I come into work and every day I am passed by GM autoworkers on their way to the line. They look as you would expect. They wear jeans and cut-offs, shorts and t-shirts. They tend to be a harder-looking bunch. On the street you'd never know they were making over $60k. They don't wear ties or slacks, don't sport good physiques or nice hair cuts, but they're not required to. They punch in and do a long days work.
I look at these workers pass me every day and I can understand why they are seen as 'hicks' and derided for their mullets. And yet, per dollar invested, the American worker remains the highest return on investment. How is this so? What is the typical American worker? Is he in retail with it's tight margins or grocery stores with their tight margins? Is he in factories like the one I'm in where the margins are rapidly diminishing as competition makes things more difficult. Is the American worker in fast food turning a buck, or owning his own small or medium sized business? And what about his counterpart in Japan or Germany, who have the next two biggest economies and have the next two largest returns on investments?
We look at the Japanese worker and have this image of a small and humble man working hard and fast at his job, proud of his company and loyal beyond reason. We see him as this personification of a biological robot, working long, hard hours because that's what Japanese workers do. His counterpart in America is losing his job to outsourcing in India or China or an immigrant from Mexico. His counterpart in America is losing his job due to closing plants because of declining market share to the Japanese. His American counterpart makes minimum wage and has to care for a family of four working at a mall outlet or Burger King and can't afford to replace a busted mirror or light on his car.
So, what is the reality? Is it somewhere in the middle? When I go out on the line I hear radios blaring and see people talking to one another and catching a few paragraphs at a time of a novel or magazine, but the line keeps a certain rate and the operations within each area are completed. The line doesn't stop because of an operation not completed, it stops when data from a mainframe or server doesn't get to them or a faulty part or mechanical device stops it. In general, it doesn't stop at all, and the worker casually keeps going. It's menial work and I'm glad I don't have to do it, but the trucks keep getting built at whatever the line rate is. When I go home and drop into a Wendy's or Burger King on my way home, I'm paying almost nothing for a burger and the person handing it to me may not have a big screen TV, but they eat well, probably spend too much time on the Internet, and always seem to have enough left over at the end of the week to buy a lottery ticket or a case of beer. When I order my food, I may complain at the line and the time it takes to get my food, but competition between the chains have made such waits shorter and shorter and while their margins on many foods aren't very high, they're making enough to open new locations all the time.
So, where does that leave the typical worker in Japan or Germany or any number of other countries? If nobody is buying American anymore and Americans are buying 'Made in China' products and cars made in Japan or Taiwan and microwaves or televisions from the East, how are we yet so wealthy? Why do we also remain the best bargain on labour?
I would argue that there are four factors: Our view of workers outside of America is inaccurate, the processes at home assist in efficiencies, natural resources at home remain at high levels, historical factors beneficial to America put us way ahead and we're feeding on that residual difference.
The first, our view of workers outside the United States is inaccurate. I think wherever you go you find hard workers and slovenly workers. In this, I think you have to look beyond cultural factors in determining how efficient a worker is. There is strong competition in education pretty much everywhere except in the America's and Africa. Traditions are as varied as the blades of grass in a field. However, there is no place that a work ethic is necessarily stronger on average than in the U.S. Sure, you can look to some workers and some factories in some countries that are examples of efficiency, modernity, and utility, but you also have the lazy, complaining worker not happy with his job and wishing he were somewhere else. I think these sentiment cross cultural boundaries and permeate themselves into the psyche of the global worker.
Processes in the U.S. promote efficiencies you don't often find elsewhere. This is a country founded on industry, capitalism, and competition. While certainly the bloated margins of past decades and the past century or so have decreased, the way our economy was built has resulted in methods of ensuring the highest return on invested dollar possible. We've used factories to replace one-of shops, we've utilized social scientists to show us more time-efficient and productive uses of our time, we've employed the means of getting the products to market faster and faster, and we've employed the methodologies of standards organizations to ensure quality is both high and predictable and can be relied on by purchasers as a result of being certified.
