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Tesla's New Factory Project Imported Foreign Laborers (mercurynews.com)
An anonymous reader writes: "Overseas contractors are shipping workers from impoverished countries to American factories, where they work long hours for low wages, in apparent violation of visa and labor laws," reports the Bay Area Newsgroup. For example, "About 140 workers from Eastern Europe, mostly from Croatia and Slovenia, built a new paint shop at Tesla's Fremont plant, a project vital to the flagship Silicon Valley automaker's plans to ramp up production of its highly anticipated Model 3 sedan..."
This "hidden workforce" arrives on B1/B2 visas, which federal authorities acknowledge are subject to "widespread abuse" in Silicon Valley. The newspaper reviewed visa, court, and payroll documents, and conducted dozens of interviews, identifying Tesla's small third-party Slovenian subcontractor ISM Vuzem as the company who ultimately recruited many of the workers.
While most of the imported workers were happy with their wages, one worker was earning the equivalent of $5 an hour while his American counterpart was earning as much as $52, and they worked 10-hour days -- without overtime -- up to seven days a week.
This "hidden workforce" arrives on B1/B2 visas, which federal authorities acknowledge are subject to "widespread abuse" in Silicon Valley. The newspaper reviewed visa, court, and payroll documents, and conducted dozens of interviews, identifying Tesla's small third-party Slovenian subcontractor ISM Vuzem as the company who ultimately recruited many of the workers.
While most of the imported workers were happy with their wages, one worker was earning the equivalent of $5 an hour while his American counterpart was earning as much as $52, and they worked 10-hour days -- without overtime -- up to seven days a week.
It's more of a shock that anyone is still paid well considering hype literal billions of cheap labor outside America.
Sure, we could fix the visa problem, but if companies are forced to use expensive (globally speaking) labor, they'll just leave the country.
I suggest everyone start saving their money, because the gravy train is ending.
This "hidden workforce" arrives on B1/B2 visas, which federal authorities acknowledge are subject to "widespread abuse" in Silicon Valley
If everyone realises that wide spread abuse is going on, then why the hell do they allow the practice to continue? I am not generally one who bashes big business and the tech giants, but give me a break. Create a points system for bringing new people in with the right skills and education, and make sure they are paid a similar wage, so that local wages do not reduce rapidly.
http://www.latimes.com/business/la-fi-hy-musk-subsidies-20150531-story.html#page=1
"and they worked 10-hour days -- without overtime -- up to seven days a week."
I have seen people do seven days in a row but then they got off several days in a row if you do a two week pay period. So you work 7 days at 10 hours and then have 7 days off. Some people like that.
So are they breaking labor laws or just doing 7 10s and 7 off?
See my blog http://ilovecookes.blogspot.com/ for light hearted technical information.
Just because we renamed slavery to minimum wage doesn't mean anything has changed. The American dream is to convince someone to work for slave wages while you rake in profits from their work.
Aren't visas like this for jobs skills that are lacking in the US? This was a construction job. thousands of people could have been imported from Detroit, Buffalo, etc.
...People produce stuff they want to sell, but don't want people to earn enough to be able to buy it.....
Tesla and Musk are Heros, must be a hit job from big oil!!!1
and he is running for president, and a great man. So why shouldn't elon be allowed either? We should focus on killing all criminals and stopping the crime from pouring into our country. Elon at least builds cars in America, and not in asia or africa (Asia's asia).
The detractors, that is. "First it was the batteries will run out!", "it can't do the job, "it's never going to fly", then it was "lol they failed at landing, AGAIN!", and now it's allegations about "slave-labour". Obviously I don't know the truth about this story, but it reeks of another hatchet-job. Sounds like someone is getting desperate.
Ever eat at a grocery store? Guess what? You are eating products that were worked on by imported labor and I bet you aren't complaining about the lower prices. This is nothing unusual and I don't think less of Tesla for trying to get a better deal. As long as Tesla followed whatever regulations are in place for bringing in their workforce and paying them, I don't really see a problem here. If they broke some laws then appropriate and proportional punishment should follow. If the laws are allowing something they shouldn't then the answer is to change the laws. See some of the H1B abuse if you need an example of laws that are being abused.
While most of the imported workers were happy with their wages, one worker was earning the equivalent of $5 an hour while his American counterpart was earning as much as $52, and they worked 10-hour days -- without overtime -- up to seven days a week.
