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I wonder what plan B should be for the Western labor forces that are not competitive with 9-9-6 kind of labor. With transportation as cheap as it is, obviously

I wonder what plan B should be for the Western labor forces that are not competitive with 9-9-6 kind of labor. With transportation as cheap as it is, obviously the two sides must equalize one way or another.

aurareturn 2y ago
War & tariffs. That seems to be the way it's going.
mensetmanusman 2y ago
996 is self-destructive. The current events have more to do with the entire Chinese society (knowingly or unknowingly) being led by the CCP to massively subsidize their manufacturing far beyond demand curves at >10x the rate of the west. Many of their industrial companies now only survive as jobs programs that would collapse if they were not being subsidized by the government. This is a publicly acknowledged long term play that is starting to bear fruit. 1) Invite tech companies like VW to manufacture in China. 2) Set up government funded parallel factories to quickly clone the output. 3) Compete on price with a government backed supply chain. 4) Flood the zone and put global competitors out of business who don’t have the 10x subsidizes. 5) Reduce subsidies and be the last company standing. Edit: Here is a department of treasury talk on this from July: https://www.cfr.org/event/us-china-economic-relations-jay-shambaugh https://www.cfr.org/event/us-china-economic-relations-jay-sh...
- novaRom 2y ago
  This strategy is not unique to one particular country. Basically, it happens on different scales but repeatedly in the history (like Japan post-war).
  - mensetmanusman 2y ago
    Having an order of magnitude larger country makes this strategy somewhat similar, but different in kind, due to the new economic distortions that haven’t been trialed before.
otoburb 2y ago
>>I wonder what plan B should be for the Western labor forces that are not competitive with 9-9-6 kind of labor It's not really tongue-in-cheek to suggest that labour rights for other countries are being fought to emulate other Western labour forces that transitioned away from 9-9-6 to 9-5-5 (and maybe aspirationally eventually 10-3-4). For example, there is a growing backlash in China around the "inevitability" of 9-9-6 resulting in more youth (still a tiny minority, but growing) opting out. As manufacturing and the 9-9-6 (or worse) schedule transitions to cheaper countries, the cycle will repeat.
cabirum 2y ago
The western model is architected to exploit cheap labour from its colonies/vassals/"developing states". And to keep them from ever becoming developed. When these become unavailable, there is no plan B, you just go bankrupt and out of business.
- _visgean 2y ago
  this article is literally about closing factories in GERMANY. So VW is definetely not "exploiting cheap labour from its colonies/vassals/".
  - cabirum 2y ago
    Why not? Cheap energy from Russia, that came to an end. Cheap parts from China are not so cheap now because trade war and tariffs. Result: margins shrink, VW makes worse cars at higher price.
    - _visgean 2y ago
      You said they are exploiting cheap labour from its colonies/vassals, again the factory is in germany. Also electricity prices are largely back to pre-war levels https://tradingeconomics.com/germany/electricity-price https://tradingeconomics.com/germany/electricity-price , so is the gas price https://tradingeconomics.com/germany/gasoline-prices https://tradingeconomics.com/germany/gasoline-prices
- lpcvoid 2y ago
  I disagree. Yes, the west had pretty terrible colonial past, but we are owning up to that. We introduced supply chain laws to remove child labor and extortion where possible. We have debates over closing factories because of human rights violations. Yes, there's black sheep, but in total the west is trying sincerely. And then you have russia, which is basically the largest colonizer on the plant, and Saudi Arabia, North Korea, Syria, many African Countries... which are a gleaming example of human rights as we all know. Yet, you chose to pick on the group of countries which at least try? I cannot understand your worldview.
bluGill 2y ago
Automation - which western companies have been doing for years. The typical western factory makes just as much today as in 1950, but with 1/10th the number of humans. That automation is often not only cheaper (compared to western wages, not compared to Chinese wages!), but more accurate.
- foobarian 2y ago
  That's a solution for handling the manufacturing/productivity side, though doesn't necessarily address the part of the labor force that may become redundant. Growth is always possible as long as a technological edge exists over the cheaper labor regions, but when that goes away it's down to UBI or (idealized) communist style redistribution. I don't know how compatible the market economies are with this kind of policy. Interesting times indeed
  - bluGill 2y ago
    There are more jobs than ever. Someone needs to design those machines they are building, design the automation and so on. There is more we want to do than there are people for the foreseeable future.
gedy 2y ago
Westerners wouldn't need as much noncompetitive wages if housing was cheaper.
deleted 2y ago
[deleted]
mattmaroon 2y ago
Tarrifs are the obvious solution and what we're doing. I expect to see a lot more of it. This is the one situation where economists would largely recommend them. If you're afraid of a looming onslaught of cheap Chinese cars, just make 'em not cheap.
- ExoticPearTree 2y ago
  But then again, you want to export to China as well, so they can make your products more expensive in retaliation by slapping tariffs on your exports.
  - mattmaroon 2y ago
    And they certainly have and will and it has had an impact. But what’s the alternative? Let them decimate your industries one by one until they own them all? It’s not great in any case and one hopes diplomacy can solve it but I don’t see another path.

