Posted by: Rational Voice | August 1, 2010

Michigan Governor and Manufacturing Jobs

In this piece out on Thursday in the Huffington Post, Michigan governor Jennifer Granholm complains about the number of manufacturing jobs that have been lost in the United States over the years to countries where labor costs are significantly lower than here. She whines that her state has lost nearly a million jobs since 2000, many being outsourced to places like Ciudad Juarez where wages are $1.57 an hour. In her pouting she states “American voters decided they needed a president and federal government that would jettison the old theories of laissez faire, supply-side and hands off — and weigh in on the side of American workers and the U.S. economy.”

The irony here kills me. She complains that the free market is the problem when the real problem is the regulations she seems to think don’t exist. The biggest among these is the minimum wage. That is to be expected because all Liberals know how to do is lie and use emotion instead of reason and facts. The most important fact to consider here that minimum wage, with the number of increases we’ve seen in it over the past couple year, actually cost jobs. Research by the Heritage Foundation, John Stossel, and Ball State University are but a few of the examples of research that shows how minimum wage, while it sounds so compassionate, is actually harmful to workers and the economy. It is especially harmful to the employment prospects of young or unskilled workers. They can even lead to longer term problems for these workers since they’ll have a harder time getting the jobs they need to gain the experience and skills required to progress in their field.

When employers are forced to pay workers more, especially the younger, unskilled ones, it cuts into their bottom line and they need to stay out of the red if they want to stay in business. If the work their employee does is only worth $5 an hour, why would they pay them $5 or $6? They have no marginal benefit here and will likely cut that worker and get another worker to take on the other task or the employer may just do the job himself. They need to have some sort of marginal benefit to make their employment of another worthwhile and if it isn’t, they either don’t hire or they fire. It’s as simple as that. Minimum wage is nothing more than a good intention but good intentions are meaningless when they end up causing more problems.

That is one of the reason so many jobs are being outsourced because it’s in the business’ interest to do so. If they can get people to do the same job for a lot cheaper, why wouldn’t they outsource? From a business aspect it makes sense because businesses operate to make money, not lose it.

Another reason so many jobs are being outsourced is because of labor unions. They demand not only high wages but also sorts of benefits like healthcare, pensions, etc. Again, just like with the minimum wage, employers can’t make money when they’re forced to give more to their employees than they get from them. Why do you think Chrysler and GM went belly up? Why do you think states like New Jersey and California are in such a mess? Non-union companies like Toyota, Honda or Hyundai are doing just fine. They didn’t need to be bailed out. Unions demand too much and rarely compromise, leading companies to shut down plants, costing even more jobs, but yet the companies are the greedy ones. Many times, in reality, the unions are at fault, but you won’t ever hear tht in the news. Private sector unions aren’t the only problem. Public sector unions are just as bad, like the teachers union in New Jersey.

You cannot pay out more than you take in and expect your financial situation to be just fine. Even in Liberal “La La Land” that doesn’t work. They just pretend it does until everything crashes down and then, instead of seeing that they’re the problem, turn and blame the “greedy capitalists” for the dire fiscal situation we’re in. They are the problem. This entitlement mentality is the problem. Why they hell should people get something they haven’t earned? Oh, and what ever happened to saving for your own retirement? Union auto workers make more than enough that they shouldn’t need all the other benefits they demand but then again personal responsibility died when welfare took hold in this country. Unions need to look at their greedy selves and realize that if they weren’t demanding so much employers would be able to hire more workers or keep jobs here in America. Cutting the unions and minimum wage would undoubtedly stop the flow of jobs out of this country and may even bring them back.

Again, don’t get me wrong. I feel for those who are barely scraping by on minimum wage because you can’t survive on it but that should be a prod to work harder, to improve oneself so they can move up through job market into a position where they can make more. While I feel bad, I don’t let emotion interfere with facts and logic. Also, if there was no minimum wage, prices could very well be lower because it costs less to produce goods when you don’t have to pay out the nose to produce them.

Minimum wages, other government regulations, and unions are the job killers in this country, not the “laissez faire, supply-side and hands off” approach that Governor Granholm condemns in her ignorant piece. If “laissez faire, supply-side and hands off” methods were allowed to work, we wouldn’t be having the issues we are having today.


  1. Thank you for your sharing.

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