Well, they said this would be a jobless recessionary recovery, and the economists were right. Currently major corporations are sitting on hundreds of billions of dollars in cash because they’ve become really good at collecting the money. Their business models are tight, proven, and highly efficient. No matter how much money we give to the poor the wealthy corporations will have that money in less than three transactions.
Meanwhile the government keeps setting up corporate welfare programs on top of that. And if that wasn’t enough, due to all the lobbyists, our legislatures are putting more regulations on small business and building moats, and barriers to entry. This is a great time in American history to be an American corporation.
Many less than free-market capitalist thinkers are now complaining and demanding that corporations let loose of some of those hundreds of billions of dollars and start hiring more employees. But with all the regulations and Types Of Manufacturing Industry rules about hiring new people, including the additional cost of ObamaCare, it doesn’t behoove their bottom line, shareholders equity, or quarterly profits to do so. Meanwhile the small business community can’t afford to.
Therefore we continue our jobless recovery, as we enter a stagflation period, which is worse than a double dip, because you get inflation, but no growth, meaning no GDP growth, no job growth, and no earnings growth and thus, the jobs that do exist, but you still have to deal with increases in commodity costs, and wholesale inflation due to regulations and perhaps fuel and energy costs.
There was an interesting article recently in the New York Times which was titled; “Companies Spend on Equipment, Not Workers,” by Catherine Rampell, published on June 10, 2011. The article stated;
“Companies that are looking for a good deal aren’t seeing one in new workers. Workers are getting more expensive while equipment is getting cheaper, and the combination is encouraging companies to spend on machines rather than people. “I want to Secondary Industry have as few people touching our products as possible,” said one Tech company. “Everything should be as automated as it can, we just can’t afford to compete with countries like China on labor costs, when workers are getting even more expensive.”
Sure, that makes sense, after all why would you wish to hire more workers, only to be forced to pay their healthcare insurance, deal with employment law lawsuits, and all the increased regulations? You see, if you hire a worker at $15 an hour, that same worker really cost you $23 per hour. For that amount of money you are better to go buy a new robotic system for your factory, and take the depreciation cost over time against your corporate taxes, because you come out way ahead, and you don’t have to pay all those additional costs.
These corporations aren’t bad, they’re doing what makes sense. Now if our government will use common sense, it is my contention we can rectify this problem and get our …
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Manufacturing Jobs – Yes We Need Them, But This Next Generation Doesn’t Want to Work
Four years ago, I was doing some consulting for a small business who could not find quality workers to work in his company. The unemployment rate was so low, that there were not many good workers left. Whenever he put a “help wanted” sign out front of his business he was underwhelmed by those folks who would come in and ask for an application. It’s as if they didn’t really want a job, or really want to work at all.
In fact, right now we see much of the same thing. Folks would rather play on their iPad or iPhone all day long in the office, rather than getting any work done. And this brings up another point. What if someone is working in a factory, and they are in charge of things coming across the assembly line? Obviously they can’t be using their personal tech devices while working around or operating machinery and equipment.
I know there’s been a lot of talk about the weak US dollar strategy to promote manufacturing jobs in the United States. The theory goes something like this; if we keep the US dollar low we can produce products cheaper How Long Has The Tech Industry Been Around on the global market giving us the competitive advantage in international trade. Yes, I understand that concept because I watch how China is manipulating its own currency so they can have a continuous advantage.
But even if we grow the manufacturing jobs that United States, will any of these kids really want to work in the factories? No, I don’t think they will, they would Industrial Engineering Masters rather go home and play video games, or text their friends, and play on their Facebook page than actually do work in a legitimate factory and a real job.
There was an interesting article recently in Industry Week posted on June 8, 2011 titled; “A Stimulus Plan to Encourage U.S. Manufacturing” by By Niko Michas, CEO, and Mikael Trapper, managing partner, BridgeNet Solutions, Inc. which laid out an exciting manufacturing revitalization strategy; “Each state should take a portion of its federal stimulus money and allot it towards specific tax incentives that will enable U.S.-based companies to convert to U.S.-based manufacturers.”
Although I am not one who is much into stimulus of this type, as I see a core problem with over-regulation, over-lawyering, and litigation, and corporate taxation issues, I still do believe the plan could indeed work. But then again I reminded of the problem with the up-and-coming generation that doesn’t really want to work all that hard. And if we produce all these jobs who will fill them, who is willing to work in a factory? Indeed, I hope you will please consider all this and think on it.…