Some interesting discussions going on here. But all you talking about here is Economics 101 Supply and Demand Equilibrium being sought. And---discovered.

It is an interesting proposition to discuss the merits of Econ 101 Supply/Demand equilibrium in abstract while one is sitting on his ass in class listening to the professor expound on the logic and virtues supply and demand issues. It is quite another proposition when that same one (me) watches as his own job leaves the country for Mexico and is handed a pink slip shortly thereafter.

I have personally felt the sting of outsourcing---my job left me. I also enjoy the benefits of outsourcing every time I go to Harbor Freight, for example (come on, we are pinheads and we JuuuuST LuuuuV Harbor Freight. Admit it )

But nothing new is going on here. Outsourcing has been going on for ages. But here in the good ol' US of A, the outsourcing may have been a company moving a factory and jobs from New York, or Chicago to the midwest where wages and taxes were cheaper---and there were vey few toll roads "out here in the wide open spaces".

Case in point #1: In the late 70s I was running a small retail business in a small to mid-sized Nebraska town. As I recall (perhaps incorrectly, so please consider my numbers to be magic numbers), the prevailing wage was around $4.50 to $5.00 per hour for people who had been at their jobs for years. The city fathers got together and built a small industrial park. An automobile parts manufacturer out of Chicago, Perfect Circle Piston Rings, moved to town and set up shop in the park to make piston rings. And the starting wages were $5.50 and up. It upset the local labor market for a little bit and Perfect Circle was now enjoying cheaper midwest taxes and lower labor costs compared to where it came from.

Nobody in the Nebraska town was bitching about the new jobs except for the established businesses that were now having to scramble to replace lost long-time employees and raise wages for the others still left.

If anybody in Chicago was mourning the loss, I never head about it.

What has changed since then? Those Perfect Circle jobs would have left for China instead of Nebraska. And workers from Chicago would have been able to move from Illinois to Nebraska if they had wanted to. It is a little harder to chase a job across the border.
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Case in point #2: My city's main industry is producing aircraft. The plane maker/employees in Wichita KS are unionized. Several years ago, Cessna Aircraft started a new airplane model and chose a small town in the southeastern part of the state for its location to build a new plant. Good paying jobs in southeastern Kansas are few and far between. Cessna comes in and raises the local wages and is still paying one third to one half of the wages it paid in Wichita.

Wichita and its employees did not like it. But the jobs stayed in state and did not leave the country. And Cessna got cheaper wages.

Later on, Cessna went to China to produce a new airplane model.
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Case in point #3: I used to work for Boeing building the 737s, 747s, and 757s you fly on. Boeing was founded and headquartered in Washington state. Boeing's main production happened and still happens in Washington state with a large manufacturing plant in Wichita. Boeing is/was unionized in Wichita and is still heavily unionized in Washington state.

Several years ago, Boeing restructured and moved its home offices from Seattle, Washington to Chicago. The Wichita plant was sold and is now called Spirit. Spirit is an independent company but its largest customer is Boeing.

When Boeing was preparing to start building its new 787 it started looking around for places to build a new factory. Of course, the union and employees wanted to have the 787 built in Washington but Boeing (as do many other companies ) started shopping for incentives from other states. It becomes dog-eat-dog as prospective cities pony up with tax abatements and other give aways to attract (and poach) jobs from other cities and towns.

The state of South Carolina the pat on the head from Boeing due to some real nice tax giveaways and lots of cheaper non-union labor. As you might surmise, Boeing had to send out lots of its highly trained unionized labor to teach the new South Carolina aircraft workers how to build an airplane. So, now Boeing builds 787s on both sides of the country.

Long term, I would expect Boeing to continue to grow its South Carolina operations and shrink Washington state operations and continue the trend to cheaper labor.

At least the jobs did not leave the county---yet. Wait until China gets its large commercial jetliner online in a few more years. Don't take this lightly. Boeing is the USA's largest exporter. Competing in the world market with China for jet sales will be cutthroat.

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30 or 40 years ago, we used to make idle talk about how much money we could save if we could cut out the middleman. Back then, when we talked about the middleman we were usually unwittingly referring to the wholesalers and distributors. Factory direct was what we wanted. Did you lose your job because the factory bypassed your wholesaling behind and sold directly to me? I'm so sorry but that's the breaks. Tough shit for you; Maybe next time you will try to get yourself educated to get a better job.

Now, here we are 40 years later and the internet is the fly swatter that makes it possible for us all to buy "factory direct". First, it was Walmart that cut out the wholesaler. And then Walmart cut out the manufacturer by buying up China. And next, along came Amazon, that is eating everybody's lunch, including Walmart's.

