Tariff Implications from 1st September

[Rich_S]

Rich S?  I wonder if  it is "our" Rich_S who also posted in this thread?

Pete, I haven't posted anything on the ST Facebook page, I've only posted my thoughts here on TRW.

Rossford Yard, I'm not a economist just a simple working guy but the thing that does make sense to me is, the more of our money we can keep here, the better off we are overall. Looking at this another way, if a company like Micro-Trains was to move their operation to China, how many folks in Oregon would loose their jobs? How many companies in Oregon who supply Micro-Trains with material, supplies, etc would have to lay off employees? How much would the tax base of the town Micro-Trains is located in be reduced? Let me put this another way, I was alive during the death of big steel in the Ohio River valley. There are towns like Aliquippa, PA who've never recovered from the loss of one fully integrated steel mill. Yes that is the extreme end of the spectrum, but I have to wonder, how many people today work for Athearn in California verses the number of folks employed in 1975? Remember folks, my questions are not an attack on any company or individual, but things we all need to think about, because the next person to loose their job maybe you. It's like the old joke about the difference between a recession and a depression. A recession is when your neighbor gets laid off, a depression is when you get laid off       

[Philip H]

@Rich_S,

You make some very valid points, and steel (and automaking) is a really good example of how the loss of major manufacturing had serious economic repercussions in certain parts of the US. Those lessons were hard earned with peoples live and livelihoods and should not be swept under the rug.

Problem is we can't undo the 4 decades since (now almost 5).  We can't undo China's rise on the back of a labor intensive economy - in no small part because of the amount of labor they have available to throw at a project.  We also can't ignore that in this trade war, model railroading products are really collateral damage. And there's a LOT of money in the US economy right now - its just not in the hand of labor (who could then buy more modeling products).

Yes, it would be nice to give the steel towns back a more solid path to better economic status that the mills once gave (an auto towns and textile towns and . . . ).  And it would be great to have all our hobby products brought back to the US for production (as it might do away with the much detested preorder world we now model in). This trade war won't accomplish that however (for all the reasons outlined above). Frankly no trade war will.  So perhaps we should be working harder to create what's next here in the US and helping our fellow citizens grow and adapt to the way the world is. Doing so has many benefits, not the least that it leaves us all more time to rivet count!

[Ed Kapuscinski]

One other way to look at.

Say MTL changed their business to using labor in Thailand and they lay off all their assembly people.

But then hire half as many people that they pay more than twice as much to do marketing, project management and distribution.

So the net amount that flows into the local economy increases but the number of jobs decreases.

That's essentially the story of the American economy.

[Maletrain]

Part of the trouble with the U.S. economy is how many people we pay to not work.  And, what we require employers to provide to people who do work.  Then we add a minimum wage requirement.  Then we allow a large influx of non-citizens to come in and work "off the books" while we largely look the other way (and those workers often send their earnings out of the country). 

The net result is that there are a lot of U.S. citizens who can't get employed.  And, that disproportionately affects minorities, especially black minorities.  I have watched as workers in several types of jobs in my area have gone from many black employees to mostly Latino employees, many of whom are obviously not native English speakers.

And an exception to the minimum wage requirement was made for (choose one: handicapped, disabled, differently-abled) people to allow them to get employment when they were not capable of doing work that was worth the minimum wage to employers.  But, now the activists for "rights for the differently-abled workers" are demanding that the minimum wage laws be applied to them, as well.  The activists may be right that some employers abused the exemption, but actual cases are not being broadcast on the media.  But, changing the law is probably going to mean the loss of jobs for a lot of the people those activists claim to represent.

I wonder how it would work-out for the model industry if people could make "extra money" working "second jobs" doing things like assembling models, without necessarily getting minimum wage and benefits.  Could that allow some additional people to crawl out of poverty?  Would it keep some people off the streets so they stay out of trouble?  There are a lot of things that don't seem to be considered very effectively in our legally constrained employment practices.

