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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

 

 


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