Between the Amazon/Walmart bookends, everybody's nice paying job with a pension is at risk.
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All of the above is to try and illustrate that business is always looking for cheaper labor costs as well as other cheaper inputs. The big difference now is that transportation makes it easy for production to happen worldwide but makes it difficult to follow jobs across borders.

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I laugh when I hear people taking about cheap Chinese products and try to extend that cheap quality to the lack of skills of Chinese people. If what you bought was of cheap quality, that is because it was designed to be cheap and built cheaply for the cheap buyers that frequent Walmart and Harbor Freight.

As attested to earlier on these pages, Apple's iPhone is not of poor, cheap quality. China will build, and can build, the quality that is required.

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As far as jobs go, to quote whoever. "we have seen the enemy and he is us" ! It all depends on who is lucky enough to avoid the job chop axe the longest.

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A few months ago I needed some new gas shocks for my hatchback lid. Publicly traded auto parts stores like Autozone, Advance Auto Parts, and O'reilly's ( all who just love cheap Chinese car parts ) have run all the mom and pop auto parts stores from town. Tit for tat, I use Google and found an online auto parts store for my gas shocks. These shocks were cheaper than the big three auto parts retailers prices, so I bought online.

I had a choice in prices. One brand sold for $48.00 a pair. The other brand was $3.00 cheaper. "What was the difference?", I asked. The more expensive pair was made in the USA. Hmmm. OK. For three bucks it was worth buying USA. Both of these choices were cheaper than Autozone etc.

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Here is something about the political system in the US that perplexes me. We have this 50 year old boycott with Cuba that morphed somewhere along the timeline that we cannot do business with "communist Cuba", while at the same time while we shop the next "bargain" at Walmart---or Harbor Freight---we send all of out money to Communist China.

For the longest time, I have wanted to print a T-shirt that says, "Down with Communism Shoot Castro", on the front while the back would printed to say, "Support Communism Shop Walmart". I wonder how long I could wear a shirt like that before Walmart would kick me out of the store?
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I started rambling quite a while back so I will shut up now. But I leave with a question:

I once read somewhere that years ago, Gottlieb outsourced its wire harness work to some Indian reservations in North Dakota or some other nearby state. Nowadays, most of the auto makers wiring work goes to Mexico. Why couldn't the car makers send their wiring work to the reservations instead of out side the country?

Well, in Japan, it might have been "Slave" but it was certainly not trash. Japan was making some good products by the early 70s.

And I don't think anybody could consider Honda motorcycles from the 60s junk. It was Milwaukee USA made Harley-Davidsons that were junky oil leakers.

I was not suggesting govt. intervention in free markets, but you do raise an interesting point. At the same time, it is govt. policy that allows, or dis-allows, markets to enter or leave the country.

Good points. Not too mention Google and Tesla's experiments with driverless cars---and trucks. I learned years ago to assume nothing, so have you been reading some of the stuff with Coors/Miller sending a driverless semi-truck down the highway to Point B with a load of beer?

Damn !!! Walmart's self checkout stations are getting larger and now I find myself standing in line to check myself out, and I won't be able to get a job as a checker, as a cab driver, or as a truck driver.

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We are all going the way of 411 calls for information, telephone operators, and receptionists.

" Your call is very important to us". If you---push 1---push 2--or push 3. Your call is very important to us. All of our representatives are busy helping other customers. " Enter some real crappy elevator music and then, "Your call is very important to us..............

If we keep going here, The Marshall Plan is going to start being discussed.

I like the "freedom from environmental degradation caused by pollution;" That starts delving into the "true costs" for that cheap product we hunger for. Sort of like the "tire disposal fee" we all pay extra for when we buy new tires.

Witness the plastics pollution going on in our oceans. Especially the Pacific. That plastic McDonalds cup or that plastic shopping bag that got tossed into the street washes into the gutter system that drains into the river and then washes out to sea. And now marine life is suffering. And Midway Island is getting buried in plastic garbage from Asia and the US. The true costs for the plastics pollution is going to bite bigtime, sometime in the future. And we all contribute.

Are you talking about that leaky oil pump that was on my '54 Panhead? Or are you talking about that reverse internal threaded bushing that played the part of an oil seal on the crankshaft under the primary chain drive gear?

1973: I still remember hanging out at the local Harley dealership and looking at all the cardboard squares placed strategically under the Sportsters and Superglides to keep the oil drips off of the floor. That was the way it was---and we accepted it. It was Harley, after all. They were supposed to leak oil !!

