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Procter & Gamble now marketing to America’s economy like Mexico and Philippines

Tuesday, Sep 13, 2011

* You can look at charts and treatises all day long and still not quite get your head around the problem of America’s stark inequities. This incredibly important Wall Street Journal article, however, brought it all home for me

For generations, Procter & Gamble Co.’s growth strategy was focused on developing household staples for the vast American middle class.

Now, P&G executives say many of its former middle-market shoppers are trading down to lower-priced goods—widening the pools of have and have-not consumers at the expense of the middle.

That’s forced P&G, which estimates it has at least one product in 98% of American households, to fundamentally change the way it develops and sells its goods. For the first time in 38 years, for example, the company launched a new dish soap in the U.S. at a bargain price. […]

Economist Edward Wolff of New York University estimates that the net worth—household assets minus debts—of the middle fifth of American households grew by 2.4% a year between 2001 and 2007 and plunged by 26.2% in the following two years.

P&G isn’t the only company adjusting its business. A wide swath of American companies is convinced that the consumer market is bifurcating into high and low ends and eroding in the middle. They have begun to alter the way they research, develop and market their products.

Food giant H.J. Heinz Co., for example, is developing more products at lower price ranges. Luxury retailer SaksInc. is bolstering its high-end apparel and accessories because its wealthiest customers—not those drawn to entry-level items—are driving the chain’s growth.

Citigroup calls the phenomenon the “Consumer Hourglass Theory” and since 2009 has urged investors to focus on companies best positioned to cater to the highest-income and lowest-income consumers. It created an index of 25 companies, including Estée Lauder Cos. and Saks at the top of the hourglass and Family Dollar Stores Inc. and Kellogg Co. at the bottom. The index posted a 56.5% return for investors from its inception on Dec. 10, 2009, through Sept. 1, 2011. Over the same period, the Dow Jones Industrial Average returned 11%.

“Companies have thought that if you’re in the middle, you’re safe,” says Citigroup analyst Deborah Weinswig. “But that’s not where the consumer is any more—the consumer hourglass is more pronounced now than ever.” […]

To monitor the evolving American consumer market, P&G executives study the Gini index, a widely accepted measure of income inequality that ranges from zero, when everyone earns the same amount, to one, when all income goes to only one person. In 2009, the most recent calculation available, the Gini coefficient totaled 0.468, a 20% rise in income disparity over the past 40 years, according to the U.S. Census Bureau.

“We now have a Gini index similar to the Philippines and Mexico—you’d never have imagined that,” says Phyllis Jackson, P&G’s vice president of consumer market knowledge for North America. “I don’t think we’ve typically thought about America as a country with big income gaps to this extent.”

Procter & Gamble is one of the smartest marketers in the world. If this is how P&G now sees our country, you can bet it’s accurate. We really are in serious trouble here.

Go read the whole thing.

* And here’s another important story that you shouldn’t pass by

Caterpillar Inc. is struggling to add skilled workers in its manufacturing operations despite high U.S. unemployment levels that have forced President Barack Obama to take extraordinary measures, the company’s chief executive said on Friday.

The dichotomy in the makeup of the workforce is threatening U.S. and Canadian competitiveness, Caterpillar CEO Doug Oberhelman said.

“We cannot find qualified hourly production people, and for that matter many technical, engineering service technicians, and even welders, and it is hurting our manufacturing base in the United States,” he told a business audience at the Spruce Meadows equestrian facility outside Calgary.

“The education system in the United States basically has failed them and we have to retrain every person we hire.”

* Related…

* Social Status and How the Elected Vote

* Capital gains tax rates benefiting wealthy feed growing gap between rich and poor

* Steel company moving HQ to Chicago: An Ohio steelmaker is in line to receive more than $1 million in financial incentives from the city of Chicago to move its headquarters to a downtown office tower… In addition to the 50 jobs that will move from JMC’s Beachwood, Ohio headquarters, the company, which makes steel pipes and tubes, plans to retain 50 corporate jobs already in Chicago that could have moved to Ohio.

