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"The problem in the U.S. was much the same problem we've always had: free trade became synonymous to opposition to government intervention. All the free trade b

"The problem in the U.S. was much the same problem we've always had: free trade became synonymous to opposition to government intervention. All the free trade bills in the U.S. invariably included funding for re-education and R&D to help manage dislocation and build competitive advantages, but they were meager financially and suffocated by neglect. And that's because these measures were considered "government intervention" and hedges to preserve "big government", which as well know as Americans (and, to a slightly lesser extent, everybody else in the Anglosphere) meant naivety, ineffectiveness, and corruption. So it's no surprise that the American public and politicians drifted toward a fundamentally broken policy situation." But this hinges on the premise that employers are receptive to older retrained workers. In my life time I have never seen this, and I have long considered it to be one of the biggest lies in economics. This has never happened on a large scale, and is an academic theory. Whats more, this would only be possible with a some kind of glut of jobs. Starting at the bottom of another career hierarchy at the age of 40 is a complete disaster, you will be out-competed by 22 year olds who cost alot less, are easier to train, have less grievances about a low salary, are okay with the bottom rung, and do not have huge expectations. Even more than that, shifting X00,000 people from one career to another would flood the labor market and destroy wages. The whole thing makes literally no sense.

ep103 7y ago
I read an article once, that claimed when a Scandinavian country joined the EU, they expected significant job distortion as a result of free trade. So they literally moved government agencies from their current locations, to locations that they expected would be hardest hit. The end result was the shifting of thousands of government jobs from one location to another. Highly trained people in the old government centers were still in really competitive markets with significant government opportunities. But those communities that were about to be devastated by free trade (usually smaller backwater communities) suddenly saw federal agencies appear that required thousands of jobs overnight, and whom had a mandate to hire those affected by free trade, thereby saving the economy for those workers in the area. My point is that creative solutions are possible, if we dispense with the notion that the only solution possible is the free market.
- aeternum 7y ago
  This seems like a great idea. It ensures that even if government efficiency is low, it is providing positive value. I'm surprised this concept isn't more widespread.
  - wahern 7y ago
    Until the 1990s (at the latest) the U.S. had a policy of widely distributing government agency offices throughout the country. This 1) kept power (agencies, lobbyists, workers) from centralizing in D.C., and 2) spread government expenditures. There were other reasons for doing this, especially before the telecommunication era. But for the middle part of the 20th century this pattern held strong even as transportation and telecommunication exploded. But there's always the risk of a pathological co-dependency on government employment. You can see this in many developing countries. So for partly legitimate reasons, the Civil Service has long been the boogeyman of Republican politics. Specifically, that civil servants are reliable "big government", Democratic voters. Better to 1) pack their voting power and 2) prefer private out-sourcing. This is one major reason (if not the major reason) why government agency activity and policy have migrated to D.C., and why the headquarters of so many corporations have moved to the D.C. metro area.
  - repolfx 7y ago
    Usually it just means gutting the department that moves. The UK has been trying this with the BBC, forcibly relocating the organisation to the north of the country. It encodes a basic assumption that in government, skilled and experienced people are so unimportant you can just lose all of them (as very few people want to relocate to a place chosen specifically because it's fallen behind). Says a lot, really.
    - bigfudge 7y ago
      The bbc move seems successful though.not just Manchester either... also to Wales
    - aeternum 7y ago
      Many governmental organizations do not need to have the most skilled or experienced. Different people bring different ideas, in government especially diversity is important. Moving the department seems like a great way to do this. Those that choose not to move can leverage their experience in private industry.
wahern 7y ago
It is, to be sure, an immensely difficult problem. But my argument doesn't hinge on anything; IMO, it's simply a statement of fact. It's sort of like saying that if we want to avoid global extinction we need to acquire space travel and populate distance worlds. Not knowing how to get to space, let alone travel to distance worlds, doesn't change the logic. The alternative is that we accept extinction. We're exceedingly myopic about what strategies like re-education imply. We associate it with a small number of particular programs and are quick to conclude they're ineffective. But re-education can mean many things, things we haven't even explored yet. We could look to German countries with a stronger history of apprenticeships and union labor programs, though that only scratches the surface. And maybe it does require incentivizing or even mandating age-based affirmative action. And maybe re-education (and education policy more generally) will ultimately prove to be relatively limited and constitute only a small part of a larger constellation of strategies. The point is that we have to stop pushing back and earnestly move forward. There's simply no choice in the matter; we have to be open-minded. Unless we're comfortable continuing to roll the dice to see how many more generations the United States can go fecklessly chasing fantasies. What someone like Trump and the cast of opportunists across the spectrum he has ushered in have shown is that we're not immune to the political pathologies that have afflicted so many other countries in the Americas and around the world.