And then Honda came along with the 750 that kicked ass and did not leak. That changed the game. Instead of seeing cops on their Harley's we started seeing cops on their Hondas (anybody remember the TV show Chips?).

When Indian Motorcycles went broke in the 50s, Harley had no competition and got lazy. It could afford to since if you wanted a big bike you only had Harley or a Triumph 650 Getting sold off to the AMF bowling ball people almost finished Harley off.

Finally, in the early 80s, the Evolution engine came along.

I could not disagree more. If every Tom, Dick and Harry could enter any business without legal barriers to entry, try to imagine the chaos that would ensue.

So, govt. reduces productivity?

How would you like to go flying on a commercial jet, or any other aircraft without the FAA acting as watchdog make sure your airplane's maintenance is up to date---and more importantly---done correctly? The aircraft industry is filled with legions of plane crashes where sloppy, haphazard maintenance was the cause for an airplane coming down.

When you go to the drug store and buy a bottle of aspirin you can buy with confidence that you are buying 100% aspirin and not some adulterated junk cranked out in someone's basement.

If there were no regulations in the fishing industry, the fishermen would take every last fish from the ocean if given a chance.

If I go buy a bottle of tax stamped booze, I have pretty good idea of what I am getting. If I go buy a bottle of "white lightening" from an unregulated tax-cheating bootlegger, I could be one of those people you read about who died because he got some poisoned liquor.

If it was not for regulations, the timber companies out west would have chopped down the last redwood tree years ago.

Regulations exist because people cheat. All the time.

Regulations exist for natural monopolies, such as the electric company or natural gas company. With no competition, and no regulation, these monopolies would bend you over the meter every chance they got.

Recently, a larger electric company wanted to take over my electric provider with a combination of stock and debt. Let me rewrite debt into DEBT. The stockholders on my electric provider were going to get paid a nice premium over the stock's market price and the remaining company was going to be so debt laden that it would have to come to regulators for a rate increase. Our POS governor thought it was great deal. Fortunately, the state regulators so "NO!' to the high level of debt that would be left over ater this Wall Street style raid.

I could go on and on and on.

Maybe you would be happy living in an unregulated environment. And as much as it can rankle sometimes, I would rather have some regulations for my own protection from those who like to cheat.

That would be where regulation would rear its "ugly" head and put a "crimp on productivity" and then where Amazon might try to "buy" the regulation by hiring a team of lobbyists to swing the regulation in its favor. But Walmart would be a formidable competitor. Result: Los of richer lobbyists.

Can you imagine an Amazon drone, a Walmart drone, and pizza delivery drone all arriving in your yard at the same time?

That's interesting. How will some of these small "All-American" towns that live on speed trap money make the transition?

Will these self driving cars be able to read posted speed limit signs and brake or accelerate accordingly? I'm asking because I just got hammered with a speed trap ticket in a small north Oklahoma town.

After I got ticketed, I went into town and did my business. I went back out on the highway to see how I got caught (and I passed the radar cop in the same spot still gunning for speeders). It was a rural highway with a speed limit of 55mph. Out in the middle of wide open spaces were two signs with speed limit 45 followed about 300 feet later with a limit sign of 35mph. I was ticketed for doing 53 in a 35. And as I was SLOWLY returning back into town from seeing where and how I got nabbed, another vehicle doing highway speed of 55 climbed onto my tailgate. As I passed cop, he already had his lights on, and he nailed my follower.

The story is a little bit longer, but yes, it was a speed trap.

So, how will self driving cars behave with unexpected speed limit signs in the middle of nowhere? Are these cars going to be able to read and act on random speed limit signs or they just going to be acting on banks of data that have been programmed into their brains? So who, or what, will win the battle between self- driving cars and speed trap towns (you know they exist)?

Yeah Vid, I do remember those AAA trip ticks. And I have an AAA membership. But this time I was going 80 miles from home and did not need AAA services. However, when I returned home I visited my local AAA office to ask about how AAA highlighted for speed traps. All I got from the AAA office wonks were blank stares---and one whippersnapper actually had the cajones to tell me I should slow down. Pissed me off !!

We have been talking jobs lost to China, jobs that would not be if not for China, and how self-driving cars are going to put loads of people out of work. It has me breaking my brain trying to think about what jobs have been made obsolete by technology and what jobs have been made by technology.

I'll start with the classic business school example. When the automobile industry took off, buggy whip makers were put out the door. Anybody who had any kind of business dealing with horses, such as livery stables, and I suppose anybody whose job it was to shovel horse shit from the streets, were out of business or looking for new work.