[daniel_leavitt2000]

Part of the trouble with the U.S. economy is how many people we pay to not work.  And, what we require employers to provide to people who do work.  Then we add a minimum wage requirement.  Then we allow a large influx of non-citizens to come in and work "off the books" while we largely look the other way (and those workers often send their earnings out of the country). 

The net result is that there are a lot of U.S. citizens who can't get employed.  And, that disproportionately affects minorities, especially black minorities.  I have watched as workers in several types of jobs in my area have gone from many black employees to mostly Latino employees, many of whom are obviously not native English speakers.

And an exception to the minimum wage requirement was made for (choose one: handicapped, disabled, differently-abled) people to allow them to get employment when they were not capable of doing work that was worth the minimum wage to employers.  But, now the activists for "rights for the differently-abled workers" are demanding that the minimum wage laws be applied to them, as well.  The activists may be right that some employers abused the exemption, but actual cases are not being broadcast on the media.  But, changing the law is probably going to mean the loss of jobs for a lot of the people those activists claim to represent.

I wonder how it would work-out for the model industry if people could make "extra money" working "second jobs" doing things like assembling models, without necessarily getting minimum wage and benefits.  Could that allow some additional people to crawl out of poverty?  Would it keep some people off the streets so they stay out of trouble?  There are a lot of things that don't seem to be considered very effectively in our legally constrained employment practices.

I have a few issues with this on several levels...

1. Are you looking for a greater participation in the workforce or increased wage earnings by workers? We are past full employment by a few percentage points now - meaning there are more in the workforce than workers due to teens and retired working jobs. This would seem to contradict your statement that these are under the table jobs... these are jobs listed by the fed, verified by tax income. What exactly are these under the table jobs and how many do you think there are? The numbers do not support it.

2. Who are these people who are paid not to work? The US give out very little direct financial assistance except for SS. Most of the money is spent on food stamps and affordable housing for those who do work with very low wages. How would eliminating minimum wage help anyone? You seriously sound like you expect the whole population to work for nothing. Why?

3. Race fluctuates with migrations, so job ownership would too. Areas in Boston were first German, then Irish then Italian, then Hispanic. now they are growing in Asian population. It follows the immigration trend as others who lived there gain affluence and move to better areas. And what does speaking Spanish indicate? It is a primary language in more than one US territory. If they are all of Hispanic heritage, then why wouldn't they speak their native tongue? Go to a fancy French restaurant and they will speak french in the kitchen. I really take this personally because my wife was not originally from America. When she is with her friends and co-workers, she speaks Thai. According to your logic, this means she is an illegal alien stealing your job. She has been an American for over 10 years.

4. Are you actually advocating people with severe disabilities to be paid far below a living wage? So you want to prey on the absolutely most vulnerable population?

5. On what planet would you find anyone willing to spend hours assembling a model below minimum wage? All that tedium for what, a candy bar an hour? Did you really think this though?

I'm just kind of speechless...

[learmoia]

Yeah that post made no sense.. With employment at all time lows (for all sectors of our population).. and several million unfilled jobs..

There is plenty of work out there for people still not working who want to go look for it.. (which may require moving to where the work is.)

But for model trains, People don't want to do the work.. part time or full time for the low wage.. Nor do we want to pay $100 for a freight car and $1000 for a locomotive.. and the people on the street make more working the street than we do. 

And dont ask How can MTL do it.. We have beaten that horse to death several times.

The Model Railroad Industy (and I'm sure most hobbies) are innocent bystanders in all this.. so we need to suck it up and let it play out.

Let's say a major toy producer mass produced 5 million Dolls for the 2019 holiday season, but.. there are Tarriff, so they announce.. Next Year we are going to produce next years order in... Thailand....

And 10 producers with similar volume do that.. That's 50 million items produced this year that isn't produced next year..

The product lines are disposable because fads come and go.

Like I said long ago in one of these threads, Washington needed to coordinate with big mfgs to fight the war from the bottom up long ago
. Start discussing moving production Nov 4th 2016.. cause.. (25% Tarriffs are coming..) and once orders start flat lining and dropping off, You have much more leverage.

