12132019What's Hot:

American Robots Stealing Jobs from Hard Working Mexicans! Bot Promoted for Managerial Position.

"When Megatron sends its Decepticons, they’re not sending their best. They’re sending robots that have lots of problems, and they’re bringing those problems to us. They’re bringing drugs.They’re bringing crime. They’re rapists. And some, I assume, are good robots!"

The CEO of United Technologies just let slip an unintended consequence of the Trump-Carrier jobs deal

Greg Hayes, the CEO of United Technologies, the parent company of the heating and air-conditioner manufacturer Carrier, just let slip a consequence of a deal struck to keep jobs in Indiana.

And American workers won't like it.

Carrier said last month that it would keep more than 1,000 jobs across two locations in Indiana, following pressure from President-elect Donald Trump. The decision was touted as a win for the incoming president, who had pledged keep the jobs from moving to Mexico.

In a wide-ranging interview with CNBC's "Mad Money with Jim Cramer" that aired Monday, Hayes set out the comparative advantages of moving to jobs to Mexico, the motivation behind his decision to keep those jobs in Indiana, and the ultimate outcome of the deal: There will be fewer manufacturing jobs in Indiana.
Before we get to that

First, Hayes was asked what's so good about Mexico. Quite a lot, it turns out. From the transcript (emphasis added):

JIM CRAMER: What's good about Mexico? What's good about going there? And obviously what's good about staying here?

GREG HAYES: So what's good about Mexico? We have a very talented workforce in Mexico. Wages are obviously significantly lower. About 80% lower on average. But absenteeism runs about 1%. Turnover runs about 2%. Very, very dedicated workforce.

JIM CRAMER: Versus America?

GREG HAYES: Much higher.

JIM CRAMER: Much higher.

GREG HAYES: Much higher. And I think that's just part of these — the jobs, again, are not jobs on assembly line that people really find all that attractive over the long term. Now I've got some very long service employees who do a wonderful job for us. And we like the fact that they're dedicated to UTC, but I would tell you the key here, Jim, is not to be trained for the job today. Our focus is how do you train people for the jobs of tomorrow?

So Mexico has cheaper labor with a much more dedicated workforce, and these are the kinds of low-skilled jobs most people don't find that attractive. Elsewhere in the interview, he made clear that United Technologies intended to keep engineering jobs in the US and that these higher-skilled jobs were not at risk of being moved overseas.

"The assembly lines in Indiana — I mean, great people," Hayes said. "Great, great people. But the skill set to do those jobs is very different than what it takes to assemble a jet engine."

Hayes was then asked why he decided to cancel the move to Mexico. From the transcript (emphasis added):

GREG HAYES: So, there was a cost as we thought about keeping the Indiana plant open. At the same time, and I'll tell you this because you and I, we know each other, but I was born at night but not last night. I also know that about 10% of our revenue comes from the US government. And I know that a better regulatory environment, a lower tax rate can eventually help UTC of the long run.

But here's the kicker

The result of keeping the plant in Indiana open is a $ 16 million investment to drive down the cost of production, so as to reduce the cost gap with operating in Mexico.

What does that mean? Automation. What does that mean? Fewer jobs, Hayes acknowledged.

From the transcript (emphasis added):

GREG HAYES: Right. Well, and again, if you think about what we talked about last week, we're going to make a $ 16 million investment in that factory in Indianapolis to automate to drive the cost down so that we can continue to be competitive. Now is it as cheap as moving to Mexico with lower cost of labor? No. But we will make that plant competitive just because we'll make the capital investments there.

JIM CRAMER: Right.

GREG HAYES: But what that ultimately means is there will be fewer jobs.

The general theme here is something we've been writing about a lot at Business Insider. Yes, low-skilled jobs are being lost to other countries, but they're also being lost to technology.

Everyone from liberal, Nobel-winning economist Paul Krugman to Republican Sen. Ben Sasse has noted that technological developments are a bigger threat to American workers than trade. Viktor Shvets, a strategist at Macquarie, has called it the "third industrial revolution."

Hayes said in the same interview that United Technologies was focused on how to "train people for the jobs of tomorrow."

In the same breath, he seems to be suggesting the jobs it is keeping in Indiana are the jobs of yesterday.