If someone is willing to pay the American worker $52/hour (roughly $100K/year with 8 hour work day) and gets good value for their money then where is the problem? On the other hand I cannot imagine paying $52/hour for that sort of work unless I had no alternative. Heck, my little company doesn't pay skilled trades $52/hour and we're a pimple on a gnat's ass in size compared with Tesla. I respect skilled trades immensely but Tesla would be nuts to pay that sort of labor rate if they could get the same work done for less. Just because this hypothetical American skilled trade worker is asking $52/hour doesn't mean Tesla or anybody else should be prohibited from looking for a better deal. Would you pay 10X the cost for work on your house solely because the worker is a US citizen and not because they do any better work? If you say yes I'm going to call you a liar.
Every time some stupid cunt progressive millionaire opens their pie hole about changing America, you should note that it will always be for the worse.
If this is true then I have news for Elon. He's not doing fellow Americans any favors. What goes around, comes around Elon.
So, cheap labor was supplied by a subcontractor who worked for the company that Tesla hired to build an add-on to its existing facility?
How is this news worthy?
If Tesla were deliberately skirting US labor laws, that would be news worthy. If they chose to contract with well-known abusive employers overseas, that might be important to potential buyers.
But outside of defense and aerospace, how many industries routinely vet every subcontractor they hire? No one. At best, they might check the primary contractor to make sure they don't have a sketchy history. But not everyone he might hire.
Because that is a ton of work. It takes lots of time and money to investigate, especially since you'll need to check every bidder before you award the contract.
If you personally don't like it, support laws that prohibit foreign workers or make disclosure of foreign labor required for all primary contractors.
A company cannot be expected to investigate the labor practices of every company it might contract. That is just insane, and that is why this article is worthless trash.
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According to the latest ruleset, this post should be modded as Vorpal Flamebait +5.
A subcontractor, not Tesla. Microsoft subcontractor made Windows XP sounds using a stolen copy of Sound Forge, and the the evidence got baked into Windows XP. I did non hear much outrage about it from the press
If I need a job done, I look for whomever can do it on time, correctly, and inexpensively; the latter generally being the least important. Upon settling upon a particular vendor, I may do some vetting, but exactly how much am I supposed to do? Particularly knowing there are already laws and enforcement bureaus in place to handle transgressions, I'm not likely to conduct my own deep investigation.
So Tesla hires Eisenmann to do a job, build a paint shop. That company, and at least one (ISM Vuzem), possibly more, position themselves to maximize the profit from the money Tesla is paying by hiring skilled workers made cheap through exploiting the visa system, and run afoul of the law. How much of that blame are we supposed to lay at Tesla's feet?
The the article mentions Tesla's name 39 times, including the title, 14 times in the first 16 paragraphs. Eisenmann is mentioned twice in the same space, and only in paragraphs 14 and 15 (13 overall). Vuzem is only mentioned once in that opening space (22 overall).
It looks like the Mercury News is intentionally bashing Tesla to grab headlines, particularly by front-loading the name. They could have just as easily reported that there is a huge problem in the United States with contractors hiring overseas workers under false pretenses, and Tesla was the latest victim.
I'm sorry, but your opinion seems to be wrong.
It's more of a shock that anyone is still paid well considering hype literal billions of cheap labor outside America.
Try trillions of cheap labor. We have this deluded notion that we can have both the highest labor costs in the world AND keep labor intensive work. That does not and cannot work over the long term. China has 4 people for every 1 in the US. That means all other things being equal, labor costs in China will be 1/4 that in the US on average. There is no reason China cannot have productivity equal to that of the US. Therefore it is illogical to continue to believe that the US can continue to have exceptionally high wages in the face of competition with a clear labor cost advantage.
Sure, we could fix the visa problem, but if companies are forced to use expensive (globally speaking) labor, they'll just leave the country.
Some will, some won't. If they get good value for money they'll stay. If the work can be done comparably well for less elsewhere then they'll leave. Honestly we should expect US wages to experience some form of reversion to the mean. If you want to have the highest wages in the world you should expect labor intensive work to go elsewhere. That's just Economics 101.
I suggest everyone start saving their money, because the gravy train is ending.
If the US wants to stay ahead then we will need to stop spending money on stupid things (wars, oversized military, interest on national debt) and start spending money on R&D, education, infrastructure and an efficient health care system. You know, things that will actually improve quality of life and incomes and productivity. Failure to do this will eventually result in the US experiencing a reversion to the mean in GDP per capita.
If you replace "Tesla" with the actual company's name that hired these workers, and no one would care. Everyone is up in arms because of the name "Tesla", and no one would care if the article didn't mention them.
Sure looks a hell of a lot like the pre-Haymarket 19th Century Economy.
