The Class of 2017 – Raising America's Pay
epi.org
epi.org
> Make it easier for workers to bargain collectively for higher wages
> Make more workers eligible for overtime pay
> Provide earned sick time and paid family leave
Good suggestions. Unfortunately, if you do this, the affected jobs will simply be moved overseas to countries where policies like this don't exist. Unless we get rid of free trade policies and impose taxes on foreign trade, to take the money companies save from this form of cost cutting out of their pockets.
Trump is the first President in a long time to actually seriously consider rolling back globalization. People say it's a good thing, citing Ricardian theory. But it has essentially destroyed entire local economies (my hometown being one of them). Economic theory is all well and good, but theory needs to be tested against the real world. The evidence that globalization causes great harm is simply too obvious for me to ignore.
I'm disappointed Trump is starting to get friendly with Xi, instead of following through on his campaign rhetoric and slapping some taxes on imports.
I'm no xenophobe. As far as I'm concerned, those taxes can go away as soon as China stops crapping all over the environment and starts giving its workers the same rights and wages that we give our workers in the US. That way the playing field would be level, and companies would no longer be able to use free trade to exploit their workers.
Jobs like that can be moved largely already have been - we're left with the jobs that can't be moved (like McDonalds fry chef and Walmart checkout assistants). Those companies will eat any pay rises and post lower profits.
This is partly why the fight for 15 has had some measure of success.
McDonald's response to $15 is automation.
Increasing labor cost makes capital expenditure on automation more attractive.
Increasing minimum wage helps the people that keep a job, but hurts the people that can no longer find a job (especially high school, less educated, etc.)
Just like mandated health insurance has pushed down working hour limits, so many workers have to have two half-jobs instead of one full-time job.
Good, we should work to automate more low level work. In fact, all of it if possible. Our response to lower work availability will probably either be revolution or a better social safety net. But then again, the world of snowcrash is possible.
> Increasing labor cost makes capital expenditure on automation more attractive.
Tax automation. If it does the job of a human, tax it, like a normal human working. That's just one solution of many for the automation 'problem'. Of course, another option is to eliminate the minimum wage so that we never automate another thing, and there are a massive plethora of other responses to the problem, but mostly I'm just trying to avoid a false dichotomy logical fallacy while pointing out the two most extreme solutions.
> Increasing minimum wage helps the people that keep a job, but hurts the people that can no longer find a job (especially high school, less educated, etc.)
I have a feeling that this is going to become more true no matter the situation. Similar to how some energy companies have been coming out and arguing that no matter how much money we throw at oil, renewables are the future. The economy is changing, we are nearing a point where there are massive numbers of people that simply aren't needed to keep the modern economy running. The first time I really started following/believing (lacking a better term) this idea was when I read "Labour Markets: On Bullshit Jobs"[1].
If an economy makes enough for everyone, regardless of their ability to participate, perhaps we need to reconsider how the wealth is distributed a bit, especially if we have a falling population.
> Just like mandated health insurance has pushed down working hour limits, so many workers have to have two half-jobs instead of one full-time job.
Perhaps then we should reduce the number of hours in a full time job. Instead, we are currently going the opposite direction, with regulations moving towards no time and a half overtime pay.
The shorter we make the hours, the more people hired, the more automated. Really, the problem is not with automation/high minimum wage/etc. The problem is with the response. Perhaps of assuming that companies are in the right with not hiring people and automating, thus protecting their massive profits that they have right now, we should be assuming that their massive profits are on the wrong side of history, and we should do something about that instead.
[1]: http://www.economist.com/blogs/freeexchange/2013/08/labour-m...
Actually it's lobbying. Automation didn't work out so well for Horn & Hardart.
Its really hard for me to not burn with anger when I see comments like this. The US and the West did the exact same thing that you mention: crap all over their environment and treat workers terribly, to accumulate all the capital in their hands. That capital was re-invested in technology/research and that is the main reason why people in the West have higher standard of living now. And when Europe and US were in the path of industrial development, they DID have high import taxes as well. And now that China is doing essentially the same, you are not OK with that? That's just hypocrisy, plain and simple.
