“With his threats to impose punitive tariffs on Chinese imports, rip up trade deals and force companies such as Apple to bring manufacturing home to the US, Donald Trump has offered a protectionist vision of the future that makes traditional economists quake in their boots,” Shawn Donnan reports for The Financial Times. “But with proposals designed to cater to the fears of angry blue-collar workers in the rust belt states through which his presidential campaign has been moving, the Republican frontrunner has also set off the biggest trade war inside the party since the 1970s. Whether or not Mr Trump is elected, analysts say it is an internecine war that is already having repercussions beyond the party.”
“In an op-ed published in USA Today on Tuesday the property tycoon railed against a vast new Pacific Rim trade pact covering 40 per cent of the global economy that the Obama administration agreed with Japan and 10 other economies last year,” Donnan reports. “‘TPP is the biggest betrayal in a long line of betrayals where politicians have sold out US workers,’ Mr Trump wrote.”
“It is hard to overstate what a shock to the Republican system Mr Trump’s trade pronouncements — and the support they are finding among voters — have been,” Donnan reports. “Since Ronald Reagan the Republican party has, with a few exceptions, been unabashedly pro-trade even as the Democratic party and its labour union base have grown more sceptical. (Hillary Clinton and Bernie Sanders have said they oppose the TPP in its current form). Mr Obama last year relied on Republicans in Congress to marshal votes and secure the “fast-track” authority he needed to conclude the TPP negotiations and others. He needs a repeat of that support to have any hope of seeing the TPP ratified by Congress before he leaves office next January.”
Read more in the full article here.
MacDailyNews Take: We live in interesting times.
Those jobs aren’t coming back. – Steve Jobs, February 2011, when asked by U.S. President Barack Obama why iPhones aren’t made in America
We sell iPhones in over a hundred countries. We don’t have an obligation to solve America’s problems. Our only obligation is making the best product possible. — Anonymous Apple executive, January 2012
The entire supply chain is in China now. You need a thousand rubber gaskets? That’s the factory next door. You need a million screws? That factory is a block away. You need that screw made a little bit different? It will take three hours. — Anonymous former Apple executive, January 2012
Why Donald Trump is now targeting Apple and their ‘damn computers’ – January 19, 2016
Trump could cost U.S. consumers $6 billion per year by imposing a 35% tariff on Apple iPhone – January 19, 2016
Trump: We’ll get Apple to manufacture ‘their damn computers and things’ in the U.S.A. – January 18, 2016
Robots, not people, led Apple to make new Mac Pro in the U.S.A. – January 21, 2014
Former Reagan staffer: Apple has an obligation to help solve America’s problems – April 3, 2012
[Thanks to MacDailyNews readers too numerous to mention individually for the heads up.]
First 2014 then 2016!
No, you don’t understand how well protectionism works! When the high Smoot-Hawley tariffs were imposed in 1930, they ended the Depression, boosted American employment, and swept Herbert Hoover to reelection.
It is not 1930, it is 2016 and manufacturing & trade in 2016 looks vastly different than it did in 1930.
Imposing a 1930’s solution to a 2016 problem isn’t going to work. The world is smaller now, economies much more closely linked and frankly America doesn’t make much anymore.
I think the protectionism sounds great on paper, right up until your iPhone cost $2500. America has chosen a path, we like things to be affordable and we like to have lots of things. We were not like that in 1930. Good luck.
You do know that the Depression lasted 10 more years, unemployment hit 24%, and FDR was elected in 1932, I hope.
Nixon removing the last vestiges of the Gold Standard in May 1971 is what started these wild fluctuations in the world currencies. https://en.wikipedia.org/wiki/Nixon_Shock
Oh an internecine war, that’s good, give the junkie, uh I mean the country their regular war fix.
Gee, a presidential candidate who puts American jobs first…how refreshing.
Yes let bring those very low paying jobs back to American robots. /s
It is better to support American robots than support the Chinese. American robots, ie robots and automated factories in the U.S. is better than no robots.
America needs to bring manufacturing back. Just like Apple realizes it is important to do everything in-house.
You are not going to have a strong vibrant country if it relies on EVERYTHING from the outside.
“Those jobs aren’t coming back. – SJ”. Won’t be the first time SJ was wrong. He never batted 1000 either.
“You are not going to have a strong vibrant country if it relies on EVERYTHING from the outside.”
I would disagree on two counts.
1. We don’t rely on everything from outside this country
2. Just because we use outsourced materials doesn’t make us weak.
Since we are in an apple blog, think of it like apple switching to intel, or getting rid of Xserve, they see there are other people better equipped and doing a better job…so they would rather partner with them instead of making it hard on themselves.
I don’t have a problem when America (and let’s face it – America means the U.S. defense industry because it is our military that keeps us free and strong) needs a technology/skill that we do not or never possess(ed).
However, we had possessed many skills and use to have many capabilities. Bringing American manufacturing back means we used to know how to do it and use to have the skill. I.e., we used to make our own steel.
