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Japan auto companies triple Mexican pay rather than move to US

asia.nikkei.com

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Re: Japan auto companies triple Mexican pay rather than move to US

#21

Post by microcolonel »

627467 wrote: post #19

> The US-Mexico-Canada Agreement requires 40% or more of parts for each passenger vehicle be manufactured by workers who are paid at least $16 per hour... On face value this seems to be a very progressive condition.

It's kinda two ways. It raises the cost of automobiles (that's why analyses project a reduction in automobile sales by a bit over a million vehicles per year), reduces labour demand, and erases more low-skilled work; but those who do get the jobs may be paid more than otherwise, until the numbers expire.

Re: Japan auto companies triple Mexican pay rather than move to US

#22

Post by 8ytecoder »

jonahhorowitz wrote: post #18

> The center also said U.S. car sales will drop by up to 1.3 million units annually due to the Trump administration's trade policy This is incredibly good news, if true. We need to reduce the number of cars in the US if we are going to have any chance of confronting climate change.

Not without a change in the underlying dynamics including infrastructure. Used car sales and prices have dropped drastically and so people would just keep their old inefficient cars longer than ever before.

Remote working if it sticks might contribute more to car reduction.

Re: Japan auto companies triple Mexican pay rather than move to US

#23

Post by ixvvqktiwl »

SpicyLemonZest wrote: post #13
gurumeditations wrote: post #8

Earlier quoted context omitted.

Exporting working class jobs from a higher cost of living area to a lower cost of living area is on the whole a loss for the vast majority of people who are not wealthy and a gain for those who are wealthy. It’s a blatant wealth transfer from the masses to the wealthy few. So Americans get cheaper cars but no way to pay for them, and wealthy Americans get record levels of wealth. Globalism is a sham and it’s surprisi…

What do you think of the argument that foreign imports are just another kind of technology, allowing us to produce things cheaper with less labor? Surely it wouldn't be helpful for us to ban industrial bread machines so that more Americans have jobs as bakers.

Fun fact: in some states they passed laws that make it illegal to pump your own gas just so gas station attendants wouldn't lose their jobs.

Re: Japan auto companies triple Mexican pay rather than move to US

#24

Post by colechristensen »

Barrin92 wrote: post #16
SpicyLemonZest wrote: post #3

The article is making it sound like some kind of backfire, and I'm not really sure why. It's gotta be good in the long run for US auto workers if their competitors' wages triple.

Because the US now gets no new jobs but the price for the cars will go up as the labour cost increases, proving the very trivial point that tariffs function as a tax on domestic consumers. If the goal of the policy was to redistribute money from Japanese carmakers and American consumers to Mexican factory workers they've done a great job, very altruistic. Also it's quite hilarious how quickly the reputation of the US…

Raising your neighbor's income means they will import more from you, it's not backfiring, it's working as intended.

Re: Japan auto companies triple Mexican pay rather than move to US

#25

Post by nindalf »

Barrin92 wrote: post #16
SpicyLemonZest wrote: post #3

The article is making it sound like some kind of backfire, and I'm not really sure why. It's gotta be good in the long run for US auto workers if their competitors' wages triple.

Because the US now gets no new jobs but the price for the cars will go up as the labour cost increases, proving the very trivial point that tariffs function as a tax on domestic consumers. If the goal of the policy was to redistribute money from Japanese carmakers and American consumers to Mexican factory workers they've done a great job, very altruistic. Also it's quite hilarious how quickly the reputation of the US…

The quoted Japanese executive is betting that the next administration will probably do it's best to undo these actions that Trump is taking. That's the cost of Trump (and others) acting unilaterally rather than building consensus. If he had chosen to compromise on other things with his opponents and gotten them on board with this, this trade policy would have been taken seriously and had its intended effect. Instead Trump is left with nothing.

Although it's in vogue to hate on Biden for being old, out of touch, not progressive enough etc., this speaks to the effectiveness of his core political strategy - reaching across the aisle and building consensus. The system might not usually reward such behaviour, but it often leads to solutions that last.

Re: Japan auto companies triple Mexican pay rather than move to US

#26

Post by hourislate »

ixvvqktiwl wrote: post #2

Sounds like a boon for Mexico, good for them. I guess it's kind of satisfying to see these policies have the opposite of the intended effect.

>it's kind of satisfying to see these policies have the opposite of the intended effect

This policy is actually doing exactly what it is suppose to. It is preventing more auto manufacturers from moving operations to Mexico or Canada where labor and Exchange rates are more favorable.

GM, FORD, Toyota, Honda, Chrysler all had their eye on moving more production to Mexico, this new agreement probably stops that.

I don't think anyone thought an auto manufacturer in Mexico would pull up shop and move to the US, that wouldn't make sense.

Re: Japan auto companies triple Mexican pay rather than move to US

#27

Post by hourislate »

samfisher83 wrote: post #4
ixvvqktiwl wrote: post #2

Sounds like a boon for Mexico, good for them. I guess it's kind of satisfying to see these policies have the opposite of the intended effect.

Even triple the pay they are making $16 dollars/hour which is less than whatever an american auto worker is going to make.

I don't know about that. Being an autoworker no longer pays that well from what I understand. There are tiered levels of pay depending on how long ago you were hired, etc. It's not like the old days where you earned what the guy with 30 years of seniority earned per hour. Even the benefits are different with some folks who have been around for a couple of decades enjoy a different level of coverage or vacation, etc.

Re: Japan auto companies triple Mexican pay rather than move to US

#28

Post by onion2k »

jonahhorowitz wrote: post #18

> The center also said U.S. car sales will drop by up to 1.3 million units annually due to the Trump administration's trade policy This is incredibly good news, if true. We need to reduce the number of cars in the US if we are going to have any chance of confronting climate change.

Only if there's a corresponding drop in the number of cars in use. It could be that people keep their old, inefficient, polluting cars for on the road for longer rather than replacing it. That would be bad for the environment.

Re: Japan auto companies triple Mexican pay rather than move to US

#29

Post by ksk »

gurumeditations wrote: post #8
masukomi wrote: post #7

Earlier quoted context omitted.

Mexican workers get a dramatic quality of life improvement. US workers don't have to work for less than market value / cost of living prices. Tens of thousands of US people continue to get cheap cars. Sounds like a great deal.

Exporting working class jobs from a higher cost of living area to a lower cost of living area is on the whole a loss for the vast majority of people who are not wealthy and a gain for those who are wealthy. It’s a blatant wealth transfer from the masses to the wealthy few. So Americans get cheaper cars but no way to pay for them, and wealthy Americans get record levels of wealth. Globalism is a sham and it’s surprisi…

Well, nobody is "owed" a job. Markets transform and respond to pressures. When you operate in a saturated market like the US the only line item on the balance sheet that is easy to tackle is labor costs, not revenue or profit. Your customers aren't going to buy products from you because you gave a raise to your janitor instead of replacing them with a roomba (relax, its a joke :P). The China/Walmart economy is here to stay. For retail companies, the only growth markets that you can sell into are the developing world markets around the world. These are also the companies your retirement funds are invested in, unless you don't want your savings to grow. If every country turned protectionist, it will trigger a massive economic depression. I suppose we'd come out of it eventually, if global warming doesn't kill us first :)
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