The American Worker should be Protected!

The American worker cannot and should not have to compete with impoverished third world laborers willing to work for survival level wages!

I have no problem with free trade with another country, but only when it has similar living standards and environmental protection laws.

I know Reaver is going to jump into this thread and complain that protectionism prevents the economy from expanding and would start trade wars. What will really prevent the economy from expanding is if the wages of the American worker decline even more. Yes, trade with China is lowering prices of many consumer goods, but it is driving down wages much more.

American exports to China are insignificant when compared to imports. The USA would have far more to gain than to lose in a trade war with China. Trade with Mexico is somewhat different. I do not like it, for several good reasons, but it is far better than more unemployed Mexicans illegally entering the USA to work, so one cannot begin to argue against trade with Mexico until the problem of illegal immigration into the USA has been delt with.

The USA is a huge country with enough natural resources and a huge, specialized, labor force, and diversified industries. It could get along completely fine without any trade with outside world, with the possible exception of its insatiable addiction to petroleum. Lack of free trade certainly is not, and would not be, a real cause of lower living standards.

 

The American worker shouldn't be competing with third world labour. They should be skilled. Indeed, to maximise intra-industry gains its imperative that the US focuses on innovation. That, not surprisingly, requires an abundance of skilled labour.

One shouldn't blame China for the US's structural deficiencies.

 

I do not see a huge amount of room for innovative growth. Surely you cannot expect a country as large as the USA to be able to base so much of its economy merely on innovation? In any case, as soon as the USA develops a new technology, the Chinese begin copying it within 5-10 years, legally or not.

The economy of the USA does not have any structural deficiencies, at least not of the type you are referring to. And even if it did, just when is American industry going to correct itself? (since only the free market knows what is "best")

And if you think "education" is the answer, what exactly should american schools be teaching? Simply throwing more money at the current system which is not really teaching students how to do anything economically productive is not the solution.

 

Start with an appreciation of the product life-cycle. Mature economies do not have a comparative advantage in labour intensive product. These are typically old products where innovation, if any, has been focused on reducing production costs. It is new product where trade gains are to be had (both in terms of inter-industry and intra-industry trade)

You haven't understood. Of course we expect imitators. That is what drives the innovation process. Its on a par with creative destruction, with the pursuit of success constantly driving the enterprise to find new product.

Name a mature developed economy that can compete with the US in terms of 'low wage abundance'. I can only think of Britain.

It isn't focused on supply side limitation. Its a demand-led problem, with resources skewed too much in favour of short term profit opportunity. This has been intensified by neo-liberalism and policies designed to aid capital at the expense of labour

 

Look back at the 50's.

Japan and Europe were recovering from WWII, so didn't export to the US. Your proposal addresses this.

Women and minorities held menial jobs, no longer the case.

Unions flourished, because the demand for goods exceeded supply, this is no longer the case. Even if we were to eliminate imports because automation has replaced people on almost all menial manufacturing jobs.

There was lots of innovation, because there was much left to develop for labor saving. Not so any more, we are making improvements on products that already meet most of our needs (notice laptop prices have fallen in the last 10 years - additional performance no longer commands premium prices).

You proposal will have a far larger negative impact on the US, than the rest of the world.


We are in a transition. We went through it with Japan, Taiwan, Korea, etc. China is having a big impact because has a much bigger population. But, China will become a bigger consumer than provider, prices, and wages will rise.

That will happen even if we lock ourselves behind a wall of trade barriers. The world will progress, and we will stagnate. China did the same thing after their golden age - not a good move.

 

Americans became unrealistic after WWII, when they were the only country left with power plants, and liquidity, which lead to the easiest economic environment for labor the world has ever seen.

Those days are mostly over, and the American workers will be stronger when the great equalization is complete

 

Unrealistic? No such comment is required. The rot started in the 1980s. In 1970, in 1984 real terms, 20% of labour earned less than $7,000. And then, between 1979 and 1984, 60% of created jobs fell into this category. A rapid rise in low wage abundance created through demand conditions engineered by right wing policy

 

Not sure I agree...IMO the rot started during the Arab oil embargo, energy/gas shortage post Watergate/Vietnam 70's.

 

I agree! Let's help the third world workers lift themselves up out of subsistence wages and poverty. Let them join us as equal competitors with aligned goals. There is no reason to force them to live in squalor.

 

Supply-side shocks ain't nothing compared to the long term damage from underemployment

 

in that context, I agree.

The 80's is when we began record deficit bloating during the Reagan defense spending stimulus.

 

Military Keynesianism doesn't empower the workers, but does maintain capitalist stability. Rational, but terribly inefficient

 

Eisenhower was right about the military-industrial complex. Had we listened to Demming as your quote suggests we would be in much better shape as I believe our situation is just as much bad management as bad government. Our workers are still the most productive in the world we should be able to do something with that. Someone once asked JC Penny what was more important, the Customer, the Employee, or the Shareholder? roughly quoted, he said "Take care of the first two , and the third will b e taken care of."

 

Government is the definition of inefficient. Look it up.

 

In what? Right Wing Cliché 101?

 

The american worker whoever they are, in fact the global working class trapped in america actually.See labour is a commodity and all commodity markets are being or are already Globalised.

the nation market no longer can resist global forces and global markets.