- codingslave 7y ago
  Your argument here is sound, if you assume this is true: "It's sort of like saying that if we want to avoid global extinction we need to acquire space travel and populate distance worlds. Not knowing how to get to space, let alone travel to distance worlds, doesn't change the logic. The alternative is that we accept extinction." My point, and the point of the economics article, is that this is not the case. We created this situation by shipping jobs over seas and enacting NAFTA/pushing for trade with China. Economic policies as well as other measures can protect and mitigate the devastating effects of offshoring all jobs. As the world becomes more connected wages will converge to an equilibrium, so the point of non free trade is to stop the equilibrium. If you don't, the USA becomes something like a third world country. It's that simple.
  - 7y ago
AnimalMuppet 7y ago
One of the options (at least, back then) was to control the rate of change. That makes these issues easier to deal with. X0,000 people this year, and the same next year and the year after, are easier to deal with than X00,000 people right now.
hos234 7y ago
I don't think economists are lying about it. Krugman atleast keeps posting graphs about the low odds of unemployed men over 35(?) getting back into the workforce. If I remember right, he brings it up to push Infrastructure Spending (2-3 Trillion much overdue since everything is falling apart/also has bipartisan support). Something like that would produce that "glut of jobs".
- neffy 7y ago
  There's really a very fundamental lack of imagination going on in economics if people there are defending a state where there is clearly work that needs doing (bridge repair for starters), and people available to do it. The equivalent in a computer would be a bunch of processors sitting idle, because the programmers couldn't figure out multi-threading.
  - asdff 7y ago
    The money that is used to pay for that work has been extracted from the economy and hoarded away. If you want better schools and infrastructure, step 1 is to tax property at market rate.
nostrademons 7y ago
> But this hinges on the premise that employers are receptive to older retrained workers. This shouldn't matter in a liquid, competitive economy. If employers are not receptive to competent older retrained workers, they'll bid up wages for young workers and hold down workers for old workers. This opens up a market opportunity for some of those older workers to take the opposite side of the trade, start companies in new growth sector, and hire mostly older workers at lower prices, thus outcompeting their younger competitors. In the short term it rarely works like this because VCs and other primary capital firms are just as susceptible to bias as hiring managers. In the long term it very frequently works like this, which is why you have firms like Whatsapp getting bought out for $19B while all the recent college grads that entered the social networking fray in 07-08 (myself included) got flushed out and took jobs in big tech.
yorwba 7y ago
> Starting at the bottom of another career hierarchy at the age of 40 is a complete disaster, you will be out-competed by 22 year olds who cost alot less, are easier to train, have less grievances about a low salary, are okay with the bottom rung, and do not have huge expectations. Only if those 40 year olds believe they're entitled to higher pay just because they're older. The number of available jobs in a given career hierarchy shrinks pretty quickly as you ascend, which means that most people won't rise very far. Start at the bottom rung, stay at the bottom rung for the rest of their life. My mother lost her job as a factory worker (bottom rung) when Samsung stopped manufacturing CRTs in Germany. She was 50 at the time and retrained as a call center agent, working for the same pay as 22 year olds. She kept working there until her retirement, while new 22 year olds had to be trained every few months because they hadn't yet learned how to hold down a job. Talk about "out-competed". > Even more than that, shifting X00,000 people from one career to another would flood the labor market and destroy wages. The whole thing makes literally no sense. Only if they all retrain for the same job. Spread it over all industries that have room for growth and the effect becomes much less catastrophic.
- codingslave 7y ago
  "Only if those 40 year olds believe they're entitled to higher pay just because they're older. The number of available jobs in a given career hierarchy shrinks pretty quickly as you ascend, which means that most people won't rise very far. Start at the bottom rung, stay at the bottom rung for the rest of their life." So your solution is to delegate a 40 year old replaced by trade policies to the bottom of the economic rung. This is the exact situation that the article is saying is a problem. Don't think you read the article. My point was that we should tilt economic policies so that this situation does not occur. And make no mistakes, this situation is avoidable, and caused by the destruction of that 40 year old's career.
  - yorwba 7y ago
    Unless I misread the article, it's about blue-collar workers losing their manufacturing jobs due to globalization. I don't know what the typical career progression in manufacturing looks like, but if you can be replaced by some freshly hired 22 year old in China, you're probably in the bottom rung. So it's not like that hypothetical 40 year old was suddenly thrown back into the bottom rung after a successful career where their superior experience protected them from competing with 22 year olds. Their well-paying job at the bottom rung disappeared, with the only alternatives being retraining for less well-paying jobs in the bottom rung of other industries or staying unemployed. It appears many stayed unemployed. I think they should be given sufficient support to bridge the gap while they retrain; potentially even before their jobs disappear. That seems strictly preferable to unemployment.
imtringued 7y ago
>The whole thing makes literally no sense. Compared to staying jobless it's a hell of a good deal.

