Should Trade Be Treated Differently?
I promise this is not a continuation of the shouting match. But I was interested in all of your opinions on one question: should trade be treated differently?
People lose jobs for lots of reasons, technological changes, taste shifts, and trade -- to name just three.
One of the interesting points Gene makes in his book is that our policies should target all of these sources of job loss. Retraining, wage insurance, and other proposals should apply to everyone dislocated from a job.
To me, this has strong normative appeal -- why should we react differently to a factory that shuts down due to trade than to one that shuts down for other reasons.
It also has strong political appeal, going beyond heated debates about how much job change is due to trade.
And finally, I might note, it's not simply a "triangulating" or "centrist" idea. If anything, it's a radical set of proposals that could greatly improve our labor markets.
What do others think?
One difference is that it might be sensible to seek different sources of funding to redress different causes of job loss.
In the realm of trade, a tremendous source of funding exists that doesn't exist with other causes of job loss. For instance, if the United States adopted a worker retraining tariff, the country could use global trade to fund its worker retraining programs. By adding a very small new tariff on imports, America's steady and enormous influx of imports could be used as a prime funding source for a broadened retraining program for those displaced by global trade.
The rationale behind this arrangement essentially is fairness: global trade winners--i.e., importers--should compensate its losers--i.e., workers who lose their jobs due to overseas production. But it's also Pareto Optimal because it specifically requires the winners to compensate the losers. It's also good policy because it uses the country's comparative disadvantages to fund worker transition to sectors where the nation has comparative advantages--thereby tying displacement to adjustment.
By the same rationale, however, it doesn't make sense to use such a tariff to compensate victims of other varieties of job loss.
So if we are concerned with how we pay for job loss assistance, it does make sense to respond to separate causes through separate mechanisms.
November 7, 2005 3:28 PM | Reply | Permalink
There is a difference between "job loss" and "economic dislocation." Not every lost job creates economic dislocation --- and business in fading industries could probably prevent most economic dislocation through attrition --- (which, of course, increases if a business is doing so poorly that it offers neither raises or opportunity for advancement.)
"Trade" isn't the problem either --- its greed, pure and simple. Knight-Ridder doesn't have a whole lot of competition in the Philadelphia newspaper market, but its cutting its staff on both its publications here, because the double digit profits that the corporation realizes aren't (supposedly) high enough. We've set up a system where people no longer believe that their stock market investments represent potential risk as well as potential profits -- and we'll throw people out of work to sustain that myth.
"Trade" plays a role in this, because it provides one means by which corporations can maximize profits by creating economic crises for their (former) employees. But trade isn't the problem, its the greed that makes the "downside" of trade necessary.
November 7, 2005 4:12 PM | Reply | Permalink
p lukasiak is right on the money.
It was not that long ago that "downsizing" was a new term originated to describe the smaller cars of the 80s. It now refers to the lopping off of ten thousand workers. It used to be NEWS, but now it is so commonplace it is relelgated to page 47, if it is reported at all.
Greed says it all.
And they do it because they can. Hell, you can always fire 10 percent of your employees and work the rest 10 percent harder. That's not rocket science. It's also not very nice. But, hey - - we've got to hit those quartlerly earnings for the Wall Street Analysts or they'll bomb our stock.
And we wouldn't want that, would we?
November 7, 2005 4:55 PM | Reply | Permalink
I haven't read Sperling's book, though I'd love to. I can't afford books anymore. I haven't had a job for 5 years.
Retraining? Are you serious?
I have a Ph.D. in Computer Science. Every single job one might apply for anymore involves computer skills. I can't get those jobs because I'm too qualified - and I couldn't lie to hide my qualifications if I wanted to - anyone who wants to know about them doesn't even have to ask me.
Technology, technology, technology. Technology devalues labor. The nature and level of technology in the world now is having a dramatic and fundamental effect on the value of labor worldwide. It is the root of all of the other problems I've seen mentioned in this thread.
