How to stop plant closings

[RichardJensen]

I wouldn't talk down to you if you knew what you're talking about.

 

Railing against fiat currency is tantamount to railing against movable type.

 

The argument most frequently marshaled in support of the gold standard is the notion that money should be backed by something with intrinsic value.

 

This is a wonderfully simple and delightfully circular argument.

 

Watch:

 

One ounce of gold is worth $1300. $1300 buys one ounce of gold.

 

See? The only way of assigning value to gold is with currency. There is no intrinsic value to gold, even if there is a finite supply of it.

 

The question of finite supply is far more amusing to me:

 

Consider this example:

 

Piddsylvania has 500 ounces of gold and they have 500,000 piddlbinks in circulation.

 

One ounce of gold is thus worth 1,000 piddlbinks.

 

Vardastan has 1,500 ounces of gold and they have 3,000,000 vardayips in circulation.

 

One ounce of gold is thus worth 2,000 vardayips and 1,000 piddlbinks.

 

One piddlbink is thus worth two vardayips.

 

With me so far?

 

Well, what happens if the government of Piddsylvania issues 100,000 piddlbinks in bonds without purchasing (or discovering) another 100 ounces of gold?

 

All of the sudden, an ounce of gold is worth 1,200 piddlbinks, while still being worth 2,000 vardayips.

 

Now one piddlebink is only worth 1.67 vardayips.

 

Thus the piddlebink has lost value vs. the vardayip.

 

-----------

 

This is basically what happens with fiat currency anyway.

 

When currency in circulation increases faster than GDP growth, it drives down the value of the currency (I'd explain how GDP growth fits into the gold standard, but I'm sure you wouldn't believe it.)

 

In fact, one of the strongest arguments in favor of abolishing the gold standard was that the gold standard was little more than a least common denominator between currencies.

 

The money supply has *always* varied from nation to nation and from one point in time to another, and thus the exchange rates between nations (denominated in specie or in ratio to one another) have *always* varied in practice, even when nominally fixed.

 

Going back on the gold standard would do NOTHING. It's a chimera. It's a red herring. A wild goose chase. A snipe hunt. A waste of time, breath, brain cells, and so on and so forth.

Edited December 17, 2010 by RichardJensen

[Noah Harbinger]

Stolen by the IRS. I heard somewhere, I don't know if it's true or not, that the IRS spends nearly, if not completely, as much as it takes in in the form of taxes employing the people that work there and funding their operations. The IRS serves to redistribute wealth, not to fund any part of our budget if that is true.

 

 

 

Wow. Just wow. The fact that anyone who could even for a moment contemplate that the IRS only collects money to run itself could ATTEMPT to understand economics, let alone make cognizant arguments about them, is just baffling.

 

The IRS cost $11.7 billion in 2009. No small change, but pretty pretty small compared to the total revenue (half a cent per dollar collected). The rest goes into the US general fund.

 

Jensen, so I'm the crazy one because I think things with actual value should be used at currency while you think pieces of paper with numbers printed on them and that aren't backed by anything except the idea that they hold value should be used?

 

 

Have you considered that the notion that some pretty pieces of metal should somehow represent fabulous value is crazy? That it's insanity to think that a year's work could be represented by a couple pounds of metal? Why is that any less crazy than pieces of paper?

 

Value is entirely a social construct.

 

Here, watch this video and tell me where it goes wrong. If you could take two seconds and stop trying to talk down to me I'd really like to know why it is such a crazy idea that paper money is a bad thing? Please, convince me.

