and/or is it influenced by human greed? (of those able to make a difference).
The directors/investors will all be used to years of healthy fat cheques, bonuses and regular pay-rises and when the recession hit and profits dropped, would they willingly take a pay-cut? So, if they wouldn't then that saving has to come from somewhere down the line. Given that a director's wage is likely to be pretty decent it, what would be a 5% drop in their wage would be a much larger cut of a number of "lesser-beings". More and more companies stretch their staff more and more then the average wage will only drop.
Not to mention that as any manufacturing industry declines then any directly related industry like design & engineering will be dragged down too afterwards. I can only imagine how the fall of Detroit (as an ignorant non American I can't think of other massive US manufacturing that's gone under) would impact a broad wealth of jobs related to our skil-sets.
I saw this vid the other night - as it's all politics I'm sure it's biased, but it still makes you wonder:
"I once quit a job because my pay was reduced from $6.50 an hour to $5.15 (which was min wage at the time) by a new manager who was 'cost-cutting'."
The beatings will continue until morale improves?
Is that the one where Dilbert is telling others "Hey, come join us flicking our fingers... we get paid for this!" Boss: "I'm not sure what success sounds like, but I'm pretty sure this isn't it...".
Oh trust me, I fully understand the other side of the equation. As I tried to state, I'm not only looking for work for myself, but I also have a few employees or people who'd like to be employees as well.
I can't stay in business without making a profit, just as these companies, but at the same time I also can't stay in business if I employ sub-par employees. Afterall, they represent me and my company. Granted, I don't have any entry level types on my payroll, so I can understand lower wages for low experience. But I have people that all have at the very minimum 20 odd years of experience in the mechanical design field, I myself have been in the field since 1980.
The issue is, if these places want to pay such low rates, they need to be looking at local candidates and direct hires, not contractors.
Contractors will typically if not always have a set place of residence and travel to the job site, usually in another state. Meaning they now have to cover two places of residence along with all the added features and costs that come with that. On top of that typical contractors do not get any type of benefits. They don't get paid for holidays, vacation or sick days and they have to purchase their own healthcare if they so choose and that's usually extremely expensive.
I recall many years ago working at Westinghouse, they paid their contractors on avg just $2.00 an hour more than their directs. But those contractors did get benefits from their contract house, but nothing along the lines of the Westinghouse bennies. So at the end of the day, a direct employee was making out far better than a contractor. There was a reason they had a revolving door for contractors. They got to the point of recruiting recent grads from a tech college in upstate NY, paid them squat and once they got 6 months under their belt as experience, 90% of them bolted for higher paying jobs. We were in a constant state of training new employees and thus got very little down.
Back to my situation, if I offered an employee that $18 ph job, I'd have to expect to pay him about $10-11 an hour to cover my costs and that's giving me ZERO profit, that would be a break even for me. So, ask yourself, would you be willing to work for say $10.50 an hour as a mechnaical Design Engineer/Ansys Tech with at least 5 yrs experience and being Certified on Inventor and having vast experience on the Sheet Metal package? Oh and you have to relocate at your own expense, there's no per diem and no benefits included.
This is why there are still so many people out of work, people can't afford to take these jobs.