The Shrinking Job Market

The Wisconsin State Journal today ran an editorial cartoon of Uncle Sam holding up a way too small t-shirt (US workforce) that just came out of the Obamanomics drier with the caption I don't understand why it keeps shrinking.  This is supposed to be Obama's fault when the US workforce of jobs that pay a living wage has been in decline for more than 30 years.  The President is actually trying to put policies in place that would possibly encourage companies to quit creating jobs overseas but has been stifled by a do nothing congress.  Now along comes the job creator Mitt Romney.  This is a man who made a career out of buying companies, running them into the ground, filing for chapter 11, and then shipping the jobs to lower wage countries as part of restructuring.  I would think that a Mitt Romney Presidentcy will make that t-shirt a lot smaller. 

The only thing that will bring jobs back to this country is if we make it too expensive to manufacture products out of this country.  That would mean renegotiating trade treaties that have helped to destroy the economy.  That would mean raising taxes on products produced abroad.  That would mean ending tax breaks for companies that ship jobs out.  Most corporations would say that if they had to manufacture here the products would cost too much.  This is a red herring.  A lot of products already cost too much.  All one has to do is look at the record profits and the salaries of the top executives to know that there is enough money available.  For example Apple has said to manufacture the i-phone in the US would add $30-60 dollars to the cost of each phone which they would have to pass on to the consumer.  Keep in mind that this is a company that had $100 billion dollars in cash on hand.  They could keep the price the same but then they would have a lower profit.  This is the side of the equation that no one wants to talk about.  How much profit should a company make, how much should the executives (who have been lowering wages and benefits of workers) make?  No the workforce and their buying power are shrinking but it is not entirely Obama's fault, it is the fault of policies enacted over the last 30 years and decisions made by corporations.  I'm afraid that if we keep going in this direction we (the workers) will not be able to purchase the products that are for sale, then the boards of directors and politicians might notice. 

Wolf appliance

Wolf Appliance asked its Madison employees for a 20% pay cut toady. The employees said no. I thought WOW in this economy any job is better than no job. One employee who voted no explained it like this, "either way I'm doomed, the pay cut puts me on the street and losing my job puts me on the street". My question to Wolf (makers of very expensive stoves) is would the prices also decline by 20%? My guess is no. For some reason business hasn't figured out that if we continue to depress wages and benefits they lose. At some point (I think that we are there) we won't have enough people to buy things to keep the economy going.

We also have Harley Davidson doing the same thing. They can't compete because people don't have $17,000 to spend on a motorcycle that won't be driven all year and gets bad gas mileage. When they leave prices won't go down.

Henry Ford believed that his workers should be able to buy the cheapest car made and paid accordingly. Today's executives could learn something from him.