Employment, education, and standard of living are all tied together.  People are not buying anything because they have limited funds.  Things are too expensive for the amount of money the people have.   People are going without many things, including the basics.  Because of this lack of purchasing power, few businesses are hiring and most are laying people off.

This poor economy adversely affects the family.  Either the parents are working many penny ante jobs and have no time to devote to family matters or the parents have no jobs and the family structure is breaking down.   Now imagine that you are a young or not so young child growing up in this environment.  How much attention are you able to devote to learning history, English, or algebra?  To apply one’s self, one need rest, good nutrition, and most of all “hope” that studying will make a difference.  When the family is being torn apart, that hope is hard to come by.

What if that new Chevrolet that used to cost $30,000 were to cost $4,500?  What if that new refrigerator the family needed only cost $400 instead of $2000.  I think people would start buying the things they need.  Is that even possible?  Yes, it is.  According to Bloomberg News,

GM workers in Mexico earn wages and benefits of 340 pesos a day ($26.40) on average, or less than $4 an hour, said Tereso Medina, head of the union for GM’s 5,000 workers in Saltillo, a city that makes one in four Mexican autos. Ford workers in the U.S. earn about $55 an hour with benefits, compared with $50 an hour for Toyota Motor Corp.’s U.S. workers, Lewis Booth, Ford’s chief financial officer, said on a Jan. 28 conference call.

Labor costs of that new car are less than 10% of what they were when the car was made here in the U.S.  Where are those cost savings?  We were told that NAFTA would bring lower cost goods.  Show mw the goods.  Those cost savings are going directly into the pockets of the CEOs.  But, STOP, the U.S. taxpayer is a very large stockholder in GM today.  It is that large stake that is held by the U.S. government that is pushing GM to come out with an IPO.  They want to dilute the government’s share of their company.  They want to dilute the taxpayer’s voice.  We need to take our voice to the boardroom and demand that the huge cost saving be passed on to the American consumer.  And know this, If you think that a 10% labor cost is a huge savings, you ain’t seen nothing yet.

A worker in Mexico earns nearly twice as much as a worker in China.  I have a shirt that was made in Sri Lanka.  I believe it cost $40.  It was perhaps a bit more than a yard of cotton.  Say that cotton cost $5 bucks.  The median wage in Sri Lanka is $3,730 a year.  I am guessing a garment worker makes a bit less than the average, so lets say $3,000 per year.  If one divides that by an eight hour day, that works out to less than $1.50 per hour.   Even if they cut out that shirt by hand and they have two hours to make that shirt, that brings the cost of that shirt to $8.00.  Add another $2.00 for all the space that shirt will occupy in a shipping container, that shirt cost no more than $10.  Add in a 50% profit along the way, that shirt should cost about $15 bucks in the store.  In reality, that shirt probably only cost about $5 to the company that actually imported it.

By passing on the cost savings to the consumer, the CEOs could still make a really good living and so could the workers who lost their jobs.  People would not have to work two to three jobs in order to provide the basic necessities and this economy begins to improve.  The Family structure improves and children get the support they need to learn and more importantly, they get a glimmer of hope.

I have heard that the U.S. Government is going to sell off its investment in AIG.  I say, don’t.  Use that stake to make AIG start helping the people they recently ripped off.  It is time to take this country back, one, two, or three companies at a time.  It’s time to FIX this thing.