Let me explain something that should be obvious. The more product people like me create, product that persists and propagates with a life of its own, and product that augments and replaces human labor, the more we make ourselves economically obsolete in a capitalist-only economic environment.
I shouldn't have to explain this in detail. If the rest of you are smart people, you should be able to start from the premise and fill in for yourselves. Unless flouride has some unknown effect, or something like that.
There's only one thing I don't understand, and that's why the rest of you don't understand. This is basic economics, and the way people discuss these issues, I'd presume that those basics wouldn't be lost on so many people.
November 7, 2005 4:56 PM | Reply | Permalink
Retraining, wage insurance, and other proposals should apply to everyone dislocated from a job.
How many times should people expect to have to "retrain" in their life?
What are you going to retrain them for?
How can someone retrain while they're in the middle of trying to raise kids and pay a mortgage?
The "retraining" mantra is the folly of economists who see people as nothing but economic production units. When applied to real people with real hopes and dreams, it is simply a sophisticated way of saying "Fuck You, I've Got Mine".
Hardworking Americans should have a reasonable expectation of a lifetime career, even if that lowers corporate profits.
November 7, 2005 6:22 PM | Reply | Permalink
Retraining? Are you serious?
I have a Ph.D. in Computer Science. Every single job one might apply for anymore involves computer skills. I can't get those jobs because I'm too qualified..."
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Teach. Math and science teachers are in demand in a big way. You can expect to start at 40,000 but end at 70,000 plus a government pension, health benefits, and that elusive thing those of us disallusioned with the corporate world never had - stability.
Well that's my plan anyways. I'm using software as a service now by the way, as a web site hoster, but its super competitive so I'm enrolling in a teaching credential program.
And yes getting a teaching credential is retraining. Of course with a masters or better, and in your case a phd, you could probably teach @ a university or college and you'd not need to retrain at all.
November 7, 2005 10:19 PM | Reply | Permalink
Let's really get radical. . .
What is the problem, really????
People are getting put out of work, because our economy is too efficient creating a surplus of labor. Meanwhile, people are working 60 hours per week 51 weeks per year just to pay insurance on the car to get them to work. Is there something crazy here???
Perhaps a little higher pay and a little more leisure is in order. Those crazy French decided to dial the work week back to 30 hours and none of them have starved just yet. And Airbus still makes a damn nice airplane.
Ok, ok, I know it's a crazy thought and a lot of people LIKE working long hours (even in France)- but being the liberal I am, at least I'm willing to think out of the box.
November 7, 2005 10:57 PM | Reply | Permalink
I'd like to point out something else that's pretty explicitly radical, but it damn well shouldn't be.
What's really infuriating is that in all these discussions of trade, pro-traders go off economic theory and the discussions of world political and economic elites, even homegrown ones in the Third World, and they use these as excuses to push really dramatic policies.
But no one ever bothers to check with what popular movements really want. There are thousands and thousands of groups around the world based in communities of farmers, fishermen, timber workers, factory workers, slum dwellers, etc. And thousands and thousands with very clear positions on global trade. And quite a few of them have websites. And the thing is, liberals never actually talk about what they want.
I mean how dare we critique the bushies and republicans and corporate leaders for callous manipulation of the world and then go right along and say what we think is best, totally ignoring what groups tied to real communities say, totally ignoring the very nuanced positions of civil society the world over. Most of these people are not interested in becoming grain factories for our beef cattle. They mostly just want the rich to stop using, degrading, and pimping them off for their own unequal wealth creation. And they certainly don't want America deciding their futures, even if their homegrown corrupt elites are working with our homegrown corrupt elites.
And I harp on this because I really don't think professional liberals have indicated any more respect for regular Americans either. I think they all just decide the best way to push growth while ignoring what people outside the upper middle class want and care about.
So really, what's the point of all this nonsense when all we're doing is having rich liberals fight with rich conservatives over the best ways to run the world and tell everyone else what's best for them?
November 8, 2005 12:47 AM | Reply | Permalink
One more point, about automation.