As much as I'm not a Trump fan, one of the things he's right about is that visa abuse is rampant. The original intent of the H-1B program is good; our company is a multinational and we bring lots of very smart, talented employees to the US to work with us. The huge loophole is the body shops and IT service providers who just use it as a relief valve to earn more margin on IT outsourcing deals. The thing I don't like seeing is companies who just decide they don't want a 25-year veteran employee anymore, call up Tata or Infosys, and have a less-skilled replacement shipped in next week (that the veteran has to train to get his severance package.) I don't know how many more stories like that will have to be written before people realize this is not a good way to conduct business.
The problem with the visa abuse, the trade deals, etc. is that to make a dent, every company across the board needs to be affected equally and immediately. The only way to do that is to take away the visa programs for everybody, or unilaterally cancel a trade deal overnight. This would be the only way to ensure no company still had an advantage. One of the reasons companies offshore IT or import cheap H-1B workers from a body shop is because their competitors are doing it. If they don't, their IT costs are higher even if the quality is better. If, all at once, every company suddenly lost access to the loopholes they were exploiting, or that their "IT service partner" were exploiting, the incentive to offshore because everyone else is doing it would disappear.
Americans today are horrendous at efficiency because their government made them absolutely inefficient.
Don't let a little thing like actual facts contradict your ideological rant. Sadly for your argument the US is among the most efficient and productive workforces in the world. (#3 in GDP per capita behind only Norway and Luxembourg) The notion that the US government has made the US hugely inefficient is not supported by any actual evidence.
As to what makes a person efficient - capital savings and investment into labour saving devices.
Which as it turns out the US economy is impressively good at. What do you think the computer you are typing this on is but a labor saving device? The US leads the world in utilization of many forms of automation.
The LA Times attacks on Tesla and Musk are nothing but a poorly researched hatchet job, probably funded by the fossil fuel industry in an attempt to discredit Tesla and distract the media from their own failings (such as the fact that the fossil fuel industry receives $5 trillion in subsidies a year).
http://electrek.co/2016/05/12/...
The US has nowhere near the highest labor costs in the world. We're not even in the top 10.
If you actually believe that labor costs in the US aren't among the highest in the world then you haven't actually bothered to look at the data. Depending on how you measure it the labor costs in the US are mostly somewhere between 5th and 20th per capita. Yes there are some countries with higher labor costs but not very many of them. The fact that we don't have THE highest labor costs per capita is not important. What is important is that our labor costs are WELL above the mean globally. If you want to know why manufacturing companies have moved to China (and elsewhere) for labor intensive manufacturing, labor costs are by far the biggest factor. There are a lot of products that simply cannot be made in the US for the hourly wages that a US based manufacturer would have to pay.
I used to do global sourcing for a living. I've traveled all over Eastern Asia, Southeast Asia, and Central America for manufacturing companies. I work in manufacturing and I buy products and commodities from around the world. The US without question has some of the highest labor rates in the world. It's not even a debate. If you think otherwise you don't know what you are talking about.
Because not all of us are busy sucking off the kock Bros like you do. Seriously, dicks like you need to go spend your time on a trump site rather than a mostly tech site.
No mod points, so +1.
I comment occasionally so that I can mod others -1 overrated or -1 offtopic.
While most of the imported workers were happy with their wages, one worker was earning the equivalent of $5 an hour while his American counterpart was earning as much as $52, and they worked 10-hour days -- without overtime -- up to seven days a week.
I'm sure that importing these new workers is just a temporary measure. Tesla's long-term plan is to lower the cost of American workers by refurbishing and reusing them after burnout. However, they've only been able to recover three of them so far. Hopefully the numbers will improve after they figure out how to soften some of the workers' hard landings.
If everyone realises that wide spread abuse is going on, then why the hell do they allow the practice to continue?
It is very hard to create programs and policies to achieve a difficult goal and at the same time prevent unintended consequences and abuse. Abuse of immigration policies is probably inevitable, but so is the downfall of any nation which closes itself off to the world and/or tries to create one-sided trade policies. So one thing everyone should agree on is immigration requires a delicate and difficult balancing act of many concerns.
Create a points system for bringing new people in with the right skills and education, and make sure they are paid a similar wage, so that local wages do not reduce rapidly.
That isn't even the type of visa this article is talking about. B1 visas are meant for business professionals to enter the country for business meetings, conducting research, conducting negotiations, etc. It is not meant for gainfull employment. But my guess is it is very hard to write rules and enforce rules which prevent abuse. In this case "consultants" are traveling to the US for a few months and then leaving. You cannot replace full time positions with these guest workers, but you can replace temporary workers (both skilled and unskilled).