Maybe that has been going on under the radar.. we dont know.. But that would be my approach.

~Ian

[jdcolombo]

I'm just kind of speechless...

Me too.

The current federal minimum wage is $7.25/hr.  That's about $15,000/yr if you work 40 hours a week for all 52 weeks of the year (no vacation).  If you are single, that's just above the official poverty line; if you are married or, heaven forbid, married with children, it is below or WAY below the poverty line.  Even in California, that bastion of crazy liberals, the minimum wage is $12/hr or just under $25,000/yr.  That's under the poverty line for a family of four.

Honestly - does anyone who posts here on TRW live on $15,000/yr?  Could you even imagine doing so?  Would YOU take such a job?  Of course not - no one who attacks the minimum wage would actually work for anything close to the minimum wage.  They just want all those "other" people to work for (or below) the minimum wage.  Especially if that lines the pockets of the richest 1%.

Instead of bashing minimum wage laws, how 'bout we as a country invest massively in education, children's health and nutrition, and infrastructure to attract jobs that actually pay decently.  There are plenty of possibilities for that.  They range from advanced manufacturing (automobiles, machine tools, 3d prototyping, advanced energy production, etc) to high tech (Apple, Microsoft, Intel) The fact that BMW has invested over $5 billion in its Spartanburg assembly plant since 1992 and that Microsoft employs 40,000 people in the Seattle metro area at far above the minimum wage is at least anecdotal proof that such a model is possible.

If the net result of that strategy is that we have 1000 fewer McDonald's franchises, I suspect the nation will survive.

John C.

[Maletrain]

Wow, all  of a sudden I am a "bad" guy, and people are spouting propaganda at me.

The things that are missing from the replies to me are:

1. The statistics on unemployment are on people looking for jobs compared to people who have jobs.  The unemployed people who are not looking for jobs are not counted.  What we really need is a tally of all working age adults and their employment status (working, not working but looking, not working and not looking, retired, too disabled to work).  That would provide some real clarity to discussions about employment and welfare. 

2.  As for being somehow against minorities, that is the opposite of the truth.  I can understand their plights, and have actually had some conversations about their status and plans with some undocumented workers here in the U.S.  My comment about the likelihood that Latinos who cannot speak or understand English well enough to work without an interpreter probably being here illegally (in the capacities that I have seen them replacing black workers) is spot-on.  Their children tend to pick up English quite well in school, and the older ones who have been here a while also become functional in English.  How they speak when together is not the issue, rather it is how they can't comprehend when I speak to them directly in English while they are doing a job for a contractor I hired.

3.  People who are paid not to work come in a lot of flavors.  Unwed mothers with dependent children get a lot of welfare in the U.S.  And, don't start telling me that statement means that I am against minorities, because I can show you plenty of white girls, some from decent families, even one in my own extended family, who started doing drugs, got pregnant, dropped out of high school, started stealing from their parents to support their habits, and ended up getting kicked out of their parent's houses (and then other relatives houses, too), so they are living on welfare.  Some have gotten menial jobs but lost them because they acted irresponsibly or failed drug tests.  So, I do know first hand what I am talking about.  The government is basically paying irresponsible young girls enough for them to get away from their families if they have children they can't support.  That incentive is just plain backwards, and its effects are showing because we are now into about the 4th generation of rebellious children raising rebellious children, and it is showing in our crime statistics, and not just "in the slums."

4.  The comment about paying disabled workers to do jobs they can handle at less than minimum wage is something that is already in our Federal law.  Many will not have jobs if the law is changed to prevent them from working for less than the minimum wage and the minimum wage keeps getting raised to assure that it is a "living wage."  The truth is that there are many (not all) disabled people who simply cannot do work of sufficient value to be worth a for-profit employer paying them minimum wage.  But, it is good for their self-esteem and helpful to those who are supporting them if they can be as productive as they are able.  And, if they can get a start, then they can sometimes actually get to the point of self-sufficiency.  A local organization (Melwood) is good at finding jobs and providing supervised living arrangements for adults with disabilities in this area.