 

http://video.google....02339531&hl=en#

 

1. They start the video off with a bible verse... in a video about the federal reserve. This is not a good sign.
2. Man on the street interviews... in a video about the federal reserve. Also not a good sign. Points towards a general strategy of "Gee this is too confusing, it MUST be bad!"
3. Claims that article 1 section 10 prohibit the federal government from using paper currency, a contention which was resolved in the supreme court 150 years ago
4. Uses FALSIFIED QUOTE from Thomas Jefferson to support their case
5. Claims the Federal Reserve has its own financial stake in its policy, which has no basis in reality; makes specious comparisons to criminal organizations
6. They contradict their own statements repeatedly: "Federal reserve founded to allow big government spending without income taxes" vs. "Federal Reserve probably caused income taxes"..."Federal Reserve founded the same year as the income tax". Pick one version and stick to it for crying out loud!
7. Relies on forgotten history to make arguments: The video says "Prior to the founding of the federal reserve, the country never did better"... History says the Federal Reserve was "largely a response to a series of financial panics, particularly a severe panic in 1907". Oops. No attempt even made to explain WHY they think the Federal Reserve made things worse.
8. REPEATEDLY plays up the "Conspiracy" angle. 7 minutes in and they STILL haven't made any arguments about WHY they think the federal reserve is bad.
9. Ron Paul: "The notion of a national bank does not fit in to the constitution" McCulloch v. Maryland: Yes it does.
10. Contradictory arguments: "the value of money is set by government dictate" - if that were true, there would be no problems with inflation. With gold as with unbacked currency, value is set by buyers/sellers in open market.
11. Tries to tie the Federal Reserve's constitutionality to the Depression-era National Recovery Administration, on the basis that "Since the NRA was unconstitutional, so must the federal Reserve be"..... but the NRA IS NOTHING AT ALL LIKE THE FEDERAL RESERVE.

 

Ok I'm getting bored of this. That video is pure derp. If it had any actual arguments, I'd try to refute them, but it's just derp derp derp.

 

Does anyone have any arguments that aren't derp?

Edited December 17, 2010 by Noah Harbinger

[RichardJensen]

That video is pure derp.

You watched the video??

 

Since the premise is, as Pauli said, "not even wrong", I worried that any elaboration on that premise would cause my brain to melt and run out my ears.

[BrewfanGRB]

Stolen by the IRS.

 

Spoken like a true Wesley Snipes apologist. This is hyperbolic as best and sheer stupidity otherwise.

 

I heard somewhere, I don't know if it's true or not, that the IRS spends nearly, if not completely, as much as it takes in in the form of taxes employing the people that work there and funding their operations.

 

I've read a lot of truly bizarre things here over the last year or so, but this actually makes my head hurt. As Richard as said, you can't have an argument with someone who doesn't know what they're talking about. Whether you pawn this off as "something you read" or not, the fact that you posted it means you must have belief in it. Just, please, for the love of Christmas, just THINK about how truly illogical this statement is. If you don't get it, then, well, forget it. Even the mere idea that the IRS spends everything it collects to fund itself just...uggh. How exactly does the Defense Department get funded? The National Weather Service? The Federal Aviation Administration? (Again, remember, every dollar the IRS collects funds itself, under this theory....yes the deficit is huge, but not every dollar is deficit spending).

 

As for the paper money question....well, frankly, it's like trying to teach quadratic equations to first graders.

[Ford Jellymoulds]

I wouldn't talk down to you if you knew what you're talking about.

 

Railing against fiat currency is tantamount to railing against movable type.

 

The argument most frequently marshaled in support of the gold standard is the notion that money should be backed by something with intrinsic value.

 

This is a wonderfully simple and delightfully circular argument.

 

Watch:

 

One ounce of gold is worth $1300. $1300 buys one ounce of gold.

 

See? The only way of assigning value to gold is with currency. There is no intrinsic value to gold, even if there is a finite supply of it.

 

The question of finite supply is far more amusing to me:

 

Consider this example:

 

Piddsylvania has 500 ounces of gold and they have 500,000 piddlbinks in circulation.

 

One ounce of gold is thus worth 1,000 piddlbinks.

 

Vardastan has 1,500 ounces of gold and they have 3,000,000 vardayips in circulation.

 

One ounce of gold is thus worth 2,000 vardayips and 1,000 piddlbinks.

 

One piddlbink is thus worth two vardayips.

 

With me so far?

