News Why did trickle up economics work in Brazil?

[WhoWee]

Using the auto industry as an example, old workers were getting $28 per hour working on assembly lines. Despite increased productivity per worker, new workers earn about $14 per hour, 50% of the older wages. Very few of these people will be able to find $28 / hour jobs.

USA supposedly gained 100,000 total jobs this month, less than the rate of population growth. In the meantime the Chinese factories making iphones and similar products created 300,000 jobs. So there is job growth, just not in the USA, at least in the case of manufacturing. Most of the job growth in the USA was related to low paying jobs in service and health care.

What are the hourly wages of manufacturing workers in Brazil and China - are any of them $14 per hour?

 

[rcgldr]

What are the hourly wages of manufacturing workers in Brazil and China - are any of them $14 per hour?

Probably not, which was my point that outsourcing jobs tends to raise the standard of living in foreign countries, while lowering it in the USA.

 

[CAC1001]

Using the auto industry as an example, old workers were getting $28 per hour working on assembly lines. Despite increased productivity per worker, new workers earn about $14 per hour, 50% of the older wages. Very few of these people will be able to find $28 / hour jobs.

Assembly workers seeing cuts in wages doesn't mean their incomes have gone down. Remember that the auto companies have a crushing burden in terms of pensions, healthcare, and other things they must provide for workers. So auto workers could very well see wages decline, yet increased incomes.

USA supposedly gained 100,000 total jobs this month, less than the rate of population growth (about 150,000 new jobs per month are required to keep up with population increase in the USA). In the meantime the Chinese factories making iphones and similar products created about 300,000 jobs (this from CNN). So there is job growth, just not in the USA, at least in the case of manufacturing. Most of the job growth in the USA was related to low paying jobs in service and health care. In a consumer based economy, such as the USA, it's difficult to recover from the recession when a large perenctage of consumer goods are being manufactured outside the USA.

What are you basing that last part on? Also, I would say it would likely be more difficult for the economy to recover if a large amount of the consumer goods were manufactured stateside becaue then everything would cost more.

As it is, the USA manufactures more than any other nation (although China is catching up), and our manufacturing sector continues to grow, but manufacturing has been declining as a percentage of the economy over the years, because the rest of the economy has grown faster. Manufacturing employment has declined over the years as well, even though we manufacture more and more.

 

[CAC1001]

Probably not, which was my point that outsourcing jobs tends to raise the standard of living in foreign countries, while lowering it in the USA.

The standard of living has continued to increase in the USA for decades despite lots of outsourcing. What outsourcing does is to benefit both sides. If tech jobs get outsourced to say India, it raises the standard of living in India through the jobs and hence wealth created, meanwhile it raises the standard of living in the U.S. because of the cheaper products/services that this leads to.

 

[mheslep]

Unemployment doesn't include workers that have simply given up on trying to find jobs. My post was about the labor force versus the total population (mostly due to the number of retirees increasing). Try the Bureau of Labor Statistics if you want acccurate data. Labor force as a percentage of population has been decreasing since 2000. A chart from BLS showing the data, you can change the start and end dates:

http://data.bls.gov/PDQ/servlet/SurveyOutputServlet?data_tool=latest_numbers&series_id=LNS12300000

Yes I'm familiar; I was challenging the original claim that the labor force percentage has been "declining for decades" which is clearly not the case.

(from '48)
http://data.bls.gov/PDQ/servlet/SurveyOutputServlet?data_tool=latest_numbers&series_id=LNS12300000

 

[rcgldr]

I was challenging the original claim that the labor force percentage has been "declining for decades"

I was tired, should have written for the last decade, not for decades. Part of the change soon after 1974 was the increasing number of women in the work force. Part of the current trend is retiring baby boomers.

 

[WhoWee]

Yes I'm familiar; I was challenging the original claim that the labor force percentage has been "declining for decades" which is clearly not the case.

(from '48)
http://data.bls.gov/PDQ/servlet/SurveyOutputServlet?data_tool=latest_numbers&series_id=LNS12300000

That is a very significant decline - might be worthy of it's own thread?

 

[Proton Soup]

That is a very significant decline - might be worthy of it's own thread?

it reminds me of another thread where the recent productivity of the market seemed to coincide with the computer revolution. PCs hit the scene about mid 80s i think.

 

[CAC1001]

it reminds me of another thread where the recent productivity of the market seemed to coincide with the computer revolution. PCs hit the scene about mid 80s i think.

Do you have a link to that thread (I'd be interested in reading it)?

 

[Proton Soup]

Do you have a link to that thread (I'd be interested in reading it)?

maybe it was just me. but something interesting happened mid-80's
https://www.physicsforums.com/showpost.php?p=1991167&postcount=54