The 'What is Wrong With Michigan' Thread

[monsoon]

It's about what kind of economy you'll have if you do that. Some states are comfortable with calling a perpetual "Walmart Economy" or "Walmart State" economic development. Personally, I'm not.

Indeed. Re. my earlier reference to Fla.

[RustTown]

And, to expound on that even more, here are two articles from Crains Detroit Business:

1. Michigan ranks fifth on Small Business Survival Index; place is one slot higher than year before

By Sheena Harrison

Oct. 13, 2005 5:41 PM

http://www.crainsdetroit.com/cgi-bin/news.pl?newsId=7065

1. Michigan second in nation in new capital projects; auto sector leads industries

By Tom Henderson

Oct. 12, 2005 4:52 PM

http://www.crainsdetroit.com/cgi-bin/news.pl?newsId=7055

So, while Michigan's manufacturing is in the dump (though the second artcile seems to say that it's not all that bad), it is retaining other small businesses, and is still a good state to do business in despite the contrary opinion.

[superNOVA]

This "rewarding the rich" theory that the left always talks about is ridiculous.

It is nothing more than class warfare - and it is the root of the problem. With all of these 'issues' the middle class is still doing better than they were and they are making more money on average then they were a decade ago. The media however, in their tireless assault on the right is attempting to paint a bleak picture in what technically is one of the most vigerous economic expansions in this nations history. Other than simple hatred for Bush, their is nothing to back their view that they shove on America when unemployment in most placed is below five percent (perfect employment is 5.6% and anything better than that is considered to be exceptional) and even in Michigan it is slightly above perfect employment. Not the end of the world.

Class warefare people, the only way the Dems manage to get votes. Make people jealous of others and you have instant issues. Well, that and racism also play into their play book. Look at the issues that they have been trumpeting for the last five decades.

Look at how many issues they have fixed. Either they are terribly innefficient (as they pretty much ran the country for four decades) or they have reasons not to fix these problems...

[snoogit]

GM-UAW deal could help industry

While this is a blow to the common man, what really should stick out is this:

"Now the onus is on GM to roll out products consumers want to buy," she said.

You don't do that, and all the healthcare cutting in the world wont save you.

[GRDadof3]

That's funny. I found the article to be the first good news in a sea of bad news

[HolidayInnExpress]

What

[GRDadof3]

Couldn't let sleeping dogs lie, could ya snoogit

[TheseGoTo11]

Manufacturing represents just 12% of Detroit metro's workforce, just 2 pts higher than the natl avg. The economy has been diversified since the late 80s. Problem is Michigan cannot attract new people - especially yuppies and Latino immigrants. Detroit is just 5% Hispanic, well below the USA at 14%, and dramatically behind Chicago at 27%.

Michigan is very business un-friendly, but then again so is California, Mass, and Wash state. Difference in those states is that they attract outsiders because of lifestyle and availability of interesting, high-tech jobs. Detroit is not about to become another Seattle or SF, so it needs to find something else to distinguish itself.

[GRDadof3]

Manufacturing represents just 12% of Detroit metro's workforce, just 2 pts higher than the natl avg. The economy has been diversified since the late 80s. Problem is Michigan cannot attract new people - especially yuppies and Latino immigrants. Detroit is just 5% Hispanic, well below the USA at 14%, and dramatically behind Chicago at 27%.

Michigan is very business un-friendly, but then again so is California, Mass, and Wash state. Difference in those states is that they attract outsiders because of lifestyle and availability of interesting, high-tech jobs. Detroit is not about to become another Seattle or SF, so it needs to find something else to distinguish itself.

Thanks for the input, but this thread is in the Grand Rapids forum As far as latinos go (at least in GR and Ottawa County) it is the fastest growing segment of the population here. And as far as yuppies go, in my line of work, that's just about all I see moving to this area from other parts of the country. Yuppies, Asians and Middle Eastern folks.

Perhaps this thread should have been dumped in the Michigan forum, and then the Detroiters could defend their lousy track-record.

[RustTown]

GRDadof3, this thread is "What is Wrong With Michigan" key word "Michigan" not "West Michigan."

And, the former poster is quite a bit off in his assessment. Detroit's hispanic population has nearly doubled over the past few years. In fact, it's the only major ethnic group actually growing (besides the Arabs and Chaldeans, though, their populations are much smaller).

Once again, to think that we should only be talking about West Michigan goes against the very title of the thread. You can not discuss the Michigan economy without discussing Southeast Michigan as part of the picture.

[GRDadof3]

Thesegoto11's post was directed specifically toward Detroit, if you look at it again. And it wasn't me who started the thread.

[torgo]

GRDadof3, this thread is "What is Wrong With Michigan" key word "Michigan" not "West Michigan."

And, the former poster is quite a bit off in his assessment. Detroit's hispanic population has nearly doubled over the past few years. In fact, it's the only major ethnic group actually growing (besides the Arabs and Chaldeans, though, their populations are much smaller).

