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RE: Design via Internet (India & Mexico)

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Dennis wrote: 
"What choices does this family have other than bankruptcy, the need for
the
second parent to seek employment to compensate for the lost wages, the
need
to liquidate assets and return to renting rather than ownership or
finally
to chose a new field and be retrained."

You forgot to mention the option to move to that part of the world where
you can stay in your field of work and have your dollar go farther.

That's exactly what I did, but within the U.S.  For me the cost of
living in California was too high compared to the salary I was making.
I was able to move to Idaho for a little less money, but have that money
go a lot farther.  For example, I grew up in Santa Barbara thinking
there is no way in my wildest dreams that I would ever afford to
purchase my own home.  I had a house purchased in Boise, Idaho a month
after I moved here.  I also did some research on the Internet to
determine how much salary I would need to move back to California.  To
move to San Francisco I would need about a 75% pay increase.  There is
no way some one is going to pay me that much in the bay area (this
amount would be about 2.67 times my age).  I would imagine the Los
Angeles area has the same cost of living index.

My point is that we already of economic differences within the United
States.  Going global will have its benefits and will have its draw
backs.  We'll just have to get used to it and adjust.  We just got to
figure out what is important to us: how far our dollar goes or where we
live.  Of course this is a very simplistic approach.  We got to keep in
mind what our tax dollars are doing for us as well (this has to do with
where we decide to live), paved roads, water, power supply, education
(the biggest issue in my opinion), welfare, defense, etc.

Don't forget, we are not stuck in staying in our current area of
residency.  We do have the option to move.  Isn't that what our families
did to get where we are now?

Just an opinion.

-----Original Message-----
From: Dennis S. Wish PE [mailto:wish(--nospam--at)cwia.com]
Sent: Thursday, November 05, 1998 9:52 PM
To: seaint(--nospam--at)seaint.org
Subject: RE: Design via Internet (India & Mexico)


Maria,
Let me preface by apologizing to everyone who has participated on this
thread. I lean more to the liberal side than conservative on most issues
but
jobs. It is not my intention to deny reasonable competition anywhere in
the
world.
Your point about cheap labor is well taken, but from our perspective the
labor rate is greatly different from that paid in this country.
Conversely,
the standard of living is much higher here - which is the justification
for
higher labor rate. I do not mean to imply less than adequate ability -
just
a cost of labor that the United States can no reasonably compete with.
As you pointed out "as you must be aware
of, the standards of living can be very different from one country to
another, so that what is considered rock-bottom engineering fees in the
States can be actually pretty good somewhere else and afford you a
Cornell
graduate (like me!)."
This is my point. The rate paid goes much farther in the country that
you
refer - far enough for you to be able to save enough to attend Cornell
and
complete your education based upon higher American rates (which I guess
you
even pay a premium for being a foreign student). The difference is that
very
few (if any) Americans can maintain the cost of living here and still
save
enough for their children to attend Cornell. I would assume that the
dollar
goes five to ten times farther in your country than it does in the
states.
If I were in your shoes, I would be doing everything I can to promote
more
work from the United States.
Give this some thought: What is the poverty level in your country (in
annual
dollars). In the United States the poverty level is encroaching upon
$15,000.00 to $18,000.00 per year (the high end of the lower income).
How well would you survive in your country if you earned $15,000.00 per
year
from an American Employer?

Let's assume that a family of three or four earns a net $30,000.00 per
year
in the United States. The family purchases a home, pays for health
benefits
and maintains the family automobile which has either been leased or
bought
but has payments left on the loan. In addition, let's assume that it
costs
$600.00 to $800.00 a month in food and staples (necessities such as
toilet
paper, toothpaste, etc), $1,500.00 a year in property taxes, $2,500.00
in
federal and state taxes (assuming the $30,000.00 is gross income) - plus
cost for education, personal property insurance, automobile insurance,
Automobile registration (about $300 and up in California for a new car
per
year) etc.
If this worker loses his job to competition outside of the United States
who
could easily work for $10,000 per year less and afford to save $3,000 of
it
for their child's college education.
What choices does this family have other than bankruptcy, the need for
the
second parent to seek employment to compensate for the lost wages, the
need
to liquidate assets and return to renting rather than ownership or
finally
to chose a new field and be retrained.

