FTA ... Killing your local manufacturing industry

[Reynod]

http://www.carsguide.com.au/news-and-reviews/car-news/the_holden_ute_is_dead

A good example here of how stupid politicians in Western countries continue to erode their own manufacturing base, and continue to de-skill the local trades and semi-skilled occupations.

I think FTA is a bad idea.

Discuss ...

 

[riser]

FTA is bad.. the only reasonable way I ever see it being useful is with countries with close or the same cost of living where personal choice dictates who what is bought, not the price.

But look at it from the other country's perspective. They're able to put people to work that otherwise wouldn't be working because they don't have a skillset or education. There is a reason why manufacturing jobs are going overseas to high population, low wage workers: the jobs just aren't that skilled anymore.

 

[johnsonma]

"It is the maxim of every prudent master of a family, never to attempt to make at home what it will cost him more to make than to buy.. . . If a foreign country can supply us with a commodity cheaper than we ourselves can make it, better buy it of them with some part of the produce of our own industry, employed in a way in which we have some advantage."

Adam Smith

 

[amdfangirl]

Tariffs. Import tariffs.

Not that I want to buy an Australian car.

I hope you're not listening Abbott.

 

[Reynod]

Its the conservatives who fought for, and implemented free trade agreements across manufacturing ... and I could be wrong in that assertion ... but I am throwing it out there as a small troll excercise.

/Zzzzz <splash>

 

[amdfangirl]

Depending on the day of the week, economists will praise and slander economic liberalism.

I for one don't claim to know enough about economics to properly argue for either one.

Although I do appreciate Japanese and German cars.

:3

 

[johnsonma]

Tariffs. Import tariffs.

Not that I want to buy an Australian car.

I hope you're not listening Abbott.

Tariffs have the end result of raising the price of goods for everyone. You might get more than you bargained for, especially if other countries raise tariffs on your country to get back at you.

 

[riser]

So does raising the minimum wage and you're for that.

The tariff will make locally produced and more expensive items compete against lower cost items from other countries. Why can South Korea or Japan build a car for significant cost less than what we can do in the US using the same materials? In order to make our own locally produced items competitive, we need to put tariffs on imported items.

Since we've been slowing moving to FTAs, our manufacturing has steadily decreased as those agreements remove the competitive pricing.

 

[johnsonma]

Read the quote I posted, its better for country to buy something on the cheap from another country than to make it itself if it costs more.

Say they produce more cars in Australia instead of the Philippines because of tariffs. The price of the car will go up for everyone while only a few people will benefit from having the extra jobs. This is not a positive scenario. You have to look past the manufacturing jobs perspective and look at the entire picture. Making economic policies to serve the few over the many is no way to be successful.

You are right about the minimum wage in a way. The minimum wage is different in that it benefits more people. You could make the argument that it would raise prices for everyone but when you factor in the fact that everyone on minimum wage has to have government assistance(which comes from everyone else) to survive then you realize that collectively it would be beneficial to everyone.

 

[riser]

John, you missed the point of your own quote. The quote says that if another place can make it cheaper, get in the supply line that you may still have some advantage over the place that can produce it cheaper. It is stating to keep some advantage over those who can do it cheaper than you. Provide the raw materials, let them produce the item at a lower cost so you can purchase it.

Last I saw the US consumes over 25% of the world's raw resources. Though, in turn, how many countries benefit from the US producing or doing something with the resources that other countries can use them? More than 25%. The US maintains an advantage that here we can do things other countries can not yet do. Therefore, advantage remains in the US for now.

Your views on minimum wage are somewhat disturbing.. since you equate the minimum wage worker to a middle aged person struggling to live. I equate the minimum wage job to a teenager to college age. Many people choose to stay at minimum wage positions and their choice should not negatively impact the whole via raising minimum wage.

Raising minimum wage hurts everyone. It raises the bottom price because operational expenses just went up. That means prices have to go up to offset the additional expense of workers. Anyone buying something now has to pay more. The person making minimum wage sees a short term increase because they now have some extra money, but prices around them have gone up as well.

