Posted on 10/08/2013 6:34:52 PM PDT by Graewoulf
Even with many of our high labor industries outsourced, BLS reports that labor costs still make up 30% of manufacturing product costs. If you can outsource and reduce your product costs by 29%, you had better do it before your competition does.
Most regulation except payroll taxes affects only specific industries. And payroll taxes aren't going away. Neither is EPA regulations or OSHA Regulations. EPA regs only affect businesses producing toxic waste. OSHA regs are pretty much common sense that any manufacturing business should be doing.
The cost of regulations is pennies on the dollar. The wage differential is huge compared to the cost of regulation.
It's not over regulation for most industries. It's labor costs.
Even with many of our high labor industries outsourced, BLS reports that labor costs still make up 30% of manufacturing product costs. If you can outsource and reduce your product costs by 29%, you had better do it before your competition does.
Most regulation except payroll taxes affects only specific industries. And payroll taxes aren't going away. Neither is EPA regulations or OSHA Regulations. EPA regs only affect businesses producing toxic waste. OSHA regs are pretty much common sense that any manufacturing business should be doing.
The cost of regulations is pennies on the dollar. The wage differential is huge compared to the cost of regulation.
It's not over regulation for most industries. It's labor costs.
We are on the same side but that stat is not true. We are offshoring to save 9% not 29%. Making it all the more foolish.
I think you may have missed a few items in the news.
The Left has defined the very air we breathe as toxic waste, and the EPA have done their damnedest as co-conspirators to codify that into law. I bet China and India aren't about to enforce the use of multiple blends of engine-killing ethanol.
Obama publicly declared war on Coal in his election campaign - and the EPA have done his bidding on that too.
And let us not forget the Delta Smelt
15,000 California farmers, ranchers and their employees driven out of work by a small fish - and by the ugly insanity of the EPA.
I'm just scratching the surface with these examples. New stories of regulatory overreach in the name of Gaia come on FR every week.
And here's the thing. Those farmers and ranchers in California were comfortably competing against everyone on the planet, no matter how poorly paid. The one entity they couldn't compete against was their own Government.
Did you forget farm subsidies? Surprised you used agriculture as an example of competition when it’s so heavily subsidized.
The Obama overreach is new. We got high unemployment before Obama’s Coal and Carbon insanity. We know we have to change administrations, but that won’t fix the fundamental problems affecting our economy.
I don’t know the issues with regard to the Delta Smelt. Wikipedia says the job losses were closer to 5000 with most of the job losses coming from drought and not a change in pumping.
I’m sure you can find isolated instances, where wildlife protection acts have hurt jobs. But that’s a political choice. If we are going to choose to have a clear environment where wildlife is protected, then that’s just all the more reason to protect our market from countries that don’t have similar protections for their environment like China.
Big or 'lobby' agriculture qualify for all kinds of subsidies and exemptions. They even got laws written to mandate the use of Ethanol, the gasket-dissolving non-fuel.
But if you are small, unlobbied agriculture - on the other hand - you just get hosed. Unpasteurized dairy, any kind of subsistence farming, any small plantation of cash-crops such as pistachios - the Government are your worst nightmare.
There should be a dedicated thread on this, as Freepers have a lot of experience both 1st and 2nd hand of the financial repression that crushes small agriculture in the US.
Big Agriculture in the US rakes in the subsidies. They are protected from competition from Small Agriculture because they got to write the qualifying rules. In fact they compete by qualifying for the rules and subsidies, NOT on efficient food production.
And if small Agriculture is still competitive: hell, just discover the Delta Smelt. That way you get to stop small agriculture from irrigating its own land, bankrupt it and then buy its assets for cents on the dollar. Drought, hell. The water was right there, it just had a fish in it.
We can look forward to similar rent-seeking and corruption the moment the Government are asked to intervene in other domestic markets either by subsidy or by tariff. And we don't have to look far. For instance: there's Solyndra, and half a dozen other names from America's protected Green Energy 'industry'.
