PeakTrader.com

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PeakTrader said...

Labor is in a huge bargaining disadvantage when the choice is being exploited or starving.

The hidden downside of Santa's little helpers
The Irish Times
December 21, 2002

"An investigation into the price of a Mattel Barbie doll, half of which is made in China, found that of the $10 retail price, $8 goes to transportation, marketing, retailing, wholesale and profit for Mattel.

Of the remaining $2, $1 is shared by the management and transportation in Hong Kong, and 65 cents is shared by the raw materials from Taiwan, Japan, the US and Saudi Arabia. The remaining 35 cents is earned by producers in China for providing factory sites, labour and electricity.

Toy factories hire the least-skilled workers...Sixty per cent are young women between 17 and 23 years old who live cramped in company dormitories, 15 to a room, earning just 30 cents an hour and often inhaling spray paints, glue fumes and toxic dust."

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Rather than "neglect," we can all do something about it, e.g. doubling the $0.25 labor cost share and raise the price a quarter, to $10.25, or reduce management's $1 share by a quarter and keep the price at $10, etc.

How many consumers are willing to pay $0.02 extra for dolphin-safe tuna?

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Of course, we can also cut a sales tax, e.g. from 8% (or $0.80) to 5.5% (or $0.55).

An 8% sales tax on $10.25 is $0.82 for a total of $11.07.

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Ron, I already know you don't believe in labor standards, including low standards, and labor is expendable, particularly using the most ignorant and unfortunate in society.

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Ron, ideally, I'd like to see firms come up with their own solutions.

Unfortunately, in reality, there are too many people like you (as we see in this comments section), who don't even recognize a problem.

In a competitive market without standards, when one firm cuts corners, others have to cut corners to stay competitive.

So, you may end up eating a hot dog with a $0.25 worker's finger in it.

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Methinks, I guess, your idea of hard work is doing boring and repetitive work, until you develop a severe case of carpal tunnel syndrome and then replaced with a new worker.

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Liberal_slayer says: "Free markets results in the the most efficient producer winning the most business and this does not mean cutting corners and delivering an inferior product it's the exact opposite."

And, you'll buy the lowest priced hot dog and believe it's just as good as the slightly higher priced hot dog.

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Chart:

http://4.bp.blogspot.com/-yYSsGrsjmEg/T9ScuKg7GWI/AAAAAAAASpU/TYQMvpiWa9k/s1600/college.jpg

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PeakTrader said...

So, what year did this so called higher education bubble start (1982)? And is it a bubble if it doesn't burst?

The housing bubble started around 1995, although the chart seems to show around 2003.

If it slows to grow the same rate as the CPI, did a higher education bubble really burst?

How much does it need to decline to declare it a bubble?

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Jon says: "College education, just like home ownership, is not for everybody."

Spoken like a true elitist. I suppose decades ago a high school diploma, just like owning a car, wasn't for everybody too.

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Ryan says: "Does anyone know the date and exact bills/policies that have created this beast?"

Ryan, maybe it started when the U.S. became a net debtor, in the early '80s, and trade deficits became increasingly larger.

Ultimately, more money flowed to the federal government and was available for education, health care, the military etc., rather than used for tax reductions.

If the education bubble bursts, it may be because the Administration spent and squandered an additional $5 trillion in four years, while the massive over-spending and over-squandering continues to the point when severe austerity measures will be the only choice.

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KMG says: "Passing a 4-course sequence with a high grade from MITx is sufficient qualification for entry-level jobs that otherwise require a bachelor's degree."

I think, it'll be the opposite. More and harder classes will be needed to compete. Also, more above average schools will be top schools, like MIT.

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