12 ms·

My father was one of the last tool makers in the US working for Molex. They spent years teaching the Chinese, the Chinese would disassemble all molds sent over

• alex_anglin 6y ago
  Competing in a race to the bottom ought to beg the question about what alternatives and options are. Focusing on efficiency and quality are two examples that would probably be a better long-term bet, with fewer negative secondary effects.
  • nextweek2 6y ago
    That's the strategy of the Germans.
    • koolba 6y ago
      We all want to be like Germany, but do we have the sheer force of will?
  • southeastern 6y ago
    I don't know why more people aren't saying this. Is it really a majority opinion on this site that a race to the bottom is a good, or even tenable idea?
    • deleted 6y ago
      [deleted]
• claudeganon 6y ago
  > To compete, you really do have to cut minimum wage. You have to loosen regulations, and importantly, you have to do massive tariffs / sanctions on China for the next decade. No, you just have to do what China (as well as countries like Germany and Japan) do and have the government subsidize preservation of the industrial base. Screwing over workers gets you nowhere but further populous unrest and social decay.
• namdnay 6y ago
  Without a very strong (and therefore expensive) social security net, “Letting people work for whatever wage they can achieve” is slavery. See 19th century Britain Germany still has a strong industrial base, without a race to the bottom and with strong unions. So it is possible :)
  • RhodoYolo 6y ago
    Do you think the 19th century is a good anecdote for what would happen nowadays? Setting minimum wage seems to create this standard that may do more harm than good. Increasing the 'standard' harms the 'middle-class' and this 'standard' may set the wages lower than entitled per job.
    • birdyrooster 6y ago
      Wealth inequality is a problem you can’t fix by reducing the income of the poor.
      • cloudinshape 6y ago
        Which is exactly the problem: wealth inequality can't be solved by fixing wages. Asian or "factory" countries (not necessarily from Asia but for illustration) have an "artificially" held minimum wage, which indirectly subsidizes the US minimum wage. This is happening to all wages not just minimum wages mind you, so the market needs rebalancing. Wages need rebalancing, taxes need rebalancing, but most wages, including the minimum wage need to come down (in real terms not necessarily in fiat terms).
      • RhodoYolo 6y ago
        I never said that or really proposed a solution, simply stated a problem as i saw it - Which makes sense why i got downvoted. I don't really know the answer with minimum wage but i tend to lean more 'darwinistic' in my philisophies. I wish there was more inherent economic incentive, where everyones salary was more closely tied to their contribution and efforts but I guess thats too much to ask for in this world where non performers and non-productive members of society are given this 'unalienable right' to live off the products of society just for being human.
• AnthonyMouse 6y ago
  > To compete, you really do have to cut minimum wage. You have to loosen regulations, and importantly, you have to do massive tariffs / sanctions on China for the next decade. Part of the problem here is that the existence of some kind of universal "more regulations / less regulations" slider is an illusion. It allows the problem to be cast in partisan terms when that isn't the problem at all, because the problem isn't more or less lines of regulatory code but rather higher or lower regulatory efficiency. Some regulations save a thousand lives at a 0.02% increase in costs. Repealing those is bad. Enacting them is good. Some regulations save two lives at a 5000% increase in cost, which could equally be saved by some less expensive regulation. Enacting those is bad. Repealing them is good. The real problem is that politicians lack the qualifications and incentives to do this well. If good rules don't exist, then someone gets hurt and there is a call for "more rules" rather than "better rules". Politicians who don't know what they're doing pass bad rules. The bad rules cause costs to exceed what they are in China, so manufacturing moves to China. Then the local lobby for improving the rules evaporates because there are no longer local manufacturers to propose or lobby for more efficient rules, and the continued existence of those rules on the books causes no more to form. We clearly need to throw away the existing rules -- they're not working -- the question is, how do we actually get better ones?
  • diryawish 6y ago
    Very well put - efficient and diligent deregulation would be a great thing to see.
  • nemothekid 6y ago
    I agree with your view wrt to regulations, but doesn't the article paint a different story? I'm wondering if I understood the article wrong - As I understand it, the US status as a global reserve currency requires us to maintain a perpetual trade deficit - other countries need dollars and we must give it to them. This is done by buying goods from overseas which has eroded our manufacturing base, as the foreign demand for the dollar is greater than the local demand (which means there is a cheaper manufacturing market). I'm not sure what regulation you could enact here that wouldn't severely depresses other sectors as they exist today.
