Economy improving?

[jackellis]

Charlie, I had another thought about this thread you might find interesting. I see you mostly do work that doesn't require a college education. Everyone thinks those are the folks who are really taking it in the shorts right now. Those are the jobs that are being "shipped abroad".

Not entirely true.

India and China each graduate more engineers than the US does. Indian doctors are reading X-rays and imaging scans from the US. Tech workers in Eastern Europe are doing routine IT work that used to be done in the US. Indian lawyers are doing routine work that use to be performed by young lawyers in the US.

If someone wants a well-paying job in this world, it's no longer enough to be capable of doing the job, even if they're highly educated. They have to be able to do the job better than anyone else in order to justify higher pay. The bar is higher for everyone, including me.

[Charlie]

Deleted by me.

[jackellis]

Yeah I know, I'm an uneducated idiot

I wouldn't say you're an uneducated idiot, especially since I've never met you.

I'd also point out that book learning only gets one so far. I spent an hour yesterday evening researching how to attach a compatible 4-prong plug to a 220V motor and I'm still not sure I have it right. This is in spite of an expensive engineering degree. You could probably wire the plug without thinking about it.

[dbhost]

Experience does buy you a lot for sure that education leaves off... I would MUCH rather bring in a new admin with 4 + years on the job experience than one with a Bachelors degree and a wall full of certifications...

And with some of the projects you have shown here, you might want to look to see if there are any metal working jobs in your area too... You have some decent fabrication skills from what you have posted here...

If the companies don't pay what you think you should make, hang out your own shingle. It's not easy, but it IS rewarding... (been there, done that, did well, and crashed, long story...). One thing I will suggest, do NOT have a business partner.

[Charlie]

Deleted by me.

[Charlie]

Deleted by me.

[woodturner]

Well that doesn't really tell me what your job title is does it ? But from what I can tell by all the different times of day your here, your probably in an office visiting this website on company time.

That comment seems a little unkind. Guess you've never had to work second shift, or manufacturing jobs where breaks and lunch are mandated.

FWIW, I'm what is called "skilled manufacturing labor" - I program pick and place machines, robots, and reflow ovens on the factory floor, along with repairing and maintaining them.

[sparkeyjames]

Taxes executives and the little guy.
Click on it for the larger more readable version.

[billwmeyer]

I suppose "cheap" is subjective, but Houston doesn't sound cheap to me, based on the numbers cited.

For comparison, around here:
Efficiencies rent for $250/month or so in nice areas, or you can rent a room in someone's house for $150/month or so. Alternatively, if you can come up with the $4,000 downpayment and cover $150 or so a month mortgage, one can buy a small but decent home for $20,000 or so.

Land lines cost $10 per month for measured service (that's what I actually have and pay)
Utilities are around $100/month for electricity, gas, water, trash, and sewer.
Bus fare is $50/month (BTW, most places have a monthly unlimited transit pass, but after checking the web, it appears Houston does not).

So, using these numbers, we are at $410/month, add another $100 for food and some for miscellaneous, call it $600/month. Well within the $928 per month calculated for minimum wage. With two people working at minimum wage, a family would be reasonably comfortable and middle-class in much of the midwest. I do understand that the coasts are more expensive and the comparison may not hold as well in those areas.

I agree with the points that minimum wage is a starting point and that primarily teenagers and retired people earn minimum wage. Given that Costco and similar stores pay $10 to start, one could argue that's the effective minimum wage.

$100 per month for food for 4? I have a teenage grandson that can go through that in a week!

I live in a small town in southeast Kansas. I have lived several other places and this is the cheapest place I have lived. My water bill and sewage bill is $63 per month. I do not use that much water, don't water my lawn, or wash my car here, and we are a family of 2. My Electric bill is $100 per month at least on average. My gas bill runs about $95 on average. Rent in this area, is $350 to 500 on the low end. We have no public transportation option. My wife and I spend about $60 per week on gas. My truck gets 24 MPG and her car gets 28 Mpg. We work in different towns as many people do here so we cannot share a ride. So I am at $748 per month and that is without a car payment, food, and any personal car, clothing phone (there is no $10 phone option here), or any of the many other things that crop up such as medical bills, medicine, etc. This compares to your $410.

$100 per month for food is really not realistic. Bread and milk would take $16 to $20 out of that.

This is interesting, Thanks for the comparison.

Bill

[Charlie]

Deleted by me.

[woodturner]

$100 per month for food for 4?

Different families buy different kinds of food. Our food bill runs about $20 a week for the two of us, probably closer to $40 when the teenagers were at home. However, we shop carefully - use doubled coupons, buy on sale, etc. Full retail for the groceries we purchase is probably closer to the $100 figure.

[cgallery]

Clearly there are those who abuse the system, and the opportunities exist in some cases as you cite. However, in general, it is the market that sets compensation rates for essentially everyone

There is no such free market when it comes to executives and boards. Executives and boards are exclusive clubs.

Good point - but if the numbers are insignificant, why are people complaining about "excessive" executive salaries?

It is a fundamental fairness issue.

I guarantee you that an executive that positions a company for long-term growth while being able to maintain U.S.-based employment (possible through innovation) would be able to leave with a giant going-away package and the workers would cheer him or her.

On the flip side, when you all be eliminate R&D, ship production overseas, and then tell workers that they're going to have to suck-up a pay cut, you can't expect to exit compensation package as above w/o getting some heat.

Maybe the amount of experience I used in my example wasn't right. My point is that in many jobs, one eventually learns everything they need to know to do their job efficiently and correctly. People with experience beyond that point are not adding additional value, but still expect to be paid more. If the value of a competent, efficient carpenter's work is $20/hour, then a carpenter with 40 years experience should not expect to be paid more than the $20/hr the 20 year experience guy is making, IF they are doing the same work at the same skill level

I'm not sure a union carpenter w/ 40 years experience makes substantially more than a carpenter w/ 20 years experience.