* Community college enrollment falling in Illinois

* Battle Lines Being Drawn In Push For Longer School Day

* Illinois teachers union official blasts CPS longer-day tactics

* Mitchell: Rahm Emanuel right to be a bully about a longer school day

* Crop yield estimates cut due to weather conditions

- Posted by Rich Miller        


58 Comments
  1. - Retired Non-Union Guy - Tuesday, Sep 13, 11 @ 7:45 am:

    CAT must not be looking in the right locations. There are a ton of older skilled workers in Michigan. A friend is a machinist with 30 years experience maintaining robotic assembly lines; he’s out of work and retraining as a welder because his company went under during the GM/Chrysler problems.


  2. - Mac Baldrige - Tuesday, Sep 13, 11 @ 7:58 am:

    Gee.

    When CAT claims that they “cannot find qualified hourly production people” I wonder what “quality” characteristics they’re looking at.


  3. - Mac Baldrige - Tuesday, Sep 13, 11 @ 8:06 am:

    I knew it was only a matter of time before a columnist listed how cost cutting at their organization has made their job tougher, and it doesn’t surprise me that Mitchell is the one to do it.

    Mitchell’s reminds me of eight graders explaining that they must give seventh graders a hard time because last year’s eighth graders gave them a hard time when they were in seventh grade.

    I have yet to heart a CTU spokesperson oppose a longer school day. I have hear them say they want the day to get longer by brining back recess, a lunch “hour” that lasts an hour, and more enrichment programs.


  4. - Michelle Flaherty - Tuesday, Sep 13, 11 @ 8:10 am:

    Oh the irony of an income gap story in the Wall Street Journal.
    Looking forward to the WSJ editorial praising the top of the hour glass and lamenting that the bottom half exists to suck away the sand.


  5. - wordslinger - Tuesday, Sep 13, 11 @ 8:12 am:

    –“We cannot find qualified hourly production people, and for that matter many technical, engineering service technicians, and even welders, and it is hurting our manufacturing base in the United States,”–

    Wait a minute. That’s why CAT keeps adding jobs in Texas and Mexico, because of the highly educated work force? Was he really expecting not to have to train workers? How many welding classes did he take in college?

    Let’s take the man at his word. We have high unemployment. CAT says they have good jobs they can’t fill. Certainly IDES and the Department of Labor could help facilitate a hookup here.


  6. - Cincinnatus - Tuesday, Sep 13, 11 @ 8:16 am:

    After dipping in 2008-2009, personal income of US consumers has been rising again. At the same time, personal savings rates have increased, and are now in line with levels last seen during the Clinton boom. After a decline in that same period, GDP is increasing again at its historical rate. Unfortunately, during that same period, people’s home equity and investments have taken a real hit.

    What I believe this means is that while paper assets have decreased, the real loss would only occur if people liquified those assets. Future stabilization in housing and the equities will stop the downslide in paper value, and increases will occur when things improve.

    Now, since then, people have been paying down their bills, and saving at higher than previous rates.

    So,

    If things can get stabilized, we should see a boom as the savings are used to buy stuff.

    These thoughts are based on the average economy. I recognize that many people are hard hit and suffering, but this type of thought process can only be used on the economic picture as a whole, and not on any particular group.

    So, steps must be taken to stabilize the economic environment. Is it Keynes, or Freidman. Let the arguments begin…


  7. - Stooges - Tuesday, Sep 13, 11 @ 8:16 am:

    Something about that CAT story doesn’t add up. He’s complaining because he has to train new employees how to operate and fix the sophisticated instruments on his machinery? I can’t imagine any school that would turn out students that could start a job like that without some type of training.

    Plus, those types of jobs at CAT pay pretty well, you mean that if they had job fairs or advertised for these positions around the country that hundreds of currently employed techsters wouldn’t leave their jobs to work for CAT with benefits and great employment?


  8. - MC Gone - Tuesday, Sep 13, 11 @ 8:25 am:

    As long as parents keep envisioning their children as the next Payton Manning or Donald Trump the middle class will shrink. The reality is that colleges exist to provide jobs for their faculty and staff. Respect skilled workers and stop wasting money on education that doesn’t result in a JOB.


