4 ms·

So essentially you're saying, between rising minimum wage, other government involvement, various economic reactions, competition between companies, and the cust

by dgzl 8y ago

So essentially you're saying, between rising minimum wage, other government involvement, various economic reactions, competition between companies, and the customers desire for cheaper products drives production overseas? If American society insists that we legislate ourselves into a more comfortable environment (higher min wage, better working conditions) then I think we'll have to accept that certain production will just never happen here. What other reasons can we identify?

deleted 8y ago
[deleted]
vkou 8y ago
> I think we'll have to accept that certain production will just never happen here. It can happen here, if you break with neo-liberal economic dogma, and institute equalization tariffs on imports.
- dgzl 8y ago
  So you're saying instead of undoing the effects that cause outsourcing, we should equalize that same cost with tariffs? That sounds risky to me.
  - vkou 8y ago
    Without tariffs, you can pick between work not being done here, or a race to the bottom against dictatorships and oligarchies that have no concern for the welfare of their citizens. We're currently pursuing option #1, but neither one sounds fantastic to me.
- throwaway34241 8y ago
  Automation is similar to outsourcing, in that you have a black box that you put in $.20 of resources and get out an item with no US labor. Even if you can solve the issues with outsourcing that probably doesn't help the majority of the problem. The other thing with tariffs is if you put tariffs on steel that hurts automakers (since foreign ones have cheaper steel). You can then put tariffs on cars, everything, but then everybody puts tariffs on you. Also things like computers are more expensive which might hurt productivity. Most economists don't seem to think the whole thing is worth it, and there's countries like Brazil that do big tariffs and it doesn't seem to help them any.
greeneggs 8y ago
It is largely incorrect to blame loss of US manufacturing jobs to minimum wage legislation. If a company is paying $20/hour in the US, well above the minimum wage, and can outsource an equivalent job for $6/hour, that's just what it will often do. Minimum wage doesn't come into it. No employee earning $20/hour is going to accept that tomorrow she'll get $6/hour for the same job. (One reason is pride. Another is information asymmetry. As an employee being offered a $14/hour wage cut, you can't know whether the company is telling the truth about the equivalent cost of labor in China, or is just trying to cut your wages.)
throwaway34241 8y ago
There's not much difference (from the perspective of the US economy) between outsourcing to China to make a widget for $.20, and automating it in the US to make it for $.20/item. Each of them are a black box where you put in $.20 of resources and get an item, with no US labor. I think legislation like minimum wage is only a small part of the story too. Lots of people get paid more than minimum wage and we couldn't just put min. wage at $100/hr. I think the fundamentals we are looking for are productivity and macroeconomic policy. Traditionally, the Gov. and central bank stimulate the economy until it reaches full employment, then slow it down when inflation is high. Productivity will determine how much people produce/consume (in total) when everyone is working. Of course there's issues of how those goods are distributed (which is probably not quite as bad as the wealth gap, the rich put a lot of money in stocks etc instead of consuming it). There's also structural problems where the job locations/skills don't match with the workers. While I don't see why in the long-run we can't just produce more of what people want (health care, going out to eat, housing, vacations, etc), if millions of people are displaced rapidly by online shopping, self-driving cars etc I think it will be hard for people to adjust quickly. Also maybe most worrying is some of the macroeconomic stuff that has been relied on to keep the economy closer to full employment is in uncharted territory. The central bank has less ability to stimulate the economy to get us out of a recession than maybe it's ever had, and the alternative of fiscal policy (gov. spending) is controversial so I'm not sure how much it can be relied on in the US either.

by dgzl 8y ago

deleted 8y ago

[deleted]

vkou 8y ago

> I think we'll have to accept that certain production will just never happen here. It can happen here, if you break with neo-liberal economic dogma, and institute equalization tariffs on imports.

dgzl 8y ago
So you're saying instead of undoing the effects that cause outsourcing, we should equalize that same cost with tariffs? That sounds risky to me.
- vkou 8y ago
  Without tariffs, you can pick between work not being done here, or a race to the bottom against dictatorships and oligarchies that have no concern for the welfare of their citizens. We're currently pursuing option #1, but neither one sounds fantastic to me.
throwaway34241 8y ago
Automation is similar to outsourcing, in that you have a black box that you put in $.20 of resources and get out an item with no US labor. Even if you can solve the issues with outsourcing that probably doesn't help the majority of the problem. The other thing with tariffs is if you put tariffs on steel that hurts automakers (since foreign ones have cheaper steel). You can then put tariffs on cars, everything, but then everybody puts tariffs on you. Also things like computers are more expensive which might hurt productivity. Most economists don't seem to think the whole thing is worth it, and there's countries like Brazil that do big tariffs and it doesn't seem to help them any.

greeneggs 8y ago

It is largely incorrect to blame loss of US manufacturing jobs to minimum wage legislation. If a company is paying $20/hour in the US, well above the minimum wage, and can outsource an equivalent job for $6/hour, that's just what it will often do. Minimum wage doesn't come into it. No employee earning $20/hour is going to accept that tomorrow she'll get $6/hour for the same job. (One reason is pride. Another is information asymmetry. As an employee being offered a $14/hour wage cut, you can't know whether the company is telling the truth about the equivalent cost of labor in China, or is just trying to cut your wages.)

throwaway34241 8y ago

There's not much difference (from the perspective of the US economy) between outsourcing to China to make a widget for $.20, and automating it in the US to make it for $.20/item. Each of them are a black box where you put in $.20 of resources and get an item, with no US labor. I think legislation like minimum wage is only a small part of the story too. Lots of people get paid more than minimum wage and we couldn't just put min. wage at $100/hr. I think the fundamentals we are looking for are productivity and macroeconomic policy. Traditionally, the Gov. and central bank stimulate the economy until it reaches full employment, then slow it down when inflation is high. Productivity will determine how much people produce/consume (in total) when everyone is working. Of course there's issues of how those goods are distributed (which is probably not quite as bad as the wealth gap, the rich put a lot of money in stocks etc instead of consuming it). There's also structural problems where the job locations/skills don't match with the workers. While I don't see why in the long-run we can't just produce more of what people want (health care, going out to eat, housing, vacations, etc), if millions of people are displaced rapidly by online shopping, self-driving cars etc I think it will be hard for people to adjust quickly. Also maybe most worrying is some of the macroeconomic stuff that has been relied on to keep the economy closer to full employment is in uncharted territory. The central bank has less ability to stimulate the economy to get us out of a recession than maybe it's ever had, and the alternative of fiscal policy (gov. spending) is controversial so I'm not sure how much it can be relied on in the US either.