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RE: Post Columnist: Wages Are Too Low - 7/21/2011 2:11:54 PM

DomKen

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quote:

ORIGINAL: willbeurdaddy
Last time I checked 2500 times 1 million is 2.5 billion. And your last sentence substantiates exactly what I said. In a mature market where your employees stepping up and buying leads to insignificant revenues, then raising their wages "so they can buy" your product is a fallacy. My numbers are very real world except for the $10 and $35 that I was given to use. Make the spread narrower and no employee is stepping up to a buy a car they wouldnt have bought. Make it wider and the losses are even bigger.

QED

Once more you claimed

quote:

$2.5 BILLION increase in cost per vehicle.

which is wrong by a factor of 10 million.

Secondly let's take some real world numbers instead of your bullshit.
In 2010 Ford motors had 164,000 employees in the US the vast majority were paid a wage sufficient to buy a new ford every 3 to 5 years. In that year Ford sold 1.9 million vehicles in the US with operating revenue of 7.149 billion or a per unit profit of 3,762. Ford is not so forthcoming with its labor costs but the best number I could find is roughly 2k per unit.

So if we take a more reasonable theory and suggest cutting Ford's wages in half (rather than the 3.5 multiplier you used) Ford loses 41,000 sales per year and profits increase by 1.859 Billion. So the question is does Ford benefit more from a happy and content workforce loyal to the company or by a 26% increase in profits with accompaning workforce unhappiness, disloyalty, turnover etc.

This analysis of course does not take into the extremely important knock effects of a well paid workforce on communities, other manufacturers and service businesses.

All in all Ford was right.

< Message edited by DomKen -- 7/21/2011 2:12:33 PM >

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RE: Post Columnist: Wages Are Too Low - 7/21/2011 2:39:09 PM

popeye1250

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No shit, $15 an hour is subsistance level these days.

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RE: Post Columnist: Wages Are Too Low - 7/21/2011 7:04:19 PM

TheHeretic

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quote:

ORIGINAL: slvemike4u

How do you get young folks to enlist? There are a couple of shooting wars going on right now.Inducements needed to increase enlistment would come with a price tag....how does that fit into deficit reduction? Let us assume for a moment that we could get a huge spike in enlistments ,as a result of some increased push(perhaps sweetening the pie so to speak re:benefits and such)at some point a large number of young men and woman would be mustered out...and seek to cash in on those inducements...our universities and colleges would be flush with new students...and the Fed would be on the hook for scads of education dollars.
At that point tea part activists would start screaming that the cost was unsustainable

Well, to start with, Mike, there better be some lines of open and proud homosexuals forming up at the recruiters offices. If that doesn't happen, if ending DADT was all just a pissy liberal snit fit on display, I think the gay community will have it come back and bite them in the ass the next time a barrier needs to come down.

Now I suppose President Obama could get out there and start a recruiting drive, appealing to the patriotism of all his young supporters, and assuring them of the US of A's inevitable victory, but I wouldn't bet a nickel on it.

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RE: Post Columnist: Wages Are Too Low - 7/21/2011 7:20:56 PM

slvemike4u

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So that is your plan .....assuming that the repeal of official policy of DADT will convince young homosexual and lesbian youth that the military is now a warm and fuzzy place for them?
I think you need to go back to the drawing board on that one.
As to the other part of your plan...Obamas youth vote was driven in large part by college students.....not exactly happy hunting ground for your typical military recruiter...those young folks have way too many options open to them.Times are indeed tough,but as always the educated have more doors open to them than the uneducated.

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RE: Post Columnist: Wages Are Too Low - 7/21/2011 7:40:32 PM

TheHeretic

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No, Mike. That isn't my plan, that's something I think should happen, one way or another.

As for the students having better options, then let the Great Orator persuade them. The Army will take you, all the way into your 40's.

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RE: Post Columnist: Wages Are Too Low - 7/21/2011 8:04:56 PM

slvemike4u

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The "great orator" is not going to convince young heretofore successful young woman and men that military life is their best option....very few college graduates enlist in the military....unless we are talking about those embarking on a career choice...and those need no convincing.
I'm more than a litte surprised Rich...aren't you of the opinion that government needs to shrink...why are you now advocating an enlistment expansion for the military?

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RE: Post Columnist: Wages Are Too Low - 7/21/2011 8:38:00 PM

TheHeretic

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Actually, Mike, I favor mandatory national service for everybody, but that's a whole different topic than the one we've already drifted into.

Perhaps you'll note that providing for the common defense is one of those tasks specifically assigned to our government from day one, unlike, oh, I don't know, any of the out of control entitlements that have become politial third rails.

I think you're going to see this whole discussion through a particular prism, Mike.

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RE: Post Columnist: Wages Are Too Low - 7/21/2011 8:54:40 PM

slvemike4u

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What prism are you assuming I might see this thru.....allow me to tell you the prism I do see it thru,my own sons eyes...he is a proud and engaged citizen(just served jury duty for the first time) actively engaged in the political process,a recent college graduate and military service is not on his radar.
Would I be proud were he to have chosen to go that route....yes I would have,though scared and concerned to no end....do I think less of him that he does not consider that particular service to be for him....absolutely not.For better or worse service in this countries armed forces has become,for the most part,for those who a) see it as a career.....or b ) see it as a way out of their present circumstances.
My son,and many like him..particularly those who were so engaged for candidate Obama have chosen education as their path to better themselves....I think the country needs both types of young people...and I am very proud of my son and the path that he chose.....wearing the uniform is not for everyone....and compulsory service,for a country this large is both unnecessary and would be prohibitively expensive.

< Message edited by slvemike4u -- 7/21/2011 8:55:52 PM >

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RE: Post Columnist: Wages Are Too Low - 7/21/2011 9:34:08 PM

TheHeretic

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That's exactly the prism I meant, Mike, but bringing him up directly is your call.

I think you are envisioning something far narrower than I have in mind. I've spelled it out before, and don't need to hijack further, but I'll see if I can find it for you.

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RE: Post Columnist: Wages Are Too Low - 7/22/2011 2:41:24 AM

WyldHrt

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quote:

They directly address your point, apparently you dont understand it. Lets use your numbers. You can build and market a car for say $12,500 , consisting of $10,000 materials, $1000 labor costs at $10 an hour, $1500 administration and marketing. You can sell it for $17,500 and make $5,000 profit per unit, and sell 1 million of them, for $5 billion of profit. You have 50,000 employees.

Now you get the brilliant idea of raising their wage to $35 so they can afford to buy your car. Each car now only profits $2,500, and the first million you sell total profit is $2.5 billion. But wait...we have a brand new captive market of 50,000 employees. Lets sell it to them. And we can actually profit $4,000 per car for them because we can knock off the marketing and administration costs for this captive market. And being consipicuous consumers they are going to buy a new car every year. We just picked up another $200 million in profits to offset that...$2.5 BILLION increase in cost per vehicle. OOPS.

So I repeat what I said in the other post. Ford's idea only works when the market for your product is so immature that adding your own employees to the market significantly increases that market.

The numbers I gave were obvious hyperbole, which you seem to have missed... pretty much as I expected you would. You simply crunched the numbers (with a rather huge oops- 2.5 billion per vehicle? Really?) using 'Ford's' salary as the only variable. That isn't how it works. Congrats though, you are now qualified to think inside the box, which takes us back to the OP.

Clue by four- Established markets are only stable as long as they are supported by consumers, and the fast disappearing middle class have always been those consumers. These days, who do you think is going to buy those other million cars produced when US wages go into the toilet and formerly middle class workers struggle just to make ends meet?

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