aurareturn 2y ago

War & tariffs. That seems to be the way it's going.

mensetmanusman 2y ago

996 is self-destructive. The current events have more to do with the entire Chinese society (knowingly or unknowingly) being led by the CCP to massively subsidize their manufacturing far beyond demand curves at >10x the rate of the west. Many of their industrial companies now only survive as jobs programs that would collapse if they were not being subsidized by the government. This is a publicly acknowledged long term play that is starting to bear fruit. 1) Invite tech companies like VW to manufacture in China. 2) Set up government funded parallel factories to quickly clone the output. 3) Compete on price with a government backed supply chain. 4) Flood the zone and put global competitors out of business who don’t have the 10x subsidizes. 5) Reduce subsidies and be the last company standing. Edit: Here is a department of treasury talk on this from July: https://www.cfr.org/event/us-china-economic-relations-jay-shambaugh https://www.cfr.org/event/us-china-economic-relations-jay-sh...

novaRom 2y ago
This strategy is not unique to one particular country. Basically, it happens on different scales but repeatedly in the history (like Japan post-war).
- mensetmanusman 2y ago
  Having an order of magnitude larger country makes this strategy somewhat similar, but different in kind, due to the new economic distortions that haven’t been trialed before.

otoburb 2y ago

>>I wonder what plan B should be for the Western labor forces that are not competitive with 9-9-6 kind of labor It's not really tongue-in-cheek to suggest that labour rights for other countries are being fought to emulate other Western labour forces that transitioned away from 9-9-6 to 9-5-5 (and maybe aspirationally eventually 10-3-4). For example, there is a growing backlash in China around the "inevitability" of 9-9-6 resulting in more youth (still a tiny minority, but growing) opting out. As manufacturing and the 9-9-6 (or worse) schedule transitions to cheaper countries, the cycle will repeat.

cabirum 2y ago

The western model is architected to exploit cheap labour from its colonies/vassals/"developing states". And to keep them from ever becoming developed. When these become unavailable, there is no plan B, you just go bankrupt and out of business.

_visgean 2y ago
this article is literally about closing factories in GERMANY. So VW is definetely not "exploiting cheap labour from its colonies/vassals/".
- cabirum 2y ago
  Why not? Cheap energy from Russia, that came to an end. Cheap parts from China are not so cheap now because trade war and tariffs. Result: margins shrink, VW makes worse cars at higher price.
  - _visgean 2y ago
    You said they are exploiting cheap labour from its colonies/vassals, again the factory is in germany. Also electricity prices are largely back to pre-war levels https://tradingeconomics.com/germany/electricity-price https://tradingeconomics.com/germany/electricity-price , so is the gas price https://tradingeconomics.com/germany/gasoline-prices https://tradingeconomics.com/germany/gasoline-prices
lpcvoid 2y ago
I disagree. Yes, the west had pretty terrible colonial past, but we are owning up to that. We introduced supply chain laws to remove child labor and extortion where possible. We have debates over closing factories because of human rights violations. Yes, there's black sheep, but in total the west is trying sincerely. And then you have russia, which is basically the largest colonizer on the plant, and Saudi Arabia, North Korea, Syria, many African Countries... which are a gleaming example of human rights as we all know. Yet, you chose to pick on the group of countries which at least try? I cannot understand your worldview.

bluGill 2y ago

Automation - which western companies have been doing for years. The typical western factory makes just as much today as in 1950, but with 1/10th the number of humans. That automation is often not only cheaper (compared to western wages, not compared to Chinese wages!), but more accurate.

foobarian 2y ago
That's a solution for handling the manufacturing/productivity side, though doesn't necessarily address the part of the labor force that may become redundant. Growth is always possible as long as a technological edge exists over the cheaper labor regions, but when that goes away it's down to UBI or (idealized) communist style redistribution. I don't know how compatible the market economies are with this kind of policy. Interesting times indeed
- bluGill 2y ago
  There are more jobs than ever. Someone needs to design those machines they are building, design the automation and so on. There is more we want to do than there are people for the foreseeable future.

gedy 2y ago

Westerners wouldn't need as much noncompetitive wages if housing was cheaper.

deleted 2y ago

[deleted]

mattmaroon 2y ago

Tarrifs are the obvious solution and what we're doing. I expect to see a lot more of it. This is the one situation where economists would largely recommend them. If you're afraid of a looming onslaught of cheap Chinese cars, just make 'em not cheap.

ExoticPearTree 2y ago
But then again, you want to export to China as well, so they can make your products more expensive in retaliation by slapping tariffs on your exports.
- mattmaroon 2y ago
  And they certainly have and will and it has had an impact. But what’s the alternative? Let them decimate your industries one by one until they own them all? It’s not great in any case and one hopes diplomacy can solve it but I don’t see another path.