There probably is a way to reduce abuse, and lobbyists are probably trying to prevent helpful reforms, but even without these problems I doubt it would be easy to stop the abuse of these visas all together.
-- All that is necessary for the triumph of evil is that good men do nothing. -- Edmund Burke
Vote trump to fix this and the VP's and CEO should be doing hard time for stuff like there they can work for $0.13 /hr in prison.
http://www.differencebetween.com/difference-between-h1-and-b1-visa/
H-1B3 – Fashion models of distinguished merit and ability.
H-1C is for Registered nurses
B1 visa holder must possess a truly acceptable request to visit the US for the maximum stay of 3 months with limited privileges.
Productivity has increased 72% in last 15 years but real wages only 8%.
Guests who benefited?
I can't be bothered to verify your numbers but taking them as a given the answer is we all benefited. Maybe not equitably but that huge increase in productivity is a big part of the reason why many people in the US still have a job at all. We've had among the highest labor costs in the world for well over 40 years now. With countries like China growing fast ANY growth in real wages is good news. Maybe not as good as we'd like but when you already are at the top of the wages per capita chart it's kind of unrealistic to presume that productivity growth and wage growth will remain highly correlated.
I'm not arguing that wage inequality isn't a big problem but that's a separate discussion. I'm merely addressing the fact that they US work force is among the most productive in the world and also among the highest paid in the world. The US economy is larger than that of India and China combined despite having something like 1/8 of the population. Do you really think that is a state of affairs that will last forever without any impact on wage growth?
The captain is responsible for the conduct of his crew. It's basic delegation: you are responsible for the conduct of those you've delegated the job to. You can't have your cake and eat it too. If you delegate a job through subcontracting, you accept the consequences if that contractor breaks your trust.
If you failed to vet them, that's on you. You cheated, and the consequences have caught up with you. Maybe next time you won't take a chance on a shady deal.
Tesla did not imported the workers, it was the sub-sub contractor. Shameful slashdot title, I hope this is not the default.
Get my e-mail after a captcha test in: http://tinymailt
Let's not let this pass since we all love Testa. Even though Tesla is not the party directly responsible for these contracted workers, they should have better practices to vet the companies they work with.
There is a path to legally bringing workers from your overseas offices, It is an L1 Visa, https://en.wikipedia.org/wiki/... , B visas specifically are not allowed to work, but can come here to apply for jobs (which then require moving to a proper work permit), or build their own company (very easy to get permission for if you can show you'll invest a sizable amount of money here). Anyways, if you really want, getting workers legally is easy, especially skilled ones.
Foxconn is a subcontractor of Apple yet how many times do we see posts that claim that Apple runs "slave labor camps" modded up? Here Lord Elon is defended for the same business practices... on US soil, nonetheless.
The hypocrisy is amazing.
Now we know why Elon wants the government to subsidize his Hyperloop vision - it's an efficient way to import thousands of low-paid foreign workers who can't afford to buy Teslas!
Keep telling yourself that he's making the world a better place, though, you fucking simps.
Didn't Willy Wonka employ low-wage immigrant labor from Balkan countries? It seems the Chocolate Factory tried to organize and Mr. Wonka fired them all and brought in replacement workers?
When real wages increase, wage earners benefit. That part is simple.
Now let's look at productivity.
Assume one worker with a basket can harvest $150 of berries per day.
One worker with a $400,000 harvester machine can harvest $1,500 of berries per day.
Productivity (berries per worker) increased 1000%!!!
Who benefits from the increased productivity? Quite possibly nobody, because there's the little matter of the mortgage payments on the $400,000 piece of equipment that's only used during harvest season.
I agree that American companies abuse the H1 visa program and that it undercuts American workers. But the implication in the article that Slovenia is an "impoverished" country is totally wrong. Slovenians are in general well educated and have a European standard of living. I suspect Tesla wants Slovenian workers because they know what they are doing. Maybe these particular workers are being abused... I don't know. But don't pity Slovenia.
"He took a duck in the face at 250 knots." -- William Gibson, Pattern Recognition
Elon Musk claims he had no idea that this was happening and that he would get to the bottom of it. That is a lie - how could you not know if you are basically the head of a Fortune 500 company. He had a hand in this. He was just caught red handed.
Would it surprise you that I am hourly and don't get paid overtime? Some loophole in the Fair Labor Standards Act let's my employer get away with this. I routinely work 50 hours a week, all at straight time.
What? Impoverished?
