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Skills Donít Pay the Bills
The New York Times ^ | 11/20/2012 | Adam Davidson

Posted on 11/26/2012 9:40:40 AM PST by ksen

Eric Isbister, the C.E.O. of GenMet, a metal-fabricating manufacturer outside Milwaukee, told me that he would hire as many skilled workers as show up at his door. Last year, he received 1,051 applications and found only 25 people who were qualified. He hired all of them, but soon had to fire 15. Part of Isbister’s pickiness, he says, comes from an avoidance of workers with experience in a “union-type job.” Isbister, after all, doesn’t abide by strict work rules and $30-an-hour salaries. At GenMet, the starting pay is $10 an hour. Those with an associate degree can make $15, which can rise to $18 an hour after several years of good performance. From what I understand, a new shift manager at a nearby McDonald’s can earn around $14 an hour.

The secret behind this skills gap is that it’s not a skills gap at all. I spoke to several other factory managers who also confessed that they had a hard time recruiting in-demand workers for $10-an-hour jobs. “It’s hard not to break out laughing,” says Mark Price, a labor economist at the Keystone Research Center, referring to manufacturers complaining about the shortage of skilled workers. “If there’s a skill shortage, there has to be rises in wages,” he says. “It’s basic economics.” After all, according to supply and demand, a shortage of workers with valuable skills should push wages up. Yet according to the Bureau of Labor Statistics, the number of skilled jobs has fallen and so have their wages.

(Excerpt) Read more at nytimes.com ...


TOPICS: Business/Economy; Culture/Society; Miscellaneous
KEYWORDS: jobs; jobskills; manufacturing; manufacturingjobs
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Interesting article describing about how part of our manufacturing woes isn't necessarily education related, as seen in the article by the high number of students taking classes training to operate highly technical manufacturing computers. It's that manufacturing companies still want to pay $10/hr for, now, highly skilled labor.
1 posted on 11/26/2012 9:40:43 AM PST by ksen
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To: ksen

Hard to pay those higher wages when other countries pay 1/4 that much, if that much, to workers and sell their cheap crap here. An unrestricted global market if all start at the same place, too bad we started light years ahead in living standards and technology and have to go backwards to let everyone catch up.


2 posted on 11/26/2012 9:44:14 AM PST by Resolute Conservative
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To: Resolute Conservative

Oops, meant to type “global market works if”


3 posted on 11/26/2012 9:45:07 AM PST by Resolute Conservative
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To: ksen

Read the last sentence in the article. He’s saying the problem is education. The remedy will be that we need more “education”. It’s the New York Times....they can’t help themselves.


4 posted on 11/26/2012 9:48:20 AM PST by blueunicorn6 ("A crack shot and a good dancer")
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To: Resolute Conservative

Stupid reality messes lots of things up.


5 posted on 11/26/2012 9:49:36 AM PST by stuartcr ("When silence speaks, it speaks only to those that have already decided what they want to hear.")
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To: ksen

Manufacturers don’t want to pay for labor - skilled or unskilled. I have thirty years of experience in industrial maintenance and have had offers of $15/hr. Luckily I have a job and am making okay money. Don’t think it will last long, though. The only people making any real money these days are govt. workers and money changers.


6 posted on 11/26/2012 9:49:36 AM PST by raybbr (People who still support Obama are either a Marxist or a moron.)
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To: blueunicorn6

Isn’t education essentially the same as OJT or shop classes?


7 posted on 11/26/2012 9:50:41 AM PST by stuartcr ("When silence speaks, it speaks only to those that have already decided what they want to hear.")
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To: ksen

They NY Times talking about supply and demand? What has the world come to?

There is a shortage of long-haul truck drivers for this same reason. Trucking companies think people should be eager to jump at a job at any wage. Potential drivers don’t think the pay being offered is worth the downside (long time away from home/family), so they look elsewhere.

Eventually the free market will work it out.


8 posted on 11/26/2012 9:53:17 AM PST by Brookhaven (theconservativehand.com - alt2p.com)
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To: ksen

‘Part of Isbister’s pickiness, he says, comes from an avoidance of workers with experience in a “union-type job.” ‘


Unless the job applicant’s last job was in a right-to-work state, he probably didn’t have much choice as to whether or not he was in a union. Turning the applicant down for that reason alone, if he has a good skill-set, work record etc. may be ill-advised.