  9. - OneMan - Tuesday, Sep 13, 11 @ 8:33 am:

    Wordslinger — If I have to train people up I might as well do it where costs are lower. Does this really surprise anyone?

    Look at the unemployment rate for welders in May 2010
    http://www.bls.gov/oes/current/oes514121.htm
    .8%
    That’s right less than 1%
    or the folks who deal with the robots that do the same thing..
    http://www.bls.gov/oes/current/oes514122.htm
    It’s 2.5%

    Now do you find it hard to believe they have having challenges finding people.


  10. - Judgment Day - Tuesday, Sep 13, 11 @ 8:35 am:

    “The education system in the United States basically has failed them and we have to retrain every person we hire.”

    Nobody wants to hear that - but he’s correct. Our highly esteemed educational system is failing us.

    If you work for CAT in production and aren’t pushing a broom, you should:
    1) Know what micrometers are and how to use them (depth, inside, etc.).
    2) What’s a surface plate?
    3) Names “Starrett” or “Mitutoyo” mean anything to you (other than knowing they are companies)?
    4) Know the basics of 3-D Printing?
    5) Understand tolerances? “Runout”?
    6) Ever heard the term “MTBF”

    That’s just a small sampling of what he’s talking about. And if you want to have any type of career in manufacturing (and it’s very possible), you’ve got to have that type of knowledge.

    And if you say well that’s all fine for manufacturing, but what about all the other non-manufacturing jobs, well, go a step further.
    1) How many schools teach reading legal descriptions? I’m not talking lots, but metes and bounds descriptions.
    2) Try bearings. Angles containing degrees, minutes, and seconds.

    If you can’t read legals, eventually people will have screwed up mortgages and titles to what is supposedly their real estate.

    Oh, wait - never mind, the “Banksters” have already screwed that up far beyond all recognition….


  11. - wordslinger - Tuesday, Sep 13, 11 @ 8:36 am:

    –As long as parents keep envisioning their children as the next Payton Manning or Donald –Trump the middle class will shrink. The reality is that colleges exist to provide jobs for their faculty and staff. Respect skilled workers and stop wasting money on education that doesn’t result in a JOB.–

    LOL. That’s a good one, dude. Interesting take on the American Dream. College bad. Learning bad. Parents going broke sending their kids to college, bad.

    I like Peyton Manning, but he’s one of a kind. Besides, I’m pretty sure he got a scholarship to Tennessee. And I don’t know anyone who thinks it took college or brains for Donald Trump to be Donald Trump. Inheriting vast tracts of Manhattan real estate and lack of shame did the trick for him.

    Seriously, are there parents who want their kids to be the next Donald Trump?


  12. - western illinois - Tuesday, Sep 13, 11 @ 8:39 am:

    Net Worth except at the very top may well be overstated. The Fed and Census try to give an estimate of privatly held business and real estate.
    That segemnet of teh economy has revenues of 14 trillion. The Feds survey respindants value them at 14 trillion. The cenus 4 trillion. Most lager private business are selling at half revenues. These business depend more on banks and seem to have been hit much harder than the Large Corporations. This seems to be why job creation is so poor.
    How has giving all the benefits to the top worked out for the country?
    The American middle class is gone and it voted itself out of existance.


  13. - wordslinger - Tuesday, Sep 13, 11 @ 8:44 am:

    Cincy, thanks for the update and your vigorous ratification of the economic policies of the Obama/Quinn Team that has led to the economic renewal you described.


  14. - OneMan - Tuesday, Sep 13, 11 @ 8:44 am:

    Plus, those types of jobs at CAT pay pretty well, you mean that if they had job fairs or advertised for these positions around the country that hundreds of currently employed techsters wouldn’t leave their jobs to work for CAT with benefits and great employment?

    And sell the house for a huge loss? The real estate market is having a real impact of employment mobility.


  15. - muon - Tuesday, Sep 13, 11 @ 8:51 am:

    I agree with the CAT assessment. There’s a different type of training needed to prepare a student to enter the workforce than we provide in Illinois schools. I don’t know about Mexico, but there are countries that dedicate significant resources to that track.

