Posted on 04/14/2005 8:38:08 PM PDT by jb6
Onslaught of globalisation, outsourcing and rising competitiveness of countries like India, besides the American worker pricing himself out of the market with huge pay cheques, health insurance and other benefits, has led to a situation where US companies have virtually zilch for employees wage increases.
These are the major reasons given by economists to explain why employees, across the spectrum of activities in US economy, are increasingly facing a situation where their companies are left with less money for raises. If not a wage freeze, figures being bandied about are as low as 2% wage increases!
The fear amongst most workers is that this situation may have taken root for the long-term and this has jeopardised their future. With the US in a predicament, where the workers see themselves 20 years on, is no longer a time of plenty. Having planned for long-term and worked hard to achieve the American Dream, employees have been left with bad taste in the mouth and hopes shattered.
Randi Lynn Beach writing for The New York Times says, “Even though the economy added 2.2 million jobs in 2004 and produced strong growth in corporate profits, wages for the average worker fell for the year, after adjusting for inflation - the first such drop in nearly a decade.”
Talking to NYT a flabbergasted Peter LeBlanc of Sibson Consulting, a division of Segal, a human resources consulting firm, said, "Pay increases are not rebounding, even though the factors normally associated with higher pay have rebounded".
Others blame the high oil prices for the low-wage-despite-huge-manufacturing scenario. "What we're seeing now is not atypical; employers can't pay the wage bill to keep up with the oil price increase," said Allan H. Meltzer, an economist at Carnegie Mellon University.
Paying the price are companies like Sprint. Its call centre employees have recently concluded an agreement that will voluntarily freeze their wages for 2004. For 2005, prospects aren’t exactly heartening either.
It seems that the American kind of capitalism will suffer the onslaught of India Inc as at Morgan Stanley the reasons attributed to such trends range from foreign competition, outsourcing, and uncertainty of demand.
How is it that the Indians and Chinese recognize and write about our economic first world demise while free traitors and neocon(artists) here come and argue the exact opposite.
Yeah. Competition destroys income. Heck, if we just had the government run everything we'd all be rich!
freeze? I work in tech, my wage is down 15% (not inflation adjusted) over the last 4 years. still, I'm lucky to have a job at all.
and indeed, this is well understood - and its why US tech workers are piling their own college bound children into law schools and not sending them for engineering. no one wants to go to school and pile up college debt for a profession with declining wages and opportunities.
Whenever I see an article about life or work in the US by a Chinese or Indian, it seems like it was actually written by an alien who only saw TV on their way to Earth. The reality on the ground is far different.
Both India and China are steadily growing huge egos that will require adjustment. (Rather like our own government, IMO.)
How absolutely insightful and revealing. Time to dust off those aging, yellowing copies of Adam Smith's Theory of Moral Sentiments and Wealth of Nations.
How is it that the Indians and Chinese recognize and write about our economic first world demise while free traitors and neocon(artists) here come and argue the exact opposite.
Because the free traders leave out the parts of the theory that allows government intervention and protection, both in international and domestic trade. You can bet if you look at how these Indians implement their version of laissez faire, you'll find they enjoy an active partnership with the national government.
Japan provides a good example. The reason Toyota's healthcare retiree payouts are so low is because the government picks up the tab, freeing them to market their products at a lower per unit cost. Here in the US, a GM product carries about $1500 per car add on arising employee and retiree health benefits. Toyota's per car burden is $350.
Some of us mocked India during the seventies because their universities churned out more philosophy majors and lawyers than anything else. Something changed. But then, when you have a population of 1 billion plus people, you can churn out as many philosophers and lawyers as you want, and still produce enough engineers to attack the rest of the world. What made this possible? All you need is a satellite and a computer terminal to start the revolution.
"How is it that the Indians and Chinese recognize and write about our economic first world demise while free traitors and neocon(artists) here come and argue the exact opposite."
So the same free trade for which the US fought warsis now a bad word. How convenient?