Hmm, you appear to believe that the EPA are just high-minded folks looking out for a clean environment. If you hold this view sincerely then please wake up.
This theory about the EPA amounts to culpable ignorance. I am debating if I should try to assist you by pinging you to the next EPA atrocity story: if I do then please don't be offended.
bump
Tell you what: I’ll note them when they show up and list them out next time we have this discussion.
That seems like the best, least-intrusive way.
Cap the debt limit at 5% of GDP.
Shoot anyone trying to spend over that when we are not actively in a major International War.
You’ll have a handful of isolated instances. Probably almost all of them new. None of them affecting all businesses. Probably none of them affecting all manufacturing, except maybe indirectly through energy prices.
Also, earlier you mentioned China not forcing blended fuels. Okay, but a gallon of gasoline in California which is usually a high price state is still cheaper than a gallon of gasoline in China. So even though we have regs affecting the price, it still hasn’t put us at a disadvantage to China.
The wage differentials are the key. And that alone requires us to protect our market, unless we want to see every industry that can be moved off-shore, moved offshore.
And "unpasteurized milk" is not a good example. Unpasteurized milk was clearly linked to health issues back in the 1980's. Whether or not unpasteurized milk still causes health issues is up for debate, but the medical community is not convinced, and this is completely irrelevant to this discussion. We aren't importing unpasteurized milk.
The Amish seem to do just fine on subsistence farming. But that's because they are willing to live like they did 100 years ago. They aren't buying the satellite dish or the latest cell phone.
Lots of small farms around, we've got a garden out back. Probably you're seeing state or local issues not federal.
Ah, but do you remember what I said about America's competitive advantages?
America can't compete on wages, but wages are not the most significant cost component for thousands of products and services.
But where America does enjoy advantages - such as the fuel cost disparity you mention - it's being thrown away.
That fuel cost disparity isn't as much as it could be - and therefore isn't decisive in bringing work back to the US because of the uplift attached by aging refineries (aging due to EPA rules), Ethanol blends (EPA rules) and fuel taxes (sheer bloody-minded Government).
This is why Eagle Diesel is so exciting. Extremely cheap energy in America's heartland. It has the potential to change everything. If anything can bring industry back to the US DESPITE the EPA, Obamacare, etc, etc it is America's natural gas revolution.
The Left - who I feel I should mention are not our friends - are doing their damnedest to stamp out fracking before America shakes loose from their control.
Energy prices can certainly help. But they aren’t likely to offset the wage differential. The wage differential is 1:100 and affects 30% of the product cost of the manufactured goods we have left.
Energy is 16% of our GDP. And probably most of that is consumer usage for homes and car gasoline. I bet energy costs aren’t 5% of most product costs. So yah, you manage to cut energy costs 10%, which means you’ll lower product costs 0.5%. Offshore to China and lower product costs 29%.
Nothing compares to the wage differential.
The FDA - who I feel I should point out are another regulatory body of the United States like the EPA - have carried out dozens of armed raids on people who sell unpasteurized milk: also organic produce and natural supplements.
They have seized their property and livelihood under color of law. In most cases they have not presented warrants nor shown any probable cause.
Here is an indicative timeline
This is evident, in-your-face, Government tyranny on behalf of Lobby Agriculture against their small-time competitors. And you haven't heard of it? Or you don't think its relevant?
It is highly relevant to this discussion because it shows what happens when a market becomes hostage to intervention. Government Intervention is what you are wishing upon every market in the United States - you need to look hard and long at the toxic effects of that.
Ok, end-of-day here. See you all on the next thread. Goodnight to all.
Unpasteurized milk is completely irrelevant to this discussion because we don't import it.
It's illegal and if you sell it you are breaking the law.
And yes if we raise the tariffs, and you smuggle goods into the country without paying the proper tariffs you're likely to get raided and your goods seized. That's okay by me.
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