Anybody Want To Guess What This Is?
By Justin Gardner | Related entries in Economy, Money
The categories I picked should be a hint, but find out here.
This entry was posted on Wednesday, September 6th, 2006 and is filed under Economy, Money. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
September 6th, 2006 at 10:18 am
Wowza.
I’m a native Michigander (from Flint, no less) so it pains me to see the state doing so bad. It’s like the early 80s all over again.
September 6th, 2006 at 10:56 am
No surprise there. Michigan has been driven (pun intended) by the Big 3 for close to a century. Now thanks to labor unions, mismanagement, and competition; they are dying. As all those union jobs leave the state, of course the average income would come down, and the proportion of those living below the poverty line would come up.
Detroit is a pit. I live within an hour of it, and never go there. The current mayor and city council are 2nd only to the UN when it comes to corruption.
September 6th, 2006 at 11:09 am
The map portrays median income growth (or loss). It really doesn’t say a lot more than that the U. S. is continuing to lose manufacturing and that federal spending can help a little in states with small populations.
This is a process that has been proceeding for more than 30 years under Democratic congresses and Republican processes, under Democratic presidents and Republican presidents. I believe that both events (China’s entry into the world market, for example) and policies (one-way free trade and open borders) have contributed to the condition.
It’s not entirely clear to me how it can be remedied.
September 6th, 2006 at 12:52 pm
I think it is remedy-ing itself. For years we were the manufacturing giant. Our labor force was able to pick their level of compensation. Now that we have entered the world economy, we cannot compete with people that are being paid a quarter per day to make shoes. Your choices come down to $125 American-made shoes versus $40 chinese made shoes. Since there’s not a huge difference in quality, people are going to buy the cheap stuff. This is the primary reason Wal Mart exists. We cannot force the third world to pay at our wage level, so we can either stoop to their level, or let the jobs go. American manufacturing is a thing of the past, and we need to adapt. I think wages have pretty much topped out, and will have to start to decline
in the next decade. As long as prices drop accordingly, then no harm is done – except sales tax revenues go down. If you’re pro-big government, that’s a bad thing.
In a capitalistic – world economy, disparity in wages between countries have no choice but to fall in line eventually.
September 6th, 2006 at 5:00 pm
Interesting… that map closely matches the map of gas prices across states.
September 6th, 2006 at 9:04 pm
Now thanks to labor unions, mismanagement, and competition; they are dying. As all those union jobs leave the state, of course the average income would come down, and the proportion of those living below the poverty line would come up.
Yep, it’s entirely the fault of those evil unions.
First, the Big 3 bet the farm on gas guzzling SUVs and big trucks
http://www.chicagotribune.com/news/local/michigan/chi-ap-mi-gm-wagoner,1,5530726.story
and when high gas prices really kicked in, the bottom dropped out of the SUV and heavy truck market, which left the Big 3 with a huge glut of already built vehicles SUVs and heavy trucks.
Meanwhile Toyota increases US marketshare at the expense of the Big 3
http://www.chicagotribune.com/news/local/michigan/chi-ap-mi-autosales-optiona,1,3963687.story
Toyota’s about the only one making lots of noise about selling significantly higher mileage hybrids. With gas prices these days, is anyone surprised?
But wait, what’s the response from the Einsteins running the Big 3?
GM’s Offerings in the Hybrid Market – hybrid versions of Tahoe and Yukon which will get 25% better mileage than their current non-hybrid versions (from 17 MPG to a whopping 21-22 MPG) for 2007. DaimlerChrysler’s planning a hybrid version of their Dodge Durango SUV in 2008 and a hybrid technology luxury sedan (is the luxury sedan market big enough to pin hopes of turning the whole company around?). Ford’s plan to develop a hybrid version of its Fusion seems like a step in the right direction; hopefully they’ll market it a bit more than their current Escape Hybrid SUVs.
http://www.chicagotribune.com/business/chi-0609010172sep01,1,5900229.story
But hey, if evil unions fit into your preconceived notions and ideology, more power to ya.
I’m not at all suggesting that the unions play no part in the problems of the Big 3, but seriously, will anyone be surprised if the response to only-slightly-less-gas-guzzling SUVs and heavy trucks now with added hybrid technology draws a less than enthusiastic response in the US auto market?
September 6th, 2006 at 9:34 pm
Doug: Keep in mind that taking a truck from 17 to 22 mpg saves more gas than taking a car from 30mpg to 50mpg.
September 6th, 2006 at 10:15 pm
I’m not really going to argue that point, but if the market has just demonstrated (for whatever reasons, rational or not) that people aren’t interested in buying large SUVs and large trucks (not counting people who actually need them and will continue to buy them), what’s the point of steadfastly insisting on making more vehicles whose market has had it’s bottom fall out?