9 posted on 11/26/2012 9:53:17 AM PST by teflon9 (Political campaigns should follow Johnny Mercer's advice--Accentuate the positive.)
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To: blueunicorn6
Read the last sentence in the article. He’s saying the problem is education. The remedy will be that we need more “education”. It’s the New York Times....they can’t help themselves.

Not really. What they are really admitting is that all the money that they keep throwing at education is a dismal failure:

"The problem, he finds, is that far too few graduate high school with the basic math and science skills that his company needs to compete."

We didn't have this problem years ago before all the socialist programs in education.

10 posted on 11/26/2012 9:54:56 AM PST by PuzzledInTX (Everything will be OK in the end. If it is not OK, then it isn't the end.)
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To: ksen
Nobody wants to hire "permanent" employees now for any reason, especially companies not located in right-to-work states. They try, like the company in the article, to get by with low-priced, younger workers for the short term, then complain about the inadequacy of those workers.

The answer (other than changing Presidents) is to change the laws to favorably treat the hiring of independent contractors. But the unions go ballistic every time that subject comes up.

11 posted on 11/26/2012 9:55:51 AM PST by Mr. Jeeves (CTRL-GALT-DELETE)
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To: raybbr

We pay our Ind. Maint. Techs $21.80/hr to start, and cap at $25. Still can’t find anyone worthwhile, willing to work OT on top of that.


12 posted on 11/26/2012 9:57:38 AM PST by ItsOurTimeNow ("This ain't no party, this ain't no disco, this ain't no foolin' around.")
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To: Resolute Conservative

I realized that this was exactly what would happen when we
did NAFTA. It was meant to bring all living standards to
the same level around the world. The world only needs a
few brain surgeons but lots of lesser skilled workers.
Why should a guy with the same skills here live better
than the same guy in India? That’s the way the globalists
see things and they have been in control for a while.

Things are all going according to the plan.


13 posted on 11/26/2012 9:58:50 AM PST by jusduat (on the mercy of the Lord alone.)
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To: teflon9
I suspect he means someone who wants to negotiate. There was an article in my home town paper a while ago complaining that Union Pacific couldn't find "good workers" because of the oil boom in North Dakota. Seems they wanted to pay minimum wage for welders and diesel techs, who were able to make six figures in N. Dakota.

UP also blamed education.
14 posted on 11/26/2012 10:00:16 AM PST by redgolum ("God is dead" -- Nietzsche. "Nietzsche is dead" -- God.)
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To: Mr. Jeeves
"independent contractors" = no benefits and even less job security. Might be good for the employer, but awful for the employee.
15 posted on 11/26/2012 10:00:43 AM PST by teflon9 (Political campaigns should follow Johnny Mercer's advice--Accentuate the positive.)
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To: ksen

Perhaps the burden of Government is now so great that machine shops cannot make a profit without offering very low wages.

If there’s no Worker-Employer match it’s not the business’s fault. Businesses employ people in order to make a profit, and they must compete with other businesses.

Either there’s no one suitable to hire or the cost-of-employment in the state is simply too high for a Worker-Employer match.


16 posted on 11/26/2012 10:01:05 AM PST by agere_contra ("An unjust law ceases to be a law: it becomes an act of violence". Thomas Aquinas)
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To: stuartcr

Depends on who you talk to. Many people see a difference between training and education. The point is that the writer writes about the lack of skilled workers in manufacturing jobs and then closes the article by saying that the real problem is a lack of education. I can guarantee you he’s talking about going to college. The Democrats are scared that fewer people will go to college.


17 posted on 11/26/2012 10:04:26 AM PST by blueunicorn6 ("A crack shot and a good dancer")
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To: ksen

Companies used to train and manage. Now they don’t train and they don’t know how to manage. Frankly, very few managers even have skills anymore. “Manager” is now a career field and not a job position. “What do you do?” “I am a manager. I have a degree in management.”, not, “I am a facilities engineer and manage a facility staff of 15 for a heavy equipment company.”