The US did an almost similar thing
It's worth thinking about when discussing what countries "should" and "shouldn't" do, as you note.
Somehow the US still managed to become a superpower. China will be fine if it can transition to a better system of government. Globalization doesn't seem necessary for a country with a huge domestic market.
Demanding better working conditions for Foxconn employees is called having a conscience not hypocrisy.
lol, so the one that brings more and more people out of poverty everyday should suddenly change and adopt the American style of government where more and more people are ending up in poverty? Genius idea mate...
"When children today grow up, will they be better off financially than their parents?" http://www.pewglobal.org/database/indicator/74/survey/17/res...
People want change, but they're unwilling to consider anything else - democracy, like all systems have pros and cons. Learning from the successes of China doesn't automatically mean adopting the full ideology.
1 - The Atlantic 2 - The Pacific
Those two present enormous competitive barriers in a fight.
And with respect to treating workers terribly, there was no concept of treating workers well, for the most part. You can't really apply our standards today on people of the past. It's not hypocrisy. It's enlightenment.
But let's say you're not ok with it, do you think China should ruin the environment, let kids get their hands cut off working in factories at 13 years old, or die have workers die en mass in industrial accidents and stuff just because the US and Europe did it 100 years ago? You also can't oversimplify "we have a higher standard of living now" based on ruining our environment and treating workers poorly. It is FAR more complicated than that.
This isn't really true. The rapid industrialization that happened in England led much contemporary criticism. It's been an incremental process to get from where we were to where we are now.
> It's also worth mentioning with respect to the environment that they didn't know any better. Now we do.
Yes, so what do you propose? That China not build power plants to provide a higher standard of living to the masses of Chinese people who desire to benefit from it? Let's remember that currently China is a signatory to the Paris Climate Accord and its Trump who is threatening to withdraw. Lets please stop treating China as the enemy of the environment when its still the West that's responsible for most Greenhouse emissions.
> And with respect to treating workers terribly, there was no concept of treating workers well, for the most part. You can't really apply our standards today on people of the past. It's not hypocrisy. It's enlightenment.
I mean, come on... people thought that sending kids to work in Coal mines was OK in pre-industrial England? Really? London at one point was a huge slum with regular outbreaks of Cholera. It wasn't like nobody knew that was bad...people just didn't care. And conditions in China, although they are bad for workers, are still better than that.
> But let's say you're not ok with it, do you think China should ruin the environment, let kids get their hands cut off working in factories at 13 years old, or die have workers die en mass in industrial accidents and stuff just because the US and Europe did it 100 years ago? You also can't oversimplify "we have a higher standard of living now" based on ruining our environment and treating workers poorly. It is FAR more complicated than that.
I didn't advocate for any of that. But it is a fact that Western wealth was built on the backs of extractive industries that exploited the lower classes of their own countries at first, then exploited slaves, and currently exploits low wage workers in developing countries. And for all those reasons its very hypocritical of the West to criticize China.
> I only think that the West cannot claim a high moral ground against China, or any other developing country when it has itself been guilty of the very same practices in the not too distant past. That is by definition, hypocrisy.
Sure, but the "West" can very much say: "hey we did that and we learned our lesson on why that is bad and you shouldn't do it". Britain/US/etc... ruined their environments, whether out of stupidity or ignorance. That doesn't excuse China (or anybody else) to do the same thing.
>Yes, so what do you propose? That China not build power plants to provide a higher standard of living to the masses of Chinese people who desire to benefit from it? Let's remember that currently China is a signatory to the Paris Climate Accord and its Trump who is threatening to withdraw. Lets please stop treating China as the enemy of the environment when its still the West that's responsible for most Greenhouse emissions.
