DIYbanter - View Single Post - How Real Americans Can Compete with "Hard Workin" Day Labor

Brent P

In article .com, wrote:
Brent P wrote:

Cheap labor keeps automation out. Automation is a capitial expense,
labor is an operating expense. They can avoid the capitial expense by
paying the operating one. The cheap labor might actually cost more all
said and done, but there is no capitial expense. It's like having a
loan.... You don't have all the money today or can't spend all the money
today so you spend a little each month but more over all.

The above assumes producers are too stupid to figure out what makes
them the most money, which flies in the face of capitalism and
economics.

Has nothing to do with being stupid. It's about long term vs. short term
thinking. The busniess environment in the USA is overwhelmingly short
term thinking.

In fact, companies are very good at it. They can do the
math, figure out whether the capital investment is worth it, what the
cost of financing is, how fast it pays back, etc.

Again, long term vs. short term thinking. Businesses often neglect the
long term because they need to have profit now.

Another issue is cash flow... Cash flow says they cannot buy automation
this year, so they do cheap labor. Rinse and repeat.

They have all done
it and that is how we arrived at the mix of human vs automation we have
today. You can argue all you want, but the simple fact is
farmers/producers in the business know what their actual costs are and
are behaving rationally. If they could save money by using more
automation, they would.

Most businesses are not operating at long term ideals.

You are looking at the whole thing from a sensible long term approach
that is rarely done in practice.

Also the bigger the business, the stupider it is... (ie Dilbert's world)

When you raise all producers
costs, the supply curve shifts, resulting in a higher market price.
And no matter how much automation you have, there are still many tasks,
like inspection/grading, that have to be done by humans.

Actually automation does that in some farming applications already.

Yes, because it's possible and economical in some select cases. And
guess what? Just like you would expect, where it saves money, it is
used.

It's also states that haven't been penetrated as much by illegal alien
labor... hmm....

Now, does that mean it would result in prices so high people could no
longer afford food? No, but it most certainly would have the effect
of increasing price.

The same situation we have right now where many people can't afford the
taxes. I'd rather have slightly more expensive food than this huge tax
burden to pay for the health care, crime, infastructure, etc that we have
to pay for illegal aliens. Not to mention things like increased insurance
rates.

I tend to agree. I'm not so sure the effects on prices would be slight
though. There are many services, throughout the economy, where you'd
have to more than double wages and even then, it would be hard to find
employees willing to do that work. But I don;t agree with those
predicting it would be the end of the world either. The economy has
survived other major shocks, like the recent run up in oil prices,
without falling apart.

I can economize what I consume. I am forced by the barrel of a gun to
pay taxes. So can everyone else.

When we pay the costs as taxes it short circuits the economic system.
Prices have to go down because people are paying large segments of their
income as taxes so they drive down labor costs which puts more people out
of work and more with work needing social services which drives up taxes
and it's a nasty feedback loop.

If we just pay for the costs in the products, we buy what we can afford
to buy, more people are employed at a decent wage, leading to a larger
market and producers find other ways to lower prices in the competition
of the free market.

The first few years out of the feedback loop might hurt, but we get out
of it or we crash completely.