Which poses the ultimate question which you will hopefully answer me: Why not make minimum wage $15-$20, or even $50,000 a year? That would bring everyone out of poverty and afford everyone a respectable life, right?

 

[johnsonma]

Its not just the people earning minimum wage, its also the people earning around the same level as minimum wage. Not sure where you got the middle aged information from. In the end raising it does have some con's. Raising it so much at one time would amplify them.

You are overstating the effect of the minimum wage as well. Not all prices would go up, just industries that rely heavily on minimum wage workers(fast food). Maybe a rise if fast food prices would be a good thing, maybe people would eat healthier.

You must have misread the quote or something. The point is that if someone else can make it cheaper then buy it from then using the profits from the industries that you are better at than them.

http://www.econlib.org/library/Enc/FreeTrade.html

 

[riser]

It's cheaper for me to go to the grocery store and buy healthy food than to eat at fast food. In fact, I just had 2 steaks the other night, baked potatoes with squad and zuccinni. The total cost for the entire meal for us was just shy of $27. I had more food, healthier food, and all that great stuff. Now, had I went to Arby's and ordered 2 meals, it would have cost me around $25 for less food. And that doesn't compare to a steak.

At what point does the minimum wage increase stop affecting people? By increasing minimum wage, you reduce the buying power of everyone above them. This is called Shrinking the middle class.

If you raise minimum wage to $9. Does the person making $10 automatically get a raise? What about the person making $11, $15, $20? You effectively cut their buying power because minimum costs go up around them.

Or do you just expect the business to eat the loss?

Did you know Subway, who pay all their employees over minimum wage, breaks even on their $5 footlong promotion? They hope you buy chips and drink to make a profit. If you just bought the $5 footlong, they break even, not making any profit.

Raising the minimum wage raises minimum operational expenses. These costs are passed on to the consumer. I'm guessing you did not have to take a Microeconomics (not even Macro) class in college? The entire class generally costs operating expenses of a business.

On the quote:
With context provided, you do realize that the quote goes against everything you argue? Minimum wage is bad, Unions are bad, equal pay, etc.
If you agree with the quote, you're an evil conservative.

 

[johnsonma]

Classifying my view on tariffs as conservative is pointless. Maybe conservatives would agree with me. Who cares?

By the way, it was in my economics class that I first learned about the pitfalls of tariffs. We didn't really cover operating expenses either, that falls more in the realm of finance and accounting. Classes I have also taken.

I expect the business to take part of the loss, if they can't pay their employees enough to live without staying in business then why they hell are they in business?

Certain costs may go up but you are acting like every industry in america will take on higher costs by increasing the minimum wage when that is hyperbole. I agree that at the basic level the minimum wage is bad but given the extenuating circumstances I believe raising it would be a good thing.

Arby's is going to be expensive regardless, they charge up the nose for their food.

 

[amdfangirl]

Tariffs are good if you want to sell good domestically.

And that was fine for many many years.

Not exporting and selling goods domestically.

And it would save the Australian car industry.

Not that anyone wants Australian cars.

xD

 

[riser]

Classifying my view on tariffs as conservative is pointless. Maybe conservatives would agree with me. Who cares?

By the way, it was in my economics class that I first learned about the pitfalls of tariffs. We didn't really cover operating expenses either, that falls more in the realm of finance and accounting. Classes I have also taken.

I expect the business to take part of the loss, if they can't pay their employees enough to live without staying in business then why they hell are they in business?

Certain costs may go up but you are acting like every industry in america will take on higher costs by increasing the minimum wage when that is hyperbole. I agree that at the basic level the minimum wage is bad but given the extenuating circumstances I believe raising it would be a good thing.

Arby's is going to be expensive regardless, they charge up the nose for their food.

Was is a basic economics class? Or was it MicroEconomic, MacroEconomic, or something more advanced?