Are you certifiably crazy?
You do realize Croatia and Slovenia are countries in the EU and while both suffered from illegal US bombardment in the late 90s, the have recovered very well. They do have a good number of electrical engineers, getting out from state paid colleges. If those are coming here, then ok. On B visas they can come on a business trip up to 3 months as a consultant and are actually paid by their home company as they are being commanded by their company to provide their services in a different location for a limited time. The company picks up the tab for the hotel, food and transportation. That is perfectly legal, even if cheap, but that is why it is very time limited.
Now, they also suffer from a plague called gipsies - a lying, raping, stealing and killing offspring of people from the indian subcontinent. Some of those people are impoverished, living in cardboard ghettos, but even those are a minority. Most of them were well integrated during the communist times, and aren't actually that impoverished, they have construction experience, but it is interesting how those can qualify for a B visa, as they don't have enough savings, or education, or guarantees that they will come back. Look for the staff at the embassies that suddenly bough new top of the line german cars, got mistresses, or send their kids to ivy league colleges.
Trump uses this kind of abuse at his hotels. He isn't going to change anything.
This paradox will increase with the soon-to-come full automation of the manufacturing sector, and half of the service sector.
Worrying about cheap foreign workers is so 20th century.
You should be worrying about even cheaper A.I. and robots, made in the U.S. of A.
Automation of work will reduce the low-wage advantages of poor countries.
But it will not get you your fairly routine job back. Fuggedaboudit.
Where are we going and why are we in a handbasket?
Keep in mind, Croatia and Slovenia are both EU members, with free movement within the EU. Those are the kind of "civilized countries" that people like Sanders point to as a model for the US.
I know cases of three people with identical papers applying for B1, one getting it and the other two getting, "not eligible to apply for ANY visa to USA for 2 years" stamped on their passports. It was as if the first guy is up for stealing a policeman's helmet on the Oxford boat race night. Gets off with a five pound fine. The next guy up for the same thing. The magistrate notices a sudden spurt in theft of police helmets and sentences Agustus Fink-Nottle to two weeks in the slammer.
If Tesla has bought the paint shop from a shell company in Eastern Europe, and if this is part of erection and delivery contract, it would be covered under B1 visa rules.
I think it worked in large scale because they were from Eastern Europe. Embassies in India, China, Africa etc would have smelled a rat miles away.
sed -e 's/Chuck Norris/Rajnikant/g' joke > fact
Only an American could have a problem with earning less than someone else. The rest of the world is happy to earn what they wanted to earn.
Note that Easten Europe is part of Europe, so when TTIP is activated in a few weeks, these people are officially in direct competition with US workers (and I will be too).
Tesla hired a German contractor, Eisenmann, to build a paint shop.
Eisenmann then hired ISM Vuzem, a Slovenian company, who then hired the said Slovenian electrician.
Who then had an accident, ended up in a hospital and who is now suing all three for following reasons:
From TFA:
Eisenmann USA wrote letters to the U.S. Embassy on behalf of Lesnik and as many as 200 foreign workers stating they would supervise employees at a U.S. auto plant.
Most of the Vuzem workers were nonsupervisory laborers and tradesmen.
Tesla issued company security badges to the foreign workers, recorded their time on site and shared responsibility for setting safety conditions.
Vuzem required foreign employees to regularly work between 60 and 70 hours a week.
Vuzem paid Lesnik an average of 800 euros per month, or about $900, for a rate of less than $5 per hour. Lesnik was promised an equal amount when he returned home, but the company never paid the balance.
The companies violated wage and employment laws and benefitted from the cheap labor of foreign workers.
Workers were promised $12.70 an hour based on a standard workweek.
The suit estimates they are due $2.6 million in overtime and premium pay.
All in all, Tesla is the least responsible party in this case.
In fact, they could probably sue Eisenmann USA for failing to meet their requirements "to hire and pay their workers appropriately", as they claim is their practice.
That is, unless it turns out they were simply turning a blind eye and just looking at the bottom line.
Like everyone else.
More from TFA:
Vuzem provides teams of Eastern European workers to build manufacturing plants in Europe and the U.S. It counts Mercedes-Benz, Toyota, Volkswagen, Ford and Saab as clients, according to its website.
In 2003, an Alabama sheet metal workers union protested Eisenmann hiring a contractor that brought in Polish workers to complete a Mercedes-Benz paint shop.
The company was cleared of any wrongdoing by Immigration and Customs Enforcement.
Officials with the agency declined to answer questions about the investigation and denied a Freedom of Information Act request for materials related to the probe.
