Benefit Consultants Blog

Is Manufacturing The Answer To Fixing The USA Economy?  Should we concentrate our efforts in building more and better goods and then supplying the world with those great products?  Or should we drop manufacturing all together?

 In past decades the USA was a great consumer and producer.  The products manufactured in the USA were desired all over the world.  Should we be concentrating our efforts in finding the next big product that we can produce and export?  After all the USA has great equipment, wonderful innovation, top engineering and a superior labor force for manufacturing.

 Maybe we should focus on what products we can manufacture and export to countries like Mexico, China, Korea or India.  Let’s take cars as an example.  The USA could revamp the automotive industry and export inexpensive well built cars to every single country in the world.

 Can the USA make the best and most inexpensive cars in the world?  Can we beat German, Japanese, Korean and the up and coming Chinese cars?  Is our labor pool that much better that we pay $20 to $30 per hour for a fully loaded employee and compete with countries like Mexico that spend $2 to $3 per hour for a fully loaded employee complete with tax, insurance and social security?  Is our labor really 10 times better?

 How about other business expenses like rent, electricity, phone or water?  Are they more expensive or cheaper in other countries?

 How can all of this translate to costing and real hard cash?  Let’s just say we need to allocate 100 man hours of employee work into building our car.  In the USA the straight out labor cost would add up to $3,000 at $30 per hour with benefits, workers compensation, and employment taxes included in the calculation.  In Mexico the same car would cost $300.

 Yes, there are many variables to costs including fixed and variable.  Some big variables could be in the acquisition of raw materials or transportation of raw materials and finished products.  You also have to consider import and export tariffs for entering or leaving countries.  Taking just the labor costs as an example might not be fair.  Or is it?  Well, imagine having 1,000 employees at $3 per hour or the same for $30 per hour.  If you were the CEO, a member of the board or a stockholder in the company what would you do? 

 Is manufacturing better and cheaper products that we can sell all over the world the answer to our economic slowdown?  Or even the answer to the future of our economy?  Will this re-instate us as the dominating economic force in the world?

 Will holding high paying jobs in the USA make our products competitive around the USA?  Is building factories in a first world nation the answer in a world economy?  So far it’s not looking good for USA manufacturing.  We might be the best, but we’re not 10 times better than the rest.

 Jorge Olson is the author of the book “The Unselfish Guide to Self Promotion”. He writes and speaks on how to get a better job, a promotion and a raise in one year.  Get his new book on Amazon.com and on http://www.UnselfishPromotion.com

It’s no secret that the volatile economic recession that we’re currently immersed in has forced nearly every consumers to rethink how they use – and abuse – their credit.  From credit cards to personal loans and mortgages, many people are now struggling to deal with immense amounts of debt, all at the expense of their credit scores.

Yet what about that of your business?  While coverage of the credit crisis tends to focus on more personal stories, many businesses are not exactly smoothly sailing through the recession.  However, having a healthy credit score can drastically improve the willingness of lenders, suppliers, insurance providers and even financial institutions to work with you and your company.  Additionally, an excellent credit score will further increase your access to any funds should your business encounter a rough patch down the road.

So if you’re a business owner looking to protect the credit rating of your business, here’s a few tips that will keep you in the good graces of your most important business partners – and help you weather the recession storm!

1.       Run through your company’s credit report with a fine-tooth comb.  Order your company’s reports from credit agencies and check to make sure that any information isn’t outdated or a mistake.  Remember, these are the same credit reports that lenders and other institutions have access to, so you’ll want to make sure that  all of the information is accurate.  If you do notice any inconsistencies, immediately report the errors to your credit-reporting agency. 

2.       Pay all bills on time. Like with personal credit ratings, many factors enter into determining a credit score – but none are more important than your company’s ability to pay all of your bills and vendors on time.  Many institutions and venders who are looking to potentially work with your business want to see your fiscal responsibility – if you frequently pay your bills late, you risk losing key business relationships.

3.       Free up funds in your business.  Credit ratings often drop when individuals or businesses have to high of a debt to open credit ratio.  Prevent yourself from relying too heavily on credit by making small changes that will free up funds within your business.  Look at expense reduction, or reduce unnecessary costs that your business could do without for a time.

Protecting the credit rating of your business doesn’t have to be difficult – rather, by looking for creative solutions to solve your financial problems, your business will preserve its credit no matter what condition the global economy is in.

If you want more information on how to help your business strive and thrive towards financial security, visit www.kenhimmler.com, the IRA and 401-K experts!

Economic recession may be normal occurrence but it does not mean that it cannot hurt you. In Economics, recession refers to the period in a country’s economy when there is slowing down of progress and rising inflation rates. Like a cycle, a country’s economy is sometimes up and sometimes down. We just donít feel it before because the economy oftentimes bounces back fast. It is only now that recovery seems so slow and damage has become far-reaching with the crashes in the real estate industry as well as to the banking and insurance sectors.

So what makes an economic recession? What do you need to know about it and what is it all about?

Time Management & Goal Setting in difficult times.

1. Rising costs of living 

Because of the slowing down of the economy, production will not be as active. This stems from the lesser demand that comes from the consumers. When this happens, prices will rise as there will be lesser products in the market than before. Basic commodities will usually rise especially those that people consider as basic necessities such as food, shelter and home. Oftentimes, what you will normally be able to buy for a specific amount money will not be as many. This is when we say that the value of the money lessened. 

2. Job cuts 

During recession, many companies will suffer from cash flow problems. Because of the lesser demand, more and more companies will shut down their production lines to cut costs. This leads to cutting off jobs just to make both ends meet. Right now, many companies in the United States have already done job cuts. Although it does not sound good, these companies do not really have a choice as often, they will need to let go of some employees to keep the company running and still employ the others. 

3. Expense cuts 

Because people do not have much money in their pockets, most of them will be scrimping on their expenses. They will only buy things that they need. Some do this because they want to save their money while others do this because they donít really have a choice, having a much lower income than before. This however contributes to the economic recession as low demand will also lead to low supply which can affect company earnings. When this happens, jobs may become at risk and companies may suffer from financial losses. 

4. political turmoil 

Although it is not often the case, most countries suffering from economic recession will have political turmoil. This is especially true if the country has not responded to the economic recession well and the situation has ballooned 10 times over. When this happens, people will naturally blame the people in the government and their policies. This is the time when people troop to the streets to protest or they announce their displeasure through surveys on job approval ratings of government officials.

5. Tax cuts

Because of lesser income and less value for your money, the government tries to augment people’s financial problems and also to help companies by giving people more money that they can spend on basic goods. They do this by giving back to their people a portion of their income tax cuts.

In this instance, the government is cutting off the income that they get from people in order to stabilize the economy during economic recession. 

Do be sure not to let an economic recession keep you from achieving your own objectives.