Finance and Accounting only manage the numbers, not run the business.

We in the United States have a concept of Minimum Wage. The minimum amount you are paid to do a job. Most other countries do not have a minimum wage. They're not stupid enough to work for a rate that is not reasonable.
Not every business is out there to provide someone a great living. The businesses survive off cheap labor doing very basic jobs providing very basic needs.
Most "minimum wage" jobs aren't minimum wage. They pay over minimum wage.

If your teachers were worthwhile, you should be able to combine your economics with your finance and accounting classes to determine that supply/demand and CapEx and OpEx dictate what you can pay your employees.

As I said earlier I have two friends who both have businesses. One is a coffee/food shop, the other is a pizza place. They pay slightly over minimum wage. Both pay themselves between $50k and $75k. They run their businesses all on their own.
Based on your comments, they shouldn't be in business because they can't pay their employees a cost of living amount.

You effectively shut down nearly every place that serves food or provides a basic service. Your economics teacher did great.

What liberal school did you attend again?

 

[johnsonma]

I took both Macro and Micro.

Why do you keep exaggerating to try to make a point? Raising the minimum wage would not shut all these food and services places down, far from it. Your two friends have multiple options to cope with the loss, raising prices, taking a pay cut and cutting expenses in other places just to name a few. You know, that running a business like you know what your doing kind of stuff isn't that hard.

If we didn't have the minimum barrier to the supply and demand of our labor market, then people would need even more government assistance to live on their own because businesses could pay them next to nothing with high unemployment.

I know you don't agree with minimum wage because it is a limiting barrier in supply and demand but in this case, like I've said continually, I think the pros out weight the cons.

I went to the University of Wyoming and am currently attending Southern New Hampshire University. My economics professor had a masters in Chemical engineering before FMC made him get his MBA. He was a pretty big conservative and my adviser too.

 

[riser]

Well, I hope you keep an open mind when you venture out into the real world and realize that a lot of what you think and what you were taught doesn't work that way in practice. I have plenty of years of working within businesses, assisting with the numbers and managing resources, from small companies to huge companies.

What kind of career path are you going down? Just curious. I'm guessing you're going to try to work for a university after your graduate?

 

[Beachnative]

John, you missed the point of your own quote. The quote says that if another place can make it cheaper, get in the supply line that you may still have some advantage over the place that can produce it cheaper. It is stating to keep some advantage over those who can do it cheaper than you. Provide the raw materials, let them produce the item at a lower cost so you can purchase it.

Last I saw the US consumes over 25% of the world's raw resources. Though, in turn, how many countries benefit from the US producing or doing something with the resources that other countries can use them? More than 25%. The US maintains an advantage that here we can do things other countries can not yet do. Therefore, advantage remains in the US for now.

Your views on minimum wage are somewhat disturbing.. since you equate the minimum wage worker to a middle aged person struggling to live. I equate the minimum wage job to a teenager to college age. Many people choose to stay at minimum wage positions and their choice should not negatively impact the whole via raising minimum wage.

Raising minimum wage hurts everyone. It raises the bottom price because operational expenses just went up. That means prices have to go up to offset the additional expense of workers. Anyone buying something now has to pay more. The person making minimum wage sees a short term increase because they now have some extra money, but prices around them have gone up as well.

Which poses the ultimate question which you will hopefully answer me: Why not make minimum wage $15-$20, or even $50,000 a year? That would bring everyone out of poverty and afford everyone a respectable life, right?

Riser, your smart but the arguement of raising it to $15 or $20 is silly just as you saying by lowering it and everything will work out. How about lowering it to $2 or $1.50 and hour?