Eisenmann declined to respond to written questions about the case.
Ten years later, ICE fined Infosys a record $34 million for circumventing H-1B and B1 regulations and unlawfully using visa holders for skilled work around the country, among other offenses, according to a court settlement.
This month, Bitmicro Networks Inc. of Fremont was fined about $168,000 for giving substandard wages to workers brought in from the Philippines.
It's not a case of Tesla or emigrants or cheap labor.
It's just another example of corporations in the US being subsidized at the expense of US citizens.
Everyone does it, everyone pretends it is not an issue... until they get sued.
Mit der Dummheit kämpfen Götter selbst vergebens
the upper level contractors / main comp need to be held as well.
Some places even try to hide under 1099's like lift / uber to get out of stuff.
I'm guessing they meant Hostess? Which went bankrupt a few years ago do to Union shenanigans.
Read this and get back to me on that http://www.theatlantic.com/bus...
A multitude of problems took down Hostess, bad union contracts, management not adapting to the changing American diet, VC team that took Hostess private saddled it with debt during Chapter 11 resulting in the Chapter 7 liquidation. Plenty of blame to go around.
He doesn't have any hotels, he only licenses his name. The hotels are owned and managed by other companies.
Pardon my ignorance but since when are Slovenia and Croatia Eastern Europe? They are both former members of Yugoslavia, and members of the EU. Slovenia is even using the euro has its currency. I would say they are Southern Europe, but most important they are part of the EU. I don't know how it works with visa between the EU and the US, but I know I didn't need to do anything special as a Belgian when I went to New York and the Silicon Valley in the nineties. I just had to 'wave my passport' and I was allowed to enter the country as tourist or as a worker. Maybe things have changed since 9/11, I haven't been in the US since then.
I would say these people are working for a European company that builds factories and will not be factory workers. These kind of companies who work with cheap self employed workers are quite common in Western Europe. Often they are camped near the site and have to work 7/7 for very low wages. I think this is not really a visa problem here, but more of the 'fake' (they should have been employees) self employed workers working for a big company that profits from the lack of social protection for self employed workers in foreign nations. Of course they might need the so hated visa to be able to work in the US, but the problem here is 'fake' self employed worker's status with no social rights.
> Let's say that we're down south and the machine is used 100 days a year.
That would be a best case scenario, but anyway the exact numbers aren't the point. The point is that when comparing productivity with and without expensive new machinery, you have to take the cost of the machinery into account. Higher productivity doesn't NECESSARILY mean higher efficiency or profit.
> That's actually the problem many people see - It's the people with the capital to OWN the nation's means of production(factories and such)
Owning capital which works for you is certainly preferable to working for wages your entire life. I think we should set up a system where anyone and everyone can be part-owner of the factories, ships, and other capital. Rather than George Soros building a ship with his money; you, me, and 100,000 other people can get in on it, pooling our money to build a ship, factory, or other capital. We can then share in the proceeds. Eventually you and I could be owners of companies like Apple and Google. Or if we want less risk, companies like Proctor & Gamble and General Mills.
Along paying us cash, employers could also pay us an extra amount which is shared ownership in a company. Some people might prefer to own one type of company and other people would prefer another type, so you could choose which companies you wanted shared ownership of. A big company like Proctor & Gamble would have a million ownership receipts and you could choose to have shared ownership of P&G, or Apple, or a solar-electric company if you want to support that - whichever companies you want your capital contribution to go to, and you want part of any profit. Since it's all about shared ownership, we could call the ownership receipts "shares". Each months when you or your employer puts money into your Individual Capital Account (ICA), you could decide whether you wanted shares of Google, of Rickâ(TM)s Cabaret, or whatever. You own part of Rick's, so if Rick's makes a profit, you get some of it.
It would be good for most people to participate. The government could FORCE everyone to participate, but that would have drawbacks because sometimes it's better for you to invest in your education, or in buying a home or some other personal investment, rather than putting that capital into a corporation. Maybe instead of forcing you participate, the politicians could encourage you and your employer to participate by offering lower tax rates on money the employer or you put into your individual capital account (ICA) vs money they pay you in cash, which you then spend.
Hmm, that could be risky, though. What if I chose that I want my share of capital in particular business, and that business doesn't do well? Maybe we could have another layer of sharing so that I'm part owner of 200 different companies. There could be a a bank account with 10,000 owners, and with that bank account we'd buy capital for 200 companies, then split the profits. it would be funded mutually by anyone who wanted to participate.
