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The view from the rust belt

Visbek said:
We're now in a service economy, and no amount of gnashing of teeth will change that. Manufacturing is 10% of employment, and service is 80%.
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Point very well made!

And what are the characteristics of Services Products? Intellectual ability. That is, in general, service industries require higher-level talent.

And if that is the case, why in heaven's name is it sooooo damn expensive to get a Tertiary Level diploma in the US?

Because "education" is now being treated like a "market" that should make a "profit". Which is the summum of Patent Ignorance, and one more step in the Dumbing-down of America because the high-cost is a barrier to accessing an advanced degree.

Education is like air we breath and the water we drink, it is for the wholesome well-being of all individuals. And the more you can get of it, the better ... !
 
Lafayette said:
What do you mean by this? What regulations, for instance?
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Fixing the number of jobs that can be lost by automation, requiring annual permits to replace human tasks with machines (such permits would be costly, like 100K a year) and requiring adequate justification.

or requiring tuition payments to displaced workers to study a new field at a state college, there's various ways this can be managed.
 
Lafayette said:
PROTECTIONISM?



International trade-tariffs fall under the jurisdiction of the WTO, which is responsible for said tariffs. Excerpt:

So, before unilaterally imposing trade-tariffs they are "discussed" and "negotiated". Let's understand something: Uncle Sam is no longer the "biggest guy on the block". There are international trading rules and either we observe those rules, or World Trade comes down like a House of Cards.
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maybe, but it's not wrong to engage in conflict, really we're such a huge part of the global economy, and the only currency stable enough to be the primary reserve currency (for now, that can obviously change, but it won't be an overnight process) So I really don't believe world trade will come down like a house of cards, I think other players will decide the value they lose from renegotiating GATT is a drop in the bucket compared to what they lose from an all-out trade war, who else will they sell to? especially China, their economy is teetering now as it is, in fact this is the best time to push the issue, they can't afford to lose a trade war, They already are facing internal dissent problems on the labor front, the environmental front, and they can barely keep their people employed now, so if we need a trade war, it's now or never far as I'm concerned.

The US put up a trade-tariff against Chinese rubber-tires, and they did so (most likely, I wasn't there) by arguing at the WTO that depending upon a foreign-country for such a crucial product was inacceptable. The US needed to maintain a production capacity internally, and that argument passed muster.

How many industries can we "protect" with import-tariff barriers in that manner, which was quite a unique case?
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We don't need to. If I were president my justification will be climate change and environmental damage. countries with little environmental protection get broadly tariffed until they meet western standards.
Not a helluva lot ...
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again, don't need to.

PS1: It will amaze you to learn that I can't buy a Thanksgiving Butter-ball Turkey here in France! Why? Because all poultry from the US is banned in the EU due to the manner in which it is cleansed with a product that leaves a consumable residue on poultry skin, which is banned in the EU. The US has been trying to "negotiate" away that ban for the past two decades, and getting nowhere.
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Cool. My life goes on after reading this fact. In fact you're only making my case, that various countries ban and tariff whatever they want and don't care what international interests think about it.
PS2: TPP has raised one helluva hullabaloo, especially from unions. Why? The usual excuse: "It's gonna cost us jobs!" In fact, the key element of TPP was to protect intellectual property rights that will prevent China from producing knock-off products that are protected by an international patent. If the US wants to produce a product in China - like, say, the iPhone - China will have to respect the intellectual content within that product by not copying it and employing it in a homegrown variety. Which does not prevent China from building the product.
PS3: China was not even asked to join the negotiations for TPP. Thus, they will either accept the conditions negotiated or be enjoined from trading with the US said patent-protected products.
PS4: Moreover, the reason TPP was concocted outside the WTO is because Obama felt it would be easier to implement; since the WTO has many ways of protracting such negotiations.
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if TPP does those things I have no issue with it.
 
EMNofSeattle said:
Fixing the number of jobs that can be lost by automation, requiring annual permits to replace human tasks with machines (such permits would be costly, like 100K a year) and requiring adequate justification.
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They tried that both in Germany and France. Didn't work.

