So hire an apprentice

 figure if Donald Trump can do it, then so can you. I often think that the current pain we feel about off shoring and the loss of manufacturing jobs has to be something more than the result of what George Bush might have done. I’ve talked a bit about that previously.

In a conversation I had with Dick Morley, often acknowledged as father of the PLC, he mentioned that a certain car manufacturer had a litigation contingency as part of their earnings numbers--a big contingency.

He also said that a huge amount was added for employee retirement/pension plan issues.
That roughly added up to more than 15% of the sales cost of a car attributed to costs not associated with directly with making the car (i.e., steel and plastic).

A bit later, I watched a TV interview in which a small, east-coast business owner discuss his employee health care plan. This company spends $7,700 a year per employee for health coverage.

When I started to consider the consequences of these numbers, my head started to hurt. I thought Canada was bad (and believe me it is).

In Canada, benefits constitute more than 50% of an employee’s wage in direct cost to the company. Benefits are a fact of life for an employer, and the employee deserves them, but how does a company pay for this “social responsibility?”

If I owned a business that had to bring home a bottom line of more than $10,000 per employee to simply open my doors, I don’t think I could keep my doors open too long, especially if I was competing with products or services without this cost component. 

How can reducing the cost of steel or motors, or other components compensate for this overhead? It seems this is what companies have been trying to do, along with shipping the manufacturing off shore to reduce costs of those beautiful little widgets.

Meanwhile, it seems that some of those biggest cost burdens not at all involved with manufacturing certainly are not decreasing too.

While wondering how some companies deal with the “sue now, ask questions later” attitude so readily on display in society, I have been met with some more disheartening numbers.

As Morley told me, litigation control is a method to allow for the realization of damage, which really does happen (Erin Brockovich and Pacific Gas & Electric comes to mind). But frivolous lawsuits are such a popular option today that the fear of being sued is as big as the costs associated with protecting that fear. So with the health care component, legal ‘contingency’, retirement responsibilities, and employee benefits, how can anyone in North America compete with off-shore regulations that don’t dictate the same social responsibilities?

They usually can’t. So who’s at fault?
My daughter’s boyfriend got a new job recently—hired on a 12-month contract. His girlfriend (aka “the daughter”) was hired on a four-month contract, which since has been extended by a year.

Here, north of the 49th parallel, it has been common practice—in fact, often preferred—to hire on a contractual basis because the cost to the company is minimized.

No wrongful dismissal problems, charter of rights issues, etc. Simply, “I’ll pay you for the work you do.”

Not a bad approach if you’re the company. This way, the company can have the local support it wants and needs, and gets the off-shore pay scale (arguable, I’m sure) it has to have to compete.

The contract employee is responsible for health coverage, which is free in Canada (a topic for another time, perhaps), insurance, etc. In effect, they are their own small company.

Now, back to the point I’m trying to make. There is an apprenticeship program in Canada that trains people in certain trades. They go to school as well as get work hours in their related field. The employer gets a good worker for less money because of the improved learning curve. For those brave enough to hire without experience, the rewards can be more than financial, but you can be sure that it is the first benefit you can expect.

So as a machine builder, you can hire an apprentice, save money and benefits, develop a skilled team member, and have money left over for some litigation contingency.

Can it happen in the U.S.? Does it happen now in some measure? What do you think?