6 ms·

Wow, this should at least provide for some very interesting natural sociological experiments. For context, I make less than this as a software developer in Chil

by erikw 6y ago

Wow, this should at least provide for some very interesting natural sociological experiments. For context, I make less than this as a software developer in Chile, and still have no problems saving and living a comfortable lifestyle. This is going to significantly impact the lives of folks working in these factories, and it will be interesting to see how it will affect the individuals, their communities, and the quality and competitiveness of the factories.

AnthonyMouse 6y ago
That's assuming it lasts. When you already have a factory in Mexico and now you have to pay them $16/hour, it makes little sense to immediately move it back to the US just in order to save $0 by paying US workers $16/hour instead. But the next thing that happens is that it becomes more cost effective to automate, so you start considering that. Then you don't employ as many people, and they become skilled workers who maintain high tech robots instead of unskilled workers turning wrenches, so you're not actually paying unskilled workers $16/hour anymore. Meanwhile the automation requires retooling, and maybe then you evaluate whether to retool the existing factory or to build a new one in a place with more skilled workers who can maintain the robots. In year zero you just raise wages for the existing workers. In year two or five or ten, something else happens.
- HeadsUpHigh 6y ago
  The notion that car manufacturers from all the industries out there haven't already automated anything that's worth automating is something that I can't understand.
  - wtallis 6y ago
    "Worth automating" isn't a simple one-time binary decision. Whether a given process is worth automating depends on the cost of automating it, and the labor costs that it will save, both of which change over time.
    - HeadsUpHigh 6y ago
      Japanese manufacturers at least have had similar if not higher costs on manufacturing in Japan( and Europe). And these factories still employ a large number of skilled and non-skilled workers. I don't think a bump in salaries that puts a country in the same ballpark as existing manufacturing locations( not counting the extra costs of manufacturing in the States or in Europe) is going to be such a big push for more automation. After a certain point the versatility of human workers is still useful.
  - GrumpyYoungMan 6y ago
    It needs to be understood that any kind of new engineering project has a risk of failure, often quite high. For example, in software, there's the infamous CHAOS report from the Standish Group that comes out every couple of years. A casual Google for the 2018 results has this quote from someone with a copy (https://hennyportman.wordpress.com/2020/01/03/review-chaos-report-2018/ https://hennyportman.wordpress.com/2020/01/03/review-chaos-r...) > "The Standish Group started with a traditional metrics of success by looking at: “on time, on budget, and on target”. This means in this CHAOS Report 2018 for the year 2017: successful: 36%, challenged: 45%, failed: 19%. If they use their “modern” definition of success: “on time, on budget, with a satisfactory result.” You get almost the same results (33%, 48%, 19%)." So, about 1/3 of IT projects are successful, including being on-time and on budget, and about 1/5 are total losses that fail to deliver any value at all. Not great odds and I'd expect the numbers are likely to be broadly similar in other engineering fields. The decision on whether or not to embark on an engineering project (and whether to do it in-house or hire a third party) is among the most challenging duties executives have.
  - mbrodersen 6y ago
    Toyota and Tesla found out the hard way that a lot of tasks can't be automated. Robots are still very very very dumb.
- austincheney 6y ago
  > But the next thing that happens is that it becomes more cost effective to automate, so you start considering that. Economically that is always the desired direction, but not because people cost too much. Changes to automation are incredibly expensive to build. The benefits to increased automation are increased output volume and improved quality control. Any cost reductions that arise are almost always completely unintended. To the contrary increased automation actually raises costs directly proportional to changes in market pressure from the increased output volume and any supply chain changes that increase access to the product. You have to consider things like marketing, regulation, distribution, and so forth that do not benefit from the same automation efforts.
  - AnthonyMouse 6y ago