    The Illinois schools have a core curriculum designed to continue education at a college or university, but too many of the graduates still need remedial help. Others who aren’t all that interested in college get electives that don’t prepare them for work.

    MC Gone has a point about college and workforce readiness, too. Unfortunately, hiring rules almost require recruits to have some college to get past the first stage of screening. Job descriptions today often have a college requirement that didn’t exist 20 years ago.


  16. - 47th Ward - Tuesday, Sep 13, 11 @ 9:06 am:

    ===“Consumer Hourglass Theory”===

    Get used to it because this is one of the uglier sides of globalization. Free trade has lifted, literally, billions of people out of poverty across the globe. That’s a good thing.

    Unfortunately, it comes at the expense of the lower class in this country, whose standing has fallen as the world’s poor has seen some improvement. Poor uneducated Americans are the biggest “victims” of globalization and they don’t even know it. I’m surprised the WSJ is writing about it since nobody seems to care about poor people in this country, including other poor people.

    Marketing to the very rich and the very poor is the new normal. And there is no turning back the clock on globalization. It is here to stay.


  17. - Pliny Holt - Tuesday, Sep 13, 11 @ 9:06 am:

    Have the couple thousand — more? — that have been laid off by CAT in IL already been re-hired?


  18. - Ahoy - Tuesday, Sep 13, 11 @ 9:07 am:

    And the Republicans are blaming Obama and the Democrats are blaming Bush and no one is looking at solutions.


  19. - TwoFeetThick - Tuesday, Sep 13, 11 @ 9:14 am:

    Obviously what’s needed here are more tax cuts and benefits to those at the top of the hourglass - there’s still a few bits of sand trickling down to the rest of us at the bottom. Used to be many of those with wealth felt it was their duty to give back to the society that so benefited them. Thirty years ago Reagan changed all that. Now they can’t vacuum up all the money fast enough. One thing is certain, and there are plenty of examples throughout history: when the wealthy get too greedy and leave too many people in the dirt, they end up with their heads on pikes. Always. If the haves don’t get their heads out of their rears and leave something for the rest of us they, and our society, is doomed.

    While the tea party folks are misguided, manipulated and blaming the wrong people, their anger is real. Our “leaders” better recognize that we can’t have a stable society if 90% of the people are fighting over scraps. I’m seeing the words “civil war” popping up more and more frequently, in articles, in comments on other blogs, in too many places. This inequality needs to be addressed before we pass the point of no return.


  20. - wordslinger - Tuesday, Sep 13, 11 @ 9:15 am:

    –And there is no turning back the clock on globalization. It is here to stay. –

    It doesn’t have to be that way. Our farmers certainly don’t worship at the altar of Free Trade or hands-off government in the marketplace.

    We’re still, by far, the biggest producer as well as the biggest consumer in the world. As such, we should be asserting ourselves in the marketplace with policies that benefit our citizens, not just the cheap hustlers on Wall Street and their abstract notions on “free trade.”


  21. - TwoFeetThick - Tuesday, Sep 13, 11 @ 9:16 am:

    *are* doomed


  22. - Rich Miller - Tuesday, Sep 13, 11 @ 9:18 am:

    ===And there is no turning back the clock on globalization. It is here to stay. ===

    To some extent, you’re right. However, China has artificially kept the value of its currency down by buying up loads of US T-Bonds. It wouldn’t take much of a stronger Chinese currency to wipe out a lot of its competitive advantage

    ===Apple could manufacture the iPhone in America, but its profit margin would drop from 64 percent to 50 percent. ===


  23. - Cincinnatus - Tuesday, Sep 13, 11 @ 10:00 am:

    Wordslinger,

    Or slowed the recovery by 18 months, which is how much longer this recovery is taking over the historical norms…


  24. - Team Sleep - Tuesday, Sep 13, 11 @ 10:16 am:

    CAT is full of another short word that I cannot post here. This is the same company that files countless work visas for foreign engineers even though they can draw from the U of I, SIUC, Rose-Hulman and Missouri-Rolla. I take what they are saying with a grain of salt. There are plenty of young college grads and/or skilled laborers who would relocate to work for a company that pays an excellent hourly wage and premium benefits.