Our natural resources have always been a boon. Where some countries lack many natural resources (Japan being perhaps the most famous example of this), we do not tend to be wanting in this department. This is not a desert country or one wrapped eternally in snow. It's a temperate zone conducive to growing things. We have a large country where we can grow hundreds of thousands of acres of crops so cheap we need the government to help subsidize them because of the glut their excess has resulted in. We have vast ranges where we have cattle roaming around to feed our insatiable appetite (pardon the pun), for beef and pork and chicken products. We have large forests we replenish that help us build our houses relatively inexpensively compared to other places in the world (outside the major markets, of course). We have extensive (if declining), fisheries off our shores, we have mountain ranges that feed us clean water and rivers that give us hydroelectric power. We have extensive coal and iron mountains we pick for industrial needs. We have a large tourism industry and a large population that wants to buy and buy and buy thanks to television and print ads. How many other countries can boast the resources we do?
Finally, we have history (and geography) that has contributed to our success. Asia and Europe has plundered it's resources for a few thousand years. While there were several million native Americans here, it was not plundered the way Europe and Asia was until about 300 years ago. Two world wars has damaged much of the world in a way that America couldn't know because it was separated by two oceans. When Europe and the East was throwing men, money, and material at one another, destroying cities and factories, America was largely safe and unscathed. Meanwhile, we profited enormously by selling material to both sides. Partially because of this ability to sell so much outside our own internal economy and the result of industrial destruction across the oceans we were able to create a large difference in economies of scale. By the time they recovered and built themselves back up and became productive, we had leveraged ourselves well in the global economy, entrenching our products in its markets. We had goods ready to buy whereas they had to start afresh. This is why it has taken so long for other countries to compete and in a relative sense, for us to lose our margin in the global economy. In a sense, we've been feeding off what we gained in fifty years in the last century. We're on a diet and our gut is being lost, but we still have the same appetite and to some degree, economic clout.
What does the future hold? I think outsourcing will continue, largely unabated. I think cheap labour from south of the border is too deeply entrenched for there to much affect at stopping it. It is possible some token effort may be made to stop border crossings, but it may be too little too late to be of much use there. Between foreign markets putting the pressure on us and unions that necessarily need to remain somewhat strong to protect the industrial worker, I see us pricing our products into obscurity. It is entirely possible that the American automobile can become a thing of the past, the way televisions and camera's have largely become. Our steel is of lesser grade so nobody overseas wants it when they can get a higher grade in Europe. Our strongest piece now is technology and thanks to an educational system that stinks, a culture that discourages education, the political unwillingness to do anything about it, and a capitalist economy that values conservative business over eager rushes of technology to market, I see this changing. Europe and Asia are much more progressive when it comes to technology and bringing products to market. They have very strong progressive cultures, with people-centric care (universal health care and very cheap post secondary education), and a willingness to take prospective products and introduce them for their value as a product to the consumer over the cost of creating it (as we do here). Our conservative culture and economy will be the causes of our economic implosion, and we only ourselves to blame.
With all our advantages, we are systematically squandering our potential. We have a large and sometimes efficient economy, but through the machinations of conservative elements both economically and politically, we have pursued policies that while giving advantage to a few individuals at the top, have resulted in imbalances down the line. These imbalances down the line have hurt us internally as the buying power driving the economy at home is the middle class. It has been the plundering of the middle class by those conservative elements at the top that has partially caused and certainly increased the pace of global parity, and as a result born witness to an America that matters less and less to anyone outside it's borders.
What can be done? Without political will, nothing. In a hundred years we'll be the fourth or fifth biggest economy. We'll still be a force, but no more than France or Germany is today. We won't have the resources to enforce our will on the world stage. We've already lost most of it. We can barely keep an army of 170,000 going over in Iraq as it is. In WWII we had an army of 2 million all over the globe and all the supplies they could possibly need. When making the push into France and Germany, long trains of trucks and tanks stretched on for days. It stupefied the Germans who couldn't believe the vast resources America was casually contributing to the war effort. In what kind of world do we live in that this would be possible today? it couldn't. Hopefully, we can shake free from our conservative shackles in time to restore us to a semblance of economic glory before we become some backwater clown.