 

Well, what happens if the government of Piddsylvania issues 100,000 piddlbinks in bonds without purchasing (or discovering) another 100 ounces of gold?

 

All of the sudden, an ounce of gold is worth 1,200 piddlbinks, while still being worth 2,000 vardayips.

 

Now one piddlebink is only worth 1.67 vardayips.

 

Thus the piddlebink has lost value vs. the vardayip.

 

-----------

 

This is basically what happens with fiat currency anyway.

 

When currency in circulation increases faster than GDP growth, it drives down the value of the currency (I'd explain how GDP growth fits into the gold standard, but I'm sure you wouldn't believe it.)

 

In fact, one of the strongest arguments in favor of abolishing the gold standard was that the gold standard was little more than a least common denominator between currencies.

 

The money supply has *always* varied from nation to nation and from one point in time to another, and thus the exchange rates between nations (denominated in specie or in ratio to one another) have *always* varied in practice, even when nominally fixed.

 

Going back on the gold standard would do NOTHING. It's a chimera. It's a red herring. A wild goose chase. A snipe hunt. A waste of time, breath, brain cells, and so on and so forth.

 

Back in the 1930's great depression Roosevelt started pumping shitloads of government money into the economy Obama style under the "New Deal" which prolonged the great depression it just created a bigger massive problem further down the line in the future to deal with. Roosevelt also tried to stop the downward spiral of deflation in wages and goods like we have at the moment as it just led to more and more cutbacks cost savings as companies tried to survive, so he tried limiting production of goods so folks wages/price of goods could would rise again, Roosevelt felt the problem was overproduction (Bit like fleet/car rental sales, Roosevelt felt making a company leaner more profitable) Which failed big time throwing even more people out of work which made the problem a lot worse (nobody was left in work with cash to buy the products).

 

Herbet Hoover set up National Recovery Act was set up to impose force restricted to limit production of goods the like Ford have been doing with fleet/rentalls to push up the the price of goods, profits & wages. The entire US economy was set up to limit production of goods to force up prices & wages. It ended up one big epic disaster as nobody was left in work to buy the expensive inflated overpriced goods. Farmers were forced buy Government Acts to destroy crops against their will & livestock in a bid to force up prices wages.

 

US economy could not run for to long on high inflation because your country was on a gold standard, investors started hoarding gold which was seen as a safe haven (pushing its price sky high like today) rather than fiat dollars at the time, so government gold supplies dwindled.

 

Roosevelt ended up debasing the whole US monetary system as he confiscated everybody's gold something to do with "1917 Sleeping Trading with the Enemy, can see this is coming soon again) by bringing in a Government Order in the 1930's that required everybody to hand in their gold for next to fookall so gold could no longer be linked. You got a $10,000 fine or 10 years in prison if you didnot comply "Hobsons Choice" a bit like FWD shitboxes Ford dish out in Europe. So Americans who lost a loads of money rebelled against the US government done their best to screw the US government which helped make the 1930's depression 10 times worse, in the same way folk who have only boring dull bland styled cars became the only dish or meal in town from GM on offer they jumped into shit to Camrys & Accords in anger & rebellion.

 

It's gonna be interesting to see who has done the right thing today Richard, US by spending storing up putting off a massive problem for the future if the economy is still up shit street in five years time or Europe that paying down debt but laying everybody off and not living beyond its means. Looking forward to next year about Mid 2011 when the Spanish economy should hit the rocks requiring a EU bailout. Will have the popcorn ready when the shit hits the fan sparks to fly. hopefully it will cause a EU breakup meltdown and get rid of another tier layer of very expensive government Great Britain can not afford does not need.

 

What the world needs is more awesome shaped RWD coke bottle koolnetic designed Cortina's, Capri's & Escorts to put the fun and joy of owning cars again rather than mundane borenetic dull drudgery we have today . Wars will end, peace will break out the worlds economy will pick-up, world famine will everybody will be happy in the world apart from Nick. Well thats my story and l am sticking to it, you can dream l suppose Richard.

