The 10 Largest Employers in America

[Kreutz]

There are lots of factors that drove American manufacturing (and our prosperity with it) out of this country, but free trade is not the enemy here. In fact, if the government could get its head out of it's arse and remove more barriers to make this country more competitive, free trade could bring back prosperity to this once great country. With the progressive movement looking to get more people on the government dole (and actively looking for people to sign up), I'm not holding my breath.

http://www.forbes.com/sites/frederickal ... e-as-much/

In 2010, Germany produced more than 5.5 million automobiles; the U.S produced 2.7 million. At the same time, the average auto worker in Germany made $67.14 per hour in salary in benefits; the average one in the U.S. made $33.77 per hour. Yet Germany’s big three car companies—BMW, Daimler (Mercedes-Benz), and Volkswagen—are very profitable.

How can that be?

against all mainstream wisdom of the neo-liberals. We have strong unions, we have strong social security systems, we have high wages. So, if I believed what the neo-liberals are arguing, we would have to be bankrupt, but apparently this is not the case. Despite high wages . . . despite our possibility to influence companies, the economy is working well in Germany.

Forbes is very much right of center; the point is you cannot pinpoint just the results of government (mandated worker protections), or unions (like setting wages) on the US trade deficit.

I don't solely blame free trade, but as far as I'm concerned its a big part of the problem. When we gave away our manufacturing we lost the ability to actually create wealth; now as a service/IT economy we can only just move wealth around.

Not sustainable.

[Reverenddel]

Frak. I agree with Kreutz again...

This is becoming a bad habit.

You CANNOT sustain wealth in a SERVICE based economy. You have to take raw materials, and convert them to be productive, and gain wealth.

[ShotgunBlast]

Forbes is very much right of center; the point is you cannot pinpoint just the results of government (mandated worker protections), or unions (like setting wages) on the US trade deficit.

I don't solely blame free trade, but as far as I'm concerned its a big part of the problem. When we gave away our manufacturing we lost the ability to actually create wealth; now as a service/IT economy we can only just move wealth around.

Not sustainable.

I have no problem with the source, but it's a moot article. Of course Germany can pay its workers twice as much, because their workers are twice as productive. Any business will and does pay more for higher productivity. I'll gladly pay someone $20/hr compared to someone at $10/hr if they can pump out twice the number of widgets.

What the article doesn't talk about is how those car companies are able to sell so many cars (as I'm sure all their sales aren't overseas). The German lifestyle is built around austerity. They actually save money. Money that can be used for capital investments to make employees more productive, thus making more money. They have a smaller average house size (1300sqft vs 2300sqft in the US). They don't play the game of keeping up with the Joneses like we do. They live modest lives. Their lifestyle actually creates wealth, to the tune where everyone else in the EU is looking to them for a handout. Americans just spend money on bigger houses and more junk to put in them.

I did find the last part of the article interesting and wonder as time goes on if the Germans will accelerate their outsourcing of labor to the US because it's less expensive. If they can still maintain the productivity expectations at a lower cost of labor from what they're paying now, they can be quite a force.

Does such a happy relationship survive when German automakers set up shop in the U.S.? No. As a historian observes in the article, “BMW is a German company and it has a very German hierarchy and management system in Germany,” yet “when they are operating in Spartanburg [in South Carolina] they have become very, very easily adaptable to Spartanburg business culture.” At Volkswagen’s Chattanooga plant, the nonunionized new employees get $14.50 an hour, which rises to $19.50 after three years.

The article’s author, Kevin C. Brown, asked Claude Barfield, a scholar with the American Enterprise Institute, why the German car companies behave so differently in the U.S. He answered, “Because they can get away with it so far.”

[gunderwood]

I don't know if this is sarcasm or not, but this is not the fault of free trade. Free trade benefits everyone, from the manufacturer who is able to get a lower price on supplies to make their goods, to the consumers who ultimately purchase the product. All manufacturers ultimately want lower prices because then they can sell more goods.

Government intervention through protectionist acts like import tariffs or subsidies, along with artificially increasing prices through wage laws and higher taxes is ultimately what drives industry away from an area. Obviously the widgets are still being made and purchased; we've just drove all widget making away through government intervention.

Things sure seemed better before NAFTA and WTO.

Have you seen those agreements? Calling them free trade is laughable. The governments involved heavily manage trade and called it free to get the support of the ignorant. NAFTA/WTO are bureaucratic trade, not free in the slightest.

[gunderwood]

I don't solely blame free trade, but as far as I'm concerned its a big part of the problem. When we gave away our manufacturing we lost the ability to actually create wealth; now as a service/IT economy we can only just move wealth around.

