[Proculation]

That subject is becoming an obsession for you andy

[Canadian_Mind]

Too many maybe's in your argument about trade for my liking Proc. Saying if we import something that "maybe" someone else will take our exports doesn't make me feel comfortable.

Further, lets build on your jeans example then. You say that the model isn't big enough, so lets expand it.

Assume that 10 000 members of the population have an average total of 50 dollars per person for a pair of jeans, and that the Moroccan and Canadian jeans are 40 dollars and 50 dollars respectively. Also assume that contained within each price is the domestic (Canadian) shipping and taxes, and the remainder is the cost of the company to manufacture, including workers wages, payment of loans on capital, material costs, etc.

Under a model where a person buys up to the maximum of what they can spend on a single pair of jeans (an average of 50 dollars), 10 000 people will procure either 12 500 Moroccan jeans,or 1.25 per person (every 4th person had enough money for 2), or 10 000 Canadian jeans, (1 per person) depending on which were on the shelves. with the purchase of 12 500 Moroccan jeans, 125 000 dollars goes back into the Canadian economic engine (i.e. to other Canadians to spend on other things), while the remainder goes to Morocco. If they all bought Canadian jeans, thats 500 000 dollars going back into the Canadian economy to be spent on other things, and it is 10 less people draining the government coffers living off welfare or E.I.

Under a model where, despite the average purchasing power of the people, each person only bought 1 pair of jeans, 400 000 would be spent on Moroccan jeans, with 100 000 left over, or still the full 500 000 on Canadian jeans. This is a more beneficial train of thought as far as money going back to Canada goes, as of the 400 000 spent, only 300 000 goes to Morocco instead of 375 000. This puts a total of 200 000 back into some other Canadians pocket to spend on other things, like high tech gizmo's and gadgets. But it still isn't as beneficial as a total of 500 000 going back into the economy to be spent on that sorta thing.

Further, what would likely happen in the real world is a total mixture, where some people buy Canadian jeans, some buy Moroccan, and some choose to buy extra if they have the money, and some don't. Being as how this is a hypothetical situation, lets assume 1/3rd of the population buys Canadian, 1/3 buys only what they need, and 1/3 buys for the full amount they are willing to spend. Doing the math, thats still 225 000 going to Morocco, with the remaining 275 000 staying in Canada, out of 500 000 that was originally in Canada. Personally I'd rather keep it all in Canada.

Now, I'm all for international trade, despite my argument here. What I have concern with is that we are giving away money to countries who are either too poor to purchase what we produce, and will never be rich enough to buy what we produce when their living income is 50 cents an hour from their exports, or instead of buying product from us, will simply steal the tech to make it and then produce it for 50 cents an hour themselves, like China has developed a knack for.

In an increasingly interconnected world, you're right, it isn't good to be protectionist, and you are right, we should specialise. But the way I see it, part of this specialisation to high-tech jobs which require an abundant amount of education is leading to the problem the initial poster was making an issue of. We are specialising in the higher technology jobs without an equal balance of low-medium income jobs. So at the end of the day more and more people are either going into the high tech, high wage jobs, or they are working part time, minimum wage, with less and less meat in the middle.

I have no time for people who bitch about being poor without the willingness to work their way up, but I do recognise this disparity. And frankly, the way to fix it is to stop focusing on specialising in the highest wage, highest tech, highest qualification requirement sectors while exporting the lower wage, lower requirement jobs overseas, and develop some more medium class, can do with with highschool or minimal education manufacturing jobs. We can't all be rocket scientists, but we sure as hell better be working harder then the next guy if we want to become one. It's a dog-eat-dog world. Always has been, always will be. If you don't think you have to compete with someone else for a better position or a better job, you're delusional.

[desertdude]

A little off topic but just 3000 a month. Thats pretty crappy isn't it ? I dunno how it really is. I have a lot of friends in the US and been there for atleast a minimum of 10 years now. And they all say, life is just work work work and even with thats just sufficient to pay the bills with just crumbs left over as disposable income. And these are not people driving cabs and flipping burgers. All are degree holders some even Masters from US institutions

Many have relayed they have friends in Canada too and its the same deal there. I have only one friend I know in Canada he has a good job works for RIM and his life is good, got his own house, decent rides goes on vacation atleast 3 times a year etc etc.

I dunno this whole N.America/Candian dream starting to look like its crumbling ? I mean even if your working for 10 years and your average income is flat lining at 40k, thats not much of an incentive let alone a dream. We are making a little over that here and not to mention the currency here is more than three times lower !

[Proculation]

Well CM, like I said, I won't teach an international course here. You can try to create situations to prove that free trade is bad but it is simply not true. If you are interested in the subject, I suggest you to read about the concept of "comparative advantage" from David Ricardo. Here's a wiki link (and not a wiki "leak" ) : http://en.wikipedia.org/wiki/Comparative_advantage

[ASLplease]

Proculation Proculation:

ASLplease ASLplease:

Proc, I dont know what the correct economics101 answer is to that, but I think anytime we can produce a product here in Canada, we create jobs, GDP, and inovation.

I'm starting a business in the service industry, but if I can convert it to a manufacturing company, I would like that very much.

My answer would be a stretched comparison:

Let's say .....It's a very simplified example but the point is that it is not true that protecting jobs is beneficial for the whole population. While it's true some people loose jobs, the long term effect in the economy worths it.