18 posted on 11/26/2012 10:08:25 AM PST by CodeToad (Liberals are bloodsucking ticks. We need to light the matchstick to burn them off.)
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To: ItsOurTimeNow

“We pay our Ind. Maint. Techs $21.80/hr to start, and cap at $25. Still can’t find anyone worthwhile, willing to work OT on top of that.”

My brother does that kind of work and the rates you mention sound very competitive for the southeast US. Not sure how that would compare nationally.


19 posted on 11/26/2012 10:08:53 AM PST by DonaldC (A nation cannot stand in the absence of religious principle.)
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To: blueunicorn6
Did you mean to say:

The Democrats are scared that fewer people will go to be indoctrinated in college.

20 posted on 11/26/2012 10:09:10 AM PST by null and void (The trouble with the world is that the stupid are cocksure and the intelligent are full of doubt.)
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To: ksen

Hmmmmm....

Well, my little brother told me point blank that everyone deserves a living wage. Poppycock.

They don’t deserve anything.

They get what they negotiate for and what the job is worth.

For instance: McDonalds....How much right brain does it take to press buttons or wait for a buzzer to tell the fries are ready or now you must turn a burger over?

Seriously, if McDonalds finds them selves paying $15 dollars an hour for burger flippers and my hamburgers start costing me $10 I’m at Smith and Wolensky where they they will serve a “Fat” burger with plank style fries and I can get it rare the way I like it.

Oh, and no salt on my food, another way I like to order my food.

Grocery clerks will absolutely be replaced with only a few for those who just have to interact with other human beings.

I see a “Self Checkout”, I’m there and out of the store, lickity split.

Low level skill jobs pay low level wages. You want moh muhnny, then get your azz to work and figure what it takes to get the skills you need, learn them and then go get that job that pays $100k so you can be a big shot.

It’ll put you in the top 7% as well, of all wage earners and you buy all that stuff you thought people were lucky to have, only to learn they, like you, worked their sorry asses off to get where they are, took a lot of other peoples Shiite, got bumped and scrapped...but, hey...we think we’re happy..with our stuff and facades of happiness.

They won’t figure it out until later in life that no one really cares about the stuff you buy. They aren’t impressed and you are not really interesting.

Better to want more but to want to do more interesting things and build great friendships and family.

I prefer to go for a walk in the woods or walk along the shoreline of the Pacific.

God speaks to me there....


21 posted on 11/26/2012 10:11:06 AM PST by Vendome (Don't take life so seriously, you won't live through it anyway)
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To: jusduat

Good insight, the aim of most of our lefty leaders is to promote agendas that facilitate a single global government and there is nowhere for the U.S. to go but down. Everything about socialism sucks the fun out of being free.


22 posted on 11/26/2012 10:12:22 AM PST by Captain PJ (Are we there yet?)
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To: null and void

Yep. But it’s not just the indoctrination that ticks me off. So many young people are borrowing and paying big money for a worthless education.


23 posted on 11/26/2012 10:14:23 AM PST by blueunicorn6 ("A crack shot and a good dancer")
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To: ItsOurTimeNow
We pay our Ind. Maint. Techs $21.80/hr to start, and cap at $25. Still can’t find anyone worthwhile, willing to work OT on top of that.

Why a cap? Is OT a condition on hiring? If so, why? Can't you manage the dept on straight time workers?

I truly don't understand why some people see OT as a benefit. If people want to work OT fine. But, if they can work regular hours and do the job what's the complaint based on, then?

24 posted on 11/26/2012 10:15:28 AM PST by raybbr (People who still support Obama are either a Marxist or a moron.)
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To: teflon9

“”independent contractors” = no benefits and even less job security. Might be good for the employer, but awful for the employee. “

I think this depends on how it is structured and the type of work. It can be beneficial for both sides and I can see more folks doing this as obamacare rolls in, well, depending on what the exchanges look like and what employers do regarding buying insurance or paying the penalty.


25 posted on 11/26/2012 10:15:48 AM PST by DonaldC (A nation cannot stand in the absence of religious principle.)
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To: agere_contra
If there’s no Worker-Employer match it’s not the business’s fault.

Of course not, everyone knows that business owners can do no wrong.

26 posted on 11/26/2012 10:16:45 AM PST by ksen
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To: ksen

It isn’t highly skilled labor anymore.

It’s Xbox skills.