I'm not sure what the best solution is. But what I can say is that "doing what the West did because they did it even though it's bad" isn't the right approach. Trump may be threatening to pull out of the Paris Climate Accord but how is that relevant? I can't do anything about him being elected. In 4 years we'll elect a democrat and then sign back on. I don't treat China as an enemy of the environment more than any other country. If you're polluting you should try to stop it, regardless.
>I mean, come on... people thought that sending kids to work in Coal mines was OK in pre-industrial England? Really? London at one point was a huge slum with regular outbreaks of Cholera. It wasn't like nobody knew that was bad...people just didn't care. And conditions in China, although they are bad for workers, are still better than that.
Yes, as indicated by the fact that they did. Even if people at the time didn't care, we realize that their mindset of not caring is wrong today. Just like slavery, or pillaging cities, or whatever. But it's wrong today, from our perspective. You can't take moral standards of today and apply them retroactively on the past. It doesn't work that way.
> I didn't advocate for any of that. But it is a fact that Western wealth was built on the backs of extractive industries that exploited the lower classes of their own countries at first, then exploited slaves, and currently exploits low wage workers in developing countries. And for all those reasons its very hypocritical of the West to criticize China.
By sitting here complaining that it's hypocritical you are giving free-pass to countries (China or otherwise) to pollute because the West did it once. Even if it were to be hypocritical, it doesn't matter.
> currently exploits low wage workers in developing countries
Trust me, as bad as those jobs may be, they have been a great thing for China. Maybe if they hadn't had this whole stupid Communism thing and that mass genocide of intellectuals and free-thinkers they wouldn't have been in that position. It's sad, but those factory jobs (which won't be in China forever) have increased the standard of living. So if you want to call out the West for these exploitative labor practices, then you better be pissed at the Chinese who let their fellow people work in such poor conditions. Apple just pays people (and go figure works much harder than the Chinese do to increase working conditions) to build stuff. Nobody is forcing Chinese people to go work in these factories for next to nothing.
Globalization creates value. You can't just dismiss Ricardian theory because of your anecdotal experience. The problem is where the value that is created by globalization goes. It has increasingly gone to the richest of the rich. If that increased value was distributed fairly and we increased the social safety nets to help the people caught in the transition, like those in your home town, society as a whole would be much better off. Trying to turn back the clock on globalization is simply short term thinking on a problem that will continue to get worse if we don't come up with a lasting solution.
Same for clothes, housewares, shit really any product you buy at Walmart (which really is pretty much everything you need to survive, minus a few things).
And yes I understand for those on the poverty line it doesn't really apply, just saying the buying power of everyone in general has gone up with the introduction of low cost labor. Even that is temporary though, already workers in these areas are demanding better conditions and wages.
You need to account for cost of living. Also, if you're really worried about low wages, maybe start complaining about other countries since wages in China continually and rapidly increase.
Chinese wages now higer than in Brazil, Argentina and Mexico: https://www.ft.com/content/f4a260e6-f75a-11e6-bd4e-68d53499e...
Basically, for every unemployed worker in the USA, there's a Chinese worker who benefited. In addition there are new jobs in the USA (such as in entertainment or banking or information technology).
For this reason, both countries benefit in aggregate but if outcompeted workers fail to adjust to a different job, specific workers can suffer (like Mexican farmers suffered from NAFTA).
Economists favor free trade, but they also favor redistribution of some of the gains of trade to the losers (this redistribution hasn't been done historically).
http://www.igmchicago.org/surveys/china-us-trade
http://econlog.econlib.org/archives/2017/04/does_trade_with....
#4: Economic disincentive for wealthy countries to fight wars with each other, leading to less dead workers on both sides.
Nowadays, college graduates struggle for that sort of decent middle class life.
It looks an awful lot like the country, as a whole, is getting poorer.
As for your statement that "specific workers can suffer," what I've seen firsthand is that it's more like the entire local and regional economy, based on particular manufacturing industries, has been completely devastated. The area's basically been in a depression for multiple decades.