    > Any cost reductions that arise are almost always completely unintended. Nonsense. Are you trying to argue that computers are not an intentional cost savings over floors full of accountants using pen and paper? That a loom costs more than the labor required for hand weaving? Or that businesses don't realize that they are? > To the contrary increased automation actually raises costs directly proportional to changes in market pressure from the increased output volume and any supply chain changes that increase access to the product. Hardly any manufactured product is genuinely long-term supply constrained. Output volume increases as a result of higher demand. Higher demand comes from lower prices. If automation isn't lowering prices then it isn't increasing output volume.
    - austincheney 6y ago
      > Are you trying to argue that computers are not an intentional cost savings over floors full of accountants using pen and paper? Yes. The key word there is intentional. > Output volume increases as a result of higher demand. Indirectly. Output directly increases from higher production capacity. Wishful thinking and consumer desire do not transform manufacturing without some changes to that manufacturing.
      - AnthonyMouse 6y ago
- Sophistifunk 6y ago
  Those factories are just going to move out of the NAFTA area, assuming Biden doesn't win and undo everything Trump's done.
  - AnthonyMouse 6y ago
    Isn't the point of the agreement that the terms are better than what you get in other areas? It doesn't help to move to China if cars from China are subject to even higher tariffs than cars made for less than $16/hour in Mexico.
- mbrodersen 6y ago
  Tesla tried to go 100% automated and failed.
phasnox 6y ago
You are getting payed less than $16/hour?? As a software developer? Man you are getting ripped off. My advice is to seek for opportunities overseas, or even in your country. For context I live in Ecuador.
- henvic 6y ago
  To give you some context about how migration can impact salary: I made this spreadsheet during 2018 when I was trying to make a case for a raise that never happened. https://drive.google.com/file/d/18D1aAM0bTx4vLSDonpImtIfYR4TOfPQp/view?usp=sharing https://drive.google.com/file/d/18D1aAM0bTx4vLSDonpImtIfYR4T... In 2019 I resigned from my previous employer (an American company growing fast and short of 1000 employees nowadays). I moved to the Netherlands to work on a startup (that pays average for the Netherlands). If you check my website (https://henvic.dev/ https://henvic.dev/) you can see it's not like I was inexperienced. I was told the major reason why my request for a raise was denied was that my salary was great for where I lived in Brazil (northeast, which is poorer than São Paulo and Rio de Janeiro). I considered the work I was doing worth way more. I started looking for new opportunities and asked to quit. This is not uncommon at all. Most of my colleagues in the tech field that are average or better have eventually moved abroad for money or started working remotely for a company overseas. Working for a company in a poor country where it has a local presence is almost always a sentence to getting paid less than you're capable of elsewhere or doing remote work.
  - phasnox 6y ago
    Yes I guess this makes sense, although salaries here in Ecuador can be a little more competitive at least for developers with more experience. They are still way lower than 1st world countries. Anyways, I think moving jobs is the best way to push for a raise, no matter where you live.
pwdisswordfish2 6y ago
Paying these factory workers what they are worth, regardless of where they are situated, has been a long time coming. This is great news.
- randyrand 6y ago
  In your mind, what is the worth a laborer? How does a company determine it?
moltar 6y ago
Similar situations happen in many places around the world. Factory workers are usually not well educated and they don’t handle money well. A perfect example is Alberta oil sands. Many workers are extremely well paid. Most of them just spend everything and manage to get in debt with lavish lifestyle. Buying expensive cars, toys, large houses. They end up without any significant net worth and now are also hostage of their lifestyle. There’s a term for that: lifestyle inflation.
- newyankee 6y ago
  Or probably because they know that even in the worst case scenario they will not go hungry or lack healthcare access. This is so contrasting with India or other Asian countries where opportunities and wealth was always limited and welfare net was limited to your family and social circle which helped in dire times, this led to a very strong savings culture for the middle class.
- ejanus 6y ago
  Who handles money well? This is not true. I live in a Third world and the educated are the most wasteful. They want to show class and style. They live far above their means.

