ex-empolyee to figure out how take care of himself.

That is possible to turn around, but not in the current income/payroll tax climate.

Rep. Bill Archer, Chairman, House Ways and Means Committee 105th Congress:

• "A recent survey was done, in Europe and Japan, of the major corporations and I was astounded at the results. They were asked, 'If the US abolished its income tax and went to a sales tax, would that have any impact on your decisions?' Eighty percent of the corporations said they would build their factories in the United States of America. Twenty percent said they would move their international headquarters to the United States of America."

[facedown]

BTTT for a clear, unemotional analysis of the problem.

[sixmil]

I still don't buy this argument. If you look at the countries that we are losing munacturing to, they have much higher rates of corruption, which is a huge cost that no one ever talks about even though there is a nearly one to one inverse relationship between corruption and per capita GNP (according to IBD). I think the reason we are falling behind is simple, we give them free access to our markets, but do not get free access to their markets in return. Both sides subsidize certain businisses, and both sides have built in inefficiencies. Getting rid of tariffs and lowering the cost of labor is not going to open up these markets or reduce the trade deficit, and that is really all there is to the free traders' game plan.

[elfman2]

"Having worked in the third world for 6 years shoulder to shoulder with the poorest of the poor I can tell you they work as hard or harder with more respect for the work they are doing then their US. counterparts. "

Sounds interesting. And of course deficiencies in third-worlders’ work ethics are not what makes them worth so little. It’s deficiencies in their education and culture, deficiencies in their infrastructure and society. It’s the potential damage done when a business’s heart is moved, making departments less responsive to manufacturing and visa versa. I think this and a few other problems are what makes cheap foreign workers worth about what they’re paid. Perhaps it’s about the same time they start demanding more money that their society improves making them worth more.

I used to teas my wife after I heard that Cambodian prostitutes were going for $3. I’d suggest that our next vacation be to her birth country, and all we need is $30 to have the night of our lives (or the night of my life). She now tells me that since The Gap opened up a large plant near Phnom Penh I’m flat out of luck have to make us rich if that dream has a chance (as if it had a chance to begin with...)

BTW, I’m in Key Largo. Where do you broadcast?