In the past, a union strike at a plant would see a generous long-term contract and benefits for the workers. Now, it is likely for the plant to be moved or workers replaced with automation.
Here is Larry Summers from his 1998 speech "The Challenges of Success".
" The world looks very different than it did at the beginning of this decade, a time when America was said to be in decline. It is now clear that America will grow faster in this decade than Japan and Europe. Their four-decade-long story of convergence has ended and America is pulling further ahead. Why this success? A large share of the credit must go to the two forces that this conference brings together: technology and finance.
The twin forces of intonation technology and modern competitive finance are moving us toward a post-industrial age. And if you think about what this new economy means - whether it is AIG in insurance, McDonald's in fast-food, Walmart in retailing, Microsoft in software, Harvard University in education, CNN in television news - the leading enterprises are American. "
Edit:
I tried deleting this, because it is an ad-hominem, which feels good but adds nothing.
It is just endlessly frustrating that one of the principle architects of the current status-quo demands so much attention.
Summers helped structure post-Soviet Russia, viciously attacked Brooksley Born when she sought to regulate the swaps market, among many many other serious lapses in judgement.
And yet, when he and his students come up with another insane policy proposal we have to take it seriously and challenge it on the merits.
It feels a lot like the allied strategy during WW2 of saturating enemy air defenses.
[1] https://mattstoller.substack.com/p/how-bill-clinton-and-amer...
He holds out AIG as a world-leader to be emulated.
In the same year he gave that talk, he attacked CFTC chair Brooksley Born when she proposed margin rules for OTC swaps. She made this proposal in the aftermath of the LTCM collapse. Summers/Greenspan/Rubin said that banks were so "sophisticated" that they didn't need margin rules, and that these rules would somehow cause a financial crisis.
Ten years later, AIG almost collapsed because it had a division making massive directional bets on credit markets using un-margined swaps. Were it not for a $200bn loan from the public, AIG would have collapsed.
https://www.simonandschuster.com/books/Goliath/Matt-Stoller/...
Globalism made the very poor in China/Mexico/etc. richer, created their middle class and it made the very rich in US/EU even richer at the cost of US/EU middle class.
Saying how that is irrelevant now because of automation just smells like new propaganda to replace the old one so that the rich can get richer and the rest of us arguing propaganda.
The end-game is, of course, little need for labor at all. Like America China will have to face this and find some way to keep millions from starvation. And soon.
This may sound controversial but it's likely the only way forward for the US to compete with China long term. Trying to ostracize our neighbors and go it alone against a country 4x our size is not a geopolitically sound move.
Yeah the rust belt job loss is only temporary. They will come back any day now.
> We want manufacturing in mexico because we're connected by literal rail lines and can ship products back and forth far more readily and in an environmentally friendly way.
Yeah I'm sure those Mexico factories have all the environmental regulations that US/Canada does.
> This may sound controversial but it's likely the only way forward for the US to compete with China long term.
The US has given China it's growth. It has exported jobs and exported it's middle class along with it. It has also exported much of it's high tech advantage into China. All for the short term benefit of the investor class and it's billionaires. Competing with China could start by not giving away every advantage.
> Trying to ostracize our neighbors and go it alone against a country 4x our size is not a geopolitically sound move.
The only ostracizing I do is towards the billionaires who shape economic policy to their benefit and everyone else's expense.
To put it differently, if we have to go with outsourcing, China was a mistake and we should redirect as much of what was offshored as possible to Mexico.
Obviously the billionaire class needs to pay for what has been done. I'm absolutely not against that.
This point bears repeating until they finally take it into account when discussing inequality. It's honestly tiring to have to repeat this every time
Minor nitpick: I'd call it globalization, not globalism, as the latter has historically meant something else and currently means something terrible
What the US establishment refers to as keeping a country 'business-friendly'.
Data to back this argument up is available on FRED if you're interested.
I agree, but I think you mean income distribution and latent demand. The idea is that a lot of people would be consuming more goods and services if they weren't so cash strapped. Some of this is also affected by wealth distribution also, though.
There's a bunch of work no one wants to do that gets dumped on people who need the money by everyone who can afford it. Elder Care is an obvious examples in the US, along with Child Care to a lesser extent. Lots of people consume free or budget versions of these services with which they're dissatisfied, and the root of their dissatisfaction is often that they can't pay enough to get the people providing the service to accept micromanagement, either because there aren't enough of them to implement it, or because they don't need the money enough to put up with it.
I guess the flat-wealth-distribution case is most people grudgingly using some economy-of-scale option leveraging the people with more patience for this kind of work, and a few control freaks either doing it themselves or economizing elsewhere to pay for a boutique option.
That can be said of practically every industry. They are all segmented by cost/quality, whether that quality is real or perceived.
That said, the goal behind reducing wealth and income disparities isn't to flatten them completely, it's to put a floor under the standard of living of those at the bottom of the wealth/income distribution. That doesn't mean everyone will be consuming boutique products and services, but it means that latent demand, currently repressed by lack of income/wealth, will become active demand, and money velocity in the economy will increase.
Most of the people reading this are likely to be tech workers, so imagine what it would be like to try to join a company that was on strike[1]. How do you log in to your computer? Where's the bug tracker? What are the current goals? Where is the code stored? What part of this code base is actually relevant to what you're doing? What five year old architectural decision means that you can't just do this the obvious way? How do you deploy code? How do you roll back deployments? How do you find the metrics for what went wrong? Imagine trying to figure out the answers to any of these questions without senior engineers around, and in fact nobody around except other strikebreakers with the same questions. When I was at Google it was generally accepted that a new hire would take 3-6 months before the were productive, and that was with considerable help from the rest of the engineers.
Tech is a particularly severe instance of this, but all labor is more complex than it appears on the surface. As any roboticist will tell you, the real world is overwhelmingly detailed.
[1] Don't do this by the way, it's called being a scab, and it's against your own long-term interests. If a strike in your industry succeeds, it raises the average conditions of people in your industry.
Which would make them more valuable to employers and more in demand. You're proving that wages are a product of supply and demand
Based on what I've read about the history of blue collar strikes in America, this scenario is far more often the exception than the rule.
Unions have been on a serious decline the past several decades, but striking isn’t their only power. It’s just the only one you see on the 5 o’clock news, or in Hollywood movies, because it’s the most dramatic.