In case you have not noticed, Apple needed Intel at a moment in time but is now expending great effort to move away from Intel and DEVELOP THEIR OWN CHIPS. Hence, bringing it in house because they know it is important for them to CONTROL THEIR OWN DESTINY.
What applies to business applies to running a country. Hence, The Donald will be good for America.
It is truly amazing how enormously myopic Trump seems to be.
Anyone with half a brain can understand how these things work. In every part of the world, it has been established that white-collar work creates more wealth than blue-collar work. Service economy generally supports many more than manufacturing (or agricultural) one. There is a reason why Switzerland is richer than Honduras, or Tajikistan (all three around 8 million people). If you want your country to prosper, you want your people to educate themselves above the assembly-line (or field crops) jobs. The reason America (and Japan, and Korea) had prospered was because they didn’t hesitate to export their manufacturing to places that can do it for less. With fewer manufacturing jobs, people tend to acquire the necessary skills for those higher-paid ones. Had America kept all that manufacturing, the cost of a TV set would still be $15,000, the cost of a refrigerator would still be $5,000, etc.
Let the simple jobs be done by those who have the cheapest labour force. Your economy will be much stronger if you get rid of manufacturing and replace it with service and other professional-level work.
Seems like there might be other reasons Switzerland is richer than Honduras and Tajikistan.
Switzerland has built up its “system” over hundreds of years with willing neighbor trade partners.
Honduras and Tajikistan can not do that in less than a thousand years and likely not then given their remoteness from international centers.
Andrew Grove (Intel) on the benefits of manufacturing:
Interesting article with a lot of insight. But Grove shys away from the core issue, which is the minimum wage. The logic for supporting a minimum wage, while well meaning, is deeply flawed as it undercuts those low-skill workers it is intended to help.
Milton Friedman described the minimum wages as a form of discrimination against the low-skilled. A strong economy might generate enough jobs to compensate for those lost to a higher minimum wage. But that is disingenuous as the jobs are still lost.
Too bad those Hon Hai jobs in China could not have been created in the US. But the minimum wage ended that idea before it even began.
Your service economy vs manufacturing economy is why the “rich get richer and the poor get poorer”. How has that worked out over the years?
Guess you haven’t noticed that 47% of our population needs work and you are refusing to letting them have a choice. The other option is to feed and house them for doing nothing.
The reason gov’t emphasizes the service economy is because they are incapable of running a manufacturing company. Their performance of running service companies isn’t so good, either. Look at the USPS, Amtrak, and their new health insurance (aka ObamaCare). They all rely on subsidies because they are always in the “red”.
As I had said in another post, the rich get richer and the poor get poorer in America because the rich get the tax breaks, and the poor pick up the tax slack.
In the rest of the developed world, dumping manufacturing jobs on the lower-paying developing nations had brought the expected rewards to their populations, which is evidenced by the consistent economic growth of those countries.
It is fairly logical (to a person with a functioning brain) why getting rid of low-paying jobs is better for the economy than letting them keep the growth down.
The only reason you can buy a box of strawberries in your supermarket for $3 is because illegal Mexican immigrants are the ones picking them from the California fields. No American labourer would be willing to work for as little money and no benefits. And that’s the only reason why strawberry growers can sustain their farms (without government subsidies) — paying illegals below minimum. In order to sustain manufacturing (for example of an iPhone factory), only three options would be viable:
1. Paying workers way below minimum wage
2. Receiving a substantial government subsidy
3. Selling that iPhone for $2,500 apiece
And the only reason the remaining manufacturing jobs are still in America is because those products have high enough a margin (cars, etc) that they can sustain all those jobs and still turn some profit.
Actually, no. NOBODY is paying the taxes to cover the government services and military largesse in the USA. The rich have tax havens, the corporations have tax havens, and the working poor with low income have low tax rates. That is why federal debt in the USA is growing without any restraint.
Interestingly, post WW2, fiscally responsible leaders were able to pay back war costs, build the interstate highway system, give the GIs practically free college educations, AND run a budget surplus. How did those evil liberals like Eisenhower do it? He aligned the tax code to incentivize the rich to reinvest their profits in America rather than letting them hoard it. Today the extremist right whines about marginal tax rates knowing full well that their lobbyists punched so many loopholes into the tax code that nobody actually pays nominal tax rate. And as we all know, corporate leaders have no commitment to the country — they are the foremost promoters of a world where fences prevent humans from moving to work, but money can be shipped wherever they want to stash it. How convenient: corporations can exploit local labor surpluses where wages are low, then take the extra profits and hide them to prevent that money being reinvested in the people and infrastructure that keeps the business going. Then go on Fox news and bitch that the USA doesn’t maintain its infrastructure. Of course the USA doesn’t maintain its infrastructure. The hawks that took over government are too busy building military bases in the middle east. The military-industrial complex that Eisenhower warned us about is live and well — corporations profiting from war or their communist factories in China don’t care that bridges are falling down in the USA. US taxpayers will put it on the credit card, they always do.