I am interested the thinking behind 17 -> 22 mpg saving more gas than 30 -> 50 mpg. It’s counterintuitive, but I’m willing to be convinced. I suppose one argument would be if there were more SUVs than cars, but remember, the bottom has dropped out of the SUV market.
September 7th, 2006 at 11:07 am
Doug,
Way to totally miss the point of my argument. I wasn’t bashing unions, I was simply stating fact. People in unions tend to make more money than the average Joe. Therefore they bring up the average household salary for the state. When those jobs disappear – as they are now – the average wage will come down.
You are right in one assumption, though… I do hate unions! They were a great idea at the beginning, but they got way to greedy.
September 7th, 2006 at 1:56 pm
JustAnotherIdjut,
Greedy Unions? have you looked at the ratio of worker to exec’s pay lately? Top Executives are making vastly more now than they were 20-30 years ago in the union’s peak years… If workers are making less, and their jobs are going overseas, and Top Execs are making increasingly more, whose being greedy?
Have you been to many union workers homes? They are rarely much more than modest. The advances that unions made in this country was that the average worker could live comfortable, ensure themselves the right to medical coverage, send their kids to college (so they would not have to work in factories or construction, and stash some money away to retire on… Sounds pretty damn greedy to me.
What we need is for Unions to expand to the markets that the economy is forcing the average worker to get into. The problem is that it is really easy to can 30 fastfood workers, or 150 store clerks, where it was a little trickier to sack 1500 skilled workers in a factory, 200 licensed and experienced truck drivers. What America needs if it wants to stay powerful is more unions to force up the artificially low prices that the new world economy is creating.
September 7th, 2006 at 2:44 pm
John,
I think you make some valid points regarding how Unions help the average worker in a fairly reasonable way, and how executive pay has become extraordinarily greedy of late. You were right that JustAnotherIdiot was wrong about the greed of unions – most unions are composed of honest, hardworking Americans.
However, I strongly disagree with your conclusion that more Unionized jobs are the answer to America’s economic problems. What America needs is not more organized labor, but rather a move from manufacturing to design and engineering.
We cannot and will not ever be able to compete with Asias manufacturing ability simply because no one in the United States is willing to work (or should have to work) for the wages Asian works are paid.
JustAnotherIdiot had a good point when he said we cannot really change labor practices in Asia substantially – not that we should not try. We just need to accept that Asia will dominate tommorrows manufacturing market.
We, as Americans, must in a way grow up. We need to stop being the manufacturing workers of the world and become instead the engineers, doctors, and scientists of the world. We need to focus on innovation and design, things that uneducated Asian workers paid $1.50 a day can’t be. We need to send our kids to college, drive them to suceed academically and let go of the manufacturing age of the United States.
September 8th, 2006 at 4:39 pm
Mathew,
I agree that we need to bring more Americans up into jobs that are beyond skilled and into jobs that educated professions, but not every american, not even the majority of americans can take on that role, there will always be a middle class, regardless of our standards of living. The point that this map shows is that it is slipping back instead of moving up. I think even the unions have abandoned the manufacturing economy of the past, but don’t expect that they should just walk away from the people that made unions strong in the first place.
My point about redirecting organized labor into other fields was to point out that things are too cheap, and that is why jobs are moving over seas, but don’t think that this movement of jobs is going to be limited to manufacturing, there will be, and currently is, a movement of engineering jobs and design jobs as well. Every called on a computer problem lately? Speak to an American? Most likely you spoke to an Indian with impecable English, and their polite too.
Don’t count on the changing working modes to an engineering based economy to be our saving grace in this country. We need an entire overhaul of our Corporate mentality as well as an overhaul of our social consideration to our fellow citizens.
I can believe that I’m saying this, because I generally used to cringe when I heard it, but we need to insist that things are made in America, and take pride in that, or we need to greater taxes on products coming into this country to level the playing field, and force all corporations, even American corporations. Getting ready for Free Market Global economist types to bash me about the head, but things need to change in America, before its too late. To hell with Terrorists fear Corporations.
September 8th, 2006 at 6:24 pm
“I am interested the thinking behind 17 -> 22 mpg saving more gas than 30 -> 50 mpg.”
a 17mpg vehicle takes 58.82 gallons per 1000 miles (1000/17=58.82)
a 22mpg vehicle takes 45.45, saving 13.37 gallons per 1000 miles
a 30mpg vehicle takes 33.33 gallons per 1000 miles
a 50mpg vehicle takes 20, saving 13.33 gallons per 1000 miles.
So get the H2 driver (about 10mpg, or 100 gallons per 1000 miles) to get an H3 (about 16mpg, or 62.5 mpg), and you’ve done better than getting a Corolla driver to walk. Crazy, huh?
September 8th, 2006 at 8:20 pm
Justin Gardner says “Anybody Want To Guess What This Is?�
Yea, I can tell you what it is! It is too darn small for me to see, that’s what it is! Come on guy. Use that as a thumbnail and give us old folks a chance to play your game too.