    P&G is right, but it’s a shame it took such a severe economic dip to make people realize that saving money is a good thing. As a parent, I know there are some ways where cutting corners is pointless. But as a consumer, saving as much as I can during our big and little shopping trips is something I’ve always embraced. Perhaps we wouldn’t be as deep in this recess morass if people had been conscientious about their spending - even in good times.


  25. - MrJM - Tuesday, Sep 13, 11 @ 10:24 am:

    Cincinnatus says: “After dipping in 2008-2009, personal income of US consumers has been rising again.” http://goo.gl/03Ld1

    But the census data says:

    The nation’s poverty rate rose to 15.1 percent in 2010, its highest level since 1993. About 46.2 million people are considered in need. *** As for middle-class American families, income fell in 2010. The median household income¹ was $49,445, down slightly from $49,777 the year before. *** Adjusted for inflation, the [median income] family only earns 11 percent more than they did in 1980, while consumer prices have risen roughly 155 percent.

    http://goo.gl/whKK4

    In fact, real median household income was lower last year than in 1997.

    The personal income growth that Cinci refers to is the average income and the average income only went up because those very, very few at the very, very top took home very, very much more wealth last year. (When Paris Hilton enters a room, the room’s average income goes through the roof — but that has no effect on income of the other individuals in the room and little effect on the room’s more significant median income.) Any rise in average income was not felt by the vast majority of Americans because the wealth reflected in such a rise was not captured by the middle class but almost exclusively by the nation’s hyper-rich elite.

    – MrJM

    ¹ “Median income is the amount which divides the income distribution into two equal groups, half having income above that amount, and half having income below that amount.” http://www.census.gov/hhes/www/income/about/faqs.html


  26. - OneMan - Tuesday, Sep 13, 11 @ 10:34 am:

    This is the same company that files countless work visas for foreign engineers even though they can draw from the U of I, SIUC, Rose-Hulman and Missouri-Rolla.

    And how many of those engineering grads are graduating without jobs? Also they are engineering grads, not welders, different jobs. Also how many of those visa requests are for folks who in fact attended school in the US? Also sometimes you don’t have the time or resources to get a new grad up to speed.


  27. - shore - Tuesday, Sep 13, 11 @ 10:37 am:

    Glad we spent last years campaign focused on real serious solutions to address these problems like minor resume glitches and dogs.


  28. - MrJM - Tuesday, Sep 13, 11 @ 10:42 am:

    shore: “Glad we spent last years campaign focused on real serious solutions to address these problems like minor resume glitches and dogs.”

    Are you under the impression that someone imposed your party’s candidates?

    – MrJM


  29. - Team Sleep - Tuesday, Sep 13, 11 @ 10:51 am:

    OneMan,

    Cat, ADM and other central Illinois firms heavily recruit non-U.S. engineers and spend a large sum on visa fees and attorneys. Cat, Boeing, ADM et al have the resources to bring in entry-level grads from Illinois, Indiana and Missouri and bring them up to speed. I find it weak that Cat operates in such a fashion.


  30. - Way Way Down Here - Tuesday, Sep 13, 11 @ 11:05 am:

    CAT has always had a very close relationship with Illinois Central College. As a matter of fact, their Industrial Technology curriculum looks like a CAT wish list. So I think he could find people in Peoria, other places, I don’t know.

    CAT, John Deere, and other heavy maufacturing industries have been crying for machinists, etc. for more than 20 years. Modern maufacturing systems require nontrivial math skills be employed on the fly. If you’re good at math, college is probably in your future not the shop floor.

    I’ll bet the remediation he’s talking about is for math skills—and in THAT he’s probably right.