Once again, to think that we should only be talking about West Michigan goes against the very title of the thread. You can not discuss the Michigan economy without discussing Southeast Michigan as part of the picture.

I think one would have to assume that since this is a "Metro Grand Rapids" forum that topics would focus on Metro Grand Rapids. I don't really mind the discussion, though, since what happens in other areas of the state often affects us in GR. Let's not get too out of control, though, all right? At least this doesn't appear to be as controversial as cutting hair.

[snoogit]

Couldn't let sleeping dogs lie, could ya snoogit

eh?

I thought it was a good article to point out in this thread

Although welcome Holiday Inn Express, I love your cinnamon rolls.

[superNOVA]

Today, what is stagnating Michigan is interagency of flexibility in the free markets race to the bottom for labor cost. Indeed, Michigan and the nation has two choices: Accept much lower rates of pay and benefits in order to be competitive in a global free market for labor or accept the loss of jobs to nations and people who will work for much lower rates of pay. In other words, your damned if you do and your damned if you don

[Nitro]

Could you please justify how an unskilled worker at GM deserves more than three times the national average wage? How an unskilled worker can make more than me, a dual degree holder with advanced levels of experience in my industry?

There really is no justification for it. Historically it's the way it's always been. Profits in the manufacturing sector (cars, appliances, etc. etc) were always higher which allowed them to kowtow the unions every time they demanded a wage increase.

The days of the $25-30 hr. unskilled labor are over. Companies unfortunately feel that they have to move out of state or, God forbid, out of the country to remain competitive due to lower labor costs and lower health care costs. The work force here in the US has unfortunately become used to the lifestyle that $25-30 hr. affords and are unable or more likely unwilling to want to change.

The key to adapting is education and retraining. We have to "retool" the workforce to be able to do semi skilled and skilled labor to attract jobs that can pay better (biomedical and the like).

Even though Delphi is having its problems I give them a bit of credit for trying to revamp their system. On the brink of bankruptcy the CEO offered to take a pay cut from $1.5 million dollars to one dollar. Other key executives have offered to do the same. It makes it a little more palatable as a worker to accept the possibility of change if they know that change is happening from the top down. It's a tough pill to swallow knowing that they are asking you to take a 50% pay cut and the CEO still earns $1.5 million.

It's still a tough pill to swallow asking someone to take a 50% pay cut. I couldn't continue my current lifestyle (not that it's extravagent or anything) making 50% less then I do now. I would have to probably sell my house and downsize significantly. Not a terribly easy thing to do with a wife and a two year old.

The only thing that is inevitable is change..........

Nitro

[PBJ]

The days of the $25-30 hr. unskilled labor are over. Companies unfortunately feel that they have to move out of state or, God forbid, out of the country to remain competitive due to lower labor costs and lower health care costs. The work force here in the US has unfortunately become used to the lifestyle that $25-30 hr. affords and are unable or more likely unwilling to want to change.

Nitro

First, i'll start off by saying we are a multi-national company. We look at more than just labor costs when opening plants in other countries. Sure labor is a factor, but so is material sourcing, shipping costs, import fees, location to the customer, etc... But to your wage point, I think you're right on. High paying jobs to push buttons in a factory are over. We have packed job fairs for unskilled labor all shifts, and i believe starting pay is $9 or $10 an hour, with like a .50 cent (don't quote me on that) shift premium for 2nd and 3rd shift. But we're also a completely non-union business.

[GRDadof3]

I guess I'll weigh in on my impressions of unions, seeing as how this thread won't die and I grew up in a union family, and I worked for a GM supplier for five years:

Under unions, productivity is the worst. Productivity allows US companies to compete head-to-head with other countries. I remember showing up at the GM plants in Lansing on many occasions, and having to wait hours or an entire shift for the right "hi-lo" driver to move parts that we needed moving. They have no concept of the "internal customer service" notion.

My Father worked for the union for a big utility company for over 20 years. He used to get so frustrated as a supervisor because he worked his guys (and gals) so hard that they were one of the most productive units in the company, and he would get verbally reprimanded by the union boss for "working too hard". Or they would show up at a job, knowing that the company had allotted "so many hours" for that type of work, and have to wait 3 - 4 hours to get started because they COULD NOT finish early.

Or guys he worked with would purposely cook the books on hours, because the union had negotiated such high-paying overtime and weekend pay like "double-time". Guys would sluff off during regular shifts, knowing that they were probably going to be scheduled to work one or two weekend shifts making almost $60 - $70/hour.

Of course there is abuse in any job setting, but it seems to be tolerated and even encouraged among the union ranks.

[Nitro]

Of course there is abuse in any job setting, but it seems to be tolerated and even encouraged among the union ranks.

This is so true. My wife used to work for Lear on Alpine. I used to get the biggest laughs out of the stories that she would tell when she got home from work. Punishment for showing up to work drunk was three days off WITH pay and you were allowed to do this three times in a 90 day period before you moved to the next level of "punishment". I'm sorry three days off with pay isn't a punishment, it's a vacation.

