RACE TO THE BOTTOM, PART I: A PARABLE

So my friend Bob and I are wooing the same woman. That this is fictional should already be apparent, as no one has used the word "wooing" seriously in about 40 years. Suspend your disbelief for a moment.

I've gone on a few dates with her and she seems nice. Bob has done the same. The time has come to take the relationship to the next level, so she has to choose. We are both decent guys, and not without our respective merits. Bob and I each get one final date to make our pitch. I go first and promise that, despite my gargoyle-like appearance and mouth like a longshoreman, I'm loyal, supportive, and funny. And I do a lot of housework to boot, should we ever move in together. She seems pleased. I like my chances.

After she meets with Bob, he and I convene to talk about our experiences.

I relay that my experience was positive and I think she has an interest in me. Bob agrees; "I felt like you were going to be the choice, so I had to sweeten the deal." What does that mean, I ask? "Well", Bob replies, "I offered to pay her rent. And to buy her a car. And I guaranteed that I'd come over once weekly to clean her house."

"Jesus", say I.

"And do her laundry."

"Oh, Bob. That's…that's pitiful. Have a little dignity."

"Save the sour grapes for another time," Bob says. "I think you're just jealous. And upset that she picked the better man."

This actually worked? "Yes," Bob tells me. "It's official. She and I are now a couple." While I find this surprising and sad, I realize that a woman who would choose a partner based on such criteria must be fickle, shallow, and altogether incapable of long term commitment. I am better off without her, and to Bob I wish nothing but the best in what is likely to be a bad relationship. Unfortunately Bob and I aren't very close anymore, as he seems to derive great pleasure from gloating about his superiority over me and his desirability as a mate as evidenced by his ability to snag this questionable excuse for a woman. "Bob," I say gently, "she picked you because you're basically paying her to be your girlfriend. She might think you're a total loser for all you know." The words fall on deaf ears. He is proud of his "accomplishment." I pity him.

Then self doubt sets in. Should I have done more? Am I undesirable? Will I be alone forever? Is this what it takes to find a partner these days, and I need to get with the program? Rejection is never easy to deal with and all of these negative thoughts are natural responses to it. Ultimately, though, I tell myself that I did the right thing. She was cool but I'm not about to start paying people to date me. That makes absolutely no sense. Then again, I suppose the rationality depends entirely on how desperate one is to be in a relationship.

Neat story, right? And on a totally unrelated note that I will leave here for no particular reason, two counties in Georgia just outbid several other sad sack states (both Carolinas, Mississippi, etc.) for a new Caterpillar factory and 1000 to 1400 jobs. All it cost them was $60-80 million in incentives and the promise of a docile workforce that would be thrilled to get $11/hr.

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35 Responses to “RACE TO THE BOTTOM, PART I: A PARABLE”

  1. Leon Says:

    Best case scenario, at 1400 jobs for 60 million dollars (correct me if I'm wrong) equals $42,857.14 per job. I hope GA has a high sales tax, because you aren't going to get much income tax from 1400 $11/hr workers. Just putting that out there.

  2. Xynzee Says:

    Ah yes. The dumb**** who will pay for the priveledged to suck up someone's watery $*** with a straw. There's always one who will make everyone else have to do the same to get the job.

    That's why unions are important. Keeps those with no standards out of the mix at the negotiation table. Unfortunately, they seem to win out all the time. Then we wonder why everything is turning to crap all around us.

    Most of Aus' "wage negotiations" happen at the Fed. level. Unfortunately, the "Labor" Govt has done everything it can to poison the brand that we'll be getting this next time around:
    http://m.smh.com.au/opinion/political-news/hockey-blasts-attitude-of-entitlement-20120418-1x7zs.html

    WASF!!

  3. freeportguy Says:

    There is always a bottom line somewhere that dictates decision making. In business, one is rarely hired, promoted or laid off based on merit alone. "It's not about what you know, it's about who you know".

    Many people will date people with an upside who bring something to the table. People rarely marry for love alone.

    Most people cast their votes to those who will give THEM something. Doesn't matter if the people running are good or bad, it's about what they can bring THEM. Merit has nothing to do with who they'll vote for.

    It's all a bidding process. "What can you do for ME?"

  4. Xynzee Says:

    @Freeport: yes we can reduce *all* human behaviour to purely economic exchanges, thereby dehumanising ourselves.
    Thus proving the further negative impacts that economic rationalism has had on humanity and society.
    http://online.wsj.com/article/SB10001424052702304356604577341940149291220.html?KEYWORDS=What+Money+Can%27t+Buy

    However, that then comes back to Ed and my point. There's "what's in it for me" and then there's "I have such little sense of worth, and only by your abusing me, and I'll *pay* you for the priveledge of being abused, can I find a modicum of self worth" form of transactions.

    A primary component for economics to work as its proponents claim it will is ceteris paribus. All things being equal. So for that "All Things" in the market to work correctly would also require the actors to be equal as well. Therefore, the buyer and seller must be equals. This part of the reason monopolies though being the natural course for capitalism as we know it are its anathema. Because the buyer losses their equality for necessary goods.
    The other issue is how the actors perceive themselves in the exchange. We know that often there are actual imbalances and/or there are perceived imbalances (ie "self worth"). Someone posted that great Steinbeck quote a few months ago that's very relevant to this.