You’re absolutely right. Buffet said it really well: his maid is taxed at higher rate than him. She, who likely makes less than $50,000 per year, has to give up a solid chunk (almost 20% of it, or $10,000 depending on circumstances) of that to the IRS, leaving her with the bare minimum to survive. He, ho brings in millions, ends up paying an effective tax of less than 10%. Obviously, even if that ends up being millions of dollars, he does get to keep ten times as much.
Americans love to tax the poor and let the rich enjoy their riches.
As was said before: the poor do not pay taxes. They receive welfare and food stamps and housing.
Corporations don’t pay taxes, they are tax collectors for the government.
I’m pretty sure Buffet paid more in taxes than his secretary (let’s get that straight, also) and they both received the same services from the government. I would bet the secretary, in her lifetime, received more benefits (ie was more of a tax burden) from the government than Buffet.
So now explain fairness again, please.
That’s quite disingenuous.
What Buffet said was quite clear: Buffet’s tax burden was lower than his maid’s. After paying all the taxes, not only is he left with vastly more money than his maid (duh!?), the percentage of his income that he gets to keep is greater. Anyone with a functioning brain can understand that this is not fair. It would be more fair if the tax burden were at least exactly the same (say, 20% of the income, or 15% of the income). If we were trying to be truly fair, we would have a sliding scale, with tax brackets, where those with lower taxable income would pay smaller percentage, and those with higher would pay greater share. And we actually do have it; in most countries of the developed world, taxation system has similar progressive taxation scale. However, in America, the tax code is so complex that it allows those who are rich to take advantage of a myriad of exemptions, so that their effective tax rate invariably ends up lower than the majority of the middle class.
So, here is it, extremely simplified: The maid earned $50,000; paid $10,000 in taxes (20%), and had to survive (for the whole year) on $40,000. Buffet earned (for the sake of the argument) $10 million. He paid $1.5 million in taxes (15%), and he had to survive on $8.5 million (for the whole year).
The maid had to give up greater share of her meagre earnings to the IRS, and was left with significantly less than him to survive.
How hard is this to understand? Would you have preferred if Buffed had paid $10,000 in taxes (same as his maid)? Or how much more? $15,000? What would have been fair?
Do you honestly believe that the tax burden should be absolute (i.e. everyone pays same amount, regardless of income)? This is your idea of fairness?
As for the amount of benefits received from the government, if that maid was paying taxes, it means that she wasn’t collecting unemployment or any other direct benefit. What she was receiving from the government was what normally everyone receives (garbage collection, police, courts, schools, etc). One could easily argue that Buffet was proportionately greater burden on the society than her, using the system disproportionately more. An average middle-class person goes through their life without ever stepping into a court room. Buffet likely initiated more than one lawsuit in his life, and with highly paid private legal counsel that he had, those were likely protracted affairs. Let’s not forget the amount of flying he does in his business jet; air traffic control services are free to all who use them, but I doubt that his maid ever took a trip in a private plane. Commercial flying doesn’t count (your ticket price includes plenty of taxes and fees, which go to the government).
Studies have confirmed that rich people tend to be a greater burden on the common government services than middle-class, or lower. There is a reason why taxation is (nominally) progressive and is supposed to tax the rich more.
America is not the only developed nation in the world. There are many others (from Japan, to South Korea, to many EU nations, such as the UK, Germany, France…). They have figured it out; they once used to be agrarian nations, then industrialised manufacturing economies, then they shipped those manufacturing jobs to a place where labour is cheaper and are now reaping the rewards. McDonalds isn’t the only place where an American can work.
America is still the ‘bread basket’ for the work. We have evolved our agrarian industry to one that is highly reliant on technology, automation and information systems to increase yields, provide better looking produce and to package and ship it with less damage. I have always thought that we should have more robotic manufacturing in this country (Apple used robots to build some of its early machines). And as Predrag has stated, this will create more ‘White Color’ (educated workers) jobs to help run the machines and to process the information.
America also does well in other industries that require educated workers (space, economics, technology). However, other countries are catching up in those areas and can also provide cheap labor.
However, I don’t believe that ‘any’ politician is addressing the real (base) problem in the world today… overpopulation. Currently the world has over 7.3 billion inhabitants and a ‘theoretical’ supportable limit of around 9 billion people. Because of world-wide population growth, the historical ‘quality of life’ for most of the developed nations has been (and will continue to be) in decline.
I only hope it the ‘White Color’ remark was a typo (and you meant “white collar”)…
Yes, I had several typos in my reply. I wish that I could go back and edit the message. I have been a white collar (office worker) for most of my life… And by now I should know enough to not trust auto-correct.
Apple long term had better spread out their manufacturing to other places besides China.