5. Regarding "On what planet would you find anyone willing to spend hours assembling a model below minimum wage? All that tedium for what, a candy bar an hour? Did you really think this though?"  Answer: On this planet.  Actually, an example right across the street.  A retired lady is sewing baby clothes for free to be donated through her church.  No she is not disabled, she could be working, but she is now retired and does not have to work for money.  But, she wants to be doing something useful.  There really are people like that.  I know others who are not retired who want to be doing something useful, and they make quilts and such to donate.  What may seem like tedium to you is not tedium to everybody.  In fact, if you scratch build stuff for this hobby, some folks would wonder why you are sitting inside doing "tedious" work.

We all need to stop attacking people who don't agree with our positions, and really think about their positions on important issues.  Many of our problems today are "unintended consequences" of our trials for solutions to problems we had before.  Some of those "solutions" have turned out to be worse than the original problems, or at least just as bad.  We let self-serving activists and politicians trick us with rhetoric which is divisive.  If we don't get smart enough to deal with that, we are all going to lose, a lot.

[learmoia]

.... I think needed to get locked a page ago..

And can we get an Autolock on any use of the word Tariff?

Or what was it, the Atlas Formum did with the word 'Foobie'?
It auto corrected it to 'model of indeterminate prototype' or something like that.

NO MORE TARIFF THREADS!!!!!!

~ian

[Maletrain]

John,

The minimum wage political demands are now up to about $15/hour, and, for "full time" (30 hours/week) there must also be substantial benefits like health care and maybe 401K matches.  There are also "earned income credits" in our tax code to redistribute some wealth to low wage workers. 

Couples with children typically have both parents working, even in upper-middle class families.  But, often, child care is more costly than full time work is worth for at least one of the spouses.  So, many families have one spouse who works full time, with benefits for the whole family, and the other has job(s) that fit around child care responsibilities.  Increasingly, it is sometimes the man, rather than the woman, who has the part time job and child care responsibilities. 

It is becoming increasingly attractive to work at home, both due to child care needs and because commuting to work has become such a mess.  I would bet that there are a substantial number of couples with one spouse who would be willing to do piece work at home for relatively low pay and no benefits, and take their products to a collection point once a week or something like that.  As I wrote in my previous response, there are already a lot of people doing high quality but tedious assembly work at home for free for charitable causes.  So clearly is not something that "nobody would do."  We need a legal system that lets people work the way they want to work.  Not everybody is capable of being, or even wants to be a "rocket scientist".

[Maletrain]

NO MORE TARIFF THREADS!!!!!!

~ian

Well, golly, Ian, nobody is forcing you to read them. 

Are you insisting that nobody should be able to talk about tariffs because you don't like us to talk about tariffs?

[Chris333]

Problem with $15 min wage is the $6.45/hour (Ohio) demotion everyone else would get with it.

[daniel_leavitt2000]

Wow, all  of a sudden I am a "bad" guy, and people are spouting propaganda at me.

The things that are missing from the replies to me are:

1. The statistics on unemployment are on people looking for jobs compared to people who have jobs.  The unemployed people who are not looking for jobs are not counted.  What we really need is a tally of all working age adults and their employment status (working, not working but looking, not working and not looking, retired, too disabled to work).  That would provide some real clarity to discussions about employment and welfare. 

Actually, they look at several factors including total population, total job number, unemployment requests and the difference between those requests and the number of people not working.

2.  As for being somehow against minorities, that is the opposite of the truth.  I can understand their plights, and have actually had some conversations about their status and plans with some undocumented workers here in the U.S.  My comment about the likelihood that Latinos who cannot speak or understand English well enough to work without an interpreter probably being here illegally (in the capacities that I have seen them replacing black workers) is spot-on.  Their children tend to pick up English quite well in school, and the older ones who have been here a while also become functional in English.  How they speak when together is not the issue, rather it is how they can't comprehend when I speak to them directly in English while they are doing a job for a contractor I hired.