Everyone should read David Noble's book on the development of machine tool automation. It'll show just which of these problems are real and which are phrased badly.
Here's why: Machine tool automation was developed, mostly with military funding, less as a question of efficiency and much more as an issue of increasing the authority of management after the incendiiary labor years of WWII and immediately after. they wanted to break the union control of the workplace in many industries, which was defined by who controlled knowledge. the skilled knowledge of machine tool production, which had been in the minds and hands of experienced machinists. full automation was required to replace it, and even then this took several years to actually be more profitable than un-automated production. noble does a masterful job exploring the political nature of technology choices.
But HERE'S the kicker, unexplored in the book. If you actually look at the machine tool industry, it has all but collapsed in the States. Why? Because even with automation, they realized too late that skilled operators working with programmers provide the highest quality products. But since they had already laid off the skilled machinists and broken the chains of apprenticeship and skill development, it was too late to fix.
Now, who has the top machine tool industries in the world? Japan, Germany, Scandinavia. What's the difference? They DIDN'T lay off the skilled workforce with automation. Scandinavia has a work system with skilled machinists working with programmers. Highly effective. The others have similar cooperation. And as a result, they have these industries, pivotal ones in the world economy, and we don't.
So the moral of this story is that technology always offers different possibilities. If pursued unilaterally by management more concerned with cutting labor than with improving quality of service, it works for a little while before slow decay of the sector.
But it is just as possible to build technology that enhances and supplements and even transforms current work practices, without destroying the jobs. It is always a political choice. And there is a high-road and a low-road. American businessmen are trained to always take the low-road, and in the end, it will cripple us.
[even textiles can be more efficiently produced in modern mills with trained employees in safe conditions earning decent pay than in sweatshops. but if you make political decisions, like eliminating all taxes and regulations on the sweatshops, and eliminating all import taxes below the taxes of a home firm, and utilize a desperate workforce made desperate by agricultural policies, then you create an illusion that says otherwise.]
November 8, 2005 1:02 AM | Reply | Permalink
Although it is interesting for the opposition crowd to lay the issue ouit honestly I.E. Pro-Traders vs. Anti-Traders,
While it's certainly neccessary to take into account what 'these people actually want' , if we're discussing actual effective, reliable ways to produce economic growth and reduce poverty, Mostly based on economics, it is not the fault of the 'economic elites' that the strategies and remedies they realize produce economic growth and reduce poverty and endorse aren't exactly what a certain swath of the 'stop the world from turning' crowd wanted to hear. There can certainly be matters of disagreement when it comes to forcing others to adopt the correct policies by coercion, but I'm hardly sympathetic to those for who'm the most reliable strategies to promote prosperity aren't what they want to hear.
November 8, 2005 5:21 AM | Reply | Permalink
Not to mention the fact that most workers are viewed as obsolete by the time they are forty. I was forced to enter into a different line of work in my mid-thirties. The new jobs have been less than I want or need, but my resume might as well list pedophile under hobbies for all the response I get now (I graduated from college in 1985).
As a previous poster said, it's all about the greed.
November 8, 2005 2:56 PM | Reply | Permalink
Thanks for the suggestion, honestly, but you can't imagine I haven't tried, can you?...
I'd be telling you more about myself than I care to reveal in this kind of forum, but "been there, tried that" certainly applies. Including starting my own company.
In one case, I had an HR person for a community college get angry at me for applying, because I was so overqualified in her view. And that's not the only time I've found out or have been told I was overqualified for such a position.
There's simply no such thing anymore as getting hired because you're the "most qualified for the job." Nobody, and I mean nobody, from graduate schools to fast food restaurants, does that anymore. They all do "best fit" hiring, which means minimally acceptable, but not over-qualified, so that they don't have to worry about paying more than they want to pay. And they can do it because they think technology allows them to do it, in no small part because of the slew of brain-dead Windows-based HR applications that purport to do skills matching for hiring purposes.
November 8, 2005 5:50 PM | Reply | Permalink