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Government imposed costs on labor don't necessarily scale proportionally with productivity. It's possible that those costs can price even highly productive lab

Government imposed costs on labor don't necessarily scale proportionally with productivity. It's possible that those costs can price even highly productive labor out of the market. Furthermore, at least some of the people affected by the displacement of manufacturing jobs in developed countries do not have higher productivity. The opioid crisis in the US is to some extent an example of this. I know of blue collar communities where the level of productive employment is lower now than it was a generation or two ago. That doesn't mean these communities could not adapt to the changing economic landscape (as people did when there was the transition from an agricultural to a manufacturing economy). Patterns of specialization and trade are bound to change, but government imposed prices on labor can create a hindrance to a society's ability to adapt.

DiogenesKynikos 7y ago
> Government imposed costs on labor don't necessarily scale proportionally with productivity. Not necessarily, but they correlate very strongly. It's the rich countries that tend to have strong labor protections, mandatory pension schemes, high healthcare costs, etc. > at least some of the people affected by the displacement of manufacturing jobs in developed countries do not have higher productivity. Some of them don't, but overall, developed countries have moved on to higher value-added sectors. Moving large numbers of American workers into things like mass hand-assembly of smartphones would not make economic sense. > That doesn't mean these communities could not adapt to the changing economic landscape Government could much more strongly redistribute the overall gains from world trade to those who lose out to trade. That would make a lot of sense, though it would go against the right-wing economic thinking that has dominated American politics since Reagan.
- lliamander 7y ago
  > Not necessarily, but they correlate very strongly. It's the rich countries that tend to have strong labor protections, mandatory pension schemes, high healthcare costs, etc. Obviously they correlate. The question is whether such labor regulations run ahead of labor productivity and inadvertently price labor out of the global market place. It's certainly not a given that labor regulations are proportional. If it's not proportional, you either need to roll back some of those regulations or enact protectionist measures (tariffs, etc.) to enable fair competition. It's not just labor regulations either. Environmental regulations also play a role. While I agree with having environmental regulations, if they are too stringent, then the result is that resource extraction moves countries without any protections. > Some of them don't, but overall, developed countries have moved on to higher value-added sectors. Those "left behind" could be a fairly large number. Democratic societies need to balance the interests of all of their citizens. > Moving large numbers of American workers into things like mass hand-assembly of smartphones would not make economic sense. If those large numbers of Americans are otherwise unemployed, or even working in low-skill service jobs, then moving them into smartphone manufacturing absolutely makes sense. > Government could much more strongly redistribute the overall gains from world trade to those who lose out to trade. That would make a lot of sense, though it would go against the right-wing economic thinking that has dominated American politics since Reagan. We are already redistributing to those who lose out on trade. I don't think more redistribution is what they want. My impression is that they would rather have jobs. Indeed, it makes much more economic (and psychological) sense to have as much of your population engaged in productive occupations as possible.

DiogenesKynikos 7y ago

> Government imposed costs on labor don't necessarily scale proportionally with productivity. Not necessarily, but they correlate very strongly. It's the rich countries that tend to have strong labor protections, mandatory pension schemes, high healthcare costs, etc. > at least some of the people affected by the displacement of manufacturing jobs in developed countries do not have higher productivity. Some of them don't, but overall, developed countries have moved on to higher value-added sectors. Moving large numbers of American workers into things like mass hand-assembly of smartphones would not make economic sense. > That doesn't mean these communities could not adapt to the changing economic landscape Government could much more strongly redistribute the overall gains from world trade to those who lose out to trade. That would make a lot of sense, though it would go against the right-wing economic thinking that has dominated American politics since Reagan.

lliamander 7y ago
> Not necessarily, but they correlate very strongly. It's the rich countries that tend to have strong labor protections, mandatory pension schemes, high healthcare costs, etc. Obviously they correlate. The question is whether such labor regulations run ahead of labor productivity and inadvertently price labor out of the global market place. It's certainly not a given that labor regulations are proportional. If it's not proportional, you either need to roll back some of those regulations or enact protectionist measures (tariffs, etc.) to enable fair competition. It's not just labor regulations either. Environmental regulations also play a role. While I agree with having environmental regulations, if they are too stringent, then the result is that resource extraction moves countries without any protections. > Some of them don't, but overall, developed countries have moved on to higher value-added sectors. Those "left behind" could be a fairly large number. Democratic societies need to balance the interests of all of their citizens. > Moving large numbers of American workers into things like mass hand-assembly of smartphones would not make economic sense. If those large numbers of Americans are otherwise unemployed, or even working in low-skill service jobs, then moving them into smartphone manufacturing absolutely makes sense. > Government could much more strongly redistribute the overall gains from world trade to those who lose out to trade. That would make a lot of sense, though it would go against the right-wing economic thinking that has dominated American politics since Reagan. We are already redistributing to those who lose out on trade. I don't think more redistribution is what they want. My impression is that they would rather have jobs. Indeed, it makes much more economic (and psychological) sense to have as much of your population engaged in productive occupations as possible.