by erikw 6y ago

AnthonyMouse 6y ago

That's assuming it lasts. When you already have a factory in Mexico and now you have to pay them $16/hour, it makes little sense to immediately move it back to the US just in order to save $0 by paying US workers $16/hour instead. But the next thing that happens is that it becomes more cost effective to automate, so you start considering that. Then you don't employ as many people, and they become skilled workers who maintain high tech robots instead of unskilled workers turning wrenches, so you're not actually paying unskilled workers $16/hour anymore. Meanwhile the automation requires retooling, and maybe then you evaluate whether to retool the existing factory or to build a new one in a place with more skilled workers who can maintain the robots. In year zero you just raise wages for the existing workers. In year two or five or ten, something else happens.

HeadsUpHigh 6y ago
The notion that car manufacturers from all the industries out there haven't already automated anything that's worth automating is something that I can't understand.
- wtallis 6y ago
  "Worth automating" isn't a simple one-time binary decision. Whether a given process is worth automating depends on the cost of automating it, and the labor costs that it will save, both of which change over time.
  - HeadsUpHigh 6y ago
    Japanese manufacturers at least have had similar if not higher costs on manufacturing in Japan( and Europe). And these factories still employ a large number of skilled and non-skilled workers. I don't think a bump in salaries that puts a country in the same ballpark as existing manufacturing locations( not counting the extra costs of manufacturing in the States or in Europe) is going to be such a big push for more automation. After a certain point the versatility of human workers is still useful.
- GrumpyYoungMan 6y ago
  It needs to be understood that any kind of new engineering project has a risk of failure, often quite high. For example, in software, there's the infamous CHAOS report from the Standish Group that comes out every couple of years. A casual Google for the 2018 results has this quote from someone with a copy (https://hennyportman.wordpress.com/2020/01/03/review-chaos-report-2018/ https://hennyportman.wordpress.com/2020/01/03/review-chaos-r...) > "The Standish Group started with a traditional metrics of success by looking at: “on time, on budget, and on target”. This means in this CHAOS Report 2018 for the year 2017: successful: 36%, challenged: 45%, failed: 19%. If they use their “modern” definition of success: “on time, on budget, with a satisfactory result.” You get almost the same results (33%, 48%, 19%)." So, about 1/3 of IT projects are successful, including being on-time and on budget, and about 1/5 are total losses that fail to deliver any value at all. Not great odds and I'd expect the numbers are likely to be broadly similar in other engineering fields. The decision on whether or not to embark on an engineering project (and whether to do it in-house or hire a third party) is among the most challenging duties executives have.
- mbrodersen 6y ago
  Toyota and Tesla found out the hard way that a lot of tasks can't be automated. Robots are still very very very dumb.
austincheney 6y ago
> But the next thing that happens is that it becomes more cost effective to automate, so you start considering that. Economically that is always the desired direction, but not because people cost too much. Changes to automation are incredibly expensive to build. The benefits to increased automation are increased output volume and improved quality control. Any cost reductions that arise are almost always completely unintended. To the contrary increased automation actually raises costs directly proportional to changes in market pressure from the increased output volume and any supply chain changes that increase access to the product. You have to consider things like marketing, regulation, distribution, and so forth that do not benefit from the same automation efforts.
- AnthonyMouse 6y ago
  > Any cost reductions that arise are almost always completely unintended. Nonsense. Are you trying to argue that computers are not an intentional cost savings over floors full of accountants using pen and paper? That a loom costs more than the labor required for hand weaving? Or that businesses don't realize that they are? > To the contrary increased automation actually raises costs directly proportional to changes in market pressure from the increased output volume and any supply chain changes that increase access to the product. Hardly any manufactured product is genuinely long-term supply constrained. Output volume increases as a result of higher demand. Higher demand comes from lower prices. If automation isn't lowering prices then it isn't increasing output volume.
  - austincheney 6y ago
    > Are you trying to argue that computers are not an intentional cost savings over floors full of accountants using pen and paper? Yes. The key word there is intentional. > Output volume increases as a result of higher demand. Indirectly. Output directly increases from higher production capacity. Wishful thinking and consumer desire do not transform manufacturing without some changes to that manufacturing.
    - AnthonyMouse 6y ago
Sophistifunk 6y ago
Those factories are just going to move out of the NAFTA area, assuming Biden doesn't win and undo everything Trump's done.
- AnthonyMouse 6y ago
  Isn't the point of the agreement that the terms are better than what you get in other areas? It doesn't help to move to China if cars from China are subject to even higher tariffs than cars made for less than $16/hour in Mexico.
mbrodersen 6y ago
Tesla tried to go 100% automated and failed.

phasnox 6y ago

You are getting payed less than $16/hour?? As a software developer? Man you are getting ripped off. My advice is to seek for opportunities overseas, or even in your country. For context I live in Ecuador.

henvic 6y ago
To give you some context about how migration can impact salary: I made this spreadsheet during 2018 when I was trying to make a case for a raise that never happened. https://drive.google.com/file/d/18D1aAM0bTx4vLSDonpImtIfYR4TOfPQp/view?usp=sharing https://drive.google.com/file/d/18D1aAM0bTx4vLSDonpImtIfYR4T... In 2019 I resigned from my previous employer (an American company growing fast and short of 1000 employees nowadays). I moved to the Netherlands to work on a startup (that pays average for the Netherlands). If you check my website (https://henvic.dev/ https://henvic.dev/) you can see it's not like I was inexperienced. I was told the major reason why my request for a raise was denied was that my salary was great for where I lived in Brazil (northeast, which is poorer than São Paulo and Rio de Janeiro). I considered the work I was doing worth way more. I started looking for new opportunities and asked to quit. This is not uncommon at all. Most of my colleagues in the tech field that are average or better have eventually moved abroad for money or started working remotely for a company overseas. Working for a company in a poor country where it has a local presence is almost always a sentence to getting paid less than you're capable of elsewhere or doing remote work.
- phasnox 6y ago
  Yes I guess this makes sense, although salaries here in Ecuador can be a little more competitive at least for developers with more experience. They are still way lower than 1st world countries. Anyways, I think moving jobs is the best way to push for a raise, no matter where you live.

pwdisswordfish2 6y ago

Paying these factory workers what they are worth, regardless of where they are situated, has been a long time coming. This is great news.

randyrand 6y ago
In your mind, what is the worth a laborer? How does a company determine it?

moltar 6y ago

Similar situations happen in many places around the world. Factory workers are usually not well educated and they don’t handle money well. A perfect example is Alberta oil sands. Many workers are extremely well paid. Most of them just spend everything and manage to get in debt with lavish lifestyle. Buying expensive cars, toys, large houses. They end up without any significant net worth and now are also hostage of their lifestyle. There’s a term for that: lifestyle inflation.

newyankee 6y ago
Or probably because they know that even in the worst case scenario they will not go hungry or lack healthcare access. This is so contrasting with India or other Asian countries where opportunities and wealth was always limited and welfare net was limited to your family and social circle which helped in dire times, this led to a very strong savings culture for the middle class.
ejanus 6y ago
Who handles money well? This is not true. I live in a Third world and the educated are the most wasteful. They want to show class and style. They live far above their means.