    So if you and I both are competing for a job, and while because I have more skill and experience I can charge $10/hr (I have the ability to deliver faster) whilst you're less experienced can charge $5/hr (though it'll take you longer, you believe you're an up and coming gun in the industry). So the market price is somewhere in between. Both you and I believe that in our market we're asking what our skills are worth, and that covers not just costs but leads to profit as well. This is an acceptable situation.
    Enter someone who has no sense of worth, is starving and desperate not just undercuts your price, but also does the job at a loss. Because of this individual, both of us must lower our rates drastically just to be "competitive" with this lowest common denominator.
    Thus my earning goes backwards, and you lose out on earning your true industry worth as you advance in skills and experience.

  5. Middle Seaman Says:

    Is Bob available?

  6. c u n d gulag Says:

    This is our future:
    Masters, and serf's.

    We might as well change our National Anthem.

    "Let's go serfin' now
    Everybody's learning how
    Come on work some unpaid overtime with me…"

    I have one word I want to say to everyone:
    Guillotines.

    Forget the fucking American Revolution.
    The French had the right idea.

  7. buckyblue Says:

    And the Bitch is hyped as a true American and job creator.

  8. anotherbozo Says:

    No wonder I've made a lot of $$ on CAT stock.

    Thank you, Georgia!

  9. Arslan Says:

    When economists reduce every human interaction to economic rationalism, it is a good idea to question whether this rationalism even holds water in regards to economics.

  10. Major Kong Says:

    In 5 years we'll be reading about how the plant is downsizing and moving production to Monterrey Mexico or Guangzhou China.

    A race to the bottom has a tendency to keep going until it hits the, you know, bottom.

  11. Michael Says:

    "Caterpillar locked out workers at its London [Ontario] plant, Electro-Motive Canada, on New Year’s Day after they rejected its take-it-or-leave-it demand to cut their wages by 50 per cent. It was clear from the beginning that this was not a normal work stoppage. The company would not talk, wouldn’t budge, wouldn’t bargain."

    Caterpillar is a major Republican donor and will probably be right at home in Georgia, with the government crony capitalism picking up all the wage costs and Caterpillar only responsible for making the appropriate campaign contributions.

  12. Xynzee Says:

    @MK: of course they'd never do that. It's not like it's Airbus or anything. They got huge concessions, tax breaks and public "investment" to help them develop the A380 on the promise to create 1000s of jobs in Europe. Then buggered off to China.

    The Govts always fail to put enormous hooks in these things, like you get these tax breaks, but one whiff of shutting down and moving production else where before X-yrs and you'll repay all of them back at PayDay Loan rates. Oh yeah, it's the ALEC lobby… erm… legislators that scuttle these hooks.

  13. jeffteaches Says:

    I've lived in Georgia for nigh on 50 years. Currently, our dumbass state government is run by Rs; 15-20 years ago it was the Ds; these Ds held the reins since the end of reconstruction.

    In fact, many of the current Rs used to be Ds until the Democratic party grew too dark for them.

    Yet my state has suffered the same stupendous levels of cronyism and legislative ineptitude under both parties as long as I can remember!

    The modern R form of idiocy does seem more arrogant and self-righteous.

    @Xynzee: Don't use that dirty "u" word here. We're a "Right to Work" state! (Hangs head in shame)

  14. Nan Says:

    States have been engaging in this collective race to the bottom for years. So have counties, cities, and other forms of local government. The corporations play them off against each other, get a shitload of freebies and tax forgiveness for a set number of years (thus providing the illusion that, in exchange for some sacrifices now in property tax revenues, there will be a payoff somewhere down the road), and then build a factory, store, whatever, that can be abandoned in a nanosecond when they'd actually have to start paying taxes themselves. With a few rare exceptions, the factories they build are all designed to have the specialized equipment removable in less than 24 hours.

  15. Major Kong Says:

    I believe it was Jack Welch (General Electric) who once said that in his ideal world the factory would just be mounted on a barge and sailed around to whichever country had the cheapest labor at any particular moment.

  16. Dave Dell Says:

    America, and to a certain degree the rest of the world, seems to be heading in a direction written about by SF author Mack Reynolds. It's been decades since I read the short stories/novelettes but I recall what was essentially a corporate takeover of the U.S. to the extent that the corporations would wage limited wars over markets and resources.

    Three cheers for Argentina for saying to Spain, "You can't sell out our resources to China."

  17. Sour Kraut Says:

    @Major Kong,

    That'd be doubly convenient for Mr. Welch, considering the multiple felonies GE committed under his leadership. He could simply sail the factory to countries with non-extradition policy as well as cheap labor.

  18. cromartie Says:

    Moonlight and Magnolias strikes again. Read it and weep.

    http://bit.ly/er8rWK

  19. S Says:

    Xynzee at 4:09 am, while I also have the suspicion that most arguments for the free market assume that all actors have similar buying strengths and information (and act completely rational), ceteris paribus laws have nothing to do with that.