I understand what you are saying, and based on your example, I would agree with you. However, I have some new somewhat unorthodox ways of thinking about this...

Do you understand what I mean when I say that the internet has democratized the mail order business? It means that you dont have to be a corporate giant like Sears to get into catalogue sales, and mail order sales. And you dont have to have the money to throw away at thousands of flyers into everyone's mail box.

Well, the internet is not the only technology that is revolutionizing commerce and industry.

We have rapid prototype process that makes it easy to develop a prototype( perhaps a medical device) in a fraction of the time and in a fraction of the cost that it used to take. Product development is not longer the domain of large companies with large budgets. I have personally developed a working medical sensor, electronics in 24hr( prototype circuit board) and the prototype enclosure in 3 days( which actually only took the company about 50minutesd......my total cost of materials and labour was under $1000.

Now you might say 'big deal' thats product development but what about manufacturing?

Did you know the cost of rapid prototyping machines have recently dropped from the $50,000-$100,000 range to the $5,000-$20,000 range? Some companies are using RP machines to fill their production needs, and the main benefits is: YOU DONT HAVE TO DEAL WITH THE WORLD OF CHINESE MANUFACTURING, plus you dont have to hold inventory, the product can often be made on-demand. 100lbs of plastic is not a cost item like the $10 per hour labourer that you cited. I think alot of traditional logic doesn't apply now, or wont apply in the future.

To rephrase, Canada moved out of the industrial age and passed the manufacturing and product off to other countries. Technology and our ability to invest in it, will bring some of that production back to us, because, frankly, cheap labour is not a be all, end all. We want flexability, we want minimized inventory, we want LEAN manufacturing brought up to an extreme level. We can do this better than someone thousands of miles away.

[ASLplease]

what do you think will happen to Dallorama(and their cheap chinese plastic products) when the average person owns a 3D printer than can product plastic parts in ABS,PP, and HDPE,LDPE?

Combine the open source movement, where we can share 3D designs freely on the internet, and it will be easy for anyone to create forks, dust pans, patio furniture, etc from a bulk container of plastic that they keep in their closet.

Far fetched? a little, but dont be surprise when you see it happening in the next 10 years.

[andyt]

Proculation Proculation:

That subject is becoming an obsession for you andy

Pardon me for posting on topic. And it addresses your claim that median wages have not stagnated in the last decades.

[andyt]

QBC QBC:

Yep, there were a lot of people who took a hit, especially in the technology industry, the answer, move on. You want to know why that young lad I talked about did so well at such a young age in today's economy? Cause he went into a trade. Everyone thought the computer industry was going to be the where all, end all. Now, if you actually want to make a decent living, it's best to be a blue collar worker in a trade. You want a $30+ per hour job in a short period of time, go into the trades and forget the technology sector. What everyone seemed to forget is that a computer isn't going to build a building, run pipe, drill for oil, wire your office, re & re a diesel engine out of a Kenworth or dig a hole with a backhoe. I know journeymen who are making "sick" money, well into the six figures a year, just have to be prepared to be outdoors at -40 or +30. I'm not so I sell the stuff those guys need every day to keep them working. If they're rockin and busy, then I am too. But after 25 years of working in the industrial/automotive/HD supply business, I guess I've paid my dues too.

Until the particular industry your exemplar is in takes a hit, and you'll be telling him to move on - but it will be a lot harder the next time out as he gets older.

I don't see what your one example of somebody doing well has to do with the topic of rising income inequality in Canada. And your guy certainly isn't in the top few percent who are hoovering up all the gains the economy has made over the last few decades.

[Newsbot]

Title: Rich getting richer, middle class stagnates
Category: Economics
Posted By: Curtman
Date: 2010-12-01 04:51:53
Canadian

[andyt]

from a similar article:

$1:

That earnings didn't budge for middle income earners was particularly surprising, given that the economy has generally expanded over the past quarter century, said one business professor.

It's not just that there's inequality growing. We knew that. But that the middle income earner is flat-lining over a long period of time � that's stunning to me, said Tony Frost, professor at the Richard Ivey School of Business at the University of Western Ontario, who'd previously figured the middle class was moving up....

On average, salaries haven't changed much over the past quarter century. Median earnings of Canadians who work full time edged to $41,401 in 2005 from $41,348 in 1980, measured in constant dollars.

[BartSimpson]

I'm really, really getting tired of the class warfare crap. How many times does it need to be said that what someone else earns has f*ck all to do with what anyone else does or does not earn?

We do not have zero sum economies. If you can't understand what that means then take the time to learn about it and stop spreading leftist ignorance.

Thank you.

[Brenda]

Why? Why is leftist ignorance worse than rightist ignorance?

[Public_Domain]

[Zipperfish]

Brenda Brenda:

Why? Why is leftist ignorance worse than rightist ignorance?

Zing!

[andyt]

Brenda Brenda:

Why? Why is leftist ignorance worse than rightist ignorance?

How is it leftist ignorance? The gains made by the economy since the 1980's have been hoovered up by the people at the top. The middle class is stagnant. So it is a 0 sum game for them. The middle class thought it was doing OK because it had easy credit, cheap crap from China and rising house prices. The easy credit is going, the house prices are starting to fall, and that cheap crap from China turns out to have taken a lot of the middle class jobs away from us.

Funny how it's considered class war to point out inequality, but not to create it in the first place.