At the lower-end, companies simply closed down and reopened-shop in another country. At the upper-end, companies froze all new-hiring (which did not hurt since it occurred during recessions) and personnel reductions happened naturally with time.

EMNofSeattle said:
... or requiring tuition payments to displaced workers to study a new field at a state college, there's various ways this can be managed.
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Yes, let's restart the Apprenticeship Program on two-levels (both high-schoolers and the unemployed):
*Identify the children in high-school, and have a large part of their time spent on skills-training (but at the high-school)
*When they graduate, they apprentice once again at a company (where the government pays half their salary) for a given period. Or, they take whichever trade they may wish to focus-upon, and they enter an apprentice program (also paid by government funding).
*Production workers who have been laid-off go into an apprenticeship program in a skill of their choosing, and they continue on their Unemployment Insurance compensation until they graduate within a period of no-longer than one year.

The high-school apprenticeship program existed in my time, and I never did understand why it was dropped. Not everybody is destined to a college/university degree, but virtually everybody needs more kind of vocational-training. And many sooner than others.

When seeking a job, typically, their drawback is that they cannot show "real experience" on a résumé in a given domain (which hinders hiring), and that requirement could be best fulfilled on an apprenticeship program collaborating with willing private companies.

With the recession looking more distant in the past, the time is now to start such programs ...
 
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countryboy said:
Yes, because more regulation is exactly what this country needs. :roll:
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We could sure use it more then bumper sticker slogans from conservatives.
 
EMNofSeattle said:
The other problem , time to start regulating automation.
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How, exactly, do we regulate automation?

And to what end? Are we supposed to keep people employed in mindless dead-end jobs, that can be performed by a machine, solely to keep people employed?
 
EMNofSeattle said:
In fact you're only making my case, that various countries ban and tariff whatever they want and don't care what international interests think about it.
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The EU bans American poultry because of the chemicals used to clean the chicken, which are absorbed and transmitted to the eater. Studies "supposedly" support the contention.

That's not a an idle reason for banning a country's agricultural produce.

And to my knowledge your above contention is simply not true ... the ultimate arbiter of any dispute would be the WTO, which is why it exists. Countries do not use the WTO to manipulate trade by gaining an advantage.

If it worked, world-trade would come to a halt ...
 
Lafayette said:
And if that is the case, why in heaven's name is it sooooo damn expensive to get a Tertiary Level diploma in the US?

Because "education" is now being treated like a "market" that should make a "profit". Which is the summum of Patent Ignorance, one more step in the Dumbing-down of America.
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Actually, I believe there are multiple drivers for the increased cost in higher education.

• Higher demand. More people are attending college, and building up those facilities is expensive.

• State budgets. Tuitions for public higher education are increasing, as states try to cut their budgets, while dealing with more students. Note that while overall spending goes up, per-capita costs have dropped slightly.

• Competition. Private colleges drive up costs, in part because they are competing for the best students. This means spending heavily on amenities like sports facilities. Some public schools (ones with big sports programs) have similar cost drivers.

• Administration. Faculty costs haven't changed much; they are paid about the same as in the past. Administration staffs, however, are growing.

I don't think the profit motive is a big driver of costs. It mostly plays in only with certain private colleges that have massive endowments, and need to park that capital somewhere. A handful of universities have insanely large endowments, most do not.
 
While some would appear to be of the opinion that the government needs to regulate automation, impose trade tariffs, etc. etc. these actions are only going to result in a more powerful and overburdening government and a distinct position of disadvantage in world trade markets, as have been pointed out by others, 'been there, done that, didn't work'.

The race to the bottom? Well, think about it. The world trade has recently (in historical terms) opened up both China and other 3rd world nation's labor forces to compete. Couple this with the a significant drop in both the cost of air shipping and the cost of container shipping across the oceans, it's little wonder that some jobs that don't have to be performed in-country are moving to the lower wage countries. But would you deny China and other 3rd world nations the opportunity to elevate their standards of living through this productive work?

