On Mon, 26 Dec 2011 18:12:46 -0800, George Plimpton
wrote:
On 12/26/2011 2:56 PM, Ed Huntress wrote:
On Mon, 26 Dec 2011 12:03:25 -0800, George
wrote:
On 12/25/2011 7:35 PM, Ed Huntress wrote:
To anyone who thinks that US manufacturing salaries, including
benefits, are harming our industries or trade, consider that there are
13 other countries that pay mo
http://www.theatlantic.com/business/...the-us/250460/
So much for that idea. Some of the countries on that list are among
the most successful exporters of manufactured goods.
No, nothing in that chart supports that conclusion. When was the last
time you bought a manufactured good from Norway? Austria? Switzerland?
Uh, they don't have to trade with the US.g
Can you point to any manufacturing exports from Norway?
Semi-finished steel, oil rigs, aluminum, industrial machinery...
In fact, of the countries on that list, only Germany is a major
exporter of manufactured products.
As I said, some of the countries on that list are among the most
successful exporters of manufactured goods -- in the sense that their
trade balances are in surplus. Volume is no measure of success -- our
volumes of exports are huge, but our imports are even bigger.
Here's the list of current accounts:
http://en.wikipedia.org/wiki/List_of...ount_balanc e
Of the 13, MOST of them are running trade surpluses.
The current account balance includes exports of services and net factor
income. There's no indication in any of that what percentage of the
exports are made up of manufactures.
Plimpton, instead of speculating, why don't you just look it up?
Services are roughly a wash for Norway. Net factor income is trivial,
as it is in most cases.
In fact, most of Norway's exports
are primary products (71%). Of the rest, manufactured goods make up a
bit less than half, or 14.1% of all exports.
http://www.economywatch.com/world_ec...rt-import.html
Further, five of the countries with higher average manufacturing wages
than the US also are running current account deficits: Belgium,
Australia, France, Ireland and Canada.
Which means that eight are not. And, if it was true that high wages
lead to trade deficits, then there would be NO countries with trade
surpluses.
I haven't looked at the other five, but I wouldn't be surprised if
their deficits, as a percentage of total trade or of GDP, were less
than ours.
In any case, if wages are the issue, then why are eight of 13
higher-wage countries running surpluses?
They're also sizeable exporters:
http://en.wikipedia.org/wiki/List_of...ies_by_exports
Those are total exports, not net.
That's true. To say one is a "sizeable exporter" means their total
exports are substantial. Which is what I said.
In other words, their wages are higher than ours; eight of those 13
are running current-account surpluses, and several are sizeable
exporters.
So, how many excuses are you going to have to make for us, before you
run out of excuses?
Back to the drawing board...
What an absurd proposition! So, Norway supposedly paid $57.53 in
average wages and benefits to its manufacturing sector workers, while
the US paid just $34.74. However, manufacturing as a percentage of the
Norwegian economy is less than 10% of GDP, while in the US it's about
14%. Of those developed countries in the chart that pay higher total
compensation in manufacturing, only Germany is a manufacturing
powerhouse, with over 20% of GDP generated by manufacturing. If Norway
hypothetically has just 10 Lars and Nils working in manufacturing,
that's not really meaningful.
Nonsense. The US is not a net exporter.
I didn't say it was.
Most of those countries are.
And if the US is a "successful" exporter, then Norway is much more
successful in terms of net results.
I'm talking about exports of manufactured goods specifically. Norway
does not export much in the way of manufactures. Of its exports, only
14.1% are manufactures. About 14.9% is services, and the rest - 71% -
is primary materials.
The other thing that chart doesn't address is protectionism. *All*
European countries are more protectionist than the USA, particularly in
manufacturing. It's easy to prop up high wages in a sector of the
economy that is protected from foreign competition by high tariffs and
other protectionist measures.
Then we're doing it wrong and they're doing it right, correct?
No - because the goal is not to be primarily a manufacturing economy.
Why would it be?
The goal is to have a high standard of living without running up big
cumulative debts. We're running up big debts -- a smart thing in the
short run, when the economy is sagging, but not in the long run.
Those countries are doing better at it than we are.
It's worth noting that that Atlantic article does not contain any
reference to a claim that high wages are responsible for a decline in US
manufacturing.
Nobody with knowledge of the subject is making that claim.
You're whacking at a straw man.
There's a lot of straw out there, which is more noticeable if you
spend your working days visiting and interviewing managers of
manufacturing operations.
There's no need to feel too bad about the US standard of living just
yet. In terms of per capita GDP at purchasing power parity (PPP), the
US has the second highest in the world after Norway among "real" countries:
http://en.wikipedia.org/wiki/List_of...%29_per_capita.
I say "real" countries because the countries (besides Norway and
Singapore) that are ahead of the US on that list are all small, freakish
places like Liechtenstein, Brunei, Qatar, UAE and so on that don't have
real economies; even Singapore is only "semi-real".
It's amazing how you can hold up appearances if you have the world's
goldest credit card, eh?
It's interesting to see a comparison of Norway and Singapore, the two
significant countries whose per capita PPP GDP exceed that of the US.
http://cia-world-fact-book.findtheda...y-vs-Singapore.
They have very similar populations and total GDP. However, Singapore
exports about double the dollar value of Norway's exports, and imports
more than triple the dollar value. Manufacturing in Singapore
represents more than 20% of total GDP...and according to that Atlantic
chart, average manufacturing hourly compensation is only $19.10, less
than 1/3 the amount in Norway; yet Singapore's per capita PPP GDP is
slightly ahead of Norway's, in all three of the the rankings in the
Wikipedia page (IMF, World Bank and CIA World Factbook.)
You can always count on leftists to try to lie with statistics.
Plimpton, you're spinning like a top, trying to out-do the
excuse-makers.
Here are the simple facts: There are a bunch of countries that pay
much higher manfacturing wages and benefits than we do. Most of them
are running trade surpluses,
You have no idea if they're running surpluses specifically in
manufactures. Their current account balance doesn't indicate the
percentage of trade due to manufactures.
Yes, actually, I do have some idea. As I said, I've reported on
manufacturing and trade for several decades.
And you would, too, if, instead of speculating to produce excuses, you
did a little digging into the facts.
--
Ed Huntress