Edited December 17, 2010 by Ford Jellymoulds

[Edstock]

Back in the 1930's  great depression Roosevelt started pumping shitloads of government money into the economy Obama style under the "New Deal" which prolonged the great depression it just created a bigger massive problem further down the line in the future to deal with. 

Uh, no. The FDR administration actually cut back on "pumping shitloads of government money into the economy" in 1937-8, and the US economy got worse.  It was this cutback that prolonged the Depression, not the original stimulus.

 

"it just created a bigger massive problem further down the line in the future to deal with"

 

Please give details of the "bigger massive problem further down the line", considering that the US economy experienced solid growth through the 40s, 50s and 60s, so that the spending of the FDR administration in the late 30s was of no consequence, as GDP had grown considerably.

 

 

 

[jpd80]

Uh, no. The FDR administration actually cut back on "pumping shitloads of government money into the economy" in 1937-8, and the US economy got worse. It was this cutback that prolonged the Depression, not the original stimulus.

 

"it just created a bigger massive problem further down the line in the future to deal with"

 

Please give details of the "bigger massive problem further down the line", considering that the US economy experienced solid growth through the 40s, 50s and 60s, so that the spending of the FDR administration in the late 30s was of no consequence, as GDP had grown considerably.

 

 

 

I think that's what saved the USA's bacon, staying neutral during 1939-41 by supplying Britain with

all kinds of manufactured goods to keep their war effort going. As bad as Pearl Harbor was, WW II gave

the USA an enemy to focus it's energies on and motivate the whole country to rise up to give maximum

effort for the next four years.

 

The US learned from there that keeping the whole country on a "war footing" was good for business,

the Russians refusing to disarm after WW II ushered in the cold war for the next 40 odd years while Korea,

Cuba and Vietnam also keep the focus on Americans to be the best country in the world and stay ahead

of potential enemies in all levels of technology, production creating a lifestyle most enemy states would envy.

 

It was a brilliant strategy for overcoming perceived challenges domestically as well as facing external

threats from rogue states that elevated the USA's GDP to heights far above any other single country

or block of nations. Not saying the USA was responsible for the wars and troubles but more like the

country and its leaders were smart enough to take advantage of the situation and build up the USA.

 

And that's the problem today, there are no formidable enemy states any more that the USA can use as

a focal point to build up national resources, how do you fight an Idea like radical Islamic fundamentalism?

Not so easy.

Edited December 17, 2010 by jpd80

[RichardJensen]

which prolonged the great depression it just created a bigger massive problem further down the line in the future to deal with.

 

 

It was this cutback that prolonged the Depression, not the original stimulus.

 

You're both wrong.

 

Keynesian 'pump priming' didn't work. Why?

 

A lack of currency in circulation was a *symptom* of the problem, not the problem itself.

 

By injecting cash (spending on WPA, CCC, etc.), the New Deal merely addressed a symptom, not the underlying problem (a problem that was only understood in retrospect).

 

One of the biggest problems was the number of impaired assets (bad loans) that were on the books of the nation's banks.

 

You saw a similar situation in Japan in the 90s and early 00s.

 

There was a global recession in the early 90s. The US bounced back, Japan did not. Why?

 

Because Japanese banks were allowed to lend to businesses in which they held financial stakes---and what is more dangerous---they were not required to write off bad loans.

 

What this means is that banks won't fail--which seems to be good--except that these banks are holding deposits that are doing absolutely *nothing* to further economic growth.

 

Depository accounts (which are liabilities to banks) which are not being used to make loans are, essentially, money that is out of circulation.

 

So you can see how an unwillingness (or inability) to lend creates a shortage of currency. This, in turn causes deflationary pressures, and stagnant to negative GDP growth.

 

And that, folks, is what we call a recession or a depression.

 

----

 

FDR's programs did not make the depression worse, but they didn't solve the underlying issues.

[Gravedigger]

Would you mind being a little more specific?

 

Many plants have been closed and their production shifted to slave labor.

