"Tom Gardner" wrote in message
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"Ed Huntress" wrote in message
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"Tom Gardner" wrote in message
. ..
snipsnipsnip

I'm just ranting...actually, over 80% of what I make today are new
products exploiting a niche that I hope is too small to attract
competition and the technology is proprietary. I just anticipate the
other shoe dropping and I get screwed somehow. I've abandoned those
products that are made in Spain and China but I still can produce if the
demand swings and they become profitable. Ohio increased the minimum wage
by more than 25% last year and bumped it again this year. I had to
separate some low end employees that their skill level couldn't justify
the bump. (porters and cleaners) I have hired more people at a much
higher skill and wage level but I feel terrible that the jobless rate in
Cleveland skyrocketed due to the State's wage bump. Crime rates
paralleled it too with the added thousands to the street. I used to be
able to afford a few "charity" jobs for the neighborhood riff-raff.

From the statistics, it doesn't look like the increased minimum wage had a
measurable effect on unemployment in Ohio -- it was already running a few
tenths of a percent above the national average and it still is -- although
sorting out the details for Cleveland and isolating the causes would be
tough. You're a small business in a rust-belt, monopsonistic state (one that
traditionally has a high percentage of large employers who dominate the
labor market). As a small business you're always going to take the hit from
higher wages, regardless of the cause. And Ohio's fortunes are still heavily
influenced by the fortunes of the automobile industry, which, as Michigan
knows, is not exactly booming.

On the average, boosting a minimum wage results in a small increase in
unemployment (partly because more people enter the labor market when wages
go up, while hiring remains static due to the higher rates), accompanied by
a small increase in average worker incomes. Where you have monopsony the
increase in unemployment often is close to zero. Where a regional economy
has a high percentage of low-wage service jobs the increase in unemployment
can be significant. *Your* employment, as a small business, is going to drop
but the statistical effect of small changes in employment in small
manufacturing-related businesses is hardly measurable in most regional
economies.

But I won't quibble over that. You're feeling it, and you're obviously
frustrated by it. If your "charity" jobs actually helped people get started
working and encouraged them to do better, it's unfortunate that the increase
in the minimum wage took that option away from you. I'm doubtful about how
much effect that has when you start looking at entire communities and
states, but I can't judge it because I don't know how common the practice
is. The whole dynamic of employer size and dominance, union effects, and
legislated minimum wages is a complicated thing to measure and judge. It
tends to spring a few surprises, too.


You're right, the Dollar is over valued but until the Chinese cut the Yuan
loose from the Dollar completely, they have a competitive advantage so I
will stay out of those product lines or buy the products from them.

Getting back to the original post, I see less and less people being
involved in manufacturing in the US and those people will have higher and
higher skill levels. The days of good factory jobs for the masses are
gone for a while. I don't understand how the economy works with less and
less actual wealth creation...it can't be a good thing.

"Actual wealth creation" is the key to that question, and it requires some
study. The wealth tends to accumulate to the people or the societies that
control the aggregation, lending, and supply of money, like Luxembourg, New
York, or London. Where it actually comes from is an interesting question.
Manufacturing is just one of several components.

No doubt the numbers of people involved in manufacturing will continue to
drop, although the big drops may already have happened. Productivity growth
is likely to slow down and take a breather for a while. Now we're starting
to see what manufacturing will look like in the US as globalization and
development of large chunks of the world's economy and population advance.
I've thought for a long while that the US will have a smaller but healthier
base of manufacturing, and that, as you say, the people involved will be
highly skilled. If nothing else, global competition will force it.

--
Ed Huntress