And Japan and Germany have not sent their (best) the crown jewels of their manufacturing overseas.
The only manufacturing any of the developing nations had kept is only the kind that commands high price (with massive profit margins) and has a fairly small niche market share in its industry.
Practically all of SONY electronics (and other Japanese makers), as well as Philips (and other European brands) have moved their manufacturing to China, Malaysia, Indonesia, India and other developing countries with less expensive labour. the “crown jewels” may still be manufactured at home, but the output is somewhat comparable to the Mac Pro, manufactured in the US (i.e. negligible to the bottom line of the company).
Well ge whiz, I guess the USA has about 100 million or more people that can’t get a white collar job but would do well in manufacturing jobs. What should we do, euthanize them?
Just do what the rest of the developed world has done: teach them to do a better-paying job. There are quite many non-manufacturing jobs out there.
Look, manufacturing is simply never coming back. Steve Jobs said as much, and he clearly knew what he was talking about. As I said elsewhere, you’d have to pay those workers a lot less than minimum wage, or get some massive government subsidy, in order to be able to manufacture that MacBook Air, for example, and still sell it for $900. That assuming you can actually find the properly qualified people (willing to work such a job), and build such a large-scale facility.
Obviously education always helps, Predrag, but I don’t think you understand the scope of the issue. Like Europe and Japan, America is aging and will never retrain all its low-income people to become doctors and professionals. There are millions of underemployed people in the USA who are excellent technicians but, now in middle age, work multiple service jobs just to pay the bills. They have no time and no money to go back to college.
Steve Jobs was dead wrong about manufacturing in the USA. Americans are as efficient as anyone at building things. But the corporate leaders have sold out, taking advantage of the Chinese bait to relocate all manufacturing there. The first thing that happened was that all technology was stolen and the Party sponsored knockoff factories to reproduce what Western companies invented. But corporations held their noses and allowed it to happen, because the tax breaks and cheap labor were just too attractive. But that was last decade. Just watch and see as China starts ratcheting up their communist restrictions, taxes, and so forth on western business interests. After all, the ultimate goal isn’t to build stuff. China wants to rule to world — under a communist, highly corrupt regime that has absolutely no regard for labor safety, environmental impact, nor economic stability. They played western corporations well, knowing full well that short-term greed of western leaders leads to predictable erosion in economical power in the USA and in Europe.
Fair trade would require that China match western standards. But Apple, like all other corporations, doesn’t care about global levels of health or water quality. They’re maximizing profits in the short term. So while Tim can brag about his iPhone assembly line as being a step above, one step outside will show that China is a filthy soulless place. Were the iPhone line located in the USA, it would look like the Mac Pro factory, the price would be what the market would bear, and Apple’s profit margin on iPhones would drop very slightly. But a few thousand more Americans would have jobs and they could swim in their rivers and breathe the air, unlike our economic slaves in China.
Mike, I wish you were right, but I’m really not so sure. The kind of manufacturing jobs that support the vast consumer market of today (electronics, household, toys, furniture, everything) is based on monthly wages in the range of $200 – $500. In order to support a middle-class American worker, these wages would need to be ten times higher than that. Even if there IS such a large workforce in America that would be actually willing to take on such a repetitive, menial job, there is simply no way that Americans would be able to support a marketplace where a cheapest dishwasher cost $2,000, and a cheapest smartphone was over $1,000.
There are plenty of non-manufacturing jobs that aren’t engineers, doctors, lawyers or teachers. Not all blue-collar work means an assembly line in a large factory.
I regret buying that Donald Trump tie. It says “Made in China.”
The TPP is NOT a trade treaty. It is a giant step in the takeover of governments by corporations Whether you believe in free trade or not, the TPP deserves to have a stake put through its heart.
Economists make charlatans look good. How smart is is to trust those whose accuracy rate is below flipping a coin?
The latest research on Free Trade is not positive at all.
Andrew Grove at Intel wrote on this topic:
Are you talking about TV weathermen?
don’t really want to discuss the broader implications as the topic is vast so I’ll just touch on a couple of APPLE things (without much comment as I don’t want a flame war about trade)…
for many years MANY people had screamed at Apple for not building stuff in USA. I debated with some on forums, so many told me THEY WOULD WILLINGLY BUY EVEN IF THEY COST MORE, EVEN IF IT COST HUNDREDS MORE IF IT WERE MADE IN USA..
then you have Apple build the Mac Pro in USA … when it was launched universally (from the PC community, the the tech press, the normal press) panned it for ‘BEING EXPENSIVE’. I’ve read dozens of articles from PC magazines ‘comparing specs’ and ‘cost’ (to PCs made in China). NOBODY EVEN USA MAGAZINES SAID BUY APPLE MAC PRO BECAUSE IT’S MADE IN USA– it’s “Worth Paying More for USA !” . NOT ONE POLITICIAN ASKED THE VOTERS IN HIS AREA TO SUPPORT MAC PRO …
(how many times have you heard politicians bash apple over taxes yet have you heard them tell people to BUY apple stuff cause they are trying to bring manufacturing back to USA?)