Again, you hear Spanish and think they can not speak English and are not from this country. Your words dude.


3.  People who are paid not to work come in a lot of flavors.  Unwed mothers with dependent children get a lot of welfare in the U.S.  And, don't start telling me that statement means that I am against minorities, because I can show you plenty of white girls, some from decent families, even one in my own extended family, who started doing drugs, got pregnant, dropped out of high school, started stealing from their parents to support their habits, and ended up getting kicked out of their parent's houses (and then other relatives houses, too), so they are living on welfare.  Some have gotten menial jobs but lost them because they acted irresponsibly or failed drug tests.  So, I do know first hand what I am talking about.  The government is basically paying irresponsible young girls enough for them to get away from their families if they have children they can't support.  That incentive is just plain backwards, and its effects are showing because we are now into about the 4th generation of rebellious children raising rebellious children, and it is showing in our crime statistics, and not just "in the slums."

We have incentives for families built into the tax code. To parse your statement here, unwed moms are bad, incapable of contributing to society and use drugs. Stereotype much? So you would rather have them starve on the street? What exactly would be your answer for single mothers? Force them to work and send their kids to daycare, which would cost as much as their entry level job? Not to mention the fact that this is extremely rare. As I said... housing and food stamp assistance.

4.  The comment about paying disabled workers to do jobs they can handle at less than minimum wage is something that is already in our Federal law.  Many will not have jobs if the law is changed to prevent them from working for less than the minimum wage and the minimum wage keeps getting raised to assure that it is a "living wage."  The truth is that there are many (not all) disabled people who simply cannot do work of sufficient value to be worth a for-profit employer paying them minimum wage.  But, it is good for their self-esteem and helpful to those who are supporting them if they can be as productive as they are able.  And, if they can get a start, then they can sometimes actually get to the point of self-sufficiency.  A local organization (Melwood) is good at finding jobs and providing supervised living arrangements for adults with disabilities in this area.

It used to be the law to round up Japanese families into camps. It used to be the law to eradicate native peoples. It used to be the law to keep slaves. Laws do not mean moral or just. They are meant to be changed along with the times. Every time there is a minimum wage increase, we hear the same argument... it will cost jobs. But it never does. Minimum wage increases have always been a good indicator of a strong economy. Are you really comfortable with someone saying "Well Bob, you are missing a leg so we are legally entitled to pay you 3/4th the minimum wage"?


5. Regarding "On what planet would you find anyone willing to spend hours assembling a model below minimum wage? All that tedium for what, a candy bar an hour? Did you really think this though?"  Answer: On this planet.  Actually, an example right across the street.  A retired lady is sewing baby clothes for free to be donated through her church.  No she is not disabled, she could be working, but she is now retired and does not have to work for money.  But, she wants to be doing something useful.  There really are people like that.  I know others who are not retired who want to be doing something useful, and they make quilts and such to donate.  What may seem like tedium to you is not tedium to everybody.  In fact, if you scratch build stuff for this hobby, some folks would wonder why you are sitting inside doing "tedious" work.

So your business model is to take over a senior living center and force them to do your work for next to nothing. Awesome.   Also wasn't this the exact business model of the main bad guy in Happy Gilmore?

We all need to stop attacking people who don't agree with our positions, and really think about their positions on important issues.  Many of our problems today are "unintended consequences" of our trials for solutions to problems we had before.  Some of those "solutions" have turned out to be worse than the original problems, or at least just as bad.  We let self-serving activists and politicians trick us with rhetoric which is divisive.  If we don't get smart enough to deal with that, we are all going to lose, a lot.

Nope... you pretty much lost the ability to have an impartial discussion when you mentioned disabled people deserved to earn less, unwed moms drain our country, all people who speak Spanish are foreigners and training old ladies to build trains for next to nothing.

Did I miss anything?

[Bob]

Let's get back to talking about modeling everyone!  I hope that Scale Trains and other manufacturers are able to continue to produce great products in a challenging environment, so that we in turn can put them to good use!