Wednesday, July 20, 2011

Race to the Bottom ends here

Looks like manufacturing may make a comeback in the United States - this from the LATimes - "Check out the study released this month by the Boston Consulting Group, which concludes that when you compare China's soaring wages and still-low levels of productivity with our stagnating wages and rising levels of productivity, the price advantage of manufacturing in China instead of the U.S. will shrink to insignificance by 2015. Investment in the U.S., says the group, "will accelerate as it becomes one of the cheapest locations for manufacturing in the developed world.""

To prepare for this, there are many pieces arguing for an increased focus on technical skills. The argument goes that most new jobs don't necessarily require a college degree, but they do require some additional training. One of these recent pieces was in RealClearPolitics here , one line from that piece I found especially interesting, ""But Germany and other high-wage countries are doing just fine employment-wise, because they pay scrupulous attention to preparing young people for the jobs there are."

Most argue it's about government commitment to technical skills training, some Governor's, like Haley Barbour in MS, argue it's about destigmatizing industrial arts education. I came across this article in the WSJ.

Note the type of manufacturing jobs they're training their students for in Germany...

"Volkswagen workers like Ronald Wachendorf, a 50-year-old mechanic, have enjoyed the
shortest work week in the global auto industry: 28.8 hours, pulling down a full week's pay while working a day less than the 40-hour norm at General Motors Corp. and even less than the 35-hour standard at other German car makers."... "In a country that is home to the world's best-paid auto workers, Volkswagen goes even further -- paying $69 an hour, compared with the national average of $44 and the U.S. standard of $34."

28.8 hours a week, $69 an hour = $103,334.40 a year to build car's in Germany

The new Toyota, VW, and BMW plants recently located to MS/TN/SC, and all UAW workers hired since the new contract in 2007,starting wage about $15 an hour.

Is Germany doing fine because "because they pay scrupulous attention to preparing young people for the jobs there are."? Or do technical jobs pay a living wage, work a full day less and offer tremendous benefits when compared to the same job in the U.S., thus people are drawn to them?

The real question for me is, what are we selling to young people when we argue they should be aspiring for that job at the shiny new VW plant in Chattanooga? Perhaps the message is... "well, at least you ain't in China"...

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