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Then why are all the manufacturing jobs in China and other countries without those labor laws? The remaining jobs in the US are salaried position where "8 hour

by imgabe 6y ago

Then why are all the manufacturing jobs in China and other countries without those labor laws? The remaining jobs in the US are salaried position where "8 hour workday" and "weekend" are often meaningless. Plus we're talking about a wealth tax in California. You can start a company in Nevada and still access the market of California just fine.

aesh2Xa1 6y ago
"Then who will purchase your cars?" Let them leave. We have a government all the more for ourselves. We need not purchase products built with the exploitation of cheap, and even forced, labor.
marakv2 6y ago
Greater profit. How else are you going to pay a ceo 10mm per year...
tchaffee 6y ago
They are not. In 2016 China produced about $4.566 trillion in manufactured goods. Coming in 2nd place, in 2016 the U.S produced about $3.602 trillion in manufactured goods.
- rubber_duck 6y ago
  He didn't say manufacturing output but jobs, a more relevant number for that argument would be total labor cost in the sector and it's change over time between two countries.
  - tchaffee 6y ago
    That's not such a relevant number because plenty of those US jobs went to automation, not to China. There are still over 12 million manufacturing jobs in the US. About 8% of all US jobs which is a significant chunk. Easily disapproving the wild exaggeration that "all of the manufacturing jobs are in China... ".
filoeleven 6y ago
This is about startups, which are very rarely about manufacturing. Most of the “information economy” startups are still in the US.
- DuskStar 6y ago
  The point was that businesses actually have followed through on those threats to move away from countries with things like "workers rights" and "unions" and "8 hour workdays" - it just took a few years. The fact that all the major new businesses in the US are software and other 0-marginal-cost products should be a big warning sign. As always, if you "tax" something (or otherwise make it more expensive), you will have less of it.
  - spaginal 6y ago
    You tax what you want less of, you subsidize what you want more of.
  - tottenhm 6y ago
    I don't buy it. "Worker rights" and "unions" aren't the drivers of globalization or deindustrialization. Let's make an example. Suppose a "rational investor" in a globalized market is considering whether to manufacture a commodity in San Francisco or Jaipur. The cost of living in San Francisco is 200%-2000% higher than the cost of living in Jaipur. https://www.numbeo.com/cost-of-living/compare_cities.jsp?country1=India&country2=United+States&city1=Jaipur&city2=San+Francisco%2C+CA https://www.numbeo.com/cost-of-living/compare_cities.jsp?cou... The rational, by-the-numbers move is to put the factory in Jaipur because exchange rates make it radically cheaper. That's the real driver. Even if the would-be workers in SF made every conscionable concession and slogged for 25 hours a day, it wouldn't overcome the currency differences. Even if the workers in Jaipur had the most generous PTO and the most corrupt union boss, it wouldn't overcome the currency differences. Of course, if you were pitching a town in South Carolina against a town in Pennsylvania, then maybe you'd consider numerically small differentiators like "how much extra do you have to pay for the 9th hour of work" - because small differentiators are the only differentiators available. But that's not the issue with globalization. "Globalization" doesn't mean "moved from PA to SC to trim wages by 5% via lax overtime rules". It means they moved to Vietnam or China or Bangladesh to change the basic unit of measure with an aim to slash labor costs by 50% or 80%.