Not sustainable.

You CANNOT sustain wealth in a SERVICE based economy. You have to take raw materials, and convert them to be productive, and gain wealth.

The highest paid workers in the country and the world do NOT "take raw materials, and convert them to be productive." Instead they perform highly intellectual services such as managing companies (e.g. CEO), managing finances (e.g. brokers), creative services (e.g. engineers, programmers, etc.), etc.

What generates wealth is not static. You generate wealth by providing what others want. The better you do it and the harder it is to do (generally), the more others will be willing to pay you for it (at least in a free market...today it's often more about who you know in government and what laws you can get passed). Service industry makes very little because virtually everyone can perform the task so there is not a labor shortage. Also, services are very price sensitive. A $7 value meal I'll take advantage of, a $12 I'll pass on. We simply use most of the services for convenience sake, so the price is very inelastic. Manufacturing is better, but the situation the US was in post WWII was artificial and never was going to last. Again, there are lots of people who can perform the task.

Quit complaining and start competing. Since Germany was brought up, look at the prices they can charge! You may not like their cars, but lots of people with money love them. Seriously, consider the number of luxury cars that BMW, Mercedes-Benz, Audi, Porsche, Volkswagen, etc. make. Some people get it in this country and are trying to out do the competition for the electric car, namely Tesla. I'm not a fan of their products for a variety of reasons, but their success is impressive. Tesla didn't do it by complaining that others took their jobs, they did it by creating the jobs in the first place.

If this link is correct, consider the net profit margins: http://biz.yahoo.com/p/330qpmd.html

Daimler AG - 9.55%
Toyota Motor Corporation - 8.99%
Audi - 8.26%
BMW - 7.09%
Volkswagen - 5.03%
Honda - 4.32%
Nissan - 3.67%
GM - 3.61%
Ford - 3.24%

Want to see real net profit margins? Check out the Chinese manufacturers! You charge whatever the market will bear for your product and you get nice net profit margins only when you convince the market to pay substantially more than it cost to manufacture the item. American car manufactures have spent the last couple of decades convince the rest of the world we build junk, so it should not surprise anyone that the margins are so low. Of course there are a few nice models here and there, but when your competitors are making 2-3x in profit per unit as you are and with high labor costs, something is seriously wrong!

[Kreutz]

The highest paid workers in the country and the world do NOT "take raw materials, and convert them to be productive." Instead they perform highly intellectual services such as managing companies (e.g. CEO), managing finances (e.g. brokers), creative services (e.g. engineers, programmers, etc.), etc.

We shall all be CEO's and finance moguls; problem solved.

Seriously though, further concentrating wealth in the hands of an increasingly small elite while everyone else has to take crap jobs with stagnant wages while costs of living only go up is sustainable in the long run...how?

You can keep the welfare payments to keep the rabble semi-content for only so long.

People need living wage jobs, and manufacturing provided that and the US was a real world power, not the debt paper tiger it is now.

That was outsourced so CEO's and shareholders could make more cash(again further concentrating capital), so everyone else be damned I guess.

[Rich]

[quote In some ways, the fact that IBM, HP, and GE are still in business is a minor miracle in itself. Each of these companies has a different path of how it has evolved and survived several generations of technology changes, but they are still here.

IBM and HP might be a minor miracle. But not GE. They are extremely diverse and some of their divisions are huge players in their respective fields. Look at medical, air craft engines, water filtration and others.

[SHMIV]

Kreutz, how is it that CEO's found it more profitable to outsource jobs to other countries? What happened over here that made it not worthwhile to keep employing Americans?

[ Post made via Mobile Device ]

[Swampman]

Kreutz, how is it that CEO's found it more profitable to outsource jobs to other countries? What happened over here that made it not worthwhile to keep employing Americans?

[ Post made via Mobile Device ]

One word - Unions.

[jdonovan]

Kreutz, how is it that CEO's found it more profitable to outsource jobs to other countries? What happened over here that made it not worthwhile to keep employing Americans?

One word - Unions.

There is a big reason that each time a NE/upper mid-west company opens a new plant, or relocates and isn't going to China, the destination is the south-east US.

[gunderwood]

The highest paid workers in the country and the world do NOT "take raw materials, and convert them to be productive." Instead they perform highly intellectual services such as managing companies (e.g. CEO), managing finances (e.g. brokers), creative services (e.g. engineers, programmers, etc.), etc.

We shall all be CEO's and finance moguls; problem solved.

Point missed. I was responding to the fallacy that manufacturing is somehow end all be all of wealth creation. There are lots of highly skilled technical workers who provide services beyond what I listed, I just didn't want to be here all day typing. IIRC, you are in a service industry and make very nice money.

