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Thread: Political GDG - The More Things Change - Political GDG

  1. #11
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    It would be interesting to see a similar chart with hourly wages AFTER taxes.

  2. #12
    Senior Member IowaBayDog's Avatar
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    Quote Originally Posted by Buzz View Post
    We keep hearing that we're having a credit crisis. Maybe the credit crisis was caused by the wage crisis. Was FDR responsible for this?

    Technology is probably more responsible for that than anything. Productivity 1970 - Present doesn't mean someone is working harder and deserving of more pay. The processes and technology progressed to make workers either more efficient or even obsolete. Machines have replaced skilled craftsmen in a lot of trades so a person with the skills barely matching a rookie apprentice machinist in the 60s is now running a flowjet machine because he can download files stick a chunk of metal in the machine and hit run, as an example.




    Looking at the Automakers problems its pretty hard to argue that workers are underpaid based on the product they are putting out.
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  3. #13
    Senior Member Buzz's Avatar
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    So, none of the increase in productivity before 1970 was due to technology and automation?

    Higher wages only come from working harder, not smarter?
    "For everyone to whom much is given, of him shall much be required." -- Luke 12:48

    Raven - Moneybird's Black Magic Marker***
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    Mick - Moneybird's Jumpin' Jack Flash***
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    Senior Member JDogger's Avatar
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    Poor Marvin, Even faulted by Booty.

    Quote Originally Posted by Mr Booty View Post
    Actually, I think it was more like 800 years. The city itself was founded on the 7 hills around 700 BC. They didn't become an empire until the Puenic(sp) Wars around 400 BC. The official fall of Rome was in 411 AD when the Visagoths sacked the city.

    The people of Rome(western empire) had no idea that they were in decline until it all ended ushering in the Dark Ages. The eastern empire went on for another hundred years before it was taken over by the Turks.
    One cannot reason someone out of something they were not reasoned into. - Jonathan Swift

  5. #15
    Senior Member IowaBayDog's Avatar
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    Quote Originally Posted by Buzz View Post
    So, none of the increase in productivity before 1970 was due to technology and automation?

    Higher wages only come from working harder, not smarter?

    Nope, never said either of those things. Technology advances in Manufacturing after 1970 were orders of magnitude larger than they were for probably a 100 years prior. Robotics etc. and lean processes have moved production cost from Labor to Capital Investment cost. Prior to 1970 physical labor and highly skilled craftsman where essential, now it is machinery. If the majority of your production cost are labor it would make sense that labor costs and production output would mirror each other. Throw in the cost of automated machinery, less labor to create the same output it makes sense that labor costs would track downward when compared to production output, the capital has to be paid for somewhere!

    Labor is NOT working smarter, that is the point. Prior to 1970 manufacturing labor were highly skilled craftsmen that had a lot of training and were a valuable asset. Labor today is not much more than button pushers and people who sit and watch automated machines do the jobs it took 20 laborers to do 40 years ago. They are easily trained and replaced and don't require a premium pay scale to retain. The production process is working smarter through automation to increase profits to pay the workers they do have.
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  6. #16
    Senior Member Buzz's Avatar
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    I would point out that the scale on the chart I posted is not logarithmic, the axis are linear. You are focusing on manufacturing, whereas the chart isn't manufacturing productivity, it is for the entire economy.

    I was a development engineer in manufacturing of heavy electrical equipment for close to the last 30 years. Very large transformers and induction and synchronous motors ranging from 1/2 horsepower to 20,000 horsepower. Part of designing new product lines and redesigning old product lines included working with manufacturing engineering and cost accounting to revise manufacturing methods and practices. So, I'm fairly familiar with writing proposals for and justifying new equipment purchases. The payback on equipment that our management required was 2 years. That means that compared to all those skilled craftsmen, the new equipment had to reduce costs such that the machine and tooling had to be paid off in 2 years, and everything after that was gravy. As a result of our department's efforts, we were able to cut prices enough to help us compete against foreign manufacturers while making huge gains in profitability of the divisions that we were responsible for. That money didn't go to the production workers by and large. It went to the management in higher salaries and bonuses, and to the shareholders.