  31. - Anonymous - Tuesday, Sep 13, 11 @ 11:18 am:

    I wish I had a dime for every US worker who is out of a job because of the “no or wrong skills” argument. While much of the focus is on manufacturing, few seem to discuss that when our IT jobs went overseas (or more visas were granted), they didn’t go to programmers (and yes, there are still programmers with the rights skills here). The jobs were in the fields of project management, quality, analysis, and even writing (where the product coming back to the US workforce to use was so poor, productivity was impacted).


  32. - OneMan - Tuesday, Sep 13, 11 @ 11:24 am:

    Team Sleep,

    At least on our visa applications we have to list the salary and illustrate it falls in the range of what those jobs pay in the US. So with that and the expense of the visa it isn’t really a money saving operation.

    Also we hire U of I engineering graduates for jobs that do not directly involve what they studied and I know we are not the only financial company that does so.

    Just because I might have the resources to bring someone up to speed doesn’t mean I have the time, if I am already short guys the last thing I would want to do is tie up guys to bring other guys up to speed.

    Also the math required for the non-degree jobs is not exactly calculus, but the general math knowledge of American’s is sad. “I am bad at math” is a common refrain, almost a brag, heck look at the number of people who play the lottery for proof of that.


  33. - OneMan - Tuesday, Sep 13, 11 @ 11:31 am:

    Anonymous,

    Really we are looking for IT people (programmers, data center, Linux guru) right now. Yeah the outsourcing doesn’t help but the risk/reward of this industry is technology changes really fast and your skills can go out of date fast.


  34. - mokenavince - Tuesday, Sep 13, 11 @ 12:07 pm:

    It’s nice to hear we are getting 50 job’s from
    Ohio,note it was Chicago that provided the incentive’s. Rahm is going to run rings around
    Quinn.And it would not suprise me if he has some
    one in mind to challange Quinn in the next election.Alexi could use a job.


  35. - Economist - Tuesday, Sep 13, 11 @ 12:33 pm:

    The solution to the CAT problem is simple.
    Pay more and you’ll get higher quality workers. Any CEO should know the laws of supply and demand.


  36. - Anonymous - Tuesday, Sep 13, 11 @ 12:55 pm:

    OneMan, you’d probably be interested in the latest development then. Those who are being “retrained” by the government because they’ve been impacted by international trade, are generally NOT allowed to take IT courses. That would see to mean that either the government has determined that those jobs are gone no matter what–or no one has bothered to analyze the needs and develop a strategy to make sure that re-training meets short/long-term needs of employers who are willing to hire.


  37. - Anonymous - Tuesday, Sep 13, 11 @ 12:59 pm:

    And the Economist has a point, as well. While many Americans are willing to take just about any job at this point, many are still struggling with the idea of wages so low that they’ll have to live in not only a multi-generational dwelling, but one where co-workers from other families reside, as well.


  38. - Anonymous - Tuesday, Sep 13, 11 @ 1:08 pm:

    And in follow-up to my 12:55, those being retrained by other governments (who were originally trained to take over maintenance and further development of legacy systems–which “opened the door” for them because corporations no longer wanted to pay the high salaries for US workers to do continue to do that work (and also started the off-shoring of personal data belonging to Americans and sending our “know how” (i.e., process documentation, methods of manufacturing, etc.) there, too)) have now been/are now being trained to take over the jobs that stayed here (again, PM, BA, QA, QC, etc.). So they are now in a position to drive down those salaries as well–plus US workers no even have access to the SOPS, MOMs, etc. for training purposes because those operations are gone.


  39. - Anonymous - Tuesday, Sep 13, 11 @ 1:21 pm:

    And if anyone thinks those operations and data are going to be easy to get back, read some of the business articles. One healthcare company that opened operations in France a while ago, and then wanted to return them to the US because of some minor quality issues, but primarily realization of lower profits than expected due to “work ethic” of that Country, were told by the government that as long as they were making “even a penny” in profit, they’d have to pay huge severance packages and funds pensions for their workers to be able to shut down the operations.

    We’re obviously not as good at playing the protectionism game, or researching “conditions” before we “leap”.