Seriously though, further concentrating wealth in the hands of an increasingly small elite while everyone else has to take crap jobs with stagnant wages while costs of living only go up is sustainable in the long run...how?

Blame the right thing, monetary policy. That's the power of business and government conspiring for each others good; not even remotely close to free trade, free markets, etc. Cost of living is going up is due to the devaluation of the dollar. As for concentration, it's been like that for all of human history. People that lament the loss of manufacturing (and don't get me wrong, there's nothing wrong with the jobs and they are good, but you can't have ~3-5% of the worlds population in one country hold >50% of them and expect that to be stable) typically refer to the period of time where war made everyone else unable to compete, while the devaluation of the dollar had occurred internationally, but not nationally due to Bretton Woods.

You can keep the welfare payments to keep the rabble semi-content for only so long.

People need living wage jobs, and manufacturing provided that and the US was a real world power, not the debt paper tiger it is now.

That was outsourced so CEO's and shareholders could make more cash(again further concentrating capital), so everyone else be damned I guess.

Again, that situation where the US manufactured virtually half of all the goods in the world was unsustainable. It was a product of deliberate monetary policy devaluation and war. Bretton Woods created the artificial appearance of wealth when in reality what we were doing is sending all of our gold reserves overseas. Rounding numbers here, but if the international price for gold is $50/oz and the US will exchange you dollars for gold at $35/oz, of course you're going to do business with US companies and get as many dollars as you can. Of course then you exchange them via your national bank for gold and then back to your own currency. Net you get $15 of gold for free in order to prop up the devaluation of the dollar. Look at how countries like Germany acquired all of their gold reserves.

Bretton Woods was an artificial arbitrage point that was held open only by exporting the countries wealth. While there was enough wealth to keep it going, everything appeared fine and dandy. Once it closed, we got hit with massive stagflation. Which we solved with inflation and manipulation of the numbers (e.g. CPI). That's not a solution, that just postpones the inevitable and makes it worse. At some point even inflation stops working.

As long as most Americans are more interested in buying cheap Chinese TVs while the turn around and buy US investments (e.g. bonds until recently, companies, etc.), of course the wealth will flow out of this country. We're buying consumables and they're buying the producers.

[gunderwood]

Kreutz, how is it that CEO's found it more profitable to outsource jobs to other countries? What happened over here that made it not worthwhile to keep employing Americans?

[ Post made via Mobile Device ]

A lot of bad US policy for one thing, but it was NEVER a stable solution to have ~3-5% of the worlds population have >50% of the manufacturing jobs. Short term anomaly due to war and monetary policy.

Think about it if you were not a US citizen. You want to earn money and provide for your family too. Is there any reason you can't be trained to run a machine? Nope. Of course you'll be willing to do it for relatively less because your standard of living is so much lower. (Note: this is why so many Chinese rural workers go to the big manufacturing cities and put up with the harsh conditions; working 16hrs/day for $2/day is vastly better for them).

US consumers demand lower cost (often at the expense of quality, but that's their decision) and that drives businesses to look for cheaper ways of producing things. US workers can compete by being more efficient than their cheaper overseas competition (e.g. self-motivated requiring less overhead), they can also typically turn out a higher quality product through careful design and assembly, etc. It's not hopeless, it's just not the old days where anyone with a HS education could make $50/hr and a pension for screwing lug nuts on a car (I exaggerate only slightly).

[Kreutz]

Point missed. I was responding to the fallacy that manufacturing is somehow end all be all of wealth creation. There are lots of highly skilled technical workers who provide services beyond what I listed, I just didn't want to be here all day typing. IIRC, you are in a service industry and make very nice money.

Yeah, but I'll be the first to admit I just move electrons around in my pajamas.

I provide a valuable service(must be or no one would pay me), but I create nothing. I strongly suspect my income cycle is a half-assed ouroboros.

Blame the right thing, monetary policy. That's the power of business and government conspiring for each others good; not even remotely close to free trade, free markets, etc. Cost of living is going up is due to the devaluation of the dollar. As for concentration, it's been like that for all of human history. People that lament the loss of manufacturing (and don't get me wrong, there's nothing wrong with the jobs and they are good, but you can't have ~3-5% of the worlds population in one country hold >50% of them and expect that to be stable) typically refer to the period of time where war made everyone else unable to compete, while the devaluation of the dollar had occurred internationally, but not nationally due to Bretton Woods.

Forgive me my wistful nostalgia for a time I didn't exist in. The thing is I get what you're saying, but I don't want to believe it.

