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Except when a company like Best Buy can fire a bunch of workers and replace them with Accenture who are paying workers $40/hour while holding them hostage with

Except when a company like Best Buy can fire a bunch of workers and replace them with Accenture who are paying workers $40/hour while holding them hostage with the H1B. At least 20% of workers in US construction (and even higher for residential) are illegal aliens. Then there is the offshoring of manufacturing: your local workers get too uppity? China can supply whatever you need. Don’t like the United Auto Workers? Move your factory to northern Mexico. What’s interesting is that tariffs helped American workers back in the day — whether or not that happens again remains to be seen. Unless the entire world gets onboard with worker rights, trade barriers remain one of the only ways to improve the working conditions of local people. Regarding the French example: they do have the so-called 35 hour week, but compare disposable income for the same job in the U.S. versus France: Americans have much higher disposable income than the French (even after accounting for health care costs.) The US could improve conditions, but pay will drop accordingly. That might be ok or it might not, but there is no free lunch.

PaulRobinson 1y ago
While trade barriers might improve working conditions, as you hint, it's going to come at a cost of disposable income. Those barriers work by raising the minimum price of a product, making it profitable to produce it in a more expensive labor market. When you make products more expensive though, it comes out the other side as people have to pay more to get the things they want, and you get inflation. If that is what people want, OK, fine. I don't think it's what has been sold to most Americans though - not only is the narrative that inflation going to be avoided, but income tax is going to be scrapped too. It's hard to find credible economists from any part of the political spectrum who agree. I hope it does work, because if it doesn't, what will follow will be horrible to watch from afar, even if as a result we end up with prices for most things coming down (if Chinese companies can't sell to the US, they'll just dump to the rest of the World).
malcolmgreaves 1y ago
The Republicans’ trade barriers do not solve any labor problems. They contract the total market size and tax economic activity. The French have higher disposable income because Americans are too busy wasting their income on sky high rents, sky high healthcare costs, paying for cars because it’s necessary, higher food and alcohol costs, etc. (Plus they have more of the thing money can’t buy: time). And these tariffs are going to make American’s lives even more expensive. (No one release in the world is going to oh these taxes: only Americans).

PaulRobinson 1y ago

While trade barriers might improve working conditions, as you hint, it's going to come at a cost of disposable income. Those barriers work by raising the minimum price of a product, making it profitable to produce it in a more expensive labor market. When you make products more expensive though, it comes out the other side as people have to pay more to get the things they want, and you get inflation. If that is what people want, OK, fine. I don't think it's what has been sold to most Americans though - not only is the narrative that inflation going to be avoided, but income tax is going to be scrapped too. It's hard to find credible economists from any part of the political spectrum who agree. I hope it does work, because if it doesn't, what will follow will be horrible to watch from afar, even if as a result we end up with prices for most things coming down (if Chinese companies can't sell to the US, they'll just dump to the rest of the World).

malcolmgreaves 1y ago

The Republicans’ trade barriers do not solve any labor problems. They contract the total market size and tax economic activity. The French have higher disposable income because Americans are too busy wasting their income on sky high rents, sky high healthcare costs, paying for cars because it’s necessary, higher food and alcohol costs, etc. (Plus they have more of the thing money can’t buy: time). And these tariffs are going to make American’s lives even more expensive. (No one release in the world is going to oh these taxes: only Americans).