  40. - Anonymous - Tuesday, Sep 13, 11 @ 1:28 pm:

    In other words, middle management in other countries doesn’t force their employees to wear “Red, White & Blue” at “celebrations” to kick-off knowledge transfer back to the US (the way WE did in asking OUR workforce to wear “Green” when they forced knowledge transfer to areas in the UK). For anyone who experienced that as a worker, they know that many US flags went up the following day at workstations–but it meant nothing.


  41. - Anonymous - Tuesday, Sep 13, 11 @ 1:42 pm:

    And I’ll add that the CEO of that particular company, had a grand ole time immediately afterwards with his increased celebrity at social functions with organizations that supported those areas in the UK. (”Honey, where’s my tux?)


  42. - Anonymous - Tuesday, Sep 13, 11 @ 2:08 pm:

    Oh…and then let’s touch upon increased regs and lawsuits in the US. Thailand’s a good one for that, since most of HR is being off-shored there to avoid lawsuits, which results in employees not even being able to get basic information ABOUT THEMSELVES because the staff are “inept” and can’t do anything beyond read you a script and repeat everything you say. Then, if you’re able to even find someone in the US who is willing to listen to your complaints so that they can help you resolve your issue, the final response is “well if regs and suits weren’t as bad here, we wouldn’t have to off-shore that part of our business.”

    Maybe it’s just payback from years gone by where we took advantage of more “loose” regs overseas for things like clinical trials.


  43. - wordslinger - Tuesday, Sep 13, 11 @ 2:15 pm:

    –since most of HR is being off-shored there to avoid lawsuits,–

    How does putting an HR dept. in Thailand prevent a company operating in the U.S. from being sued here?


  44. - Anonymous - Tuesday, Sep 13, 11 @ 2:25 pm:

    From what I understand, it transfers (or could transfer) some of the liability to the company that has been hired to do the work. Would seem to make sense as you now have another defendant in any civil suits that maybe filed. Whether that helps much with agencies, I’m not sure, but then I don’t believe you have to get an OK from the DOL to file your own suit (while you do, I believe, if the DHR is involved).


  45. - Anonymous - Tuesday, Sep 13, 11 @ 2:31 pm:

    And then there’s credit and background checks required for employment, which “surprisingly” are conducted (if they ARE even conducted) for off-shore resources by the countries, of course, that are providing the resources.

    And then on the other side of the equation, try resolving a credit reporting error here in the US with someone who doesn’t speak English very well. Funny…usually takes long enough for it to impact your ability to get your house reinsured for just a minimal increase in your premiums…and we know how that sets off a chain of events with your escrow and monthly payments. But I’m sure that the “credit reporting person” is really sorry it took so long, but hey, they weren’t trained properly, and couldn’t understand what you were saying–and BTW, he’s also sorry that his sister got the job for which you applied in the meantime but didn’t get because of the error.


  46. - Anonymous - Tuesday, Sep 13, 11 @ 2:47 pm:

    And my favorite one is of the top honcho of an overseas “subsidiary” who bragged in the international press that he was so good at taking US jobs away, that they were now training a 60-something retired little old lady who had retired a while back to “use a computer”. She was slated to begin supporting a legacy system soon.


  47. - lost in translation - Tuesday, Sep 13, 11 @ 2:47 pm:

    “We cannot find qualified hourly production people, and for that matter many technical, engineering service technicians, and even welders,”

    How is the two-tier wage system working. Caterpillar used to be a destination employer for welders, not anymore, they can earn far more with better benefits at a variety of shops. Including Komatsu.


  48. - Anonymous - Tuesday, Sep 13, 11 @ 2:49 pm:

    He was key, BTW, in convincing the Queen into getting one of the company’s US finance people, a MEDAL.


  49. - Anonymous - Tuesday, Sep 13, 11 @ 2:50 pm:

    I kid you not. *sigh*


  50. - Fed up - Tuesday, Sep 13, 11 @ 2:51 pm:

    Well this is one of the down sides to stream lining government jobs. These jobs used to good middle class jobs that you could support a family on. I think the pendulum had swung to far in one direction high pay and benefits for some government workers, and now it may be swinging to far in the other direction. A strong and vibrant middle class should be the goal of both party’s. I don’t think either cares about the middle they are both just playing to their bases at the time being.