Nitro

[HolidayInnExpress]

Could you please justify how an unskilled worker at GM deserves more than three times the national average wage? How an unskilled worker can make more than me, a dual degree holder with advanced levels of experience in my industry?

Please justify this - because to me it is nothing more than localized wage inflation that has done very few favors for anyone. Paying someone more for less does nothing for the real value of their work or their money.

In short - it will always catch back up.

Are you sure you are asking the right question? I don

[GaryP]

Are you sure you are asking the right question? I don

[HolidayInnExpress]

I guess I'll weigh in on my impressions of unions, seeing as how this thread won't die and I grew up in a union family, and I worked for a GM supplier for five years:

Under unions, productivity is the worst. Productivity allows US companies to compete head-to-head with other countries. I remember showing up at the GM plants in Lansing on many occasions, and having to wait hours or an entire shift for the right "hi-lo" driver to move parts that we needed moving. They have no concept of the "internal customer service" notion.

My Father worked for the union for a big utility company for over 20 years. He used to get so frustrated as a supervisor because he worked his guys (and gals) so hard that they were one of the most productive units in the company, and he would get verbally reprimanded by the union boss for "working too hard". Or they would show up at a job, knowing that the company had allotted "so many hours" for that type of work, and have to wait 3 - 4 hours to get started because they COULD NOT finish early.

Or guys he worked with would purposely cook the books on hours, because the union had negotiated such high-paying overtime and weekend pay like "double-time". Guys would sluff off during regular shifts, knowing that they were probably going to be scheduled to work one or two weekend shifts making almost $60 - $70/hour.

Of course there is abuse in any job setting, but it seems to be tolerated and even encouraged among the union ranks.

Productivity gains come by virtue of increasing output per unit of input. The only real productivity gains are measured in Energy. How much energy, whether human or mechanical, does it require to produce a given unit of output. Consequently, productivity has to do with energy cost and energy efficiency, whether human or mechanical.

Human energy cost is measured in wages and salaries. Therefore, the human component of productivity is most profoundly measured in labor cost. When your competition essentially has the same labor cost and all other factors are equal, productivity is really not an issue because prices will run about the same, with quality and styling being the separating factors. However, in the global free market of labor, productivity can be increased by utilizing cheaper sources of labor oversees, which allows manufactures to reduce their prices and gain advantage over their competition, as well as increase profitability. In order to remain competitive, other manufacturers follow suit, lest they lose market share and profitability. This is how it becomes a race to the bottom as manufactures compete though efficiencies and profitability gains from cheaper sources of labor.

This only works in the short term when your customer base is the host nation that is being gutted of good paying jobs.

[GRDadof3]

So are you saying that it was good to prop up the economy with ridiculously high labor costs, but it is bad to do the same thing using government debt?

Doh! I was just going to say the same thing

[HolidayInnExpress]

So are you saying that it was good to prop up the economy with ridiculously high labor costs, but it is bad to do the same thing using government debt?

I am making observation and analysis; I am not passing judgment and will not pass judgment. Passing judgment corrupts the intellectual integrity that allows discovery and openness. What I am saying is that high labor cost created high pay and high pay created increased consumer consumption and that consumer consumption constitutes 2/3 of GDP. Hence, reducing high rates of pay will reduce rates of consumption and therefore reduce GDP, creating recessionary dynamics and or the decline of the standard of living of a society under such dynamics.

Mind you....during the vast majority of the period of high labor cost...COMPANIES WERE PROFITABLE! If people can earn high wages and companies could prosper......that is the optimal scenario that a nation and people can strive for. There was NOTHING proped up about that situation....no one was OWED and no outstanding debt was created from it.....IT WAS REAL.

[torgo]

I am making observation and analysis; I am not passing judgment and will not pass judgment. Passing judgment corrupts the intellectual integrity that allows discovery and openness. What I am saying is that high labor cost created high pay and high pay created increased consumer consumption and that consumer consumption constitutes 2/3 of GDP. Hence, reducing high rates of pay will reduce rates of consumption and therefore reduce GDP, creating recessionary dynamics and or the decline of the standard of living of a society under such dynamics.

Mind you....during the vast majority of the period of high labor cost...COMPANIES WERE PROFITABLE! If people can earn high wages and companies could prosper......that is the optimal scenario that a nation and people can strive for.

Well then why don't we just go to full-blown socialism and have the government give people lots of money? All that disposable income would get the economy going, according to your theory. Thats essentially what these companies were doing, was it not? Yes, they were profitable, but I would guess that I wouldn't have to spend $18,000 on a car if labor costs were't so high. The car companies made their money selling the cars to consumers (you and me). Since the companies have to turn a profit, the price of a car reflects the cost of labor, does it not?

[HolidayInnExpress]

Doh! I was just going to say the same thing

Sense both of your are passing judgement then you need to ask yourselves, and not me, is a high standard of living a good or bad thing.....you be the judge.