I bet I could get rich that way (slowly), because in addition to the capital that my employer put into my capital account, I would also put in 10%-15% of my salary, as a kind of savings or investment. By "I would" I of course mean "I do". That's how most millionaires became millionaires - by socking away a lit bit each pay check into IRAs and 401Ks; very often owning mutual finds in those accounts.
Known to be widely abused, but now that Tesla is involved suddenly someone cares! I wonder whom....
> Except your example is terrible because a harvester is way more than a 10x improvement over manual picking.
Not always. There's a reason some crops are still picked by hand. You can probably imagine why berries can be an example where putting them through heavy machinery isn't necesarily better. Saffron harvest may never be mechanized.
Your going to be in for a surprise when you realize that you are one of the screwed instead of the screwers.
> Assuming that the harvester machine only takes a few thousand in maintenance a year and lasts a decade, you've given a highly profitable example. Let's say that we're down south and the machine is used 100 days a year. That's $135k/year. $40k goes to interest/maintenance/cost of capital. You're looking at paying off that harvester in only 4 years.
You've forgotten about 90% of the costs of producing those $135k of berries and bringing them to market - the land, water, everything involved in planting and growing them, fertilizer, pesticide, packing and shipping, reserves set aside for bad years, etc. Picking berries that worth $135k after someone already spent $100k to grow them isn't the same as magically producing $135k from nothing.
The correct comparison would be the cost to harvest with the machine vs without. You figured the machine cost $40,000 per year to own and maintain. Maybe harvesting with machine costs $20,000 for two guys working four months and other related expenses. So using the machine, the total cost to harvest is $60k. You'd then compare the cost of not having the machine and instead hiring 20 people and equipping them with more manual tools. Twenty employees for four months might be $80k wages plus $30k taxes, benefits and govt fees. So $110k without the machine. The machine is $50,000 better. Minus the 20% of years you pay the mortgage on the machine even though the harvest was bust due to drought, too much rain, disease, whatever. It ends up $20,000 better in this example, not $135k better.
Gotta go with Trump!
the only one that shows the balls to stand up to this crap!
capitalism is inherently exploitative. has happened before and will happen again before you can complaint
Well, another liberal hypocrite.
... Tesla is making 21st Century cars with 19th Century labor practices? Tell me again why Tesla is so great?
The problem is not simply poorly written laws (or at least not primarily that). The problem is enforcement of those laws.
Hear hear!
The non-enforcement of the laws means that contractors are in a bind. Their markets are highly competitive. When a few bad actor start using cheap imported labor illegally, and the government doesn't enforce the law to stop them, they can lower their bids. The rest are left with two choices:
1. ALSO switch to illegally using cheap imported labor.
2. Go out of business.
Results:
a. Essentially all the contractors still in business are illegally using cheap imported labor.
b. NON-imported laborers need not bother to apply.
That's why, over the last couple decades, the immigrant labor pool has expanded faster than the job growth rate and the absolute number of US-born or naturalized laborers has actually shrunk.
And THAT's why Trump has swept the Republican Primaries: He's the only major candidate promising to actually turn this around - which makes him very popular with those out of work, underemployed, or underpaid, whether blue-collars being drowned in "undocumented" workers or white-collars being drowned in H1B holders.
Bantam Dominique roosters crow a four-note song. Once you've heard it as "Happy BIRTHday" you can't NOT hear it that way
> One guy using a $600 PC does the work of a roomfull of guys with adding machines, but that guy doesn't get paid more than one of those adding machine guys once you adjust for inflation.
What used to be done by a room full of people with calculators and is now done by one person? Billing comes to mind - no need for a room full of clerks to calculate bills one at a time when a single DBA can handle it Of course the DBA isn't using a $600 computer to do the calculations - he's using that computer to connect to a pair $6,000 computers through a pair of $5,000 routers, but we'll ignore those extra costs. Did you have something else in mind that uses $600 computer to replace a room full of people with calculators, or does billing sound like a common example?
The DBA makes about $100K , maybe $140k depending on local cost of living (Texas is MUCH cheaper than California).
The billing clerks made about $3k in 1950, which is $29k in 2016 dollars.
So the people in your adding machine to computer example do in fact make three times as much money, in today's dollars.
Pretty much anything that involves a spreadsheet used to be done by a room full of people with adding machines lead by one higher paid person that fed them the figures.
But if you're talking about billing, don't forget all the people typing up bills then stuffing envelopes, addressing and metering, etc. All automated now. (or eliminated along with paper costs through e-billing).
With corporate profits at an all time high and real wages slipping against the cost of living, it's not hard to figure out who the benefits are going to.