 

Our plant is closing next year in St. Paul.

 

The 2012 Ranger is being produced overseas.

 

Our Local leaders have made mistakes over the years in competing against other Ford Locals, assisting in the vanishment of the Solidarity we all need to defend our work. I think they should apologize for that and ask for help to keep all our plants open. We should all work together to re-open closed plants and return work to the United States.

 

The first step towards that would be a conversation about how we do that.

 

Briefly, I believe that we must:

 

1. Agree that nothing works without good work.

 

2. Determine what a JUST wage is for all.

 

3. Return to the strike strategies of the original UAW.

 

4. Win a Solidarity Society.

[jpd80]

Many plants have been closed and their production shifted to slave labor.

A very provocative statement, are you talking about Ford exporting jobs

to third world countries or are you referring to suppliers?

 

If you're referring to Ford can you give an example of an assembly plant or component plant

that has shut down in the past two years and the products sourced from outside USA-Canada-Mexico?

Edited December 18, 2010 by jpd80

[Gravedigger]

A very provocative statement, are you talking about Ford exporting jobs

to third world countries or are you referring to suppliers?

 

If you're referring to Ford can you give an example of an assembly plant or component plant

that has shut down in the past two years and the products sourced from outside USA-Canada-Mexico?

 

lol

 

Let's start with the last 20 years.

[Ford Jellymoulds]

Many plants have been closed and their production shifted to slave labor.

 

Our plant is closing next year in St. Paul.

 

The 2012 Ranger is being produced overseas.

 

Our Local leaders have made mistakes over the years in competing against other Ford Locals, assisting in the vanishment of the Solidarity we all need to defend our work. I think they should apologize for that and ask for help to keep all our plants open. We should all work together to re-open closed plants and return work to the United States.

 

The first step towards that would be a conversation about how we do that.

 

Briefly, I believe that we must:

 

1. Agree that nothing works without good work.

 

2. Determine what a JUST wage is for all.

 

3. Return to the strike strategies of the original UAW.

 

4. Win a Solidarity Society.

 

Nice post my thoughts are with everybody and their families that are gonna lose their jobs at St Paul.

 

I would have loved to buy a new Ranger made at the St Pauls plant, but am not one bit interested in buying one made in Thailand/South Africa l don't like those countries one bit. Ford must be shooting themselves in the foot losing a lot of sales as most Europeans would never ever consider buying a car/pick up made in those locations. Ford would rather save a few bucks on cheap labour cost, and lose a shitload of sales ta-boot.

 

Gotta say l don't have a problem with Ford selling World Rangers made in Thailand etc as for the Asian market but just don't dump their shit on Europe. Ford could have updated St Pauls, Dagenham was a run down out dated dump but it got together with the GLC and modernised the plant to run off wind power plant operating cost are almost Zero, l can't see why Ford/Local government could not have worked together done the same for St Pauls.

 

Would love to see/buy a new F-100 produced in the USA and sold to Europe nothing would please me more.

 

Merry Chistmas Gravedigger l do hope things improve in your local community for you in the new year.

[David The Bruce]

I think we can all agree that we would like to see every possible ford assembly plant here in the US of A but I have to question one of your points

 

2. Determine what a JUST wage is for all.

 

There is no answer to the above question. Pay is determined, for the most part, by what it takes to attract a competent person to do a particular job.

What is your definition of a "just wage?" I suppose we all have one, not that it matters, unless we own the company.

 

 

 

Many plants have been closed and their production shifted to slave labor.

 

Our plant is closing next year in St. Paul.

 

The 2012 Ranger is being produced overseas.

 

Our Local leaders have made mistakes over the years in competing against other Ford Locals, assisting in the vanishment of the Solidarity we all need to defend our work. I think they should apologize for that and ask for help to keep all our plants open. We should all work together to re-open closed plants and return work to the United States.

 

The first step towards that would be a conversation about how we do that.