intortus 6y ago
The most significant reason why (manufacturing) jobs no longer exist in the US is our exorbitant privilege of being the global reserve currency. It has nothing to do with labor laws or taxes.
- tchaffee 6y ago
  Manucturing is still a huge employer in the US.
dmode 6y ago
Due to lower labor cost and relatively stable government. Nobody even knows what China’s tax rates are. These jobs are also not in Chad or Central African republic
darksaints 6y ago
The US GDP contribution of manufacturing is about $2 trillion per year, and employs about 9% of our workforce. That is a far cry from having all of our manufacturing jobs shipped overseas.
cromwellian 6y ago
Why are so many software engineer jobs in California, the highest cost of living state, and not in the lowest cost of living state with lowest taxes then? You overlook the value of regional nexuses, and the positive externalities can dwarf the negatives of the taxes or regulations. Ask yourself Nevada isn't Silicon Valley.
- imgabe 6y ago
  This is an artifact of history and where the companies that started Silicon Valley existed. California in the 50s, 60s, and 70s was a different place than it is today. It's remained a nexus in spite of the taxes and cost of living, not because of it. That doesn't mean you can raise taxes and cost of living arbitrarily high and the nexus will never shift. There is no force of nature keeping it in place, just habit and custom. We're rapidly finding out this year that we don't even need to be in a particular place to continue working together, something that has only become true relatively recently. It is dangerous to assume that things will remain the same as they always have been, regardless of other things that change. There's obviously a breaking point at which people will leave. There's a thread here almost every day now about how everyone is moving out San Francisco.
  - cromwellian 6y ago
    It's also dangerous to assume that every business decision hinges on taxes. One of the extremely annoying things about politics is people constantly arguing that GDP growth is a function of some marginal tax rate here or there. The obsession with taxes overlooks so many other facts that govern success. Why isn't Sweden a hellhole? They have higher taxes than many other EU localities, but have a more vibrant startup economy. The artifact that created Silicon Valley was the University of California system, and the location of military and national labs, a nexus of government and academic R&D, with a ready and waiting STEM labor force. It was not because it was a tax and regulatory haven.
    - imgabe 6y ago
      The academic and military labs were definitely big factors. There's also: - California doesn't enforce non-competes - which allows people to leave and form new companies. The "traitorous eight" are as much part of the founding mythos of SV as the acadmic/military labs. That is a regulatory decision. - Founders and early employees get paid largely in stock or stock options, which are taxed less than salary. This provides them with capital to become angel investors in new companies and provide not only funding, but mentorship and connections. That's partly a consequence of the way capital is taxed. If you start taxing capital so that founders aren't left with enough to become investors, you'll break that feedback loop.
sukilot 6y ago
Because the US doesn't have enough tariffs to compensate for exporters who don't meet US standards.
scoot_718 6y ago
> still access the market of California just fine. Good point. I'm surprised more places aren't taxing access to their consumers. That catches all players.

