Posted on 08/17/2016 7:09:34 AM PDT by Kaslin
International trade figures heavily in the presidential race. Presidential candidate Donald Trump said, "Hillary Clinton unleashed a trade war against the American worker when she supported one terrible trade deal after another - from NAFTA to China to South Korea." And adding, "A Trump Administration will end that war by getting a fair deal for the American people. The era of economic surrender will finally be over." He lamented, "Skilled craftsmen and tradespeople and factory workers have seen the jobs they love shipped thousands and thousands of miles away."
Hillary Clinton has offered her own condemnations of trade and globalization. Some see her stance on trade as little more than typical campaign rhetoric. Bill Watson's Reason magazine article "Hillary Clinton's Protectionist Promises Would Do Serious Economic Damage," looked at Clinton's trade agenda. Watson concluded that for "fans of free trade and globalization, Clinton is a much more appealing candidate simply by not being horrible."
It is true that the number of manufacturing jobs in the United States has been in steep decline for almost a half-century, but manufacturing employment disguises the true story of American manufacturing. U.S. manufacturing output has increased by almost 40 percent. Annual value added by U.S. factories has reached a record $2.4 trillion. To put that in perspective, if our manufacturing sector were a separate nation, it would be the seventh richest nation on the globe.
Daniel Griswold's Los Angeles Times article tells the story: "Globalization isn't killing factory jobs. Trade is actually why manufacturing is up 40 percent." Griswold is senior research fellow and co-director of the Program on the American Economy and Globalization at George Mason University-based Mercatus Center. He says what has changed in recent decades is that our factories produce fewer shirts, shoes, toys and tables. Instead, America's 21st-century manufacturing sector is dominated by petroleum refining, pharmaceuticals, plastics, fabricated metals, machinery, computers and other electronics, motor vehicles and other transportation equipment, and aircraft and aerospace equipment.
Griswold suggests that political anger about lost manufacturing jobs should be aimed at technology, not trade. According to a recent study by the Center for Business and Economic Research at Ball State University, productivity growth caused 85 percent of the job losses in manufacturing from 2000 to 2010, a period that saw 5.6 million factory jobs disappear. In that same period, international trade accounted for a mere 13 percent of job losses.
Manufacturing job loss is a worldwide phenomenon. Charles Kenny, writing in Bloomberg, "Why Factory Jobs Are Shrinking Everywhere," points out manufacturing employment has fallen in Europe and Korea and "one of the largest losers of manufacturing jobs has been China."
While job loss can be traumatic for the individual who loses his job, for the nation job loss often indicates economic progress. In 1790, farmers were 90 percent of the U.S. labor force. By 1900, about 41 percent of our labor force was employed in agriculture. Today, less than 3 percent of Americans are employed in agriculture. What would Donald Trump or Hillary Clinton have done in the face of this precipitous loss of agricultural jobs? They might have outlawed all of the technological advances in science and machinery that have made our farmers the world's most productive and capable of producing the world's cheapest food.
There's one thing to keep in mind. Losing a job due to outsourcing or losing it to technological innovation produces the same result for an individual: He's out of a job. The best thing that we can do is to have a robust economy such that he can find another job.
History suggests another alternative to those concerned about manufacturing job loss. The Luddites were 19th-century English textile workers who protested against newly developed labor-saving technologies. They went about destroying machinery that threatened to replace them with less-skilled, low-wage laborers.
We will never know....
Because there is no ACTUAL Free Trade.
If auto assembly (or other) jobs flow to Mexico (or wherever), cost pressures are reduced and auto makers can hold the line on prices. So if 25,000 auto workers used to produce 5 million cars, but producing them in Mexico means a gross savings to car buyers of $1,000 per car, do you want to give $5 billion to the auto workers to save 25,000 jobs? My feeling: Markets send messages and the message here is that looking for jobs in the auto industry may not be a good idea. Personally, giving each auto worker a $200,000 shot in the arm doesn't make sense. If they want to keep their jobs, they need to think about tempering their wage and benefit demands.
If on the one hand, countries with lower wage rates are allowed to simply sell their wares here with no restrictions or obligatory regulatory oversight, and on the other hand, US producers must pay much higher wages, comply with far more regulation than the foreign competition, and pay a higher taxation rate than that assessed in the foreign country, then of course there is a distinct tilt to the playing field.
And that is not “free trade” at all. All the trade goes from the country with the lower costs of production to the country with the higher costs of production, and there is no reciprocity.
Don’t try to tell this to the buggy-whip union crowd here on FR. They will be here in full force any minute to loudly decry Walter Williams as an idiot who doesn’t know anything about economics.
As I recall, the intellectual justification for borderless trade was that we would benefit because Americans would outsource manufacturing “buggywhips” and move along to MORE efficient and productive things which would be a win/win. What we actually got, however, was more and more Americans went from making buggywhips to watching Oprah and the Kardashians and wasting time social networking about the latest Oprah show on Facebook.
NOT.
ping
..and then there’s the half-educated who parrot ceteris paribus models as if it tells everything about real world conditions when economists going back to Alfred Marshall knew it’s not the case.
What has been eliminating American manufacturing employment is global labor arbitrage something that simpletons ignore.
Every time you speak to an off-shore customer service rep, with ESL, Free Trade rears it's ugly head.
A "free trade" agreement is a one-page document.
A 5,000 page "free trade" agreement is 5,000 pages of exceptions to free trade.
BLA BLA BLA. In a nut shell: JoBS are being exported. B1’s are being imported. Illegal labor is being encouraged and even subsidised. THIS IS WHERE WE ARE. FORGET ALL THIS ECONOMIC THEORY EVERYONE LIKES TO TALK ABOUT.
As long as it’s not my job going overseas, why should I care?
One World One People
Open Borders
Free Trade
KARL MARX.
If anyone ever bothered to do just a little reading they would find that the Idea of Free Trade is and always has been right out of the Communist Manifesto and Karl Marx. Mark spoke and wrote often about his fascination with the idea of Free Trade because it would DESTROY NATIONS FROM WITHIN and eliminate the idea of NATIONS and turn is towards World Socialism.
You're mixing up the results of ignorant welfare policies with outsourcing. Williams states in the article that only 13% of manufacturing job losses were because of foreign outsourcing. The remaining were lost by productivity gains. The increased productivity provides the income to pay for the welfare programs. It's the ignorant Democrat policies that actually put them in place.
Troll. The problem and you know it is that the jobs go, but the cost of the goods produced does not. Only corporate profits and the globalists really benefit.
Concur. I’m all for free trade, but when an agency inspection in-country averages over 3 weeks and an average agency inspection out of country average 4 days then it is definitely not an even playing field.
In order to raise someone up you have to lower someone else.
That seems to be what’s happened, no?
If you read Williams article, he states that87 percent of the manufacturing job losses are caused by productivity improvements. An economic simpleton he is NOT.
Hopefully your job will not be sacrificed for lower costs to the betterment of the rest who are still employed in good paying jobs. I’m sure someone somewhere would be more than willing to replace you at a cheaper cost. Should that happen, do not go out and carry a sign bemoaning your predicament. We of the still employed care more about ourselves. Got it?
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