 

Briefly, I believe that we must:

 

1. Agree that nothing works without good work.

 

2. Determine what a JUST wage is for all.

 

3. Return to the strike strategies of the original UAW.

 

4. Win a Solidarity Society.

[jpd80]

lol

 

Let's start with the last 20 years.

 

Edit,

 

You guys sure had a tough time there, I hope Ford pursues new technology and continues refurbishing plants

in North America bringing in the opportunity to grow and deliver as many skilled jobs to Americans as possible.

Edited December 18, 2010 by jpd80

[povertyknob]

Many plants have been closed and their production shifted to slave labor.

 

Our plant is closing next year in St. Paul.

 

The 2012 Ranger is being produced overseas.

 

Our Local leaders have made mistakes over the years in competing against other Ford Locals, assisting in the vanishment of the Solidarity we all need to defend our work. I think they should apologize for that and ask for help to keep all our plants open. We should all work together to re-open closed plants and return work to the United States.

 

The first step towards that would be a conversation about how we do that.

 

Briefly, I believe that we must:

 

1. Agree that nothing works without good work.

 

2. Determine what a JUST wage is for all.

 

3. Return to the strike strategies of the original UAW.

 

4. Win a Solidarity Society.

UAW negotiated wages and benefits make for an uneven playing field compared to "transplant" facilities. While it has been a number of years since the UAW has asked for more money or better benefits the costs under the existing agreement continue to spiral upward because of increasing costs for health care and and a growing number of retirees and family members.Absent a level playing field, Ford will do what they feel is necessary to remain profitable and the UAW is in a poor position to demand which plants stay open. The transplants aren't about to offer similar benefits to their employees. I believe two things need to happen to preserve jobs: 1.The UAW needs to work to help reduce costs. I believe a lot of progress has been made with work rule changes and the lower starting wage.I'm not a cheerleader for lower wages.But it seems necessary and they could be re-negotiated when the Company is more profitable. When the economy improves the savings will be realized. 2. Ford and all Hourly and Salaried employees must design and build vehicles that consumers want. Those vehicles must be dependable for the consumer and profitable for Ford.Progress in those areas has been clear to see.The decision to close the Twin Cities facility was made a decade ago when the UAW was resistant to change and Ford saw shedding employees as the only way to reduce costs. In today's negotiating environment the decision may have been different, but it seems irreversible. I hope all the employees get into other facilities as soon as possible. Good luck to all.

[Noah Harbinger]

2. Determine what a JUST wage is for all.

 

There is no answer to the above question. Pay is determined, for the most part, by what it takes to attract a competent person to do a particular job.

What is your definition of a "just wage?" I suppose we all have one, not that it matters, unless we own the company.

 

There are general concepts that differentiate a "just" wage from a market wage. I think he meant something along the lines of the widely discussed "living wage" concept, where the minimum wage should be sufficient to not live in poverty (although I can't see how that would apply to auto workers, where even the lowest paid make more than the commonly suggested living wage levels).

[Edstock]

Many plants have been closed and their production shifted to slave labor.

 

Our plant is closing next year in St. Paul.

 

The 2012 Ranger is being produced overseas.

The Ranger always has been produced overseas. It's been an important, profitable market for decades, so Ford has a new truck for it to stay competitive, and world financial conditions preclude exporting Rangers from the US to those markets. So, your point is?

[Noah Harbinger]

The Ranger always has been produced overseas. It's been an important, profitable market for decades, so Ford has a new truck for it to stay competitive, and world financial conditions preclude exporting Rangers from the US to those markets. So, your point is?

 

Apparently that if it can't be built in the US, it shouldn't be built anywhere

[Marginal Economist]

Many plants have been closed and their production shifted to slave labor.

 

Our plant is closing next year in St. Paul.

 

The 2012 Ranger is being produced overseas.

 

Our Local leaders have made mistakes over the years in competing against other Ford Locals, assisting in the vanishment of the Solidarity we all need to defend our work. I think they should apologize for that and ask for help to keep all our plants open. We should all work together to re-open closed plants and return work to the United States.

