On Sun, 12 Oct 2003 20:38:10 GMT, "Ed Huntress" wrote:
"Gary Coffman" wrote in message
.. .
On Sun, 12 Oct 2003 00:26:02 GMT, "Ed Huntress"
wrote:
OSHA and EPA regulations combined amount to around 8% of manufacturing
cost
in the US. The wage differential between high-quality workers in China
and
high-quality workers in the US runs around 96%.

So you have an 8% solution here to a 96% problem.

What percentage of manufacturing cost is labor?
You're not telling the whole story here.

Nearly 100%. If you've bought into the "10 - 12% direct labor" figure and
don't understand why I say nearly 100%, we can discuss.

I'm aware of the marxist theory that all value is labor. I won't buy into it
for the purposes of this discussion, however. We're comparing manufacturing
costs here against manufacturing costs there, and for that purpose, the 10%
of direct costs as wages figure is correct. So 96% of 10% is 9.6%, meaning
that the difference in direct factory wages have essentially the same impact
on product cost as OSHA and EPA regulations. And neither accounts for the
much larger difference in product price for US versus foreign made goods.

Lawyers, bureaucrats, and socialists will be the death of this nation.

If anything kills manufacturing in the US, it will be doctrinaire,
conservative free-trade economics.

If we believe your figures, what's killing US manufacturing
is excessively high wages. Though if you ask the customers,
they're more likely to say it is excessively high prices.

Excessively high wages compared to what? Did we have excessively high wages
30 years ago? Manufacturing wages then were higher, adjusted for inflation,
than they are now. Were they too high?

Yes, grossly so. In your own words, we had an underworked and overpaid
middle class 30 years ago. But as noted above, that's only a small fraction
of product price. Domestic manufactured product prices have grown 12x
over the period (my example of a $3400 car then to a $38,000 car today).
Not a lot of that can be attributed to wage growth.

The great post-WWII boom in US manufacturing occurred
when US products sold for prices comparable to the prices
for Chinese products today. I don't think that's a coincidence.

I think that's the silliest parallel I've ever heard.

Not a parallel, just an observed fact. Demand is elastic, and
consumers have price points where they become resistant
to making a nonessential purchase. For many goods, the US
manufacturers have grossly exceeded that price point. As I
recently told a car salesman, I'm not about to pay more for
a damn Chevy pickup truck than I paid for my house.

You should perhaps spend less time poring over GDP figures
and more time talking to customers. In non-command economies,
their micro-economic decisions are what ultimately drives the
macro-economic figures.

Gary