ep103 7y ago

I read an article once, that claimed when a Scandinavian country joined the EU, they expected significant job distortion as a result of free trade. So they literally moved government agencies from their current locations, to locations that they expected would be hardest hit. The end result was the shifting of thousands of government jobs from one location to another. Highly trained people in the old government centers were still in really competitive markets with significant government opportunities. But those communities that were about to be devastated by free trade (usually smaller backwater communities) suddenly saw federal agencies appear that required thousands of jobs overnight, and whom had a mandate to hire those affected by free trade, thereby saving the economy for those workers in the area. My point is that creative solutions are possible, if we dispense with the notion that the only solution possible is the free market.

aeternum 7y ago
This seems like a great idea. It ensures that even if government efficiency is low, it is providing positive value. I'm surprised this concept isn't more widespread.
- wahern 7y ago
  Until the 1990s (at the latest) the U.S. had a policy of widely distributing government agency offices throughout the country. This 1) kept power (agencies, lobbyists, workers) from centralizing in D.C., and 2) spread government expenditures. There were other reasons for doing this, especially before the telecommunication era. But for the middle part of the 20th century this pattern held strong even as transportation and telecommunication exploded. But there's always the risk of a pathological co-dependency on government employment. You can see this in many developing countries. So for partly legitimate reasons, the Civil Service has long been the boogeyman of Republican politics. Specifically, that civil servants are reliable "big government", Democratic voters. Better to 1) pack their voting power and 2) prefer private out-sourcing. This is one major reason (if not the major reason) why government agency activity and policy have migrated to D.C., and why the headquarters of so many corporations have moved to the D.C. metro area.
- repolfx 7y ago
  Usually it just means gutting the department that moves. The UK has been trying this with the BBC, forcibly relocating the organisation to the north of the country. It encodes a basic assumption that in government, skilled and experienced people are so unimportant you can just lose all of them (as very few people want to relocate to a place chosen specifically because it's fallen behind). Says a lot, really.
  - bigfudge 7y ago
    The bbc move seems successful though.not just Manchester either... also to Wales
  - aeternum 7y ago
    Many governmental organizations do not need to have the most skilled or experienced. Different people bring different ideas, in government especially diversity is important. Moving the department seems like a great way to do this. Those that choose not to move can leverage their experience in private industry.

wahern 7y ago

It is, to be sure, an immensely difficult problem. But my argument doesn't hinge on anything; IMO, it's simply a statement of fact. It's sort of like saying that if we want to avoid global extinction we need to acquire space travel and populate distance worlds. Not knowing how to get to space, let alone travel to distance worlds, doesn't change the logic. The alternative is that we accept extinction. We're exceedingly myopic about what strategies like re-education imply. We associate it with a small number of particular programs and are quick to conclude they're ineffective. But re-education can mean many things, things we haven't even explored yet. We could look to German countries with a stronger history of apprenticeships and union labor programs, though that only scratches the surface. And maybe it does require incentivizing or even mandating age-based affirmative action. And maybe re-education (and education policy more generally) will ultimately prove to be relatively limited and constitute only a small part of a larger constellation of strategies. The point is that we have to stop pushing back and earnestly move forward. There's simply no choice in the matter; we have to be open-minded. Unless we're comfortable continuing to roll the dice to see how many more generations the United States can go fecklessly chasing fantasies. What someone like Trump and the cast of opportunists across the spectrum he has ushered in have shown is that we're not immune to the political pathologies that have afflicted so many other countries in the Americas and around the world.

codingslave 7y ago
Your argument here is sound, if you assume this is true: "It's sort of like saying that if we want to avoid global extinction we need to acquire space travel and populate distance worlds. Not knowing how to get to space, let alone travel to distance worlds, doesn't change the logic. The alternative is that we accept extinction." My point, and the point of the economics article, is that this is not the case. We created this situation by shipping jobs over seas and enacting NAFTA/pushing for trade with China. Economic policies as well as other measures can protect and mitigate the devastating effects of offshoring all jobs. As the world becomes more connected wages will converge to an equilibrium, so the point of non free trade is to stop the equilibrium. If you don't, the USA becomes something like a third world country. It's that simple.
- 7y ago