NOTE: Jobs built NEXT machines in USA. Even the GOVERNMENT wouldn’t buy NEXT computers saying they were too expensive…
2) Sapphire Factory Fiasco.
Go and read the articles about big USA manufactures in China, read how they say Chinese contractors will bend over backwards for them. Want an emergency order, they will get triple shifts overnight, a guy will blow a whistle to wake workers up and they will jog to the assembly lines…
One USA company was shocked the Chinese could set up a football field sized factory from ground up in a couple of weeks..
USA sapphire factory: years banging around with rounds of funding going to hundreds of millions from Apple, lawsuits, counter lawsuits, missed deadlines, executives who lied about product quality and then scampered with funding in their pockets etc and Apple didn’t get one pound of sapphire from the USA factory.
Wallstreet Journal on the Sapphire factory:
“GT hired hundreds of workers with little oversight; some bored employees were paid overtime to sweep floors repeatedly, while others played hooky.”
(I’m not bashing USA manufacturing in general but just commenting on Apple’s experience, you read the facts above and decide on your own, )
3) Finally for those POLITICIANS who say bring back USA manufacturing why don’t they SET UP CONTRACT MANUFACTURING IN USA THEMSELVES.
Donald is a billionaire , he can get partners, leverage funding, he should SHOW US how it can be done. He doesn’t even have to design phones just get the blueprints from the tech companies who want them built.
All he has to do is find thousands of American workers who are willing to stick THE SAME tiny pieces to exacting standards for 8 hours a day for about minimum wage who are willing to work shifts if needed, and hire hundreds of specialized toolmakers (which Jobs said few can be found in USA anymore compared to the thousands overseas) plus get HUNDREDS OF SUPPORT INDUSTRIES set up a (for making hundreds of types of fasteners, screws, connectors , processors, sensors, power units, specialized glass etc etc ) and GET THE PATENTS FOR THEM (Samsung a contract manufacturer says it files thousands of manufacturing patents for things like Glass a year)
Of course you will ALSO need to get contracts from many companies beside Apple to hire you because after PEAK production during launch there are slow months that need to be filled (FEEDING a manufacturing line with thousands of workers that need to be paid is an interesting task… ) and for every different product YOU HAVE TO RETOOL…. ETC. .
GO ON BIG MOUTH POLITICIANS .. show us it can be done.
Professionals are not complaining about the price of the Mac Pro. They are complaining about the fact that it’s not ready out of the box. By the time you add all the expansion boxes and piles of Thunderbolt cables the stupid trashcan design requires, you could have bought two old 2012 Mac Pros.
Germany demonstrates every day how premium manufacturing and preservation of middle class means more prosperity for everyone. Everyone including the ~1 million war refugees that will do anything to stay in Germany. The USA, in comparison, has seen jobs steadily leave to China. Other than seasonal agricultural jobs, the influx of the oh-so-scary minimum wage economic refugees (crudely labeled “illegals”) despite the fact that their US employers are also breaking the law, but never convicted) are entering the USA at lower rates than we’ve seen in generations. Why? Because corporations have killed the economy and all job prospects by shipping their factories to a communist nation halfway around the world. The only way that saves money is if the poor Chinese workers are treated and paid like slaves. Which they are.
I disagree. The reason that there are fewer and fewer people looking for low-paying work in America is NOT because manufacturing jobs were sent to China. It is because all the remaining jobs are being paid less and less.
The real purchasing power of the American rich (the top 10 % of the population, by income) has rapidly grown over the past 40 years, faster than the overall American economy. Meanwhile, the real purchasing power of the middle class (middle two thirds of the population, by income) has actually diminished. So, while the economy grew significantly, the rich grew much richer, and the rest grew poorer. This growth rate of the rich has gone more-or-less in parallel with the lowering of the effective tax rate on the rich. The famous “trickle-down” theory has widely been debunked, and yet American people keep reducing the tax burden on the rich (and only on the rich).
There should be no surprise that fewer and fewer poor foreigners are trying to enter America seeking low-paying work; it is no longer possible to survive in the US on those wages, let alone send money back to the family overseas.
I think both factors are in play. Whenever you ship a factory to China, there becomes an excess labor pool in the USA, which puts downward pressure on wages. It’s a vicious cycle.
Trickle Down has been disproven so thoroughly I can’t believe anyone still accepts that bunk. National trade policy and tax policy must work hand-in-hand to incentivize those people who have money to put that money back into the economy to fertilize the field and raise new crops of innovations. Instead, corporations have taken over government, and corporate leaders have decided to park all their money overseas. Hey, they live in gated communities far away from the mainstream. Why would we assume they care at all about the people they put out of meaningful work?