Many people, including me, understanding computers down to command line issues.

When I say most people I’m talking about those under 45, for the most part.

It ain’t rocket science to us and it’s programming a parameter or an outcome.

Super simple, really....


27 posted on 11/26/2012 10:18:42 AM PST by Vendome (Don't take life so seriously, you won't live through it anyway)
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To: Vendome

And yet the starting pay for a new McDonalds shift supervisor is 40% more than what the company in the OP wants to pay someone with much more technical skill.

I encourage to keep taking long walks in the woods, away from the computer.


28 posted on 11/26/2012 10:20:22 AM PST by ksen
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To: ksen
If Business owners get it wrong they stop owning a business.

Business owners are the experts on their bottom line. Not the Government. Not the employee. And not the NYT.

29 posted on 11/26/2012 10:21:52 AM PST by agere_contra ("An unjust law ceases to be a law: it becomes an act of violence". Thomas Aquinas)
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To: ksen

30 posted on 11/26/2012 10:22:32 AM PST by Lancey Howard
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To: raybbr
I truly don't understand why some people see OT as a benefit. If people want to work OT fine. But, if they can work regular hours and do the job what's the complaint based on, then?

Typically, OT is paid at a higher rate on many pay scales. So, some see the OT work as a pay raise for doing the same kind/type of work.

Some say that "compounding interest is a working man's best friend." That may be true, but if so, OT is maybe the working man's second best friend.

As a salaried employee, I don't get the benefit of OT, but I'm not complaining.

31 posted on 11/26/2012 10:24:55 AM PST by Lou L (Health "insurance" is NOT the same as health "care")
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To: ksen

Life’s tough.

Get some ambition on the workers part and if the complaint on the employers part is a mismatch of skills, outcome and labor costs then they got a problem.

The product is only worth so much.

Complaining about the wage doesn’t really do anyone any good.

If the market says a product is only worth “X” then the wage, the only real cost that can destroy value, has to be “Y”.

That’s why Apple products are produced and assembled in China.

Gonna go for that walk this afternoon and contemplate.

My arm is feeling better and I think I need more money. I think best out there...


32 posted on 11/26/2012 10:26:16 AM PST by Vendome (Don't take life so seriously, you won't live through it anyway)
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To: teflon9
"independent contractors" = no benefits and even less job security. Might be good for the employer, but awful for the employee.

Companies will pay a much higher hourly rate to someone they know they can part with easily if times get tough. Being an employee, especially if a union member, does nothing but set you a maximum salary limit, regardless of your ability.

Job security is a nonsensical concept in these times - there is none.

33 posted on 11/26/2012 10:27:51 AM PST by Mr. Jeeves (CTRL-GALT-DELETE)
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To: ksen
Yeah, that’s how it works now in the new economy. I worked for over 25 years as an Industrial Electician/Controls Technician, complete with higher education, training, and experience to boot. After that time, I’ve seen my wages cut in half, told I have to do twice as much work for half the pay, and threatened with firing if I wouldn’t work for what the unskilled workers were getting paid, or get my job shipped to china. Even after biting the bullet and complying with all of those requests, I still lost my job to some shithole in china that the company owners sold their business to. So, I decided that nobody here gets any support from me, especially if they’re so quick and willing to sell out the American people solely to turn a quick buck. Unfortunately for all of the respectable business owners out there, you will be unfairly lumped in with the privateer types so dominate in industry today.

These companies wonder why they can’t find good help. It’s because they’ve made a bad reputation for themselves, and nobody in their right mind will work fork them.

34 posted on 11/26/2012 10:30:41 AM PST by factoryrat (We are the producers, the creators. Grow it, mine it, build it.)
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To: Brookhaven
Eventually the free market will work it out.

An alien concept in modern, post-capitalist America.