The CEO of United Technologies just let slip an unintended consequence of the Trump-Carrier jobs deal

We Are Losing The War On Inequality And It's Not Even Close

This decade has been the one in which the American mainstream finally realized we have a profound economic inequality problem. It is only now becoming clear just how far we are from turning this around.

Three of the world’s leading economists who study inequality have published new research that they say provides the first truly comprehensive picture of not just how much inequality has surged since the Reagan era, but also how completely our system of taxes and wealth transfers has failed to stop the rise of inequality.

According to the study, about 30% of our national income goes to taxes. Some of those taxes are redistributed in various forms to the poor, spending that obviously affects levels of inequality—but until now, we have not had a clear picture of just how bit that affect is. In short, we can now definitively say that our system of taxes is not up to the task we are facing.

First, the scope of the problem: in the past 40 years, none of our nation’s economic gains have gone to the bottom half of earners. The researchers find that since 1980, the average national income per adult grew by almost zero for the bottom 50 percent; “In contrast, income skyrocketed at the top of the income distribution, rising 121 percent for the top 10 percent, 205 percent for the top 1 percent, and 636 percent for the top 0.001 percent.”

Another way to look at how unequal we have become: “In 1980, adults in the top 1 percent earned on average 27 times more than bottom 50 percent of adults. Today they earn 81 times more. This ratio of 1 to 81 is similar to the gap between the average income in the United States and the average income in the world’s poorest countries, among them the war-torn Democratic Republic of Congo, Central African Republic, and Burundi.”

Whatever Reagan did, he did not Make America Great.

And what does the picture look like after we factor in taxes and redistribution? By adding in the impact of taxes, the researchers find that the bottom half of earners have seen their incomes grow by 21% since 1980—while average national income for all earners grew by more than 60%. The clear conclusion is that all of that “taxing and spending” you hear so many complaints about has not only failed to improve the relative position of the poor; their position has gotten much, much worse.

Inequality has been getting worse since the 1970s. Inequality is now warping our society and our politics in unpredictable ways. Unfortunately, the tax plan of Donald Trump will make inequality worse, not better. The government, for at least the next four years, is out of the economic equality business.

If you want to do something to fight economic inequality before then, unionize your workplace.

[The full report]

We Are Losing The War On Inequality And It's Not Even Close

Trump Succeeded in Regions Hit Hardest by the Drug Epidemic: Study

Donald Trump was especially successful in winning votes in regions hit hardest by drug and alcohol abuse, according to a new research paper.

Penn State sociologist Shannon Monnat examined election results and zeroed in on regions ravaged by "deaths of despair." This is the term employed to describe the fatal effects of alcohol, heroin and prescription opiates on people across the country, but especially white, middle-aged Americans, whose mortality rates have been rising in recent years.

"At the core of these diseases and deaths of despair is a desire to escape pain, stress, anxiety, hopelessness, shame," she said.

Monnat found that in Appalachia and New England, Trump outperformed Mitt Romney by 10 percent in the counties with the highest mortality rates. And in the Industrial Midwest, by 17 percent. The trend also applies locally, to Suffolk County and Staten Island, which flipped from Obama to Trump and have experienced rising numbers of drug overdose deaths.

Monnat said that many people, primarily white Americans without college degrees, were being jarred not simply by the loss of jobs or income but by the understanding that hard work doesn't necessarily translate into success.

"And this is a reality that people of color have contended with for a very long time. But downward mobility is the new normal in many of these former successful and largely white communities. And with that comes shame and frustration, anxiety and certainly anger."

Upon reviewing her findings, Dr. Andrew Kolodny, the Co-director of Opioid Policy Research at Brandeis University's Heller School for Social Policy and Management, said Monnat's research doesn't explain why the Pacific Northwest did not go for Trump, despite an opioid crisis there. Or, why states like Nebraska, Kansas, South Dakota and Wyoming went for Trump despite lower rates of opioid abuse.

"But to the extent that there were many working class white voters who went for Trump because they feel that government has failed them, I think that the opioid addiction epidemic is an example of government failing these groups. Because their families, their communities have been devastated by prescription opioids and heroin, and yet the federal government really ignored the problem, up until very recently."

Kolodny and Monnat hope that Trump will deliver on his promises to address the drug epidemic, including a tough stance on Big Pharma.

Trump Succeeded in Regions Hit Hardest by the Drug Epidemic: Study

Source: ONTD_Political

comments powered by HyperComments

More on the topic