So you understand all that, great. Sorry if that came across as wrong (I can't think of the word for it). I guessed that you might be a younger person who had mostly been hearing some socialist/communist ideas, but wasn't interested enough to really learn a lot about the US economy. In such cases, starting with the socialist ideal and showing that a workable implementation is through the joint-stock company can sometimes be very effective and informative. Obviously you aren't coming from quite that viewpoint.
Let's address what you call your "central point":
> Compared to somebody in the '60s, for example, their pay is likely less, their expenses more, so fewer than ever can manage that 10% - except that it needs to be closer to 20%.
In fact, compared to the 1960s, median home size is almost three times as large. Spending 20 times as much buying Starbucks coffee instead of making it at home is now common. Here's the big bottom line number, real disposable income since 1960:
https://research.stlouisfed.or...
In fact real disposable income has tripled. And we dispose of it, buying $600 ipads, $8 cups of coffee, and multiple cars.
We could, if we chose to, live on just TWICE as much real income as our parents or grandparents did, as invest 30% of our income, retiring at age 40 or 50. Most of us don't, because in 1960 people had one car per family, not two cars, a motorcycle, and a jetski. We'd have keep a TV set for 15 years (they kept one for 20). Most of us prefer to replace LCD HD with OLED 4K after five or ten years. That's a personal choice, so I won't say it's wrong. We can, however, instead choose to have a house only twice as big as our parents' house when we're younger, and invest 30% or more of income so we can be rich later.
That's true, there WERE people stuffing those bills into envelopes, earning $1/hour for it. Median home size was 1/3 of today. Aren't you glad that's not us.
Here's the official data on real disposable income from the BEA:
https://research.stlouisfed.or...
You'll notice real disposable has tripled since the 1960s. With all of that extra money, we've been buying huge homes (compared to then), dining out six times as much, etc.
What the fuck.
I'm sure if they put a call out they could find literally thousands of people inside the United States who'd GLADLY do the same work for less than half of that.
When you have more than 100 million people in your country (the US) who are currently not working, you don't need to bust your ass to find competent local labor.
More of that BS excuse. Yay!
Better than Americans is some of the comments. Why not pay th.more than Americans? It's good when Liberals outsource. Really??
Trash American workers but take their dollars.
Do they really work seven day a week, without any rest ever? If that is the case, I wonder how long before they burn out.
Even God had to rest the seventh day, after all :-)
> Based on adjusted GDP/capita, that one income should be able to buy 3 fully furnished homes, 3 cars
And in an amazing non-coincidence, the median family home today is in fact 2.8 times the size it was in the 1960s. You can look at it 20 different ways and it comes out the same - we get three times as much.
It's also not uncommon for a middle class family to have three cars and a lower-income to have two; in 1960 middle class families had one car, lower-income took the bus.
Two notable exceptions to the "three times as much" trend are savings and entertainment (including restaurants). We spend around six times as much on eating out and other entertainment, we don't have three times as much savings. Another not-amazing non-coincidence.
I cited the figures showing that real median income has triple, you responded with an article full of feelings, like this bit:
> In fact, three-quarters of Americans polled by the Brookings Institution in 2008 said the dream was harder to attain.
It's interesting that they feel that way. It's also contrary to fact.
The authors added up the cost of a house three times as large, sending two kids to college without them needing to work even a part time job, buying a new 4 wheel drive SUV, etc. Guess what - average people a generation ago actually did NOT have a 3,000 square foot house with a new SUV in the garage, and even high school kids worked summers and after school. Everybody in my family worked FULL TIME while in college to pay their expenses after serving in the military so the GI bill covered tuition.
Why assume my daughter shouldn't have to lift a finger? Why is she owed a college education without needing a part-time job? I probably -could- afford to do that, but that would be a disservice to my daughter. She'll learn about the rewards of work just like her great-parents, grandparents, and parents did (I learned a bit late).
The numbers are what they are. Whatever feelings that spoiled millenials have doesn't change the facts.
Also I should acknowledge that the economy did suck when they took they survey, near the end of 2008. I can understand why people felt that things were rough. They WERE rough compared to to the 1980s and1990s, but not at all compared to the 1960s and 1970s.
Posted summary is better than the article for clarity.
Well done.
Well, it's all from TFA.
But with less agendas, tugging at heart strings, and dropping almost all of the human element from the story.
I.e. Stuff that is there to catch people's attention and get them to actually read an article which is taking a broader look at the economy and politics - which MIGHT just concern them.
At least it's an informative article.
Mit der Dummheit kämpfen Götter selbst vergebens