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Volkswagen & Toyota are doing great however their workers are being paid less in real terms than they would had been in the 1970s despite modern car factories b

by qwytw 5y ago

Volkswagen & Toyota are doing great however their workers are being paid less in real terms than they would had been in the 1970s despite modern car factories being significantly more productive. And this is not surprising because they are competing with workers currently working other industries which are not protected by tariffs. According to https://www.migrationpolicy.org/programs/data-hub/charts/immigrant-population-over-time https://www.migrationpolicy.org/programs/data-hub/charts/imm... immigration didn't start growing until ~1970 and it increased significantly in the 1980's and later.

bobthepanda 5y ago
Tariffs and regulatory barriers in the US just really don't have a great track record. Take railways. Railroad standards (until the late 2010s) were totally incompatible between Canada/US/Mexico and the rest of the world, and combined with Buy America regulations for federal funding you pretty much had to buy domestic. This had the effect of making international customers totally disinterested in incompatible American railroad locomotive products and hiking up costs for American railroads who could also not source internationally without a lot of paperwork, but also not actually resulting in a healthy American railroad manufacturing industry because it turns out the addressable market in just North America was not large.
- qwytw 5y ago
  Yeah, I agree that in general tariffs and other trade barriers are in general a net negative for the economy (and I think this is/was the case in all developed countries). But I just don't see any other way high wage jobs could have been maintained in the manufacturing sector, with a simultaneously shrinking demand and an increasing supply in the labor market. Of course that would be at the cost of the consumer.
  - bobthepanda 5y ago
    I just think that high wage manufacturing was more of a historical aberration than a sustainable long term trend. The US emerged from the war as the only Western power without a shattered manufacturing base. By the times the '70s rolls around this is no longer true; Germany and Japan are now alternate sources of manufacturing for non-US countries so the current account surplus is no longer there. This is ultimately what led to Bretton Woods' collapse; it wasn't that imports were necessarily flooding into the US, it's that the US ceased to be the only source of manufactured goods in the world. The oil embargo further walloped American manufacturing, particularly automakers which had (and have) relatively gas-guzzling models compared to international carmakers. Even if we had high tariffs manufacturers would've figured something out, like how Boeing and some automakers have shifted jobs over the years to the less unionized south. Some of the biggest Ford plants on this list are in Kentucky and Missouri: https://en.wikipedia.org/wiki/List_of_Ford_factories https://en.wikipedia.org/wiki/List_of_Ford_factories
briandear 5y ago
> being paid less in real terms That’s a myth. https://fee.org/articles/dispelling-the-myth-that-wages-have-been-stagnant-for-decades/ https://fee.org/articles/dispelling-the-myth-that-wages-have...
- qwytw 5y ago
  Not really... I wasn't talking about average wages but specifically about car factory worker wages: Ford assembly worker mean wage: $4.30 in 1970* (equal to $29.60 in 2020) $6.57 in 1976. ($30.84( average $20 in 2020* (range $13 - $33) And in any case the article only references the average wage and nobody is disputing that it has increased since the 1970/80s. However it has increased at much slower rate than worker productivity and incomes in lower quantiles have been largely stagnant due to rising income inequality. https://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.492.9277&rep=rep1&type=pdf#:~:text=At%20Ford%20Motor%20Company%2C%20for,1970%20to%20%246.57%20in%201976 https://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.49.... *https://www.glassdoor.com/Hourly-Pay/Ford-Motor-Company-Assembly-Line-Worker-Hourly-Pay-E263_D_KO19,39.htm#:~:text=The%20typical%20Ford%20Motor%20Company,can%20range%20from%20%2413%20%2D%20%2433 https://www.glassdoor.com/Hourly-Pay/Ford-Motor-Company-Asse....

by qwytw 5y ago

bobthepanda 5y ago

Tariffs and regulatory barriers in the US just really don't have a great track record. Take railways. Railroad standards (until the late 2010s) were totally incompatible between Canada/US/Mexico and the rest of the world, and combined with Buy America regulations for federal funding you pretty much had to buy domestic. This had the effect of making international customers totally disinterested in incompatible American railroad locomotive products and hiking up costs for American railroads who could also not source internationally without a lot of paperwork, but also not actually resulting in a healthy American railroad manufacturing industry because it turns out the addressable market in just North America was not large.

qwytw 5y ago
Yeah, I agree that in general tariffs and other trade barriers are in general a net negative for the economy (and I think this is/was the case in all developed countries). But I just don't see any other way high wage jobs could have been maintained in the manufacturing sector, with a simultaneously shrinking demand and an increasing supply in the labor market. Of course that would be at the cost of the consumer.
- bobthepanda 5y ago
  I just think that high wage manufacturing was more of a historical aberration than a sustainable long term trend. The US emerged from the war as the only Western power without a shattered manufacturing base. By the times the '70s rolls around this is no longer true; Germany and Japan are now alternate sources of manufacturing for non-US countries so the current account surplus is no longer there. This is ultimately what led to Bretton Woods' collapse; it wasn't that imports were necessarily flooding into the US, it's that the US ceased to be the only source of manufactured goods in the world. The oil embargo further walloped American manufacturing, particularly automakers which had (and have) relatively gas-guzzling models compared to international carmakers. Even if we had high tariffs manufacturers would've figured something out, like how Boeing and some automakers have shifted jobs over the years to the less unionized south. Some of the biggest Ford plants on this list are in Kentucky and Missouri: https://en.wikipedia.org/wiki/List_of_Ford_factories https://en.wikipedia.org/wiki/List_of_Ford_factories

briandear 5y ago

> being paid less in real terms That’s a myth. https://fee.org/articles/dispelling-the-myth-that-wages-have-been-stagnant-for-decades/ https://fee.org/articles/dispelling-the-myth-that-wages-have...

qwytw 5y ago
Not really... I wasn't talking about average wages but specifically about car factory worker wages: Ford assembly worker mean wage: $4.30 in 1970* (equal to $29.60 in 2020) $6.57 in 1976. ($30.84( average $20 in 2020* (range $13 - $33) And in any case the article only references the average wage and nobody is disputing that it has increased since the 1970/80s. However it has increased at much slower rate than worker productivity and incomes in lower quantiles have been largely stagnant due to rising income inequality. https://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.492.9277&rep=rep1&type=pdf#:~:text=At%20Ford%20Motor%20Company%2C%20for,1970%20to%20%246.57%20in%201976 https://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.49.... *https://www.glassdoor.com/Hourly-Pay/Ford-Motor-Company-Assembly-Line-Worker-Hourly-Pay-E263_D_KO19,39.htm#:~:text=The%20typical%20Ford%20Motor%20Company,can%20range%20from%20%2413%20%2D%20%2433 https://www.glassdoor.com/Hourly-Pay/Ford-Motor-Company-Asse....