Tens of thousands of US factories have been closed in the past few generations. Millions of manufacturing jobs have been lost. There is no “trickle-down” theory, it’s a leftist straw man that never existed. So much hot air Predrag.
You’re confused. The “trickle-down” theory is the concept championed by the favourite conservative American president Ronald Reagan, which implied that if you reduce taxes for the rich, they will invest the newly saved money into new jobs, which should stimulate growth of the middle class and the poor. Rewarding the rich would presumably “trickle down” to the poorer in the society. As Mike above says, this “trickle-down” theory has been disproved many times.
Manufacturing jobs will never come back unless there is a massive government subsidy, or wages are well below minimum (only illegal, undocumented immigrants are currently willing to work for that little money), or the price of those products triples. Would you buy an iPhone for $2,000?
“trickle-down theory” is a leftist straw man, it doesn’t exist, you could make the case for “spread the wealth around theory” at least those words were actually uttered by our president, not inserted there by his enemies
the “free trade” agreements that benefitted globalist corporations are what gutted our manufacturing base, you’d have a far stronger case focusing on those than taxes
You can call it the ‘Supply-side economics”, it is still all the same.
Manufacturing outsourcing is essentially the modern version of colonialism. You get rid of the most grueling, lowest-paid work that nobody in your land wants to do anymore, and have it done by the folks in the developing regions, where there is still plenty of people willing to work menial, repetitive, low-skilled jobs for pennies.
Trump can claim to want to bring manufacturing back as much as he wants, but the reality is that no normal American would ever be willing to do those kinds of jobs anymore. If there weren’t for illegal immigrants, there would be no farm workers willing to pick those strawberries in California.
When Americans were making washing machines, their cost was almost a full months’ worth of an average middle-class salary, and not many households had them. Today, even the poorest Americans can buy a $300 washer. Do you honestly believe that the American middle class would be OK if the cheapest washing machine cost $5,000 today?
Another straw man: “most grueling, lowest-paid work” you mean like building cars or more recently, Carrier air conditioners? You sound like a shill for the globalist corporations. News alert, most agricultural jobs, construction jobs, nannying, etc. are done by LEGAL Americans. A nation is more than its access to cheap, foreign goods.
Perhaps not cars; margins are still high enough there to support the highly-paid American work force.
But the rest of consumer goods? No way. Electronics, toys, home appliances, all are built by workforce that gets less than $2 per hour. Replace that with Americans that need to be paid at least $20 per hour, multiply by the total number of man-hours needed to build each of those items (an iPhone requires between 12 – 15 man-hours, according to research), and the math is quite clear.
Agriculture, construction and “nannying” will never go away (for obvious reasons), but if they could, they probably also would, for the same reasons — grueling, menial jobs with low pay.
Every developing nation strives to rid itself of low-paying, repetitive jobs and transform its population into a middle-class society. America went through that decades ago, as did most of Europe (and Japan / Korea). Others are decades behind, but on the same path. It would be foolish to try to actually bring those kinds of jobs back.
I agree with Mac Pro having more problems for the USER than the price BUT I’m saying the press is often comparing specs of it to PCs on PRICE.
I can show you many articles on this, but can you show me one where the tech press asks you to buy it because it’s made in USA?
(never been to germany but got good german immigrant friend here . One of her kids have gone back to Germany to work. She says the culture is quite different especially regarding how kids are taught about schooling, and cultural differentiations like work habits, following orders, society pressures — you have to perform as the society exerts a pressure etc from Canada where I live now. Don’t want a flame war as I don’t know enough about this BUT..
like i said people can SET UP FACTORIES in USA and PROVE IT it can be done.
About “following orders”: in Germany you are taught to think for yourself, to question authority. Even in the military we are taught not to blindly follow orders but that the ultimate responsibility lies with you. And if your commanding officer is giving illegal orders (like shooting at civilians) then you have to arrest your commanding officer.
My experience from living in different countries outside Germany for 17 years has been that while Germany still has a reputation for “following orders” (undoubtedly due to all those war movies being screened in the afternoon till well into the nineties, at least in Britain) other societies are MUCH more authoritarian and restrictive. A woman I know had married a US soldier and moved to the US. When their kids (aged 10 and 12) walked the 200 m to a neighbours house to play with their kids they were picked up by police and the parents called in. Social service was informed because of the parents “irresponsible behaviour”. What’s worse is the over-protectiveness of US parents. I couldn’t believe how much a cousin spoiled and at the same time restricted his kids – sorry, but we believe in free range kids.
Students in Britain are well educated, but it is very much like school – they are technically excellent but are at a loss when they have to come up with their own solution.
Overall I notice a distinct change from striving for excellence to striving for exposure, especially in the US. Kardashians anyone? Or Palin and Trump for that matter?
I appreciate your post, like I said i don’t know enough to intelligently make a comment.
as you a German and have gone overseas what is your honest opinion:
Can USA , other countries match Germany’s ability to keep high tech manufacturing?