    Ceteris paribus laws are those that assume a relation between some variables with all /other/ variables held constant. Thus an economic theory could claim that, all else being equal, the less money A has, the more others exploit A. The others may be radically unequal from each other and A. The ceteris paribus claim simply compares two situations that differ only in A's wealth.

  20. sluggo Says:

    You wrote an allegory, not a parable. Sorry. Just feeling nit picky, bitter and needed an innocent person to take it out on.

  21. Mo Says:

    Yeah. Guillotines. So appealing, especially when contemplating the .1% and goons at the bottom

    I just read a history of the French Revolution, hoping to pick up some hints.

    Alas, they murdered Lavoisier. And Robespierre was a total prick, the very last sort of person you'd want in charge of death squads. At least Stalin wasn't self-righteous about executions.

    Burke the conservative admired the Jacobins, which is a dink in their column.

    And then, of course, Napoleon.

  22. Chicagojon Says:

    20 years ago IL gave Sears $250 million in incentives to stay in IL when they threatened to leave. Recently this was extended another 15 years (~$125 million incentive) plus employee income tax credits for the next 10 years (~$150 million incentive).

    Fuck Sears. Go to Ohio or Georgia. Don't let your ass hit you on the way out. Have fun with regional airports instead of O'Hare. I'm sure the 5 star hotels in Athens Georgia are great.

    Unfortunately IL paid out (put out?) yet again, but there have been other cases where IL has refused to match or counter GA, IN (our nearby shittier little brother), the Carolinas, and the other Southern slum-lords. My hope is that everyone goes to Georgia and it becomes the new Mexico of slum-workforce and shitty quality.

  23. HoosierPoli Says:

    "Best case scenario, at 1400 jobs for 60 million dollars (correct me if I'm wrong) equals $42,857.14 per job. I hope GA has a high sales tax, because you aren't going to get much income tax from 1400 $11/hr workers. Just putting that out there."

    The state could also just hire 1400 new teachers at entry-level salaries and SAVE money.

  24. Major Kong Says:

    @Mo

    I plan to make a fortune running the torches an pitchforks concession.

  25. Sarah Says:

    And in another note, also completely unrelated, one in two new college graduates are either jobless or underemployed. http://hosted2.ap.org/FLJAJ/f7ded15e4d4846268a17b79c1c4b7cb8/Article_2012-04-23-US-Overqualified-College-Grads/id-05d79e3950b84dcda608863442071fa9

    or http://tinyurl.com/7l8bxhq

  26. mothra Says:

    My hope is that everyone goes to Georgia and it becomes the new Mexico of slum-workforce and shitty quality.

    No, New Mexico is the "new" Mexico of slum-workforce and shitty quality. People here will work for just about any wage you want to throw at them. Repub. governor and legislature cut the incentives for about the only good paying industry we had: the movie industry. You see, that was liberal Hollywood in addition to being the Dem governor's idea, so it just HAD to go. Plus….they are union. Can't have unions. Oh, no.

  27. Mo Says:

    Major Kong -

    Hey, if you can get hold of some shoulder-launched RPGs, I'd buy a couple dozen crates.

    For hobby target practice, of course.

  28. Davis X. Machina Says:

    "I plan to make a fortune running the torches an pitchforks concession."

    Ames/TruValue closed its pitchfork plant in West Virginia in 2002.

  29. fcc Says:

    And Ann Romney will be the shop steward.

  30. Talisker Says:

    To complete the analogy, Bob cannot easily afford to throw money at his girlfriend. In order to do so, he lives off ramen and stops paying child support for his kids from a previous marriage. (Maybe that's Part 2 and I'm jumping the gun here…)

    On a completely unrelated note, state governments could find much better uses for this money than throwing it at multinational companies. But that would be Evil Socialism, so is not allowed.

  31. Andrew Laurence Says:

    A long-ago girlfriend dumped me in favor of a sexually inexperienced man who seemed grateful to have a girlfriend at all. He earned a bit more than I did (which was significantly more than she made) but was much more generous regarding spending his financial resources on her. I honestly don't know whether that was a deciding factor, but last I checked we were both happily married (and I still am), so all's well that ends well.

  32. Patrick Says:

    I'm generally pretty liberal, but I don't think we should bend the facts to suit our preferred worldview. So I'm gonna play some devil's advocate here.

    If you read to the end of the article, you'll note that the agreement between Athens/Oconee counties & Caterpillar included a clawback provision for the incentives if Caterpillar did not invest the promised $200 million.

    So really, the counties are betting that Caterpillar will not go out of business in the next 20 years. Considering that Caterpillar has been in business for almost 90 years, that doesn't seem like an unreasonable bet.

    Also, these two counties are smartly taking advantage of the rock bottom loan rates that are available at the moment. Again, this seems like reasonably smart management.

    Poorly management and cronyism is not uncommon amongst local governments, but that does not mean that all business incentives are a bad idea.

  33. fireproof Says:

    +1 to patrick for engaging in reasoned thought (even if he's wrong) over kneejerk lament. but of course, i read this blog for the laments ;)

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