Maria, I am not implying that workers in other countries are any less
capable - only that they offer an unfair competitive advantage that
seduces
companies to move their labor forces out of this country. Most of the
companies who lay people off are no longer American owned companies and
therefore no longer loyal to the American workforce.

You state: "Perhaps you should look in a more positive way: if I get
more
and better paid work, my economy and thus my spending capacity will
improve,
and I'll buy more American clothes, shoes, books, software, etc. so that
YOUR economy improves."

This is the argument used to justify NAFTA and GATT. Consider the
consequences. In a previous paragraph you ask "Could you possibly afford
to
buy things produced by American people?  No way. " You're right, but
Americans can afford to by these goods since they earn more.

Your previous argument has two serious flaws for American workers.
First, we
must sacrifice our existing standard of living to help yours improve.
Second, Americans might no longer be able to afford products if their
income
levels continue to fall and can't be compensated by an already dual
income
family. The problem is not the cost of goods, but the cost of labor. The
problem that seems insurmountable is what do we do when our indebtedness
does not fall proportionately with our income? If we take a cut in pay,
will
our mortgage lender reduce our principle to be in line with the change
in
income, will property take fall, will health coverage be more affordable
and
still offer the same services? Will our Doctors be willing to earn less,
our
farmers sell food for less just so we can afford to eat?  Of course not
-
this is not a proportional food chain we live in. No one wants to earn
less
just because engineers and manufacturers decide to profit more by using
cheaper labor. We jeopardize our homes, health care, transportation -
all so
your standard of living will increase.

You also state: "It doesn't have to be all negative- if you're designing
a
project overseas, say in India or South America, your engineering won't
be
cost-competitive
against the locals." Whoa, why not? If I have to take a cut in pay to
help
your economy, why is it unreasonable for your country to pay more for
American labor to help our economy?

" But if you merge with a local firm and work together, you can produce
a
well engineered product backed with local knowledge, at a competitive
price.
Just a thought."

This is a very good point and one that would convince me to support a
Global
economic trade. However, you would need to overcome the transition
concerns
before you can expect voluntary support. I did not support NAFTA and
GATT
since it forces global trade down my throat by Government regulations -
and
this was supported by many Republicans and Democrats alike. However, in
this
example, we would be competing apples for apples based upon local
ability
that might require a foreign firm to absorb some of the higher cost of
American labor.

I object to doing local work (within the United States) and using
foreign
labor just so I can profit more.

Maria, put the shoe on the other foot. Assume that at some time in the
future Americans are earning a fair wage of $1.00 per hour. Your fair
wage
is $6.00 per hour. Would you take a project in your home town and refuse
to
hire local help in order to hire an American at $1.00 per hour just to
place
the additional $5.00 per hour in your pocket? Personally I believe this
to
be motivated by greed rather than competitive necessity.

We are an imperfect society where corporations are bound by loyalty to
the
stock-holders and greed rules over the responsibility of our workers. I
understand this from a realistic position and believe that it is simply
a
"Catch-22" that we have created. We build a workers standard of living
to a
point where he can afford and purchases the "American Dream" and he
becomes
indebted in the process to cover his cost of necessities. He believes
that
his well being is considered by his employer who then lays him off while
hiring lower cost and equally competent labor. In the process, our
society
condemns him for not being responsible and defaulting on  his debt. Even
if
he recovers, he is marked for seven to ten years by bad credit ratings
and
may not be able to rebuild what he lost.
Today, I heard about three or four companies who are laying off another
7-10,000 employees (sales people) during the Christmas season in order
to
meet the stock-holders profit potential. Explain this to the families of
these people as they approach Christmas.

I hope you will understand my position. If we competed on a level
playing
field for ability, timing, economics of design or slight variations in
labor
rates - I would be supporting your statements. But as imperfect as we
are,
there are those who abuse the system (and these are the CEO's who must
answer to their shareholders for the most part) and who do not want
government intervention to protect American workers.
I expect other countries with predominately higher cost of living have
the
same concerns - Japan, Germany, England et.al.

I thank you for your comments and hope you do not believe me to be
un-just
or closed minded. I will admit I am wrong when American workers feel
secure
in their jobs despite unfair International competition.

Respectfully,
Dennis Wish PE