Golly Geez--

If you read Trapper John's statement today in Daily Kos and many of the comments you would see what could at best be a cross-section of many public thoughts. Keeping in mind that many of thoughts are from so-called progressives, they amaze me. Most of the comments get that this about the loss of the middle class as the cost of employee benefits is rising greater than the cost of living. Companies have to make profits in a world market in order to employee people. That is a given. Simple math, cost of living raises are maybe 3.25%. That means if you give an employee a 3.25% pay increase and the cost of benefits is around 35-38%, you have just given them a 3.25% raise plus the 35% benefits that gone on with this making it about a 4.2% raise (1.35 * 0.0325 = 4.3875% total raise). The cost of the products have to raise maybe 5% to make everything stay the same, leading to a slow inflation.

What becomes questionable is how much profit and how much CEOs are paid (are they really rock stars), are there pensions (almost unheard of these days) and how much this raises the cost to the consumer. Is the price still viable? Looking at cars, the costs of American cars because of higher labor costs are more than the equivalent foreign product. In order to protect industry we could reinstitute tariffs, making foreign autos competitively priced. Or we can allow foreign competition in unbridled and see what American ingenuity can come up with. How can we be competitive if we do this? Can't. So jobs have to move overseas. Or we cut salaries and benefits. Both have happened in an ever-increasing curve so share holders can have their profits.

As a manager of auto repair shops and environmental companies I have seldom have used union labor, but paid commensurate benefits, just to keep away from the politics of unions. Until recently. Pensions have disappeared, medical costs are going up. It is hard to keep up as a manager and if we do not make a profit, we close the doors. From my standpoint it sucks. Love that middle management position. Same thing is going on at GM. I feel for them. But they have made many BAD decisions as far as market desires and engineering.

One comment that made me nuts was to give up the auto industry and retrain the employees. Yes, making burgers will replace those salaries. We need to get tariffs, cut CEO salaries, management salaries, get national health care and look at the percent return required by shareholders. Maybe more. We cannot be competitive with foreign companies anymore. The question is what do we do. What remedies do we make. Free market economy makes us all the poorer (unless you are the owner.)

rojo