I live in the UK and am married to a German woman. I spend a lot of time in Germany and my work has involved lengthy visits to many other countries including the US & Canada, China and Russia, together with pretty well most of Europe and a lot of other places too.
My impression is that Germany have got the right approach for the 21st century. They value and respect their historic buildings and traditions, but they think ahead in a way that few other countries do. Here in the UK, our present government only cares about the very short term. I’m not sure that some US politicians even think that far ahead. The Chinese only worry about being modern and are happy to tear down far too much of their history. China is quite a success story in many ways, but it seems to lack a soul or any desire to enjoy a decent work/life balance.
Something that is very clear is that the Germans have a good work ethic. They work hard and play hard. They take pride in what they are doing and work collectively to make their particular business as good as it can be. That doesn’t mean high pressure salesmanship, but providing goods and services that are desired and worth paying for. It’s no accident that such a high proportion of the world’s quality car brands are German, or that the best home appliances are German. When you look at how Apple operates, it behaves much more like a typical German company than a typical American one.
There are plenty of things I don’t like about Germany ( very little public WiFi, camouflaged roadside radar speed traps, roadworks on the Autobahn seem to go on for years at a time, and some German people can come across as being rather rude ) but overall it’s one of the most civilised countries that I know and I think that other countries would do well to examine how Germany really operates and to learn from them.
like I said I can’t judge differences between germany and North America as I dot know enough but perhaps SCHOOL TEST SCORES will enlighten what I said about schooling and cultural differences:
“This year, the U.S. scores below average in math and ranks 17th among the 34 OECD countries. ….
The U.S. scored below the PISA math mean and ranks 26th out of the 34 OECD countries. ”
(see that Rank near bottom on Math?)
“Parts of China, Singapore, Japan, Korea, and Liechtenstein topped the rankings for math, reading, and science”
I’m NOT saying that USA bad or evil or lazy etc, I’m just pointing out facts, COUNTRIES AND CULTURES ARE NOT THE SAME, the USA has long time “taken it easy” on education etc. I’ve worked over 10 years overseas and I’ve worked 10 years as a contractor to government social services here in North America and my wife has a masters in Education from Chicago.
@Predrag: that would be true if only the low-value labour-intensive jobs had moved. But you completely forget that China etc are no longer just third-world countries. They have invested in education themselves. By now many of the jobs that used to be done by middle-class people have gone overseas too. Support, Accounting, Programming etc are often done overseas, especially in India.
And yet American economy continues to grow.
The jobs that fuel American economy are the high-paying ones; not the manufacturing, or low-end service jobs.
The economic development starts from an agrarian economy, transitions through manufacturing, through engineering and on up higher. China, India, Indonesia and others are now embarking on that transition from manufacturing to higher-paid jobs, but for now, the vast majority of their economic growth comes from the manufacturing (for obvious reasons — their labour fource is still extremely cheap, compared to the West, and those plentiful manufacturing jobs are much more attractive than farm jobs). Eventually, these lands will “graduate” from manufacturing into technology, engineering and other high-paid work. By then, sub-Saharan Africa should be ready for transition out of the agrarian economy and into manufacturing. Eventually, the world will run out of cheap labour, and I’m not smart enough to predict who would then be manufacturing iPhones, but that day is quite a long way off.
Fundamentally, I’m not so sure. While Europe is almost as bad, interestingly the Euro is still the more valuable currency than the $. The middle class continues to slip into poverty, which to me makes the American economy a farce.
Where does the majority of wealth reside? Most of it is held overseas by corporations. The typical US citizen is living hand to mouth. If they aren’t up to their necks in debt, their small businesses are treading water. Those who think they are well off may have some paper assets based on real estate speculation or Wall Street funny money, but look how quickly those fortunes can change course. Speculation does not offer stable economic foundations. Credit debt and national debts continue to skyrocket and real estate bubbles are headed for another bust.
The small percentage of Americans who are able and want to be professional workers is not willing to support the 90% of Americans who traditionally preferred to do manual labor and trades in the past — before their jobs were shipped overseas, that is. Now the former working class is working multiple minimum-wage, zero-benefit, dead end jobs. They are willing to work hard, but these people are not entrepreneurs, they are entirely reliant on companies like Apple reinvesting in the American worker. I guess Apple hires a few thousand retail jobs, so we shouldn’t complain, but it’s clear Apple isn’t tapping its cash pile too much to ensure that the middle class remains vibrant. A couple generations ago, Henry Ford ensured that his workers could earn enough to realistically buy the product they built. Can we say the same for Foxconn employees?
But the average economic statistics look great anytime you toss Warren Buffet and Bill Gates into the room. And that’s all anyone bothers to look at: Wall Street bluff rather than Main Street reality.
@Predrag: what has grown? The economy, or the number of people making a decent living?
The rich got very much richer, but the middle class has moved down in real terms, and the State aka the People are nearly broke.
