[citation][nom]aford10[/nom]I live in the heart of the automotive area, smack dab in michigan. I know how much the average joe was making on the lines. Just a few years ago, when I was looking for different jobs, I found several in the area paying $17 - $25 an hour in different auto/autoparts plants. It's not a dream at all.[/citation]
First off, I did explicitly mentioned non-primary automotive. Second, I lived in a Toledo suburb until last year. Third, look at Flint where 11 of the 13 major factories are closed and houses for the last 5 years have been unable to be sold. The unemployment rate is insane in MI and there are not a host of jobs paying $17-$25/hr.
The fact you believe there is such a wealth of these jobs (there isn't) invalidates your point.
[citation]Your argument is backwards. We don't need to make more $$ to keep up with cost of living. If companies didn't pay so much in salaries, pensions, 401k, bonuses, etc..., the cost of goods/living wouldn't be nearly as high. To see proof of that, just compare cities like NYC, and Toledo, OH. This is why the minimum wage increase only hurts those you mentioned who work flipping burgers, at grocery stores, and gas stations. The companies they work for just increase the price of their goods, and pass the cost on to the customers. I used to work in fast food, also at a grocery store, and can tell you that most who worked there, also shopped there. So the increase in cost of goods, was easily more than the $15-$25 a week increase in pay.[/citation]
Not quite.
Your burger flipper, gas station attendant, and grocery clerk need to live in the areas they work. When inflation increases faster than bottom end wages and, more important, income disparity drives up basic costs (housing, health care, transportation) in these areas it isn't basic goods killing them. It is essential consumerism: You want your cheap labor in your pretty neighborhood but you don't want to pay the people working in your neighborhood enough to live there.
@ Snow: to give a realworld example, take a large consumer appliance that costs between $500-$1200 at retail (model dependent, but the bulk of the product designs are identical and are simply rebadging). This product is made in the US and there is less than 1hr labor in the product for a total compensation of $26 to the operation staff (wages, retirement, medical, etc). The major costs after materials are retail mark up, transportation, marketing, and warranty repairs as there is a 5-10% out of the box failure rate on these products depending on model. This company has moved stuff to both China and Mexico. Wages were lower, but so was quality and productivity. Quality was a big issue for this market as consumer tolerance for large ticket items isn't very high and when fuel costs increased (increase material costs AND delivery costs) they moved a lot back to the US. But this also corresponded to major cuts in compensation.
Every scenario will be different, but in this case labor compensation is a very small portion of the cost of the product. But it is one of the elastic elements, one of the reasons for a new start up shop in a neighboring state where they are able to cut labor compensation by close to $10/unit. The dynamics between consumers, investors, and labor is cut throat. Consumers are very much distanced from the people who make their products--you as an American don't know the working or living conditions of the people you buy products from. The bottom line is almost always cost and value. This isn't a bad thing, but it does have consequences. But don't believe the above concerning $25 floating all around MI for unskilled labor. Anyone with half a brain can see MI is in a bad situation and there is NOT a wealth of openings at car companies. Indeed the news over the last 5 years has been layoffs followed by more layoffs. Some of this has been good and needed correction, some of it self destructive. But there are a lot of MI residents who would love a $25/hr job right now--many with a lot of experience in manufacturing. Those type of jobs are NOT available to satisfy the mass of unemployed in that state (which is one of the worst states in terms of management and long term preperation; they clearly did not plan for shifts in the economy believing American cars would always be a strong market force and able to adapt to globalization. Opps.)