I do - the bus drivers in Pittsburgh make something like $30/hour to start, one reason that the transit system in Pittsburgh is in such bad shape. People won't ride the bus because it is too expensive, but they have to keep fares high because union driver wages are excessively high. Unfortunately, unlike private business, they can't relocate to escape the union burden.

$30/hour sounds high. That would be $62k/year. I assume that figure includes benefits like health insurance, some sort of pension benefit, etc.

OK, but the people who borrowed the money that they could not afford to repay are the primary ones at fault. No question that the banks "gave them the rope to hang themselves with", but the people did the hanging themselves.

I can't cut banks that much slack.

Banks lend money that isn't theirs to lose. It is their responsibility to perform due diligence to verify that borrowers have a means to repay the loans.

Income verification isn't difficult. When I purchased my house about 15 years ago (I am self-employed), I had to provide three years of tax returns, current financials, bank statements, etc.

Why did some banks stop verifying income? Why did some of them encourage borrowers to falsify documents?

Saw an ad for a mortgage company offering 4% loans to "savers". Read the fine print - they are 5 year loans, so there is a balloon payment at the end. I suspect some people will be foolish enough to get those loans, then lose their house when the balloon payment comes due and they can't refinance. At the same time, the person who has relocated for a 3 year contract or otherwise knows they would not own that house for more than 5 years wouls save a lot of money with that loan. The bank can't know which category a given buyer fits, in general.

5-year notes w/ come-on rates have always been around. Nothing new there.

[Charlie]

Deleted by me.

[woodturner]

Woodturner, you don't talk like an average worker in this country thinks.

As far as Unions go, as I mentioned before, they insure workers rights and give them a respectable liveing wage.

How do you know I don't "talk like an average worker"? Have you talked to enough workers to know what an "average worker" thinks? Or is it just because I understand economics, exhibit some intelligence, and keep learning that leads to the conclusion that I am not a union worker or "average" worker?

I think what you mean is that I don't think like you do. From my experience, your viewpoints are in the minority. In my experience, people who "buy into" the union dogma don't want to think for themselves and investigate the truth. If you were to talk with most workers around here, you would find that most of them understand a bit about how business works. They also understand that the purpose of unions in today's market is primarily to transfer wealth from the worker to the union leadership. You complain about business executives making high salaries, but union leaders are far worse in that regard and far more corrupt. Why do you think organized crime is so involved in running most unions? It's a huge money maker for them.

Most workers are opposed to the unions' proposal to eliminate the secret ballot for union acceptance votes. They understand that the unions are trying to coerce them into letting the union in, so the union can line their pockets with the workers' wages while the workers suffer.

My first "real" job was at a plastics blow molding plant, pulling a lever to make milk bottles. It didn't take me long to realize I would go crazy if I did this for very long, so I made myself useful, asked questions, learned other jobs. I took some classes to learn new skills, worked my way up. Did a stint as a union carpenter, learned all about the bad points of unions. Went to work for another non-union shop, made much better wages and was treated much better. Learned that unions are the "lowest common denominator", and that a good company treats its workers better than if they had a union. People are the primary resource for a company, and a good worker is hard to replace. Unions require companies to keep the dead-wood, non-union shops keep the competent workers and work to keep them happy.

[woodturner]

There is no such free market when it comes to executives and boards. Executives and boards are exclusive clubs.

One could make the "exclusive club" argument about any job, really. Perhaps we should "agree to disagree" on this issue.

I guarantee you that an executive that positions a company for long-term growth while being able to maintain U.S.-based employment (possible through innovation) would be able to leave with a giant going-away package and the workers would cheer him or her.

Unfortunately, that has not happend in my experience. Many workers seem to complain about management no matter how productive management is.

I'm not sure a union carpenter w/ 40 years experience makes substantially more than a carpenter w/ 20 years experience.

Most union contracts, in my experience, have an annual cost of living adjustment. In addition, seniority requires that the more experienced carpenter gets the better and better-paying jobs, so the carpenter with more years of seniority makes more, regardless of his skill level or quality of work.

$30/hour sounds high. That would be $62k/year. I assume that figure includes benefits like health insurance, some sort of pension benefit, etc.

Yes, free health insurance, pension, etc. Top paid bus driver earned $130K last year - but that included overtime. Lowest paid made $45K. After checking the number, the $30/hour is burdened wage - not gross wage to the employee, but direct wage cost to the port authority. Sorry for the confusion, was going by what I read in the newspaper and hadn't checked it myself.

I can't cut banks that much slack.

Banks lend money that isn't theirs to lose. It is their responsibility to perform due diligence to verify that borrowers have a means to repay the loans.

From a business standpoint, they should verify borrowers means to repay. However, even if a bank wants to make weak loans, the borrower is still promising to repay and is ultimately responsible.

Why did some banks stop verifying income? Why did some of them encourage borrowers to falsify documents?

I have not heard of banks encouraging borrowers to falsify documents, though there were charges that mortgage brokers (essentially salespeople) were doing that.

The original purpose of no-doc loans was to allow those who could not demonstrate a consistent flow of income to obtain a loan. For example, the salesperson who might earn $100K this year and $5K next, or is paid in ways that do not illustrate a conventional monthly wage. I don't disagree that many borrowers took advantage of the system.

Borrowers also "played games" with down payments with the help of mortgage brokers, allowing borrowers to get a second mortgage for the down payment without the primary lender's approval or awareness.