35 posted on 11/26/2012 10:31:35 AM PST by pgkdan (We are witnessing the modern sack of Rome. The barbarians have taken over.)
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To: PuzzledInTX

Good story to tell. American born girl student whose parents were from India. She applied for jobs after she graduated from college with BS in computer programming. After tons of resumes no interviews. She even lowered her asking starting salary. Still no responses. One of her friends suggest that she take her American citizenship off her resume and see what happens. Immediately after removal of US citizenship, she had many interviews. After each interview the software companies were making job offers. She took one, worked a year before she told them she was a US citizen from the start. The employers were upset!!! What they really want is a foreign worker on VISA and willing to work low salaries. Moral of the story is even if we were willing to work at the lower salaries, many employers want you to have the mindset of a VISA worker, easy to fire and silent when abused.
Keep this up and corporate America will face class warfare with the rich hanging from lamp posts. Many corporations claim they must keep salaries low to meet slim profit margins. Gee the CEO keeps getting huge raises and bonuses along with his exec staff. The HQ building don’t look like a building trying to keep costs down. Laser edged glass, expensive furniture, art, look more like steel and glass palaces, limo drivers to work, gov bailouts, perks etc etc fit for a king. Until CEO’s live modestly, HQ buildings look economical, hard to sell this crap of slim profit margin to Main Street America. It is more like the guys on top help themselves to the profits first, then claim too little is left for the workers in the factory.


36 posted on 11/26/2012 10:33:50 AM PST by Fee
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37 posted on 11/26/2012 10:39:47 AM PST by RedMDer (Please support Toys for Tots this CHRISTmas season.)
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To: Lou L

OT is a benefit to the employer. There are usually fixed costs both monetary and others such as regulatory, legal, training, and etc, for having an employee that are not seen in the hourly rate. These fixed costs may make it cheaper in the short run to work OT than to hire another worker.


38 posted on 11/26/2012 10:40:23 AM PST by FreedomNotSafety
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To: ItsOurTimeNow
Does the company place onerous conditions on the applicant? Drug screening at random? Required to report arrest (for any reason) to the employer? Deny employment because of a five or ten year old criminal act (OUI or drugs)? Want Facebook/social networking passwords?

Wages are not the only consideration when taking a job.

Impeach the kenyan or secession.


39 posted on 11/26/2012 10:47:04 AM PST by ex91B10 (We've tried the Soap Box,the Ballot Box and the Jury Box; ONE BOX LEFT!)
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To: Vendome

“Many people, including me, understanding computers down to command line issues. When I say most people I’m talking about those under 45, for the most part.”

I’ve found the opposite to be true. Those that learned about computers in the GUI age are less technical than their (older) pre-GUI counterparts.

I can’t tell you the number of times I’ve opened a command prompt and had (an otherwise computer savvy person) say they were lost.


40 posted on 11/26/2012 10:56:49 AM PST by Brookhaven (theconservativehand.com - alt2p.com)
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To: Fee
From what I can tell....you think Dims have the answers.

Why are you here?

41 posted on 11/26/2012 10:59:57 AM PST by Osage Orange ( Liberalism, ideas so good they have to be mandatory.)
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To: ksen

The cost of wages is not set by the employer, is it ? The wage is set by the market, based on demand of the product. At least that’s the way I learned it in economics.


42 posted on 11/26/2012 11:04:54 AM PST by Red Boots
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To: Red Boots

If that’s what you learned in economics class you should ask for a refund.

“The market” is just a euphemism for the employers looked at as a group. And before anyone tries to chime in about employees holding out for better wages it doesn’t work 99% of the time because the employer will just pass you over and take one of the other 500 applicants that will work for what they want to pay.

All the negotiating power right now is in the court of the employers. Thank you for that union bashers.


43 posted on 11/26/2012 11:11:04 AM PST by ksen
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To: agere_contra

The churn has its business costs as well. In my view, we are setting up our new employees to fail because we don’t or aren’t allowed to invest enough in training. It’s self-defeating because we’re wasting $4K per new employee.


44 posted on 11/26/2012 11:12:19 AM PST by newzjunkey
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To: factoryrat

“Yeah, that’s how it works now in the new economy. I worked for over 25 years as an Industrial Electician/Controls Technician, complete with higher education, training, and experience to boot. After that time, I’ve seen my wages cut in half, told I have to do twice as much work for half the pay, and threatened with firing if I wouldn’t work for what the unskilled workers were getting paid, or get my job shipped to china. Even after biting the bullet and complying with all of those requests, I still lost my job to some shithole in china that the company owners sold their business to. So, I decided that nobody here gets any support from me, especially if they’re so quick and willing to sell out the American people solely to turn a quick buck. Unfortunately for all of the respectable business owners out there, you will be unfairly lumped in with the privateer types so dominate in industry today.
These companies wonder why they can’t find good help. It’s because they’ve made a bad reputation for themselves, and nobody in their right mind will work fork them. “

I said goodbye to manufacturing a number of years ago. Too hard to make a decent living. I had 35 years experience in management and accounting and I have found that the skills learned pay much better outside of manufacturing.