The real issue here is the US$ and how depressed the asian currencies are which is why they have poverty and also jobs that are moving there because wages are cheap.
The bush administration knows this very well and has been pushing asian nations to let their currencies appreciate. Its already happening but it cant happen in a day! or even 1 year.. give it some time.
The US worker has been the worlds most privledged and properous worker for a very long time and now that some of that prosperity is spread around the world.. those same values of free trade are being looked down upon. Values only mean something when you stick by them when they are inconvenient.
" You can bet if you look at how these Indians implement their version of laissez faire, you'll find they enjoy an active partnership with the national government."
NO. There is no partnership with the govt in India. In fact thats whats nice about doing business in India or anywhere the Govt minds its own business.
The reason jobs are outsourced is the cheap Rupee. Once the rupee appreciates there will be equilibrium in the labor market and outsourcing will slow down.
"Toyota's per car burden is $350."
Toyota manufactures in the US so its health care costs will be same as GM. The reason its doing well is because it builds better cars.
The brutal reality in this statement is that the market has determined you aren't worth what you were four years ago.
It's been my opinion that programmers and other tech people, for the most part, are way over paid. If a 15-year old can do it, it isn't highly skilled labor, people, your egos notwithstanding. Expect wages to continue downward as the market asserts itself.
in the global market for labor, everyone is "way overpaid" by US standards. Expect more people to seek government employment (that's what I will do when the axe gets to me) - the free traders can pay my salary and benefits.
Precisely why HillaryCare is inevitable, the corporations will demand it.
I am still waiting for India to create something.
To their credit, they did just purchase a bunch of Boeing jets.
I'm suprised this article came from an Indian site. Is this gloating?
indeed, I post that on all the healthcare threads. Unless our party comes up with some plan to keep the medical system private through MSAs (with a private/public/corporate funding model) - national health care is inevitable, because corporations are blowing away their healthcare plans and retiree medical as fast as they can. The only reason GM doesn't do it is because of the UAW.
yeah, whose parts subassemblies increasingly come from china.
Who owns the banks in India?
"Toyota's per car burden is $350."
Toyota manufactures in the US so its health care costs will be same as GM. The reason its doing well is because it builds better cars.
I see I was not clear. The first two sentences refer to Toyota in Japan.
Japan provides a good example. The reason Toyota's healthcare retiree payouts are so low is because the government picks up the tab, freeing them to market their products at a lower per unit cost.
The third sentence refers to the situation in the United States. I'm quite aware Toyota builds cars in the U.S. We have a new plant going up right here in San Antonio. The facts are the same. Lower employee/retiree healthcare costs translate into a lower per unit cost. Ask GM.
Here in the US, a GM product carries about $1500 per car add on arising employee and retiree health benefits. Toyota's per car burden is $350.
The reason its doing well is because it builds better cars.
Thank you for expressing your preference for Toyota. I prefer my 1985 primo Ford Explorer (pickup truck)--still a bright and shiny red . . . and running smooth and easy.
Sure looks like it.
"Who owns the banks in India?"
Once upon a time the govt owned all banking in India. That was a disaster for business and not an advantage. Since the last 10 years most banking has been privatised and the top banks are now pvt banks. In fact most are publicly traded companies. One is even on the nasdaq. The quality of service has improved enormously needless to say and that has helped consumers as well as businesses.. just like it does in any capitalist economy. The govt has some remaining stake in some banks still which is being offloaded to the public. In fact just recently even foreign banks were allowed to take up equity stakes in any bank they choose.
"Lower employee/retiree healthcare costs translate into a lower per unit cost. Ask GM."
The question is are toyota employees complaining about inadequate health care coverage? Has toyota done anything illegal? if not then whats wrong? If GM doesnt know how to run its business then why blame toyota?
"Thank you for expressing your preference for Toyota. "
Its not just my opinion. Thats what consumers think..
In fact GM and ford are living in denial. If they dont wake up from their slumber and see the light, they will go under.
UAW contracts are up in 2007 - big changes will be coming. Its going to be ugly.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.