The wage slave market is no different.

 

@Reiver:

I generally agree with most of your economic argumetns (not just on this subject, but in general) though I'd like to point out that..

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But what of the American workers who are no less skilled than those of their Chinese or "insert random non USA" counterpart? the funny thing is that for similar skilll level work the US still pays eons better than most other places. though structurally speaking that is probably part of the reason of higher unemployment since it has essentially the same effect as setting a salary floor that is too high.


The biggest difference is that the stage has expanded, mobility is now even more world wide, PLENTY of people (including Americans) are moving up the social ladder by exploiting works outside of their native countries. where their expertise are much more in demand.


I would think though, that in your argument, the more fundemental fallacy is that we can not have an entire society where everyone is super well educated /skilled. the US by most definition is already pretty high on that ladder . isn't there a diminishing return effect ? also my general view on the problem of education in the recent decades is a simple matter of planning never catching up to changing, education inherently is a long term investment, but by the time that investment pays off the return is most likely already very different from what it was when you started. Changes happen so rapidly that most college or even trade schools often are teaching stuff tha are quickly becomming irrelvant .

 

Not quite. US has higher working poverty than many of its Western competitors.

There are two aspects of labour mobility that need consideration. First, the extent that it reflects market flaws (from non-tariff barriers hindering 'comparative advantage' specialisation to structural unemployment). Second, the extent that external economies of scale are relevant (with trade liberalisation then encouraging clustering of firm).

We'd of course always expect a skills distribution. However, the issue is the relative lack of up-skilling (suggesting an over-reliance on low wage exploitation)

The issue with education is the relative importance of certification. The worst case scenario is the strong screening hypothesis, where education no longer serves a human capital role (i.e. "we waste our time acquiring post-graduate education in order to achieve entry into the 'primary sector hierarchy'"). Unfortunately in Anglo-Saxon capitalism such a result is encouraged. Whilst I'd go for a weak screening hypothesis (i.e. we have both certification and human capital roles), education goes hand in hand with inequality of opportunity. Education's primary role becomes the reproduction of class divides (and the means to justify inefficiently high wage differentials)

 

We're in general agreement here, though that is hardly just an anglo-saxon thing, it's very common in East Asia, even China (though right now cost still inhibits most kids from seeking high education).

And what is the soluation? if even the US gets stuck in this mode, it would seem even more hopeless here in Asia where there is a strong historical tradition to go for higher study to begin with. from a political POV it is generally suicidal for a elected offical to try and REDUCE college entries and/or raising the bar for it in general. in the end the cycle ends up pretty much the same for everyone, it use to be most folks were just Highschool grads... then everyone's college grads.. then everyone's a post-graduate.. before you know it you probably need a PHD just to qualify as a postman (ok hyperbole but not by that much, we DO have PHDs trying to get jobs as postmens since the pay is actually better than what they would otherwise find.)

 

I'd make a distinction between Anglo-Saxon capitalism and liberal democracy in general. The latter tends to have greater social mobility, making it more difficult to utilise standard 'class' arguments.

It has to start by reducing labour market flexibility. Resources should be shifted away from reliance on abundant low skill labour. We can't just focus on education as we'll just get a high number of underemployed graduates!

 

huh? do you mean reducing employer's ability to shift place of operation? I would have thought that everything being equal a flexible labour market is a good thing. Though i'd agree that labours being unable to quickly adapt to changing times is a very big part of the issue, but the solution of not letting the times change that fast doesn't seem like the most logical.

 

No, I mean the use of either collective bargaining or a minimum wage to reduce the profit from production reliant on low skilled labour. The profit motive, here celebrating the short term, generated market failure for human capital delivery

 

If American wages decline China will have to lower its prices on goods, because, when the scenario of American worker's wages constantly lowering is extrapolated out, the cost of imported goods would naturally be higher than goods manufactured right here in the US because there would be a premium of transport for imported goods attached to the price of an item.

Actually the most significant American 'export' to China US dollars, as consumers in the US buy the cheaper Chinese products. As I said above, if our economy gets worse China could all but lose its biggest 'customer.'

Yes it could however, we (US) are not in that position at this time in history because of many things, not the least of which has been a more 'protectionist' approach to both human and environmental resources in our own country.

 

But again, we roll back to the same problem, if you do this, then there is a strong motive for the operators to simply pick up and seek greener pastures. which means they're also taking away capital, not to meantion that you can stimulate the demand for higher skilled labor but if the supply does not actually match it then it's still for naught. From what I've read there is actually a strong demand for skilled labor in the US RIGHT NOW, but most of the unemployed folks simply do not qualify for them. which seem to suggest that there is a very strong mismatch between demand and supply.

And we go back to similar basic problems, from the supply side, most folks can not sufficiently change / improve their skill set / orientations during their career, at least in a relatively quick fashion, if the demand side is in a strong mismatch situation from the supply, then we're pretty much stuck. the only solution seem to be that you either try really hard to force / help those folks change their skill set or you change the demand set to fit with the supply.


Also, isn't many industry need an entire chain of workers? aka everything from low waged / low skilled folks to those in higher end? wouldn' the effect of reducing the demand for the former also play a part in reducing the demand for the later as well?

 

What US employers rely on abundant low skilled labor?