Consider Germany. It's one of the highest labor cost countries, and yet, has a thriving export market. Previously in Germany's history, early in the post WW II era, Germany had a thriving industry in the manufacture of garden hand tools, shovels, rakes, etc. that sort of thing. Once their labor costs went up, these industries moved to Spain, to take advantage of the lower labor rates there. Yes, the labor unions and many others cried for tariffs to protect their local industries. This wasn't to be. The German labor force and industries retooled to higher margin products for export, continued to improve their standard of living, and continued to have high margin, high value added production.

So it seems to me that the answer isn't to create an overly expansive government which adopts ever strong trade tariffs, anti-automation regulation, none of which is going to have the desired impact in the long run, but rather to promote the adaptation and innovation of new, high-value added industries, as we have seen Germany and other nations have done.

Face it. Government regulation isn't going to stop the steady march of progress nor innovation nor automation, just as it's not going to stop the march of markets optimizing themselves. So do you want to face these challenges head on, adapt to these changes in the market, or do you want to bury your head in the sand in the hopes that it'll merely go away? (Only to be at a more severe detriment later on?)

I think the choice is a pretty simple one to make.
 
Visbek said:
Actually, I believe there are multiple drivers for the increased cost in higher education.
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You may well be right, and I will not dispute your argument.

Nonetheless, what I am proposing for the US already exists in the EU. In France, a good friend who has two law-degrees never paid more than a tuition fee (of 1000 euros) per year to obtain them.

So, it is difficult (from my perspective) to understand why costs in the US as so very much greater. The OECD says that it is due to the fact that American teachers earn far more than their equivalents in other OECD countries.

The fact remains nonetheless that students in the US graduate from postsecondary education with one helluva large debt. See Selected Countries, Tertiary Education Spending.

There is no reason that state-run postsecondary schools could not nearly free, just as primary and secondary education are today. Of course, they would need Federal-funding assistance. And if we knew how to cut Defense Spending, the money could very well be used to educate our kids rather than send them to war with a promise that if they survive they can get a government-paid tertiary education.
 
EMNofSeattle said:
The other problem , time to start regulating automation.
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"regulating automation". Interesting. Do we go back to the middle of the 20th century with 'feather bed" jobs? And if we restrict automation for economic reasons, what's to stop every other country in the world from filling the void made by regulated automation thus leading to the American product being the highest priced. It might be OK in the short term as Americans will be forced to pay a much higher price for any, assuming tariffs are in place to keep the American product competitive. Do it enough and you have stagflation.

Tariffs and taxes have NEVER worked even before they became obsolete. With the grow of globalization few products are 100% made in any one country so in most cases you are merely shooting yourself in the foot.

"regulating" automation has been tried. They were called Luddites.
 
Fearandloathing said:
"regulating automation". Interesting. Do we go back to the middle of the 20th century with 'feather bed" jobs? And if we restrict automation for economic reasons, what's to stop every other country in the world from filling the void made by regulated automation thus leading to the American product being the highest priced. It might be OK in the short term as Americans will be forced to pay a much higher price for any, assuming tariffs are in place to keep the American product competitive. Do it enough and you have stagflation.

Tariffs and taxes have NEVER worked even before they became obsolete. With the grow of globalization few products are 100% made in any one country so in most cases you are merely shooting yourself in the foot.

"regulating" automation has been tried. They were called Luddites.
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Spain in the seventeenth century went through an ugly period, where they had so much money
coming in from the new world, many industries shut down.
Tariffs were enacted to protect the remaining Spanish products from European competitors,
but the new products from France and England were made with a more efficient process,
and could be made cheaper, and better, even with the tariffs.
 
longview said:
Spain in the seventeenth century went through an ugly period, where they had so much money
coming in from the new world, many industries shut down.
Tariffs were enacted to protect the remaining Spanish products from European competitors,
but the new products from France and England were made with a more efficient process,
and could be made cheaper, and better, even with the tariffs.
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? And what happened in Spain 4 centuries ago relates to regulation automation how?
 