That make sense? Because it only kind of does to me.

As long as most Americans are more interested in buying cheap Chinese TVs while the turn around and buy US investments (e.g. bonds until recently, companies, etc.), of course the wealth will flow out of this country. We're buying consumables and they're buying the producers.

Once knew a man who said we're winning the trade war; we get finished goods, they get worthless IOU's. Wasn't sure if he was right or wrong then, still ain't sure now.

As for unions influencing facility locations of businesses, I don't think thats a factor weighted as highly as it used to. Private sector unions are a ghost of what they once were. Ironically supplanted by the governments mandates.

[Reverenddel]

I disagree with the lack of manufacturing as a judgement of valued trade, and economy. Again, AGREEING WITH KREUTZ (Frakin' becoming a habit), Service industry is made up of people who do things for other people who do not want to do things, or lack the technical training.

If the economy still goes further in the sh'tter. I won't NEED a stock broker, because I'll BE broke. I won't NEED a restaurant, because it's less expensive for me to grow my own food, and cook it myself. I won't NEED a kid that cuts my lawn, because I'll be unemployed, and able to cut it myself.

See? One job loss, four people affected.

In manufacturing, you lose a job, and you lose a product. It cannot be replaced. In service economies, you lose a job, and you can do it yourself, or obstain.

Big difference.

[gunderwood]

I disagree with the lack of manufacturing as a judgement of valued trade, and economy. Again, AGREEING WITH KREUTZ (Frakin' becoming a habit), Service industry is made up of people who do things for other people who do not want to do things, or lack the technical training.

If the economy still goes further in the sh'tter. I won't NEED a stock broker, because I'll BE broke. I won't NEED a restaurant, because it's less expensive for me to grow my own food, and cook it myself. I won't NEED a kid that cuts my lawn, because I'll be unemployed, and able to cut it myself.

See? One job loss, four people affected.

In manufacturing, you lose a job, and you lose a product. It cannot be replaced. In service economies, you lose a job, and you can do it yourself, or obstain.

Big difference.

Like the service, why can I not simply make the product myself? It's not like people ever made their own cloths, tools, etc. before. If the economy gets any worse, you won't have a need for many products either.

Furthermore, I didn't say manufacturing was unimportant, I simply was pointing out it's not the panacea you proclaim it to be. Any type of useful work that someone is willing to pay you for is by definition valuable. The value of the work is typically denominated in dollars, more dollars means more valuable work (at least to someone). I make good money, but no where even remotely close to CEO money. It might pain us workers to admit it, but apparently someone values the CEO's labor more than ours...by a lot too! It's simple the supply of labor vs. the demand for that type of labor. No different than other market prices.

What you're essentially claiming is that service work isn't valuable and manufacturing is. I merely pointed out that most of the high paying jobs, starting at the really high end like CEOs to just upper middle class like computer programers, management, etc., are in fact services. Those services generate products, but you don't value those products vs. the output of a hammer. However, the market thinks otherwise. The worker who provides management services for a hammer manufacturer likely makes far more than the guy running the manufacturing machine. If we get really technical even most manufacturing jobs are really just services too; they provide the service of running a machine which just so happens to produce hammers. The market typically values management skills (probably because good managers are hard to come by), more than the workers who runs the machine (probably because most people can run a machine).

That being said, most people are far too wrapped up in money as a value of self-worth. The money paid for work is just that, money paid for work. It doesn't determine the value of the person, merely the value of the work being performed. A jackwagon CEO may make a ton of money, but by all other estimates isn't a good person, while a minimum wage worker, service or otherwise, can be an amazing person despite the lack of money. E.g. Paris Hilton has lots of money, Mother Teresa didn't; did that determine their value to society?

Don't get offended merely because someone else makes more money for their work than you. Work harder and/or find other work that others value more.

[gunderwood]

Yeah, but I'll be the first to admit I just move electrons around in my pajamas.

I provide a valuable service(must be or no one would pay me), but I create nothing. I strongly suspect my income cycle is a half-assed ouroboros.

Your service (health industry IIRC), enables other services that people consider extremely valuable. Your income is determined by how much others value your work.

Forgive me my wistful nostalgia for a time I didn't exist in. The thing is I get what you're saying, but I don't want to believe it.

Fair enough. What step is admitting denial?

Once knew a man who said we're winning the trade war; we get finished goods, they get worthless IOU's. Wasn't sure if he was right or wrong then, still ain't sure now.

If that's all they did with them, then sure. However, that's not all they do with them. Sure they have bought a lot of bonds, but they have bought a lot of other useful things as well. e.g. companies.