• kevingadd 6y ago
  How will cutting the minimum wage help in the long run? People earning the current minimum wage already struggle to afford rent and food. Can you really expect to get quality work from someone who has to work 4 jobs to be able to pay rent and is sleeping 4 hours a night? You're not going to defeat China by cutting wages unless you address the societal issues that cause US wages to be high. We already haven't raised the federal minimum wage in decades.
• CraigJPerry 6y ago
  >> To compete, you really do have to cut minimum wage. You have to loosen regulations That’s not what Germany has done but there’s little doubt that Germany’s manufacturing ability is held in a higher regard globally. So i challenge the “have to”. It’s the unproven talk of a particular tribe but i stress unproven since economics is a social science. That means there’s lots of science but is fundamentally stories we tell each other and not akin to, for example, the unassailable truth of gravitational pull.
• zhdc1 6y ago
  In all fairness, the same is happening to China as well. Manufacturing as a percentage of GDP has been declining every year since 2010, and iirc manufacturing in total value has stagnated entirely in many provinces over the last couple of years. Manufacturing is still moving to SE Asian countries (Viet Nam in particular), but even there producers are increasingly moving production in India and East Africa because of rising costs (e.g., wages).
• pbourke 6y ago
  I am surprised that no one has mentioned punitive taxation of companies that engage in offshoring/higher taxes on foreign direct investment as an alternative to tariffs.
  • namdnay 6y ago
    Taxing companies that offshore favours foreign competition even more, because they won’t be taxed.
    • deleted 6y ago
      [deleted]
• schemescape 6y ago
  > To compete, you really do have to cut minimum wage The article points out other ways to reduce the cost of domestic labor: namely, shifting away from high payroll taxes and severing the link between health insurance and employment.
• deleted 6y ago
  [deleted]
• ralph84 6y ago
  China treats workers like shit and the environment like shit. The US wouldn’t win a race to the bottom and shouldn’t try. Instead companies who manufacture in China should be taxed at much higher rates to account for the negative externalities they benefit from otherwise.
  • stjohnswarts 6y ago
    we could if environmental and personal costs were factored into prices. The woudl take a lot of political will that I don't think we have though
• coolgod 6y ago
  > In the end they still haven’t exactly caught up to the quality we had in the US. Arrogance, this is one of the factors that killed US manufacturing.
• southeastern 6y ago
  >You either let free people work for what ever wage they can achieve or we risk becoming slaves ourselves. Minimum wage already isn't really a living wage in much of the country. Rolling back regulations is jumping headfirst into slavery, whereas.. I'm very critical of China but don't see the connection between their expanding industry and slavery. Businesses are diversifying their supply chain in the face of this pandemic.
• momokoko 6y ago
  Banning or taxing out of existence foreign investment on real estate and pegging the fed rate to zero will accomplish the same thing without needing to care about minimum wage. Shenzhen minimum wage currently provides workers in China with a higher standard of living than US minimum wage does in the US. Only difference is that the wealthy in the US will carry more of the burden instead of the working class. And that’s why we don’t have many advocates for it even though it will solve the manufacturing problem almost overnight
  • cloudinshape 6y ago
    The reason foreign real estate investment is so high is because the dollar is the reserve currency of the world, and since those countries produce so much they have a huge excess of dollars but the US produces so little they have nothing to buy with those dollars. The only thing the US can realistically offer is land, if you ban it it will only accelerate the collapse.
    • momokoko 6y ago
      Banning foreign investment in real estate forces foreign investors into more productive investments while simultaneously lowering the cost of living for workers and cost of business for companies. Moving inflation to 6% will create millions of working class jobs in the US due to both a weaker dollar and cheaper money supply for value creation. The losers in all of this are wealthy Americans. They will see their assets depreciate and buying power diminish. And that’s why we don’t do it.
      • cloudinshape 6y ago
        Banning foreign investment will force them to dump dollars and treasury bonds and will accelerate the development of an alternative to it for international trade. But I guess since what you want is inflation that is one way to get it, tho it will not be 6% but closer to 30%. Yield curve control has not worked for anyone, it is a death spiral that results in zombie economies, at best.
• AlgorithmicTime 6y ago
  Unfortunately, we've just discovered that the incoming administration is in the pocket of the Chinese... so we're basically fucked.