Fearandloathing said:
? And what happened in Spain 4 centuries ago relates to regulation automation how?
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Sorry, the Spanish did not modernize their factories, while France and England did.
the protectionist tariffs did not slow down the consumers from buying the superior
products, which costs less even with the tariffs.
History really does repeat itself!
 
longview said:
Sorry, the Spanish did not modernize their factories, while France and England did.
the protectionist tariffs did not slow down the consumers from buying the superior
products, which costs less even with the tariffs.
History really does repeat itself!
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Oh. Ok
 
Visbek said:
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How, exactly, do we regulate automation?

And to what end? Are we supposed to keep people employed in mindless dead-end jobs, that can be performed by a machine, solely to keep people employed?
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This is centuries old thinking. Most famous among many catastrophe's were the Luddites, who fought to keep spinning wheels against the innovation of the power loom. In modern times we saw American railways forced to maintain firemen long after the shift to diesel. Lumberjacks tried to keep out the power saw.

Just because it's never worked doesn't mean someone won't propose it as an answer to lost jobs
 
eohrnberger said:
The race to the bottom? Well, think about it. The world trade has recently (in historical terms) opened up both China and other 3rd world nation's labor forces to compete. Couple this with the a significant drop in both the cost of air shipping and the cost of container shipping across the oceans, it's little wonder that some jobs that don't have to be performed in-country are moving to the lower wage countries.
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FYI, despite a big drop in the price of energy, some companies are starting to onshore again. They just automate the heck out of their manufacturing process.

And as already noted: Output is not the problem. Manufacturing output has grown steadily for decades, but so has productivity. The end result is we need fewer people to do fewer jobs.


But would you deny China and other 3rd world nations the opportunity to elevate their standards of living through this productive work?
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I wouldn't, though we do need those factories to meet basic standards for worker safety, labor standards and environmental standards.


Consider Germany.... The German labor force and industries retooled to higher margin products for export, continued to improve their standard of living, and continued to have high margin, high value added production.
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Germany also benefits from LOTS of government intervention and regulation.

One key factor was the Euro. It was much weaker than if Germany had its own currency, and this heavily favored German exports. This is a big boost to German manufacturing.

Germans deliberately chose to work fewer hours, in order to keep more people employed. Government policy reinforces this, with limits on hourly work and a mandatory minimum of 20 days vacation per year (with employers often doing 30+ days). Labor is highly regulated, including aspects of hiring, firing, mass layoffs, limited term contracts, 6 weeks paid sick leave, three years parental leave per child (unpaid, but job must be guaranteed on return), and so on.

Germany's government also provide free health care, free child care, and free university education.

Thus, it seems to me the answers are:
- Stop blaming the unemployed for being unemployed
- Stop blaming the poor for being poor
- Provide more education for citizens, so they can update their skills and perform higher-skilled and higher-paying jobs
- Better protections for employees
- Provide better health care and sick leave options
- Tilt currency in favor of the US ;)
 
Lafayette said:
You may well be right, and I will not dispute your argument.

Nonetheless, what I am proposing for the US already exists in the EU....
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I concur. Higher education and job training should be made much more widely available, at a lower cost for state schools.

I'm not sure I go the full Bernie and want free 4-year education for Americans. If we do, we'd definitely need to raise taxes, as that could be a massive liability. Keep in mind that on the whole, US taxes are generally lower than in most of the OECD.

However, I do think education is a major route to solving the issue. Instead of wishing for jobs that will never come back, we are better off retraining citizens to handle the transition from a manufacturing to service economy.
 
Visbek said:
FYI, despite a big drop in the price of energy, some companies are starting to onshore again. They just automate the heck out of their manufacturing process.

And as already noted: Output is not the problem. Manufacturing output has grown steadily for decades, but so has productivity. The end result is we need fewer people to do fewer jobs.
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Indeed, and those displaced will find something else to do. Such as it been with automation. Such as it will be with automation.

Visbek said:
I wouldn't, though we do need those factories to meet basic standards for worker safety, labor standards and environmental standards.
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Dictating to another sovereign nation what they will and will not do? Maybe tell them that this compliance is a prerequisite to allowing their products to be imported into our country, perhaps, but not dictating to another sovereign nation, I don't think.