AnimalMuppet 7y ago

One of the options (at least, back then) was to control the rate of change. That makes these issues easier to deal with. X0,000 people this year, and the same next year and the year after, are easier to deal with than X00,000 people right now.

hos234 7y ago

I don't think economists are lying about it. Krugman atleast keeps posting graphs about the low odds of unemployed men over 35(?) getting back into the workforce. If I remember right, he brings it up to push Infrastructure Spending (2-3 Trillion much overdue since everything is falling apart/also has bipartisan support). Something like that would produce that "glut of jobs".

neffy 7y ago
There's really a very fundamental lack of imagination going on in economics if people there are defending a state where there is clearly work that needs doing (bridge repair for starters), and people available to do it. The equivalent in a computer would be a bunch of processors sitting idle, because the programmers couldn't figure out multi-threading.
- asdff 7y ago
  The money that is used to pay for that work has been extracted from the economy and hoarded away. If you want better schools and infrastructure, step 1 is to tax property at market rate.

nostrademons 7y ago

> But this hinges on the premise that employers are receptive to older retrained workers. This shouldn't matter in a liquid, competitive economy. If employers are not receptive to competent older retrained workers, they'll bid up wages for young workers and hold down workers for old workers. This opens up a market opportunity for some of those older workers to take the opposite side of the trade, start companies in new growth sector, and hire mostly older workers at lower prices, thus outcompeting their younger competitors. In the short term it rarely works like this because VCs and other primary capital firms are just as susceptible to bias as hiring managers. In the long term it very frequently works like this, which is why you have firms like Whatsapp getting bought out for $19B while all the recent college grads that entered the social networking fray in 07-08 (myself included) got flushed out and took jobs in big tech.

yorwba 7y ago

> Starting at the bottom of another career hierarchy at the age of 40 is a complete disaster, you will be out-competed by 22 year olds who cost alot less, are easier to train, have less grievances about a low salary, are okay with the bottom rung, and do not have huge expectations. Only if those 40 year olds believe they're entitled to higher pay just because they're older. The number of available jobs in a given career hierarchy shrinks pretty quickly as you ascend, which means that most people won't rise very far. Start at the bottom rung, stay at the bottom rung for the rest of their life. My mother lost her job as a factory worker (bottom rung) when Samsung stopped manufacturing CRTs in Germany. She was 50 at the time and retrained as a call center agent, working for the same pay as 22 year olds. She kept working there until her retirement, while new 22 year olds had to be trained every few months because they hadn't yet learned how to hold down a job. Talk about "out-competed". > Even more than that, shifting X00,000 people from one career to another would flood the labor market and destroy wages. The whole thing makes literally no sense. Only if they all retrain for the same job. Spread it over all industries that have room for growth and the effect becomes much less catastrophic.

codingslave 7y ago
"Only if those 40 year olds believe they're entitled to higher pay just because they're older. The number of available jobs in a given career hierarchy shrinks pretty quickly as you ascend, which means that most people won't rise very far. Start at the bottom rung, stay at the bottom rung for the rest of their life." So your solution is to delegate a 40 year old replaced by trade policies to the bottom of the economic rung. This is the exact situation that the article is saying is a problem. Don't think you read the article. My point was that we should tilt economic policies so that this situation does not occur. And make no mistakes, this situation is avoidable, and caused by the destruction of that 40 year old's career.
- yorwba 7y ago
  Unless I misread the article, it's about blue-collar workers losing their manufacturing jobs due to globalization. I don't know what the typical career progression in manufacturing looks like, but if you can be replaced by some freshly hired 22 year old in China, you're probably in the bottom rung. So it's not like that hypothetical 40 year old was suddenly thrown back into the bottom rung after a successful career where their superior experience protected them from competing with 22 year olds. Their well-paying job at the bottom rung disappeared, with the only alternatives being retraining for less well-paying jobs in the bottom rung of other industries or staying unemployed. It appears many stayed unemployed. I think they should be given sufficient support to bridge the gap while they retrain; potentially even before their jobs disappear. That seems strictly preferable to unemployment.

imtringued 7y ago

>The whole thing makes literally no sense. Compared to staying jobless it's a hell of a good deal.