random thoughts and thoroughbred selections

Thursday, February 12, 2004

Made In China

After a few years of will they/won�t they from Lucasfilm regarding the original trilogy on DVD, we finally have a release date! September 21st is the day, which is about seven months too long to wait.

I really hope that we�re talking about the original trilogy, and not the Special Edition, but I�m guessing it�ll be the SE. Dammit.

In other news, in what promises to be the type of quote that the Democrats take and run with throughout the remainder of this year and beyond, our President yesterday stated that manufacturing jobs moving overseas is actually good for our economy in the long term, even with all the short term consequences.

Despite what the unions and the people who protest World Bank functions would have you believe, we live in a world economy now. Our products are available all over the planet. Same with products from every other country in the world. The most practical, useful, innovative, and inexpensive products will find their way to any shelf in any store on the planet, regardless of country of origin.

And in this is where our dilemma lies.

I worked in mortgages for a number of years in metro Detroit, and have seen pay stubs from a lot of people across a lot of careers. One really sticks out in my mind. I wrote a mortgage for a guy who was a line worker at a Ford plant. Not a supervisor, not degreed, just a guy who stuck Tab A in Slot B for a living.

And what a living.

This guy was working close to 80 hours a week consistently. His W2? Ballpark of $85k. $85k! For a guy who stands on a line all day as a cog in the wheel of manufacturing. Thanks to the unions in this country, he is probably one of hundreds of guys in that plant who make better than $60k basically for skilled grunt work.

Tab A in Slot B.

Unfortunately for the unions, they�re finding out that $85k a year will cover nearly the entire labor cost for a full year for 50 workers of the same skill level in a similarly equipped plant in China.

Here�s my problem with all this talk about preserving the manufacturing sector in this country. Let�s say you take two companies, one in the US, one overseas. If the US company spends 50% of their budget on manufacturing labor, compared to say 10% of the overseas company�s budget, it leaves them far less money to do two things:

1)Innovate for the future
2)Be price-competitive versus similar products manufactured elsewhere

I�m not a Republican on most matters, but in this day and age I feel that their economic strategy for the long term is the right one. This is not a world of governments anymore. This is a world of business and business interests. If we�re interested in staying on top, we need to take what competitive advantage we have (namely, R&D and innovation) in this global economy, and have the profits from what is being manufactured overseas be coming back to US based companies.

Just to make my point easy to digest, let�s say that televisions are the only product being manufactured out there. If we try to keep manufacturing strong in this country, and by association give workers a �livable� wage to do their jobs, we�ll have the most expensive non-cable ready black and white television on the shelf, right next to brand new big screen LCD HDTV sets that cost half as much from China. If we continue to let our big businesses in this country thrive by outsourcing their labor, we�ll make sure that American companies have the majority of the brand names for the LCD HDTV sets on the shelves at a very competitive price.

Preserving the manufacturing sector in this country is suicide.

Yes, we�re going to be disenfranchising an entire class of people, and we�ll also be creating a massive gulf between middle and lower class. But we�ll ensure that products stay affordable on our shelves, and we�ll guarantee our American corporations that they will have the best opportunity to get their products on Chinese and Indian store shelves.

Where I think the Republicans go too far is in their lack of attention to education. Actually, I believe nearly all of our society, Democratic party included, is missing the boat.

What we need in this country right now is to establish a system of education that mirrors what occurs in India. We need to create a technologically savvy generation beyond what they pick up playing on their Playstation 2. Focused technical schooling is what is going to keep American workers viable for American companies, and will help even out what promises to be a staggering disparity between the lower and middle classes over time.

History class and Geography are valuable and all, but kids need to be prepped for real-world jobs. And Engineering and Innovation careers are going to be crucial for us to continue to contend on a world stage. If we created focused and intensive technical schooling in the US like they have in India, we could give kids the opportunity, regardless of class, to acquire a valuable role in America�s innovative place in the world economy.

There are really no easy answers here, but I do believe that if we can keep our economy near the forefront in this global economy, then societal problems will be easier to deal with in the long term. But it will get ugly � very ugly � for the short term.

[>>]posted at 5:51 AM by BG - click to email
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