Visbek said:
Germany also benefits from LOTS of government intervention and regulation.
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True, but also not a major component in the process being illustrated.
Visbek said:
One key factor was the Euro. It was much weaker than if Germany had its own currency, and this heavily favored German exports. This is a big boost to German manufacturing.

Germans deliberately chose to work fewer hours, in order to keep more people employed. Government policy reinforces this, with limits on hourly work and a mandatory minimum of 20 days vacation per year (with employers often doing 30+ days). Labor is highly regulated, including aspects of hiring, firing, mass layoffs, limited term contracts, 6 weeks paid sick leave, three years parental leave per child (unpaid, but job must be guaranteed on return), and so on.
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All these things prevent Germany industry from responding quickly when the situation demands it. I see these things as a detriment, rater than an advantage.
Visbek said:
Germany's government also provide free health care, free child care, and free university education.
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The entire social structure in Germany is vastly different than here in the US. No doubt about that. But yet, the off shoring of some jobs done better off shore is going to happen regardless, example cited included.
Visbek said:
Thus, it seems to me the answers are:
- Stop blaming the unemployed for being unemployed
- Stop blaming the poor for being poor
- Provide more education for citizens, so they can update their skills and perform higher-skilled and higher-paying jobs
- Better protections for employees
- Provide better health care and sick leave options
- Tilt currency in favor of the US ;)
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Meh. #1 & #2 - stop blaming people for their own bad choices. #3 gimme free, #4 & #5 Nanny state.

Maybe could agree with #6.
 
Visbek said:
I concur. Higher education and job training should be made much more widely available, at a lower cost for state schools. I'm not sure I go the full Bernie and want free 4-year education for Americans.
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Most Americans felt that way at the turn of the 20th century. It took another decade for America to uniformly adopt universal primary and secondary education that was the responsibility of the state and local governments.

And we are still dithering with the question, "Who does secondary-schooling best, private or public?" Whilst America's children show mediocre performance at the latest testing of the PISA (OECD) study shows. Excerpt:
Key findings
• Among the 34 OECD countries, the United States performed below average in mathematics in 2012 and is ranked 27th (this is the best estimate, although the rank could be between 23 and 29 due to sampling and measurement error). Performance in reading and science are bothclose to the OECD average. The United States ranks 17 in reading, (range of ranks: 14 to 20) and 20 in science (range of ranks: 17 to 25). There has been no significant change in these performances over time.
• Mathematics scores for the top-performer, Shanghai-China, indicate a performance that is the equivalent of over two years of formal schooling ahead of those observed in Massachusetts, itself a strong-performing U.S. state.
• While the U.S. spends more per student than most countries, this does not translate into better performance. For example, the Slovak Republic, which spends around USD 53 000 per student, performs at the same level as the United States, which spends over USD 115 000 per student.
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For Universal Tertiary Education, its time has certainly arrived in America - a half-century after that of Europe ...
 
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Visbek said:
I don't think the profit motive is a big driver of costs. It mostly plays in only with certain private colleges that have massive endowments, and need to park that capital somewhere. A handful of universities have insanely large endowments, most do not.
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That's the status-quo. And, imho, it is no longer working to the benefit of our children.

They deserve better - and they need it badly.

Being selfish: Let's remember that our Retirement Pensions depends upon their ability to sustain an economy, which taxed, will pay for it ...
 
Doesn't the talk of trade tariffs ignore the primary reason for them with China? The engage in dishonest trade practices, enable copyright piracy on entertainment items, manipulate their currency, and already have tariffs towards the US.

Using tariffs in the US as an incentive for approaching the bargaining table to lower trade barriers is not the worst idea I have ever heard.
 
EMNofSeattle said:
The Tariffs need not be permanent though, they can set to repeal upon enforcement of environmental and labor standards in the countries being blocked.
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As I said, the game-rules of export-tariffs have to be agreed upon by all.

These rules as you propose them will never get beyond the negotiation stage at the WTO.

These tariffs directly force countries to change internal national laws/customs/regulations, and (regardless of the situation) any one nation does not have that right over other nations ...
 
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