October 12, 2005
That's what I've been saying
Slate is running a piece entitled "The Oracle of Delphi", referring to CEO Steve Miller of Delphi Corp., the large auto-parts manufacturer that recently filed for Chapter 11. Mr. Miller recently offered the UAW workforce a choice: termination of pension plans or a 2/3 pay cut.
Before you get all bothered by that, realize that Delphi was paying its unionized workforce the equivalent of $65 an hour. $65 an hour. There isn't any way in or out of hell that a factory worker is worth that much. You can do anything you need to do on that job after a week's training, tops. $20 an hour is still too much.
Why? Because America has been living the past century under the grand delusion that it makes economic sense to pay middle-class wages for lower-class jobs. And the reason we're seeing so much outsourcing and exportation of manufacturing jobs is that the Third World is under no such delusion.
Think about this: it costs a lot to move things from China to here, both in transport and import/export tariffs. We're paying our people so much that it makes more sense to build it 14000 miles away and fly/ship/drive it here. My wild-guesswork, back-of-the-napkin calculations say (and feel free to provide actual data if you've got the know-how and time) that making a product in China adds between 10 and 50% to the cost of the item if we exclude labor costs. But if labor costs are only 10% of what they are here... you still save a bundle.
Let me just say this slowly and clearly: unskilled jobs should not be able to support a middle-class lifestyle. The fact that they have for the past hundred years is an abberation, nothing more, and it makes perfect sense that this should come to an end. If you don't have a marketable skill or some kind of specialized knowledge you are, in economic terms, a replacable part.