45 posted on 11/26/2012 11:20:02 AM PST by buffaloguy
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To: Red Boots

“The cost of wages is not set by the employer, is it ? “

I think it depends on the market position of the company with smaller operations at the most disadvantage and most governed by narrower markets. The larger the company, the more diverse opportunities can be pursued and they will have more flexibility in attracting workers. This is why towns with mostly small business panic when larger manufacturing or the infamous box stores move in. They simply cannot compete for workers or markets.


46 posted on 11/26/2012 11:20:44 AM PST by DonaldC (A nation cannot stand in the absence of religious principle.)
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To: ksen
From the linked article: "Many skilled workers have simply chosen to apply their skills elsewhere rather than work for less, and few young people choose to invest in training for jobs that pay fast-food wages. As a result, the United States may soon have a hard time competing in the global economy. "

Also from the linked article: "As he spoke, I realized that this isn’t a narrow problem facing the manufacturing industry. The so-called skills gap is really a gap in education, and that affects all of us. "

Both of these statements reveal the author's lack of understanding what is happening in the U.S.

The fact of the matter is that there is nothing which is going to enable a skilled American citizen to out-compete a skilled Chinese while enjoying a higher standard of living, aside from interference by the Chinese government in the Chinese economy to an extent greater than the interference today in the U.S. economy by its government.

The same is true of skilled workers in India.

What we have witnessed over the last several decades (and which we witnessed in regard to Japan in the prior several decades) is that highly-educated, highly-motivated Chinese will naturally identify industries which are relatively easy to start-up and will out-produce more highly paid Americans.

As time goes on, the Chinese must identify more and more industries in which to engage. Those industries that are more challenging to start-up are simply the ones which will be established later rather than sooner.

But the bottom line is that there is very little reason to believe that any job in America that can be done in China won't someday be done in China, given that the Chinese will accept a lower standard of living.

47 posted on 11/26/2012 11:43:28 AM PST by William Tell
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To: Fee

You are 100% right.

That isn’t the orthodoxy here. And will get you flamed.

However, there is a growing disconnect between the large and small. That never ends well.


48 posted on 11/26/2012 11:44:14 AM PST by redgolum ("God is dead" -- Nietzsche. "Nietzsche is dead" -- God.)
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To: raybbr
raybbr said: "I truly don't understand why some people see OT as a benefit."

As others have pointed out, OT hours are incrementally less expensive than base pay hours, even if the employee is being paid 1.5 times their hourly rate for OT.

But my experience in manufacturing is that OT is almost an essential mechanism for handling the ups and down of a competitive company. If you don't want to be running a "hire and fire" operation, then you need a different approach for when sales decline, whether that is because the newer products are disappointing or whether it is because the overall economy is contracting.

If people are working an average of 10 hours OT on top of a 40 hour week, then contracting the business by twenty percent is as simple as reducing overtime to zero. (This is typically much more complicated by the fact that not all product lines contract by the same amount.)

Handling a sales contraction of twenty percent would otherwise have entailed laying off twenty percent of the workforce; a very unpleasant undertaking.

49 posted on 11/26/2012 12:04:29 PM PST by William Tell
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To: FreedomNotSafety
OT is a benefit to the employer. There are usually fixed costs both monetary and others such as regulatory, legal, training, and etc, for having an employee that are not seen in the hourly rate. These fixed costs may make it cheaper in the short run to work OT than to hire another worker.

Even better is having employees work overtime off the clock.

P&G did this with their hourly employees in the 1980s at one of the technical centers. Lab technicians would work past their quitting time during the week, sometimes for hours and come in on Saturdays, all for no pay. People were under pressure to do this; if you didn't, you were branded with "bad attitude". Management denied this practice, which was not consistent throughout the company, but I observed it for years.
50 posted on 11/26/2012 12:29:00 PM PST by Nepeta
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