I look at these workers pass me every day and I can understand why they are seen as 'hicks' and derided for their mullets. And yet, per dollar invested, the American worker remains the highest return on investment. How is this so? What is the typical American worker? Is he in retail with it's tight margins or grocery stores with their tight margins? Is he in factories like the one I'm in where the margins are rapidly diminishing as competition makes things more difficult. Is the American worker in fast food turning a buck, or owning his own small or medium sized business? And what about his counterpart in Japan or Germany, who have the next two biggest economies and have the next two largest returns on investments?
We look at the Japanese worker and have this image of a small and humble man working hard and fast at his job, proud of his company and loyal beyond reason. We see him as this personification of a biological robot, working long, hard hours because that's what Japanese workers do. His counterpart in America is losing his job to outsourcing in India or China or an immigrant from Mexico. His counterpart in America is losing his job due to closing plants because of declining market share to the Japanese. His American counterpart makes minimum wage and has to care for a family of four working at a mall outlet or Burger King and can't afford to replace a busted mirror or light on his car.
So, what is the reality? Is it somewhere in the middle? When I go out on the line I hear radios blaring and see people talking to one another and catching a few paragraphs at a time of a novel or magazine, but the line keeps a certain rate and the operations within each area are completed. The line doesn't stop because of an operation not completed, it stops when data from a mainframe or server doesn't get to them or a faulty part or mechanical device stops it. In general, it doesn't stop at all, and the worker casually keeps going. It's menial work and I'm glad I don't have to do it, but the trucks keep getting built at whatever the line rate is. When I go home and drop into a Wendy's or Burger King on my way home, I'm paying almost nothing for a burger and the person handing it to me may not have a big screen TV, but they eat well, probably spend too much time on the Internet, and always seem to have enough left over at the end of the week to buy a lottery ticket or a case of beer. When I order my food, I may complain at the line and the time it takes to get my food, but competition between the chains have made such waits shorter and shorter and while their margins on many foods aren't very high, they're making enough to open new locations all the time.
So, where does that leave the typical worker in Japan or Germany or any number of other countries? If nobody is buying American anymore and Americans are buying 'Made in China' products and cars made in Japan or Taiwan and microwaves or televisions from the East, how are we yet so wealthy? Why do we also remain the best bargain on labour?
I would argue that there are four factors: Our view of workers outside of America is inaccurate, the processes at home assist in efficiencies, natural resources at home remain at high levels, historical factors beneficial to America put us way ahead and we're feeding on that residual difference.
The first, our view of workers outside the United States is inaccurate. I think wherever you go you find hard workers and slovenly workers. In this, I think you have to look beyond cultural factors in determining how efficient a worker is. There is strong competition in education pretty much everywhere except in the America's and Africa. Traditions are as varied as the blades of grass in a field. However, there is no place that a work ethic is necessarily stronger on average than in the U.S. Sure, you can look to some workers and some factories in some countries that are examples of efficiency, modernity, and utility, but you also have the lazy, complaining worker not happy with his job and wishing he were somewhere else. I think these sentiment cross cultural boundaries and permeate themselves into the psyche of the global worker.
Processes in the U.S. promote efficiencies you don't often find elsewhere. This is a country founded on industry, capitalism, and competition. While certainly the bloated margins of past decades and the past century or so have decreased, the way our economy was built has resulted in methods of ensuring the highest return on invested dollar possible. We've used factories to replace one-of shops, we've utilized social scientists to show us more time-efficient and productive uses of our time, we've employed the means of getting the products to market faster and faster, and we've employed the methodologies of standards organizations to ensure quality is both high and predictable and can be relied on by purchasers as a result of being certified.
