Workers Are Consumers, Too
July 28, 2016 at 4:25 p.m.
Ford Motor Company sees the need to lay off around 30,000 workers and close a dozen or so factories.
Ford is the latest in a rush of companies seeking to downsize.
They need to downsize to stay profitable.
There are other things companies do to stay profitable these days.
Things like outsourcing to foreign lands where labor costs are much lower, and cutting health care and pension benefits of workers.
Let me say for the record that I am rabidly pro-capitalism. That's why, while I really am not a fan of how Wal-Mart does business, I don't favor restricting it as long as it isn't breaking any laws.
So as someone who favors capitalism, I am a firm believer in the phrase, "what the market will bear."
But in my simple little Hoosier mind, sometimes I wonder just how much the U.S. market can bear.
It seems to me that these corporations, in their necessary quest to become more profitable, are eliminating the very markets that generate those elusive profits.
Think for a moment about the automotive industry - not just Ford, the whole industry.
Over the next few years, there will be literally hundreds of thousands of workers idled.
Those are largely blue-collar manufacturing type people who are making some pretty high wages. They likely won't find another job that will pay them that much.
They will have to alter their lifestyles. That is, they will have to buy less stuff.
Every time a job is outsourced, it eliminates one more wage earner in this country and sends those wages to another country.
And it creates another person less likely to buy stuff in the U.S.
Cut health care and pension benefits? Workers spend more on health care and try to put back savings for retirement.
That means they have less money to buy stuff.
Does anybody see energy costs coming down anytime soon?
I didn't think so.
More money to heat the home and fill up the car - less money to buy stuff.
So as the manufacturing sector of the U.S. economy continues it's metamorphosis into profitability in the 21st century, I see the void between the haves and the have nots widening.
Workers fortunate enough to have a good education and a solid professional or tech job will do quite well.
They will have money to buy stuff.There already is evidence of this happening.
Christmas season sales at Wal-Mart and Kmart were disappointing this year.
Neiman-Marcus and Barney's did quite well, thank you very much.
I am afraid if U.S. manufacturers don't find ways to streamline their operations without eliminating and cutting back on workers and worker benefits, they are going to eliminate huge chunks of the very market they need to survive.
I am afraid it's may come to a point where lots of people, with two wage-earners in the family, will earn just about enough to drive to work, pay the rent, eat and keep the furnace and lights on.
If that happens, who's going to buy the new car or the HD TV or the sofa or the recliner?
I think corporations need to think in terms of preserving U.S. jobs.
I think they need to keep as much money in the U.S. economy as they can.
I think they should prop up the market for U.S. goods right here in the U.S.
I think more stuff should be made in the U.S.
I understand that it's much cheaper to make stuff in China. Walk in any store and see what percentage of the goods have the "Made In China" label.
There's a reason for that. It's because those goods are a lot cheaper at both the wholesale and retail levels.
There's a reason for that, too.
I think, over the years, the government in this country has over-regulated corporations. This cuts deeply into profitability.
Have you looked at a new ladder recently? They're running out of room for all the warning stickers.
Despite these warnings, ladder manufacturers still employ legions of attorneys to ward off and settle myriad lawsuits filed by people who fall. Falling off a ladder is somehow the ladder's fault in this country.
Of course this drives up the cost of the ladder. What to do? Buy the China ladder.
Workers need to be safe. Consumers need to be protected from defective products. We need to protect the environment.
But it seems our government has this penchant for going overboard.
Honestly, does a contractor really need to fill out a material safety data sheet for a water jug on the back of a pickup truck?
It won't be easy, but I think government and industry need to work together to create and keep jobs in the U.S.
That would go a long way toward sustaining markets and profitability. [[In-content Ad]]
Ford Motor Company sees the need to lay off around 30,000 workers and close a dozen or so factories.
Ford is the latest in a rush of companies seeking to downsize.
They need to downsize to stay profitable.
There are other things companies do to stay profitable these days.
Things like outsourcing to foreign lands where labor costs are much lower, and cutting health care and pension benefits of workers.
Let me say for the record that I am rabidly pro-capitalism. That's why, while I really am not a fan of how Wal-Mart does business, I don't favor restricting it as long as it isn't breaking any laws.
So as someone who favors capitalism, I am a firm believer in the phrase, "what the market will bear."
But in my simple little Hoosier mind, sometimes I wonder just how much the U.S. market can bear.
It seems to me that these corporations, in their necessary quest to become more profitable, are eliminating the very markets that generate those elusive profits.
Think for a moment about the automotive industry - not just Ford, the whole industry.
Over the next few years, there will be literally hundreds of thousands of workers idled.
Those are largely blue-collar manufacturing type people who are making some pretty high wages. They likely won't find another job that will pay them that much.
They will have to alter their lifestyles. That is, they will have to buy less stuff.
Every time a job is outsourced, it eliminates one more wage earner in this country and sends those wages to another country.
And it creates another person less likely to buy stuff in the U.S.
Cut health care and pension benefits? Workers spend more on health care and try to put back savings for retirement.
That means they have less money to buy stuff.
Does anybody see energy costs coming down anytime soon?
I didn't think so.
More money to heat the home and fill up the car - less money to buy stuff.
So as the manufacturing sector of the U.S. economy continues it's metamorphosis into profitability in the 21st century, I see the void between the haves and the have nots widening.
Workers fortunate enough to have a good education and a solid professional or tech job will do quite well.
They will have money to buy stuff.There already is evidence of this happening.
Christmas season sales at Wal-Mart and Kmart were disappointing this year.
Neiman-Marcus and Barney's did quite well, thank you very much.
I am afraid if U.S. manufacturers don't find ways to streamline their operations without eliminating and cutting back on workers and worker benefits, they are going to eliminate huge chunks of the very market they need to survive.
I am afraid it's may come to a point where lots of people, with two wage-earners in the family, will earn just about enough to drive to work, pay the rent, eat and keep the furnace and lights on.
If that happens, who's going to buy the new car or the HD TV or the sofa or the recliner?
I think corporations need to think in terms of preserving U.S. jobs.
I think they need to keep as much money in the U.S. economy as they can.
I think they should prop up the market for U.S. goods right here in the U.S.
I think more stuff should be made in the U.S.
I understand that it's much cheaper to make stuff in China. Walk in any store and see what percentage of the goods have the "Made In China" label.
There's a reason for that. It's because those goods are a lot cheaper at both the wholesale and retail levels.
There's a reason for that, too.
I think, over the years, the government in this country has over-regulated corporations. This cuts deeply into profitability.
Have you looked at a new ladder recently? They're running out of room for all the warning stickers.
Despite these warnings, ladder manufacturers still employ legions of attorneys to ward off and settle myriad lawsuits filed by people who fall. Falling off a ladder is somehow the ladder's fault in this country.
Of course this drives up the cost of the ladder. What to do? Buy the China ladder.
Workers need to be safe. Consumers need to be protected from defective products. We need to protect the environment.
But it seems our government has this penchant for going overboard.
Honestly, does a contractor really need to fill out a material safety data sheet for a water jug on the back of a pickup truck?
It won't be easy, but I think government and industry need to work together to create and keep jobs in the U.S.
That would go a long way toward sustaining markets and profitability. [[In-content Ad]]