    I can tell you that the people we had working in our shops were highly skilled craftsmen. I never viewed them as dumb unskilled button pushers. In fact, a good measure of the success I realized in my job came from spending a lot of time with those guys talking about issues related to improving designs to make it easier for them to do their jobs better and more efficiently. It was difficult when we were assigned projects to redesign products that had been off shored to places like Mexico, South America, and China, because we had lost the interaction with the products and the people putting them together. This is one pitfall of the belief that we will send the manufacturing over seas, let them do the dirty work while us smart creative Americans keep the good design jobs over here. Pie in the sky thinking...
    Last edited by Buzz; 01-08-2009 at 03:00 PM.
    "For everyone to whom much is given, of him shall much be required." -- Luke 12:48

    Raven - Moneybird's Black Magic Marker***
    (Esprit's Power Play x Trumarc's Lean Cuisine)
    Mick - Moneybird's Jumpin' Jack Flash***
    (Clubmead's Road Warrior x Oakdale Whitewater Devil Dog)
    Peerless - Moneybird's Sole Survivor
    (Two River's Lucky Willie x Moneybird's Black Magic Marker)

  7. #17
    Senior Member zeus3925's Avatar
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    Buzz:

    Why don't they show exec pay on that chart? It would be interesting to see where that went.

  8. #18
    Senior Member IowaBayDog's Avatar
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    Buzz,

    I don't doubt there were remants of skilled workers in the past 30 years. I work in the design and manufacturing of highly complex electrical equipment that makes aircraft fly and guides them to landings in zero visibility weather. Its not ancient history, it is today.

    Please take the auto industry for example and explain to me how their labor is underpaid and how that has caused their economic crisis.

    Your graph showed we are getting more bang for our buck, we are as an economy more efficient at producing goods. Due to a lot of effort by a lot of people. Had we not seen that efficiency increase all our jobs would have been outsourced to countries that can do itI am sure it is grand conspiracy that the messiah will undo with his redistribution of wealth. You are so concernced about outsourcing, how many non-U.S. made goods have you purchased. The consumers drive how much they want to pay not the evil CEOs. If you don't want Chinese made crap, stop buying it and put your wallet where your mouth is. Pay 3 or 4 times more for the U.S. made equivalent or just do without.
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    No longer live in Iowa but I have a new Bay Dog!!

    Skywatcher Salem Orchard Hard "Cider"

  9. #19
    Senior Member Buzz's Avatar
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    Quote Originally Posted by IowaBayDog View Post
    Buzz,

    Its not ancient history, it is today.
    I don't feel ancient.

    Quote Originally Posted by IowaBayDog View Post
    Buzz,

    Please take the auto industry for example and explain to me how their labor is underpaid and how that has caused their economic crisis.
    The auto industry is an anomaly, in my opinion anyhow.

    Quote Originally Posted by IowaBayDog View Post
    Buzz,

    Your graph showed we are getting more bang for our buck, we are as an economy more efficient at producing goods. Due to a lot of effort by a lot of people. Had we not seen that efficiency increase all our jobs would have been outsourced to countries that can do itI am sure it is grand conspiracy that the messiah will undo with his redistribution of wealth. You are so concernced about outsourcing, how many non-U.S. made goods have you purchased. The consumers drive how much they want to pay not the evil CEOs. If you don't want Chinese made crap, stop buying it and put your wallet where your mouth is. Pay 3 or 4 times more for the U.S. made equivalent or just do without.
    I think the graph in part shows that off shoring has been very effective at achieving what it was intended to do. In fact I think the divergence in the lines can as much be explained by off shoring as the huge explosion in manufacturing technology. In my little story, I was just pointing out the folly in the thinking that the manufacturing could go, but all the good design jobs would stay. You design products and manufacture them half way around the world, and it will work out for awhile, maybe even decades. But eventually the design work will be better accomplished by engineers that can actually put their arms around what they are designing and actually talk to and interact with the folks who are putting the stuff together.

    I've been responsible for my share of off shoring. I helped move factories and product lines to low labor markets. It wasn't really ever competition from foreign companies that forced us to do this, it was primarily other US competition that forced us to either follow suit or die.
    Last edited by Buzz; 01-09-2009 at 09:28 AM.
    "For everyone to whom much is given, of him shall much be required." -- Luke 12:48

    Raven - Moneybird's Black Magic Marker***
    (Esprit's Power Play x Trumarc's Lean Cuisine)
    Mick - Moneybird's Jumpin' Jack Flash***
    (Clubmead's Road Warrior x Oakdale Whitewater Devil Dog)
    Peerless - Moneybird's Sole Survivor
    (Two River's Lucky Willie x Moneybird's Black Magic Marker)

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