The bottom line is every third world country has an advantage over the US mainly no labor laws, no EPA, no mandated regulations....Don't think so look what happened to California with the surfboard industry when NAFTA was first passed.
Truck loads of shaped surfboards went to mexico to get glassed because of 1) labor rate and laws 2) EPA they dump dirty acetone right into the ground
It's an unfair advantage and if the intention was to make neighboring countries better ( like the laws we have) and in turn them buying more goods,OK. But that is not what happened it's still the same crap, kid workers, lousy schools, no rules for bettering Mexico.
NAFTA should have spelled it out but failed miseraby!!!

 

[amdfangirl]

I'm hoping at some point that manufactuering returns to the developed world.

It would be nice not to create an environmental catatrophe everytime we want a new product.

If enough hipsters get behind such an initive, we might be able to make a niche.

Manufacturering or assembly in developed nations is now a feature. Look at the Moto X (Texas) and the Raspberry Pi (UK). I hope this sets a trend.

Not particularly fond of eating fish from the same sea that untreated waste is thrown into.

 

[riser]

John, you missed the point of your own quote. The quote says that if another place can make it cheaper, get in the supply line that you may still have some advantage over the place that can produce it cheaper. It is stating to keep some advantage over those who can do it cheaper than you. Provide the raw materials, let them produce the item at a lower cost so you can purchase it.

Last I saw the US consumes over 25% of the world's raw resources. Though, in turn, how many countries benefit from the US producing or doing something with the resources that other countries can use them? More than 25%. The US maintains an advantage that here we can do things other countries can not yet do. Therefore, advantage remains in the US for now.

Your views on minimum wage are somewhat disturbing.. since you equate the minimum wage worker to a middle aged person struggling to live. I equate the minimum wage job to a teenager to college age. Many people choose to stay at minimum wage positions and their choice should not negatively impact the whole via raising minimum wage.

Raising minimum wage hurts everyone. It raises the bottom price because operational expenses just went up. That means prices have to go up to offset the additional expense of workers. Anyone buying something now has to pay more. The person making minimum wage sees a short term increase because they now have some extra money, but prices around them have gone up as well.

Which poses the ultimate question which you will hopefully answer me: Why not make minimum wage $15-$20, or even $50,000 a year? That would bring everyone out of poverty and afford everyone a respectable life, right?

Riser, your smart but the arguement of raising it to $15 or $20 is silly just as you saying by lowering it and everything will work out. How about lowering it to $2 or $1.50 and hour?

The bottom line is every third world country has an advantage over the US mainly no labor laws, no EPA, no mandated regulations....Don't think so look what happened to California with the surfboard industry when NAFTA was first passed.
Truck loads of shaped surfboards went to mexico to get glassed because of 1) labor rate and laws 2) EPA they dump dirty acetone right into the ground
It's an unfair advantage and if the intention was to make neighboring countries better ( like the laws we have) and in turn them buying more goods,OK. But that is not what happened it's still the same crap, kid workers, lousy schools, no rules for bettering Mexico.
NAFTA should have spelled it out but failed miseraby!!!

Yes, we have regulated ourselves to the point that we can't compete with others. This I understand because of necessity for ourselves. Dropping MW won't have the same affect because the cost is already there and the affect too great because initial costs will not go down for multiple reasons. On the other hand, raising MW means costs must instantly go up. This is why with MW being raised, it happens months or years after being passed to allow companies to adjust their pricing.

I remember when pricing was adjusted last time. I regularly stopped at the same gas station to get Gatorade along the way. Same price. One day, I went in and the cashier when to ring it up and it was $0.50 more. They thought the system was wrong. The other employee told them all prices went up on everything. This is was because the MW law was passed. Prices had to increase to offset the additional operating costs.

 

[riser]

I'm hoping at some point that manufactuering returns to the developed world.

It would be nice not to create an environmental catatrophe everytime we want a new product.

If enough hipsters get behind such an initive, we might be able to make a niche.

Manufacturering or assembly in developed nations is now a feature. Look at the Moto X (Texas) and the Raspberry Pi (UK). I hope this sets a trend.

Not particularly fond of eating fish from the same sea that untreated waste is thrown into.

Fish swim where they pee and poop.

