Japan auto companies triple Mexican pay rather than move to US • Hacker News Board

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

#61

Post by iateanapple » Wed, Jul 01, 2020, 11:20 PM UTC

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…

> Because the US now gets no new jobs but the price for the cars will go up as the labour cost increases

Over the long term it will help drive automation which will lower the cost of cars and bring jobs to the countries with high levels of education and training.

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

#62

Post by HeadsUpHigh » Wed, Jul 01, 2020, 11:31 PM UTC

AnthonyMouse wrote: post #54

erikw wrote: post #6

Wow, this should at least provide for some very interesting natural sociological experiments. For context, I make less than this as a software developer in Chile, and still have no problems saving and living a comfortable lifestyle. This is going to significantly impact the lives of folks working in these factories, and it will be interesting to see how it will affect the individuals, their communities, and the quali…

That's assuming it lasts. When you already have a factory in Mexico and now you have to pay them $16/hour, it makes little sense to immediately move it back to the US just in order to save $0 by paying US workers $16/hour instead. But the next thing that happens is that it becomes more cost effective to automate, so you start considering that. Then you don't employ as many people, and they become skilled workers who…

The notion that car manufacturers from all the industries out there haven't already automated anything that's worth automating is something that I can't understand.

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

#63

Post by pwdisswordfish2 » Wed, Jul 01, 2020, 11:33 PM UTC

erikw wrote: post #6

Wow, this should at least provide for some very interesting natural sociological experiments. For context, I make less than this as a software developer in Chile, and still have no problems saving and living a comfortable lifestyle. This is going to significantly impact the lives of folks working in these factories, and it will be interesting to see how it will affect the individuals, their communities, and the quali…

Paying these factory workers what they are worth, regardless of where they are situated, has been a long time coming. This is great news.

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

#64

Post by wtallis » Wed, Jul 01, 2020, 11:34 PM UTC

HeadsUpHigh wrote: post #62

AnthonyMouse wrote: post #54

Earlier quoted context omitted.

That's assuming it lasts. When you already have a factory in Mexico and now you have to pay them $16/hour, it makes little sense to immediately move it back to the US just in order to save $0 by paying US workers $16/hour instead. But the next thing that happens is that it becomes more cost effective to automate, so you start considering that. Then you don't employ as many people, and they become skilled workers who…

The notion that car manufacturers from all the industries out there haven't already automated anything that's worth automating is something that I can't understand.

"Worth automating" isn't a simple one-time binary decision. Whether a given process is worth automating depends on the cost of automating it, and the labor costs that it will save, both of which change over time.

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

#65

Post by soundandlight » Wed, Jul 01, 2020, 11:35 PM UTC

rasz wrote: post #17

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.

Yes, US workers get to enjoy unemployment instead. Brilliant solution.

is a japanese company supposed to make decisions based on what is best for US workers?

with all the talk of america first, who cares how this impacts US workers?

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

#66

Post by thephyber » Wed, Jul 01, 2020, 11:38 PM UTC

AnthonyMouse wrote: post #57

NikkiA wrote: post #53

Earlier quoted context omitted.

The problem is that the $16/hr is an attempt to say 'not mexico!' without being discriminatory, so it doesn't say 'non-US workers at $16/hr' it says, essentially 'workers must be paid $16/hr or more', and the result is you'd have to pay US workers $16/hr to meet the same criteria, or else cars produced 100% in the US would fail to be legal.

That's assuming corporations are too dumb to figure out how to get their other costs counted as part of the $16/hour. For example, one of the major costs in the US is employer-subsidized health insurance, and employers subsidize it because it's tax advantaged. If they instead paid the employees more only to have the employees use the money to buy health insurance, the employees would pay more taxes. But they could st…

> And if that got people asking why they pay tax on their health insurance when they buy it themselves, or why health insurance costs so much in the US, all the better.

Or it might just lower the compensation package that autoworkers get and make other industries more attractive by comparison.

Employees that want to know can already figure out what their employer pays for. Health insurance tax subsidies have massively distorted the health insurance markets for decades and there is more access to this knowledge than ever before, but there have been no major efforts to reform this and sever health insurance from company sponsorship.

That said, I think that would be one of the best things we could do to lower health care costs quickly -- force all employers to shift their health insurance to the employees and increase their pay by the cash equivalent.

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

#67

Post by AnthonyMouse » Wed, Jul 01, 2020, 11:38 PM UTC

gaukes wrote: post #47

The big issue seems to be that companies don’t know how long this version of NAFTA will last. If Biden becomes the next president and signals support for keeping the agreement the way it is, there’s a good shot they’ll move to the USA.

He could also signal support for leaving it the way it is right now and create an immediate benefit to American workers, but he doesn't really have the political incentive to signal that right now even if that's what he intends to do. (And the political incentive only changes if voters respond negatively to that sort of political gamesmanship.)

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

#68

Post by thephyber » Wed, Jul 01, 2020, 11:42 PM UTC

mhb wrote: post #37

tom_mellior wrote: post #33

Earlier quoted context omitted.

> 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) What do new cars cost in the US? Does a price difference of $500 or $1000 really make someone say "all right, I'd rather do without a car"?

Yes. Of all the people considering buying new cars, there are some at the margin of buying or not buying.

That's not exactly true. There are always near-substitutes.

If you can't afford a new Honda sedan you can: (1) look towards a Hyundai sedan, (2) look towards financing the same car for another year (which is why 7 year financing plans are common in the USA in the last decade), or (3) look at a used car.

A $500 cost difference between this month and next month means you may consider spending another $500+ on maintenance to keep your existing car running longer, but if you get into a place where your current car is no longer usable, there are several options before you have to forgo having a car altogether.

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

#69

Post by neilparikh » Wed, Jul 01, 2020, 11:46 PM UTC

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…

What about those who live in the lower cost of living area, who now gain access to new jobs? Isn't it a wealth transfer to them as well? And these people usually aren't wealthy (usually less wealthy than those in the US), so calling it a wealth transfer from the masses to the wealth few isn't fully accurate.

And a dollar goes much further in Mexico than it does in the US, so even if the net labour spending by companies goes down, more people will be able to have jobs. I think it's reasonable to believe that 2 people with jobs is better than one person than with a job, even if the 2 are in Mexico, and the one is in the US.

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

#70

Post by csomar » Wed, Jul 01, 2020, 11:46 PM UTC

mhb wrote: post #37

tom_mellior wrote: post #33

Earlier quoted context omitted.

> 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) What do new cars cost in the US? Does a price difference of $500 or $1000 really make someone say "all right, I'd rather do without a car"?

Yes. Of all the people considering buying new cars, there are some at the margin of buying or not buying.

It might boost the sales of cheaper cars. Americans buy lots of big cars. Also Americans make use of mostly new cars. In places where cars are expensive, the roads look like an American's cars junkyard.