  51. - 47th Ward - Tuesday, Sep 13, 11 @ 2:56 pm:

    Don’t worry, the future looks bright…

    http://gawker.com/5839746/a-simple-guide-to-your-bleak-financial-future

    …just kidding. Get used to Hourglass Marketing and a 3rd World right here at home.


  52. - Anonymous - Tuesday, Sep 13, 11 @ 3:03 pm:

    ===…3rd World…===

    Tsk, tsk, 47th: DEVELOPING NATION…please!!!


  53. - Anonymous - Tuesday, Sep 13, 11 @ 3:47 pm:

    Way Way Down Here:

    I believe that CAT has a similarly close relationship (at least in terms of their welding program) with Richland Community College and the Decatur vocational high school. So our tax dollars are already subsidizing the training of companies like CAT at the same time they cut back on wages and benefits for these workers.

    @OneMan:

    Do you work in finance by any chance?

    It seems like one of the sad situations that has developed in the last 10-15 years is so many of the brightest engineers in America have been brought to Wall Street (not that I necessarily blame them for going where the pay is so much better) to invent ever more complicated casino games shifting around debt through “financial engineering” such that too much of our brain power is getting sucked up by the fake economy of finance instead of the real economy of manufacturing, medicine, computers, etc…


  54. - John Galt - Tuesday, Sep 13, 11 @ 3:56 pm:

    RE: the “Hour Glass”

    1) It’d be fascinating to see how stagnant or dynamic people’s positions are within the hour glass. Although many young are in the lower brackets, as they get married & get either education or job training, they go up the brackets, and when they sell their main home into retirement, they also slide down some. The issue isn’t so much disparity as it is fluidity.

    2) I’d also be interesting to see how safety nets effect motivation on the margins. That isn’t to say that people LIKE being on the government dole–they most certainly do not in most cases. But on the margins, if the safety net plus benefits are marginally better compared to just hovering in the self-sufficient zone, on the margins it could incentivize the former “middle class” to simply succumb to the gravitational pull of the benefits. Plus, as more people get on the government dole, the less stigma there is to it so there’s less social pressure to work to get oneself off the dole.

    3) It’d also be iteresting to see how much regulation and crony capitalism has to do with income disparity. Companies large enough to hire a staff of lawyers to navigate regulations, lobbyists to CREATE regulations as barriers for other competitors, or wealthy idividuals who can afford laweyrs to take advantage of tax loopholes more efficiently can easily move through a high regulatory system. The lower class benefits from this system since they’re the recipients of entitlement programs, lunch programs, etc. whereas the middle class gets neither the benefits nor has the pull to game the regulation thicket.

    So I suppose, in summary: I don’t doubt that there’s an hour glass effect happening in this country, but I think there’s significant differences that people see in what may be the cause of said hour-glass.


  55. - OneMan - Tuesday, Sep 13, 11 @ 4:50 pm:

    So you don’t want schools to train folks for what industry needs? I am confused….


  56. - reformer - Tuesday, Sep 13, 11 @ 5:35 pm:

    “We now have a Gini (inequality) index similar to the Philippines and Mexico…” Yet our GOP friends insist we have to keep the capital gains tax at 15% so the ultra-rich pay income taxes at a lower rate than their limo drivers.


  57. - Anonymous - Tuesday, Sep 13, 11 @ 7:50 pm:

    =So you don’t want schools to train folks for what industry needs? I am confused….=

    I’m not answering that one, because foe anon strikes again.


  58. - Not today - Tuesday, Sep 13, 11 @ 8:35 pm:

    I don’t know if this will get in. Rich might have turned things off. I truly fear for the future f this country if the middle class is wiped out. We’ll become like Rome. You’ll have your aristocracy, your soldier class and then the poor. That kind of society won’t stand the test of time. They’ll be a revolution, the wealthy will be obliterated and then who knows what. I know it sounds dark but a U.S. of A with no middle class is no U.S. of A.


Sorry, comments for this post are now closed.


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