Quote:
Originally Posted by regular.joe
You are going to have to show me the numbers on how labor at $2 per hour costs more in Mexico then labor at $10 per hour in CT.
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Economics 101. In the real world, a worker gets paid $2 per hour when only productive enough to earn $2 per hour. 'The World is Flat' is a classic example.
A bean counter will use spread sheets to invent a massive profit. A product oriented person will learn a reality cited by Daniel Oks of the World Bank. "US wages are 5.25 times higher than Mexico's, but that Mexican workers are about one-fifth as productive ... because of much outdated machinery, clogged transportation, ineffective management, and poor education. The result: US wages are just 2.6% higher than Mexico's, on average, after factoring in productivity."
Well, Mr Gibson was only doing what stock brokers, accountants, MBAs, and other less informed people do. Exact same reason why GM cars cost more to build than Mercedes Benz when labor was not the reason. Why Eastman Kodak would see its future in a commodity quickly becoming a buggy whip industry. And why Apple must go overseas (Shenzhen, China) to find more productive workers in more productive (innovative) industries. In every case, a bean counter invents myths to avert a reality: his ignorance is the problem.
A bean counter would judge based in payroll numbers and profits. Because spread sheets do not measure what is more important - productivity. And a reason for many contentious posts ten years identified Wall Street as the problem - long before everyone recently learned that reality the hard way.
The greatest Americans and their companies judge based upon the product; what productive people do. Innovation is top of a list that determines who is #1. Innovation determines who deserves to have jobs. Dollar per hour, the mistake he made in CT, is mostly hyped by those who invent reality on a spread sheet - MBAs, stock brokers, accountants, finance people, investment bankers, etc.
Fortunately for Mr Gibson, he learned his foolishness and reversed it in only four years. He saved his company by paying employees $10 per hour in CT.
At this point, everyone should have understood why Ross Perot's "Great sucking sound" was obviously a myth based in bean counter rationalization.