Can you please tell our American leftists what the Minimum Wage is in Australia?

I'm all for manufacturing in America. We can't over price the items heavily because people want a better living doing the job though.

Cooper Tires in the US is a 3rd tier tire manufacturer, meaning they do not design their own tires. They buy designs and produce them at a much lower rate since they did not incur the costs of design and testing. The workers are paid well. A couple years ago they went on strike wanting to get paid more, upset the white collar workers weren't doing the real work. The white collar workers they referenced were the guys doing sales (making commission on the sale, etc).So the blue collar workers went on strike. One week later the strike continued to rage on and Cooper Tire had to do something. All white collar workers went out to the factory and within 24 hours were producing at 75% rate of the full production. Most of those white collar workers had been blue collar workers in the same factory and knew how to do the work.
The blue collar workers were making $18-$27/hour making tires. The white collar workers were $40k to $130k a year salary including commission. The C level people were making $175k and up.

The average house in Findlay, Ohio where Cooper Tire has one of its two plants is around $120,000. If you move outside the town, a nice house is easily found for $100,000 or under.

We in the US have an issue. It isn't how well you life. It's how much money do you make compared to someone else. You could make $50,000 a year and have a ton of money in the bank and live off 1/3rd of your income while the guy making $100k is living paycheck to paycheck. The person making $50k a year will feel they are being treated unfairly and demand more money.

That's the problem with manufacturing in America. It already pays well, it just requires you do actually do work where you might get dirty. Americans have become pretty boy pansies compared to a generation or two ago.

Americans are afraid to do work, plain and simple.

 

[riser]

I'll even point out that two weeks ago my fiancé had her family's friend come over that we were giving some items to that we didn't need. The girl commented that we had a nice house, nice things, and all that. A day later, we get a call saying the girl was bashing us. Were we on government assistance or selling drugs? My fiancé stays at home, I work, so in that person's eyes the only way to do that was to sell drugs or be on government assistance.

That is what is wrong with people today. No one understands you can actually work and make a nice living. It doesn't require doing illegal things or living off the government.

 

[Reynod]

I'm hoping at some point that manufactuering returns to the developed world.

It would be nice not to create an environmental catatrophe everytime we want a new product.

If enough hipsters get behind such an initive, we might be able to make a niche.

Manufacturering or assembly in developed nations is now a feature. Look at the Moto X (Texas) and the Raspberry Pi (UK). I hope this sets a trend.

Not particularly fond of eating fish from the same sea that untreated waste is thrown into.

Fish swim where they pee and poop.

Can you please tell our American leftists what the Minimum Wage is in Australia?

I'm all for manufacturing in America. We can't over price the items heavily because people want a better living doing the job though.

Cooper Tires in the US is a 3rd tier tire manufacturer, meaning they do not design their own tires. They buy designs and produce them at a much lower rate since they did not incur the costs of design and testing. The workers are paid well. A couple years ago they went on strike wanting to get paid more, upset the white collar workers weren't doing the real work. The white collar workers they referenced were the guys doing sales (making commission on the sale, etc).So the blue collar workers went on strike. One week later the strike continued to rage on and Cooper Tire had to do something. All white collar workers went out to the factory and within 24 hours were producing at 75% rate of the full production. Most of those white collar workers had been blue collar workers in the same factory and knew how to do the work.
The blue collar workers were making $18-$27/hour making tires. The white collar workers were $40k to $130k a year salary including commission. The C level people were making $175k and up.

The average house in Findlay, Ohio where Cooper Tire has one of its two plants is around $120,000. If you move outside the town, a nice house is easily found for $100,000 or under.

We in the US have an issue. It isn't how well you life. It's how much money do you make compared to someone else. You could make $50,000 a year and have a ton of money in the bank and live off 1/3rd of your income while the guy making $100k is living paycheck to paycheck. The person making $50k a year will feel they are being treated unfairly and demand more money.