by imgabe 6y ago

aesh2Xa1 6y ago

"Then who will purchase your cars?" Let them leave. We have a government all the more for ourselves. We need not purchase products built with the exploitation of cheap, and even forced, labor.

marakv2 6y ago

Greater profit. How else are you going to pay a ceo 10mm per year...

tchaffee 6y ago

They are not. In 2016 China produced about $4.566 trillion in manufactured goods. Coming in 2nd place, in 2016 the U.S produced about $3.602 trillion in manufactured goods.

rubber_duck 6y ago
He didn't say manufacturing output but jobs, a more relevant number for that argument would be total labor cost in the sector and it's change over time between two countries.
- tchaffee 6y ago
  That's not such a relevant number because plenty of those US jobs went to automation, not to China. There are still over 12 million manufacturing jobs in the US. About 8% of all US jobs which is a significant chunk. Easily disapproving the wild exaggeration that "all of the manufacturing jobs are in China... ".

filoeleven 6y ago

This is about startups, which are very rarely about manufacturing. Most of the “information economy” startups are still in the US.

DuskStar 6y ago
The point was that businesses actually have followed through on those threats to move away from countries with things like "workers rights" and "unions" and "8 hour workdays" - it just took a few years. The fact that all the major new businesses in the US are software and other 0-marginal-cost products should be a big warning sign. As always, if you "tax" something (or otherwise make it more expensive), you will have less of it.
- spaginal 6y ago
  You tax what you want less of, you subsidize what you want more of.
- tottenhm 6y ago
  I don't buy it. "Worker rights" and "unions" aren't the drivers of globalization or deindustrialization. Let's make an example. Suppose a "rational investor" in a globalized market is considering whether to manufacture a commodity in San Francisco or Jaipur. The cost of living in San Francisco is 200%-2000% higher than the cost of living in Jaipur. https://www.numbeo.com/cost-of-living/compare_cities.jsp?country1=India&country2=United+States&city1=Jaipur&city2=San+Francisco%2C+CA https://www.numbeo.com/cost-of-living/compare_cities.jsp?cou... The rational, by-the-numbers move is to put the factory in Jaipur because exchange rates make it radically cheaper. That's the real driver. Even if the would-be workers in SF made every conscionable concession and slogged for 25 hours a day, it wouldn't overcome the currency differences. Even if the workers in Jaipur had the most generous PTO and the most corrupt union boss, it wouldn't overcome the currency differences. Of course, if you were pitching a town in South Carolina against a town in Pennsylvania, then maybe you'd consider numerically small differentiators like "how much extra do you have to pay for the 9th hour of work" - because small differentiators are the only differentiators available. But that's not the issue with globalization. "Globalization" doesn't mean "moved from PA to SC to trim wages by 5% via lax overtime rules". It means they moved to Vietnam or China or Bangladesh to change the basic unit of measure with an aim to slash labor costs by 50% or 80%.

intortus 6y ago

The most significant reason why (manufacturing) jobs no longer exist in the US is our exorbitant privilege of being the global reserve currency. It has nothing to do with labor laws or taxes.

tchaffee 6y ago
Manucturing is still a huge employer in the US.

dmode 6y ago

Due to lower labor cost and relatively stable government. Nobody even knows what China’s tax rates are. These jobs are also not in Chad or Central African republic

darksaints 6y ago

The US GDP contribution of manufacturing is about $2 trillion per year, and employs about 9% of our workforce. That is a far cry from having all of our manufacturing jobs shipped overseas.

cromwellian 6y ago

Why are so many software engineer jobs in California, the highest cost of living state, and not in the lowest cost of living state with lowest taxes then? You overlook the value of regional nexuses, and the positive externalities can dwarf the negatives of the taxes or regulations. Ask yourself Nevada isn't Silicon Valley.

imgabe 6y ago
This is an artifact of history and where the companies that started Silicon Valley existed. California in the 50s, 60s, and 70s was a different place than it is today. It's remained a nexus in spite of the taxes and cost of living, not because of it. That doesn't mean you can raise taxes and cost of living arbitrarily high and the nexus will never shift. There is no force of nature keeping it in place, just habit and custom. We're rapidly finding out this year that we don't even need to be in a particular place to continue working together, something that has only become true relatively recently. It is dangerous to assume that things will remain the same as they always have been, regardless of other things that change. There's obviously a breaking point at which people will leave. There's a thread here almost every day now about how everyone is moving out San Francisco.
- cromwellian 6y ago
  It's also dangerous to assume that every business decision hinges on taxes. One of the extremely annoying things about politics is people constantly arguing that GDP growth is a function of some marginal tax rate here or there. The obsession with taxes overlooks so many other facts that govern success. Why isn't Sweden a hellhole? They have higher taxes than many other EU localities, but have a more vibrant startup economy. The artifact that created Silicon Valley was the University of California system, and the location of military and national labs, a nexus of government and academic R&D, with a ready and waiting STEM labor force. It was not because it was a tax and regulatory haven.
  - imgabe 6y ago
    The academic and military labs were definitely big factors. There's also: - California doesn't enforce non-competes - which allows people to leave and form new companies. The "traitorous eight" are as much part of the founding mythos of SV as the acadmic/military labs. That is a regulatory decision. - Founders and early employees get paid largely in stock or stock options, which are taxed less than salary. This provides them with capital to become angel investors in new companies and provide not only funding, but mentorship and connections. That's partly a consequence of the way capital is taxed. If you start taxing capital so that founders aren't left with enough to become investors, you'll break that feedback loop.

sukilot 6y ago

Because the US doesn't have enough tariffs to compensate for exporters who don't meet US standards.

scoot_718 6y ago

> still access the market of California just fine. Good point. I'm surprised more places aren't taxing access to their consumers. That catches all players.