In return, we got jobs for mechanics, gas station attendants, battery factories/jobs, tire factories/jobs, paint factories, metal plating(chrome) industry, glass factories, road construction and concrete jobs, tractors, bulldozers----you name it.

Not a bad tradeoff for getting rid of mountains of horse hockey.

I guess you could say that the telephone put the Western Union Morse Code telegram guy out of a job. But we got telephone operators as a replacement. Of course, technological advance put the operators ( younger person: "What is a telephone operator?") out of work and paved the way for direct dialing, cheap(er) long distance calling, and then the cell phone we now have.

Computers and tabulating machines came along and put innumerable office jerks out of a job, but look what happened with all the jobs created by the computer industry.

I'm at a loss more more examples, but there are many more. I don't know what happened to the buggy whip makers; Maybe they went to work building Model "T"s. Maybe they died off. But life marched on then as it continue to do will today. If there is a cheaper way to do something and that something can find a market, then it will happen.

The biggest difference between then and now, is all the jobs that could be done with an 8th grade education are going away. As already mentioned, jobs to be lost with self driving cars: cab drivers, bus drivers, school bus drivers, chauffeurs, etc.

Eventually, at the big box stores, checkers will disappear as self-checkout tech continues to improve. ( Walmart started out with one or two self-checkout stands. Now, the self-checkout corral has 10, 11, or 12 self-checkout stations and the other day I had to stand in line to check myself out !! People are getting used to it.

Sorry, I ramble. Sometimes

We get all worked up about how robots are going to take jobs. They are taking up the crappy, unsafe jobs. But forget the robots. What about all of the industrial machinery that no one ever talks about? As far as utility provided, I'm not sure robots are much different than all of the industrial machinery that has been around for years.

How many have watched that TV show called "How its made"? You can watch it now on Youtube. You know, you have a machine that can take a roll of heavy gauge wire, unroll it, snip of a piece to length, roll it and bend it to where it becomes a link for a chain, and then the process is repeated and with just a few minutes this machine has kicked out a 50 foot length of log chain; A second machine welds all the links together and pushes the finished chain into a plating bucket; This process repeats until several chains are in the plating bucket and then some factory wonk runs the hoist to move the bucket full of chains to the plating bath.

Can you imagine what you would have to pay for a log chain that was made "by hand"? Looked at in another way how many 50 foot log chains can one man make in an hour compared to the machine?

And it is not just log chains that can be made with minimum human input. How about the cookie making machine where the only human input is for someone to cut open the bags of flour while the machine does all the rest, including the packaging, boxing and loading onto a pallet for a robot forklift.

All of these industrial machines produce product much faster (and cheaper) than any team of humans can. This is the way can afford out lifestyles of today.

So, Mr. Cookie Maker, Mr. Chain Maker, your job did not leave the country in search of cheaper labor. Your job moved down the street into that empty warehouse where a machine put you out of work. I'm real sorry you are out of a job: I want to know this, but now hundreds of more people will be able to enjoy the use the product because we can now make it cheaper. On a pure cost-benefit analysis, you did not come out on top. I am so sorry.
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**A bridge replaced the ferry at the river and put the family that had an iron grip on how you got to the other side out of business.

** "If God had met for man to fly he would have put wings on man." Yeah, right. The airline industry is here to stay.

** Traffic lights put city traffic cops out of business.

** Computers replaced the elevator operator.

** The automobile gave rise to the gas pump jockey. The self-service gas station got rid of the jockey.

** Used to be some old fart could make a living fixing flat tires for a dollar. Nowadays, tires rarely go flat. So, sorry, old fart, I like flat-free tires.

Did I say earlier that I ramble? My girl friend thinks I ramble I have been with her long enough that she is always right

I leave you now and I do hope you and your job make the technology/cheaper labor hump.

SIDEBAR: I can speak with impunity about this because I am retired now, but my job did leave me and moved to Mexico. So if you do not survive the cheap labor juggernaut, I will sympathize for you and feel your pain. Now, excuse me, please. I need to get my Harbor Freight purchases out to my car.

Here are a couple of interesting vids.

This is of an English Company, Stentor, that has moved its violin production to China. What there is a lot of young adults cranking out cheap violins by the dozens. They all look very busy and, for the most part, happy. I find myself wondering about these energetic competitors when they get old and gray and start slowing down. But, I don't see any thing that looks like slave labor here

Next is an English girl reviewing some of these cheaper Chinese made violins. She seem perfectly happy with the quality of these beginner Chinese violins.

And now we have some old gray hair in Germany "working to perfection" to get one violin a week out the door.