That's the problem with manufacturing in America. It already pays well, it just requires you do actually do work where you might get dirty. Americans have become pretty boy pansies compared to a generation or two ago.

Americans are afraid to do work, plain and simple.

I can't allow you to take the pi$$ out of your fellow Americans riser ... thats our job.

We have equally the same amount of fat Aussies here who don't want to work.

My third son started work as a grano (concrete worker) a couple of weeks ago and loves it - he make $600 a week and works hard ... he is 17.

His boss said he must have trialled a dozen others in the last year or so ... most lasted a couple of days.

My lad is on the helicopter thingy now and learning about different finishes (exposed aggregate etc) and already helps with the volume cals ... so he is doing well.

Most of the work is hard ... expecially on the barrow ... but he is fit and healthy.

 

[riser]

You do not have an equal amount. Your entire country is equivalent to some states in the US. You have lazy people, sure, considering the origins of the country is founded on people taking from others (convicts).

People are lazy, especially when you see other people living with luxury items. No one wants to get dirty anymore.. nothing wrong with blue collar jobs. My family has a history of it and I'm the first generation of white collar.

 

[Beachnative]

John, you missed the point of your own quote. The quote says that if another place can make it cheaper, get in the supply line that you may still have some advantage over the place that can produce it cheaper. It is stating to keep some advantage over those who can do it cheaper than you. Provide the raw materials, let them produce the item at a lower cost so you can purchase it.

Last I saw the US consumes over 25% of the world's raw resources. Though, in turn, how many countries benefit from the US producing or doing something with the resources that other countries can use them? More than 25%. The US maintains an advantage that here we can do things other countries can not yet do. Therefore, advantage remains in the US for now.

Your views on minimum wage are somewhat disturbing.. since you equate the minimum wage worker to a middle aged person struggling to live. I equate the minimum wage job to a teenager to college age. Many people choose to stay at minimum wage positions and their choice should not negatively impact the whole via raising minimum wage.

Raising minimum wage hurts everyone. It raises the bottom price because operational expenses just went up. That means prices have to go up to offset the additional expense of workers. Anyone buying something now has to pay more. The person making minimum wage sees a short term increase because they now have some extra money, but prices around them have gone up as well.

Which poses the ultimate question which you will hopefully answer me: Why not make minimum wage $15-$20, or even $50,000 a year? That would bring everyone out of poverty and afford everyone a respectable life, right?

Riser, your smart but the arguement of raising it to $15 or $20 is silly just as you saying by lowering it and everything will work out. How about lowering it to $2 or $1.50 and hour?

The bottom line is every third world country has an advantage over the US mainly no labor laws, no EPA, no mandated regulations....Don't think so look what happened to California with the surfboard industry when NAFTA was first passed.
Truck loads of shaped surfboards went to mexico to get glassed because of 1) labor rate and laws 2) EPA they dump dirty acetone right into the ground
It's an unfair advantage and if the intention was to make neighboring countries better ( like the laws we have) and in turn them buying more goods,OK. But that is not what happened it's still the same crap, kid workers, lousy schools, no rules for bettering Mexico.
NAFTA should have spelled it out but failed miseraby!!!

This is a progressive idea. Make everyone even including entire countries. Even if it means making great countries mediocre to crappy to match all the other mediocre to crappy countries out there.

That's a NAFTA idea and look who drafted it up, Clinton signed it too. But be honest and find out who created it then call them progressive........With much consideration and emotional discussion, the House of Representatives approved NAFTA on November 17, 1993, 234-200. The agreement's supporters included 132 Republicans and 102 Democrats. NAFTA passed the Senate 61-38. Senate supporters were 34 Republicans and 27 Democrats. Clinton signed it into law on December 8, 1993; it went into effect on January 1, 1994.[3][4] Clinton, while signing the NAFTA bill, stated that "NAFTA means jobs. American jobs, and good-paying American jobs. If I didn't believe that, I wouldn't support this agreement."[