If one person earns a billion, and a thousand only earn 10,000, then on paper they might earn good money (average is about a million each), but REALITY is very different.
If less and less hard-working people earn enough to make ends meet, then where is this progress?
It is the ‘supply-side economics’ (also known as ‘trickle-down economy’), where cutting taxes for the rich is presumably going to motivate the rich to create jobs for the middle class and poor. It is clear that it doesn’t work, which is why the rich are much richer, and middle class and poor are poorer.
I don’t think hard working people are working less and less. Data shows that Americans are actually working more than before, but fewer and fewer hard-working people are earning enough for a comfortable living.
The point is, this continuing disparity (rich getting richer, poor getting poorer, despite the growing economy) isn’t caused by the outsourcing of manufacturing. The loss of manufacturing in America did NOT have a negative impact on the economy itself; it has been growing strongly during those years. However, domestic fiscal policies have caused the rich to get richer (and poor to get poorer). Since there is only so much money to go (it is, after all, more-or-less a zero-sum game), for the rich to be that much richer, someone else must be poorer.
Trump only puts his names on things. when they actually put out products they are faulty and fall apart. for example, take his central park south building. My friend moved into a Trump building. There were many many problems with his apartment you would never expect in a luxury building – such as it was Fall of the House of Usher, from tiles falling off the bathroom wall to all the appliances breaking – did they fall off a truck? bought at discount?
lots of people talking about economy jobs and poor people.
after living a while on planet earth I found that all the talk about helping the poor is basically whacking (like taxing) the MIDDLE class to help the poor.
the TRUE rich who can afford fancy tax lawyers, accountants, off shore shelters etc are immune . Many rich businessmen pay themselves small salaries to avoid taxes, on the other hand they live in corporate paid lux mansions, have corporate jets, cars, take corporate paid ‘conferences to Bali’ (aka vacations), even the Picasso drawing in their bathroom is from the ‘corporate Art Collection’ (most of these things being tax deductible so good for the corporation as they pay less tax).
I live in Canada now.
i give you an interesting example.
Paul Martin one of the richest men in Canada was Canada’s Finance Minister and then Prime Minister. Most of his families assets and business (about 200m) are located in Barbados where he didn’t pay Canadian taxes.
(this is a bit different from Apple which pays all USA taxes but holds off shore profits offshore due to high reparation rates)
Paul Martin’s company CSL (HQ Barbados) actually got Canadian Govt. contracts :
CBC “n January 2004, Ottawa said CSL had received $161 million in government contracts,”
btw I think Martin was actually quite competent as PM as he managed to balance the budget etc but that’s another story.
what I’m saying in short BEING A CYNIC as I am is that whatever the breathing gasbags (aka politicians ) implement if you are middle class you will hurt and the true rich will be immune.
I always come to MDN to help me formulate an opinion about such important issues. I have learnt not to trust my own judgment, but go with the loudest bluster, and adopt their rhetoric and reasoning (if any there be). It has served me well at the water cooler. In practical terms, that leads to advancement, regardless of merit. Cynicism 1, Naïveté 0.
No sane person opposes international trade.
The problem is what has been codified in these so-called “free trade” agreements as they have been used as a loophole around our Constitution and legal process. They have concocted ‘Executive-Congressional Agreements’ that are treated in court as treaties, but are not subject to the process for treaties prescribed by our Constitution. They are further passed under ‘trade promotion authority’ or fast track, that bypasses the normal process of Congressional hearings and amendments. Finally, they are negotiated in secret.
What could possibly go wrong?
During the negotiations, the details of the treaty are secret to citizens while every lobbyists for big business has a front row seat. Consumer groups, environmental groups, labor groups, citizen watchdog groups are kept out and in the dark. Members of Congress are allowed to look at the drafts of the document, but are not allowed to even take notes. Special Interests become the inmates running the asylum while the citizen and his interests are muzzled.
Again, what could possibly go wrong?
In some instances the full text is kept hidden from public view until AFTER the deal is enacted. The TPP has portions where the text is embargoed for years after the fact- essentially secret law.
Again, with emphasis, what could possibly go wrong?
Big Business interests dump stuff into these ‘trade’ agreements that have nothing to do its trade, but have everything to do with getting stuff in law that cannot pass Congress by the proper method. SOPA and PIPA – killed by Congress after citizen opposition- are neatly inserted into the TPP. How about that for a Fuck You from the MPAA and RIAA?
This is all about money. Note that the Republicans in Congress that oppose everything done by the President have given him this fast track authority which limits their oversight and forces them into an up or down vote without amendment.
A proper trade deal would be negotiated in public, subject to oversight and amendment and voted on as a Treaty subject to a 2/3rds majority in the Senate. That is not what has been or is being done. These deals are opposed by Libertarians and Progressives and championed by the bought and paid for mainstream Democrats and Republicans.
Trump should lead by example and start making his clothing line in the US. Otherwise he is a hypocrite talking out of his @$$.