 

The first step towards that would be a conversation about how we do that.

 

Briefly, I believe that we must:

 

1. Agree that nothing works without good work.

 

2. Determine what a JUST wage is for all.

 

3. Return to the strike strategies of the original UAW.

 

4. Win a Solidarity Society.

 

To address points 2,3,&4 - I think the UAW is going in the opposite direction. King wants to expand UAW presence into the VW, Toyota, and other manufacturers. They want the message to be that the UAW provides a well trained, high quality workforce that is competivie in the labor market and will make your life easier if you have a UAW represented workforce. Solidarity slogans and strike threats are not a part of that message.

 

If Ford is hampered by a UAW strike in 2011, why would transplants want to deal with the UAW?

[Gravedigger]

A Just wage would be compensation that allows a comfortable living for a family, the ability to educate the kids and to otherwise see that they enjoy their lives.

 

I am not interested in free traitor arguments about why its ok to ship our work out of our country. I've heard all that for years and do not agree with any of it. I am not interested in arguing about the economic nonsense box the uaw has us in.

 

I am interested in connecting with good people who care about their work, families, communities and country.

 

Who here is familiar with the Mondragon Corporation?

[aneekr]

A Just wage would be compensation that allows a comfortable living for a family, the ability to educate the kids and to otherwise see that they enjoy their lives.

 

I am not interested in free traitor arguments about why its ok to ship our work out of our country. I've heard all that for years and do not agree with any of it. I am not interested in arguing about the economic nonsense box the uaw has us in.

 

I am interested in connecting with good people who care about their work, families, communities and country.

 

Who here is familiar with the Mondragon Corporation?

Did you consider immigrating to Spain or some other country where your conception of a syndicalisme worker's paradise supposedly exists?

[RangerM]

A Just wage would be compensation that allows a comfortable living for a family, the ability to educate the kids and to otherwise see that they enjoy their lives.

 

A Just wage is relative.

 

What you might consider a "Just wage" in Detroit, Michigan is likely an above average wage in Demopolis, Alabama and a poverty-level wage in San Diego, California.

 

Yet, you're making a product that you hope to be able to sell in both areas.

 

Obviously there are many variables that go into the cost of production (raw materials, energy, shipping, taxes, environmental compliance, etc), but from strictly a labor standpoint, how could you expect to sell in all parts of the country, if the wages required to produce it are significantly above the average wage in the target market?

[Gravedigger]

A Just wage would be compensation that allows a comfortable living for a family, the ability to educate the kids and to otherwise see that they enjoy their lives.So what is relative to this?

[xr7g428]

Grave, What mechanism would determine the difference in compensation for a highly trained engineer and a retail store clerk?

[RangerM]

A Just wage would be compensation that allows a comfortable living for a family, the ability to educate the kids and to otherwise see that they enjoy their lives.So what is relative to this?

According to the Trulia website, the median family income in Michigan is $53,487.

 

Using this calculator, a Michigan median family income of $53,457 would be equivalent to $47,986 in Tuscaloosa, Alabama, and $68,931 in San Diego, California.

 

However (using the same Trulia website), the median family income in Alabama is $41,657, and the median family income in California is $53,025. (going to other websites like city-data yield slightly different, but proportional, results)

 

The Michigan median family income is relatively higher than the cost-of-living-adjusted median family income of other markets.

 

If you would say that a "just wage" would be at least the median wage (or higher), I'd conclude that a "just wage" in Michigan is relatively higher than "just wages" elsewhere. That is not to say that all wages are higher, but when you are manufacturing a product that must be sold nationwide (if not globally), then the price setpoint must take into account those differences. Wages are only a single component of overall costs, however if wages are relatively higher, then other costs need to be kept relatively lower to offset. Once all these costs have been accounted for, the minimum price that a manufacturer must charge (to break even) can be calculated.

 

If the price floor is too high relative to what the target market(s) can bear, you aren't going to sell as much (if any) product.

Edited December 19, 2010 by RangerM