It's not so much about sending people to school for a few months or years to learn to do something else. It's more that, back when people who worked in the factories had money to burn, they spent it at a wide variety of secondary businesses in all kinds of different industries. Now the factories are mostly abandoned, rusting eyesores. A lot of the commercial real estate's gone downhill and is near rock bottom; people simply don't have money to spend on anything but necessities. The bad parts of town seem to be expanding, the drugs are getting bad, most of the ambitious kids and the people with money all pack up and leave for somewhere else. The closest thing to a growth industry is healthcare for the old folks who were born here and are going to stay here 'til they die.
The fabric of an entire community's been torn apart. I've seen it with my own eyes. Simply saying "specific workers can suffer" is a euphemism that minimizes, or even denies, the true extent of the damage.
He was a hypocrite all through the campaign trail, why would you be surprised he's continuing that trend?
Then other countries slaps taxes on their imports in retaliation, and then US exports are equally hurt... causing other economic contractions that could similarly "destroy local economies." And everything gets more expensive for everyone.
This is generally always what happens when you try to raise import taxes. One example from history: https://en.wikipedia.org/wiki/Smoot%E2%80%93Hawley_Tariff_Ac...
China is incredibly protectionist of their own industries and engages in widespread subsidies and import tariffs. I'm not sure why anyone cares about the US returning the favor.
I don't think you realize that protectionist measures in America is nothing new; in fact, we have quite a lot of protectionist measures. It's just a media bias here that makes you think otherwise.
Here's a chart from Euler Hermes (a unit of Allianz), Protectionism Is Not New: http://www.eulerhermes.com/economic-research/publications/Pa...
It's not like this article is counter to the organization's obvious left-leaning interests [1].
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If we raise the minimum wage, that would surely increase unemployment. Even a minimum wage job is hard to get for an uneducated, unskilled person, so how would it be easier for them to get a job at a rate employers are even less willing to pay?
http://i.investopedia.com/inv/tutorials/site/economics/econo...
is not a free market model! Not at all! It is a "perfectly competitive" model and has several very specific assumptions:
1) All firms sell an identical product
2) All firms are price takers - they cannot control the market price of their product
3) All firms have a relatively small market share
4) Buyers have complete information about the product being sold and the prices charged by each firm
5) The industry is characterized by freedom of entry and exit.
Furthermore, if you are interested in how minimum wage actually effects employment I would check out the following report(here's a good quote).
The employment effect of the minimum wage is one of the most studied topics in all of economics. This report examines the most recent wave of this research – roughly since 2000 – to determine the best current estimates of the impact of increases in the minimum wage on the employment prospects of low-wage workers. The weight of that evidence points to little or no employment response to modest increases in the minimum wage.
The paper I linked mentions a dynamic monopsony model and also 11 different channels through which adjustment is possible. Basically the market is lots and lots of different forces (not just supply and demand) all originating from (not always rational) people, in this case we need a model which more accurately models this.
If you'd like to read more about how the proliferation of the basic supply and demand model has really hurt the layman's understanding of the economy there's a great book that came out recently called "Economism." Here's a short article which can give you a bird's eye view: https://www.theatlantic.com/business/archive/2017/01/economi...
There's three things that can give:
1) Unemployment (workers eat shit)
2) Inflation (customers eat shit)
3) Profits (owners eat shit)
I'll give you a clue which group takes the brunt of minimum wage increases. Take a wild guess who paid for this expensive times sq advert:
https://pbs.twimg.com/media/CNsVNeGWUAE3T7p.png
The low pay commission study actually found no effect on employment and no effect on prices except for a very slight non-commensurate rise in one industry (canteen services i think).
Now, if the argument was "don't raise the minimum wage because we want people to keep their jobs temporarily while we spin up xyz programs to help for when then inevitably lose them to automation" then, OK, that seems reasonable. There's a plan to move forward from the inevitable.
[1]https://scholar.google.ca/scholar?hl=en&q=minimum+wage+incre... [2] http://www.mitpressjournals.org/doi/abs/10.1162/003465301750...