Our natural resources have always been a boon. Where some countries lack many natural resources (Japan being perhaps the most famous example of this), we do not tend to be wanting in this department. This is not a desert country or one wrapped eternally in snow. It's a temperate zone conducive to growing things. We have a large country where we can grow hundreds of thousands of acres of crops so cheap we need the government to help subsidize them because of the glut their excess has resulted in. We have vast ranges where we have cattle roaming around to feed our insatiable appetite (pardon the pun), for beef and pork and chicken products. We have large forests we replenish that help us build our houses relatively inexpensively compared to other places in the world (outside the major markets, of course). We have extensive (if declining), fisheries off our shores, we have mountain ranges that feed us clean water and rivers that give us hydroelectric power. We have extensive coal and iron mountains we pick for industrial needs. We have a large tourism industry and a large population that wants to buy and buy and buy thanks to television and print ads. How many other countries can boast the resources we do?
Finally, we have history (and geography) that has contributed to our success. Asia and Europe has plundered it's resources for a few thousand years. While there were several million native Americans here, it was not plundered the way Europe and Asia was until about 300 years ago. Two world wars has damaged much of the world in a way that America couldn't know because it was separated by two oceans. When Europe and the East was throwing men, money, and material at one another, destroying cities and factories, America was largely safe and unscathed. Meanwhile, we profited enormously by selling material to both sides. Partially because of this ability to sell so much outside our own internal economy and the result of industrial destruction across the oceans we were able to create a large difference in economies of scale. By the time they recovered and built themselves back up and became productive, we had leveraged ourselves well in the global economy, entrenching our products in its markets. We had goods ready to buy whereas they had to start afresh. This is why it has taken so long for other countries to compete and in a relative sense, for us to lose our margin in the global economy. In a sense, we've been feeding off what we gained in fifty years in the last century. We're on a diet and our gut is being lost, but we still have the same appetite and to some degree, economic clout.
What does the future hold? I think outsourcing will continue, largely unabated. I think cheap labour from south of the border is too deeply entrenched for there to much affect at stopping it. It is possible some token effort may be made to stop border crossings, but it may be too little too late to be of much use there. Between foreign markets putting the pressure on us and unions that necessarily need to remain somewhat strong to protect the industrial worker, I see us pricing our products into obscurity. It is entirely possible that the American automobile can become a thing of the past, the way televisions and camera's have largely become. Our steel is of lesser grade so nobody overseas wants it when they can get a higher grade in Europe. Our strongest piece now is technology and thanks to an educational system that stinks, a culture that discourages education, the political unwillingness to do anything about it, and a capitalist economy that values conservative business over eager rushes of technology to market, I see this changing. Europe and Asia are much more progressive when it comes to technology and bringing products to market. They have very strong progressive cultures, with people-centric care (universal health care and very cheap post secondary education), and a willingness to take prospective products and introduce them for their value as a product to the consumer over the cost of creating it (as we do here). Our conservative culture and economy will be the causes of our economic implosion, and we only ourselves to blame.
With all our advantages, we are systematically squandering our potential. We have a large and sometimes efficient economy, but through the machinations of conservative elements both economically and politically, we have pursued policies that while giving advantage to a few individuals at the top, have resulted in imbalances down the line. These imbalances down the line have hurt us internally as the buying power driving the economy at home is the middle class. It has been the plundering of the middle class by those conservative elements at the top that has partially caused and certainly increased the pace of global parity, and as a result born witness to an America that matters less and less to anyone outside it's borders.
What can be done? Without political will, nothing. In a hundred years we'll be the fourth or fifth biggest economy. We'll still be a force, but no more than France or Germany is today. We won't have the resources to enforce our will on the world stage. We've already lost most of it. We can barely keep an army of 170,000 going over in Iraq as it is. In WWII we had an army of 2 million all over the globe and all the supplies they could possibly need. When making the push into France and Germany, long trains of trucks and tanks stretched on for days. It stupefied the Germans who couldn't believe the vast resources America was casually contributing to the war effort. In what kind of world do we live in that this would be possible today? it couldn't. Hopefully, we can shake free from our conservative shackles in time to restore us to a semblance of economic glory before we become some backwater clown.
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