Many say that jobs going overseas are major job killers, and I cannot disagree with that supposition. Going back 125 years, all the woolen mills in New England shut down and all went south. Those huge, rambling mills are still there, usually on a canal, because they were powered by water wheels and steam originally, before electricity. The New England woolen mills were a wonder. No longer was it necessary to import cloth. We made it ourselves! Why did the mills go broke and head south? The south had no unions and could turn out cloth just as good as New England, but at a much lower cost. Much lower wage costs. The cost of doing any business, and its subsequent profit, by a large percentage, depends on labor cost. The south had lower labor costs, because the cost of living in the south were, and are, much lower. No huge heating bills from raw New England winters, union harassment, and very high property taxes. The American South still has much lower heat and property taxes than does the American Northeast. Cheap labor costs, eventually made the cloth mills leave the south and go to Mexico, where wages were even lower. Now, Bangladesh does most of it, with labor costs about fifty cents an hour, leaving Mexico out. Mexicans don't make the cloth any more, but they do still make some clothes.
Detroit became a virtual ghost town, thanks to unions pricing themselves out of the market, plus the shoddy cars which Detroit put out, with doors and body parts that didn't fit. In the days of Detroit autos, it was always wise to request a car not built on either Monday or Friday. On Monday, everyone was hung over, and on Friday, they were so anxious to go home for the weekend, that the cars were sloppy in construction. No one gave a good damn. I remember those cars, and they were horrible. Japan's labor costs were microscopic compared to America's, they had no unions, and they had a sense of quality control. The first Jap cars came into America in the 50's, and by the 60's they were a torrent. German Volkswagens came in too, and were not only superbly crafted and engineered, but they got 30-35 miles per gallon of gas, were air cooled, needed no anti-freeze, and would even float, they were so well built. Old Volkswagen's now, command a premium price. The reason foreign cars came into America and killed a good percentage of American car sales, was because of quality and union labor costs to build them. Japanese cars are so dependable, that 90% of woman buy them, as opposed to a Ford or Chevy, even though American cars now are very well built, economical to drive, and very dependable. They are now commonly built in the American South with non union labor, and even my 2014 Mercedes was built in Alabama with American, non union labor. Wage costs affect every single product used by everyone.
The American farm, as it was pictured by Norman Rockwell, no longer exists. It can't, as food would cost too much. Today, farmers have air conditioned, computer driven tractors, which guide themselves, incredible machinery which makes food costs maybe a quarter less than they would have cost fifty years ago, inflation adjusted. Farms today, require far fewer laborers, repairs to machinery, lower fuel and transportation costs, and even irrigation uses far less water than before, due to efficient dispensers. While farm machinery is far more expensive than before, it does far more work, such as pulling multiple plows with one tractor, vs. the old single plow I remember in the 1940's and 1950's. I still miss the two cylinder John Deere's, (Nothing runs like a Deere), but they, like steam locomotives, are but a romantic memory of days of yore.
Railroads are now so efficient, that their labor costs are a fraction of 60 years ago. Gone, are cabooses, jointed rail, steam locomotives, dispatching with station agents, telegraphs, and telephones. Today, if you see a long freight train with a couple of locomotives at the back end pushing, (keeps trains from pulling in two), there is no engineer in those engines. All controlled by radio from the front engineer. No more five or six man crews. The conductor and engineer both ride in the cab. That’s the crew. Unions had a fit, but efficiency won out. Labor costs of railroading are but a fraction of their costs 75 years ago, inflation adjusted of course. Steam locomotives, which I love, are about 8% thermodynamically efficient. Modern diesel-electrics are approaching 45% efficiency. Railroad cars are now 100% sealer roller bearing equipped. Brass bearings and hotboxes have gone the way of the Dodo bird.
Now we come to the latest job killer, and this one's costing tens of thousands, if not millions of jobs in America. Walmart, under pressure of union threats, decided to raise the wages of all its employees. McDonald's and other food and retail establishments have also decided to raise wages. Why? Pressure from politicians, "Black Lives Matter," ACLU, etc. Well guess what? The job losses are from, as an example, McDonalds. That outfit is now installing computer ordering systems. A customer punches his order in on a screen, it comes out, and the only labor needed, will be a cashier and kitchen help. Gone will be tens of thousands of McDonalds employees. All retail sales places, such as Walmart, Target, J.C. Penney, etc have huge labor costs, and these costs determine the profitability of each store. If a store may be marginally profitable, and increased wages make it less so, or even a break even situation, that store will undoubtedly close. Walmart has recently announced that it is closing 150 stores, and 10,000 employees will lose their jobs. Walmart has also cancelled plans to build new stores in the Washington D.C. area, thanks to labor costs, and questionable profitability at D.C.'s soon to be established $15 an hour minimum wage. In Oakland California, Walmart is closing stores as a result of a high minimum wage of $12.55 an hour. A few years ago, Hardees restaurants were on the verge of going under. A new CEO did some detailed checks on all outlets, and found that 400 were marginal at best. He closed all 400, and Hardees is now well in the black. Several thousand lost their jobs.
Efficiency is the hallmark of good business sense, and minimum wages of all types, at any rate, are simply job killers. My re-printed book, "I Hold These Truths," which I wrote 25 years ago, has a chapter on minimum wages, Chapter 59, on page 193 is titled, "The Minimum Wage." The chapter has it all wrapped up in a nice, brief package, as do all 89 chapters for that matter. (There are now less than a hundred left, and I will not reprint the book). Here's a brief quote from that chapter. "The minimum wage keeps teens, and especially uneducated, male negro teens unemployed. They aren't worth the minim wage, so they stay unemployed. If an uneducated, inexperienced worker could be hired at their worth, everyone would be employed that wanted to be, and there would be no unemployment. Suppose, to teach how to work, a potential employer would be glad to hire a kid for $1.50 per hour to sweep the sidewalks or do some other inconsequential work. It is illegal to do so, thanks to the minimum wage. I can think of no better way for a kid to grow up than to sweat long, hard hours doing something menial. Teaches them that hard work is good for you, and that money is supposed to be earned and spent wisely." The chapter goes on pointing out that minimum wages are just like price controls, etc.
Minimum wage laws are nothing more than legalized, legislated, compulsory, unemployment, and as is typical of government, the blame is all on, "Greedy businessmen and huge corporations." A 'huge corporation,' is nothing more than a business owned by millions of stockholders who want their business run efficiently. An efficient business will prosper, and one that has huge labor costs, advertises too much, or is inefficient, will be killed by a business with none of those flaws. There is currently a pillow made in America, which its inventor loudly praises in what seems to be thousands of TV ads. I called, and two pillows cost $100! I am certain they are not made by union workers, but the outfit's advertising is costing a fortune. Maybe $40 a pillow sold? I am not buying one. Colorado Gold is run by family, has no employees other than those who you see on the website, and has never spent a dime on advertising, Who do you think pays for those expensive TV ads for gold and silver? I'll let you guess on it.