"Ed Huntress" wrote in message
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"Buerste" wrote in message
...

"Wes" wrote in message
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"Buerste" wrote:

In reality, I'm not moving out of the US just yet, but we are moving
into a
more efficient building in another city. We are planning for
electricity
and natural gas to triple within three years and labor costs will
skyrocket
with mandatory COLAs, union demands and healthcare. More automation,
less
people. Almost the same effect as if I moved to Indonesia...less and
less
employees! I hear the same talk from other business owners. So much
for
job creation! The number of jobs I have and will eliminate will be
multiplied by hundreds of thousands.


About 14 months ago we recieved an automated cell that wiped out 5 jobs.
If the numbers
make sense, machines in, people out. As long as the equipment isn't
self repairing, I'll
be fine.

Wes

Yep, as long as there is demand for the products produced. Less
employees equals less money circulating in communities. A dollar gets
spent 7 times locally. That's created wealth from manufacturing, cheese
checks don't count. Even low-end jobs give accomplishment satisfaction
to people, cheese-checks cause despair, apathy and crime.

It isn't clear what your point is, Tom. Are you arguing for trashing
automation? For paying people Chinese wages? Or what?

You and Wes seem to be implying that you wouldn't automate if there
weren't factors that raised labor costs. That's a mistake. What drives
automation is competition, not labor. That's been true since manufacturing
began, and the commentary I read in _American Machinist_ from the 1920s,
'30s, '40s, etc. said exactly the same things you're saying now. And it
was just as wrong.

It wouldn't matter how low your labor costs were. The greatest influence
on the economics of automation is the interest rate you pay for capital
equipment, in combination with the availability of credit for large
capital investments -- investments in automation, in other words. And the
relationship between the viability of automation and labor costs ALWAYS
trends in favor of automation. That's happening even in China today.

If you take a look at the automotive parts plants in Mexico, you'll see
the same thing. We were selling Wasinos for that work and they had to be
sold without our gantry autoloaders -- not because it was more economic to
run without the automation, but because the Mexican government required
it. Even with their low wages, automation won, on the P&L statement. It
just lost temporarily because the government didn't want to face the
inevitable.

In the US, or Mexico, or China, competition always applies pressure to
automate. One Chinese company competing with another will cause each of
*them* to automate -- and put even more pressure on you to do so. There's
no getting around it.

And trying to avoid it is just like pushing on the end of a rope. However,
if you succeed in driving down wages as a temporary stop-gap on the way to
further automation, you will have one economic effect: You'll drive real
wages, and the real economy, into a race for the bottom.

--
Ed Huntress


I know it sounds funny but I feel guilty for eliminating jobs due to
automation. The lack of continual improvements in the previous generation
gave me a huge opportunity to make a lot of simple, easy improvements that
had big impacts in profits. I always had a lot of empathy with my workers
because I've done every job in a production role. A lot of the jobs were
very simple and a lot of the people we had just weren't capable of anything
more complex. But, they did the jobs proudly and felt good about
themselves. I worked side-by-side with everyone, ate lunch and told jokes
with them. Those are the jobs most easily eliminated and I know they won't
GET another job...they are doomed to welfare. But, If I wanted to stay in
business, I had to cut costs. The State of Ohio was no help to these people
by raising the minimum wage by almost 50%. Almost a third of my people were
affected. I couldn't keep everybody at that rate. The people that I had to
let go would gladly WORK for the lower wages rather than not work at
all...and they knew it! I think it's VERY important for all people to work
and feel productive as a contributing member of society. The left doesn't
get this at all! The left thinks that if somebody isn't making $30k, they
should be on welfare, they are worthless and can't contribute to society.

The average employee salary is much higher now as is the training level and
skill level. BUT, my labor costs are a lot lower, production is much
higher, and quality is higher. I've even managed to have a structure in
place that has allowed me and my sister to take a lot of time off. A few
phone calls and a half-day here and there have kept everything going
smoothly. Good for me but bad for guys like "Robert" who used to sweep and
move stuff around for me. That was all he was capable of doing and he was
happy. I had to let him go, I liked him and he was handy to have around.
And, with his past record, he'll NEVER get another job. But guess what - I
couldn't justify the unnecessary expense, especially after union demands. I
would love to provide a bunch of jobs to people

Meanwhile, my neighborhood is blighted with the jobless and crime is worse.
Are these people better off on the dole? The yearly COLA from Ohio won't
increase my labor cost or put more money into the neighborhoods, it'll hurt
the people THAT MUCH MORE! Sure, my first responsibility is to keep the
business running and profitable, but why does the State, unions and other
democrats demand that I hurt my community? It just goes against my grain.

Sorry, just another fanatical right-wing rant.