• deleted 6y ago
  [deleted]
• Zenst 6y ago
  >To compete, you really do have to cut minimum wage. You have to loosen regulations, and importantly, you have to do massive tariffs / sanctions on China for the next decade. Not so, import taxes and one avenue that should be explored is true carbon costs/impact factored in. Why should something made locally be more expensive than something made the other side of the World and shipped all that distance. Clearly some impact costs not being factored and the whole carbon aspect should be utilised for many benefits - balancing out imports for one.
• ClumsyPilot 6y ago
  > "You either let free people work for what ever wage they can achieve or we risk becoming slaves ourselves." We should work for slave-like wages voluntarily or have it forced upon us? This is a poorly thought out argument. Cost of living, housing, etc. is obviously different in US, you might end up with less income than is necessary for survival. What makes you think you will be able to find any workers at all, let alone those trained to the necessary standard and skill? It should be obvious that appropriate responce to a crime (slave labour) being committed is not to commit the same crime yourself. Any products with stolen materials, stolen labour, or stolen taxes should not be allowed on the market at all.
• simonh 6y ago
  They aren’t slaves, they’re just people extremely happy to get a wage of $10k per year, which would be unobtainable for most of them any other way. The fact that this means they under cut US manufacturing wages by more than half isn’t really their fault. As for bringing back manufacturing home, you need to find two things to make that work. First massive subsidies and tariffs to drive up the cost of foreign imports, imposing huge costs on tax payers and consumers; and tens of millions of people willing to work in factories. The US long term unemployment rate in 2019 was about a third of a percent. Where are you going to find the money, and where are you going to find the people?
  • onepointsixC 6y ago
    He's not referring to all Chinese laborers, but Uyghurs who were first sent to re-edcation camps and then sent off to factories all against their will.
    • simonh 6y ago
      A reprehensible and horrific crime for sure, which I don’t want to trivialise, but not an economically consequential one in the grand scheme of things.
  • pnutjam 6y ago
    I say taxes aren't necessary. Just hold companies accountable for every step in their manufacturing chain. They need to audit and ensure factories address meeting or standards for the workers. I don't mean wages, I mean safety, overtime, etc. Labor needs to be valued at home and abroad.
    • simonh 6y ago
      I'm all for holding companies accountable for their supply chain management, but within reason. I can't see the US government accepting EU employment contract, health, safety and business practices imposed on the US arbitrarily. There has to be some flexibility. Let's be clear, the west has reaped _staggering_ economic benefits from opening up China. Of course there have been costs too, some of them painful, but that's always the way with economic change.
• etc-hosts 6y ago
  > To compete, you really do have to cut minimum wage. Minimum wage workers do not think they are making too much money, also there are a lot more of them then you.
• confidantlake 6y ago
  I am not so sure about the loosen regulations thing. The US had periods of time with virtually no regulations. Rivers caught on fire, people were maimed and died of industrial accidents at much higher rates, water was unsafe to drink, ect. The countries now without much regulation are usually poor, dirty and dangerous. I want to live in a safe, clean, healthy environment. I agree with you on the tariffs. China should not be able to outcompete us because they pollute and use slave labor. Force them to compete on fair terms.
• sgnelson 6y ago
  I've got to add my two cents to this discussion... You discuss tool and die makers, a very highly skilled profession; one that I would argue takes many years of training and labor to master. I would further argue that in the manufacturing world, when it comes to hands on work, tool and die guys are near the very top. Yet at the same time, you talk about cutting the minimum wage. Tool and die makers (of any sort) aren't going to be working for minimum wage. While I don't disagree with the importance of American manufacturing, I think your prescription is wrong. We don't need lower wages, we need better education, more apprenticeships, more buy in from industry to spend money on training their employees. Because sooner than people think, China will have labor cost parity with the US, and we'll find that labor cost isn't solely the reason they are a manufacturing power house.
• sanp 6y ago
  This is missing the point of the article. The main reason for the current state of affairs is the petro-dollar system and the need for US to run deficits. Changing regulations for domestic manufacturing has very little to do with it. There are quite a few European countries with very robust manufacturing bases who are far more regulated (both from a labor and capital perspective). So, minimum wages, labor unions etc have little to do with the US' manufacturing base. In fact, one could argue that weaker unions, if anything, have contributed to the decimation of the manufacturing base.
• Guthur 6y ago
  I'm not disagreeing on the spirit of your statement but I wonder if labour costs are really the prime driver of profitability with high tech manufacturing. It may be, but I'd love to see some of the figures, there could be other factors at play such as environment protection for example.