What if Tarriffs to Protect the US Manufacturing Base Were Imposed in the 60s/70s?
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kernals12
Banned
Way to ignore absolutely everything I said in that post. And how could we possibly pay for all that stuff I listed if our real wages hadn't increased?What do the examples in the final sentence have to do with wages? The graphs could show the top 20/30 percent getting a pay bump while the bottom 80/70 don't see a big pay bump. I found a FRED graph that could account for this a bit more.
Also found a median income graph
To address your 2 charts:
The consumer price index consistently overstates inflation rates because of substitution bias whereby people change their buying habits in response to changes in relative prices, for instance buying more apples when the price of oranges goes up. Therefore, it understates real income growth.
The series on wages of production and nonsupervisory employees suffers because it ignores fringe benefits and the question of who falls into the category of "production and nonsupervisory employees" is vague and creates measurement problems.
Median household income data doesn't account for shrinking household sizes and as the Brookings Institution showed, since 2005, the census' income data has grown slower than the obviously more accurate tax return data collected by the Bureau of Economic Analysis
Lastly, this claim about stagnant wages implies that we could raise incomes by 80% overnight just through redistribution. As they say, if something sounds too good to be true, it probably is.
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marathag
Banned
One difference, is that from the onset of the NLRB with FDR, Union/Management relations were set to be adversarial from the way the regulations were setup.
In Germany, Unions and Management both had the goal of making the Company do better together, and not just screwing over the other side, as in the US
Marc
Donor
Very good summary.
I would add that Germany, like Japan, moved up the value/sophistication chain very adroitly and consistently. Then, that is mostly true as well for much of the rest of North and Central Europe - Besides Germany, add Switzerland, The Netherlands, and Scandinavia to the list of modern countries that managed to maintain their manufacturing sector.
Italy now is an odd case: 2nd largest manufacturer in Europe, on the leading edge in various fields such as metallurgicals to pharmaceuticals. You might say successful almost in spite of their political culture and centuries old corruption. Then, Italian industrial companies seem to have a natural ease of adaptation and fluidity- especially the quite large number of them that are small to medium sized family-owned operations.
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Where'd I say real wages haven't increased?
You said that
and I asked what that has to do with wages (maybe a better way to phrase it would be aren't there better metrics to prove your claim like real wages).
To address your 2 charts:
The consumer price index consistently overstates inflation rates because of substitution bias whereby people change their buying habits in response to changes in relative prices, for instance buying more apples when the price of oranges goes up. Therefore, it understates real income growth.
The series on wages of production and nonsupervisory employees suffers because it ignores fringe benefits and the question of who falls into the category of "production and nonsupervisory employees" is vague and creates measurement problems.
Median household income data doesn't account for shrinking household sizes and as the Brookings Institution showed, since 2005, the census' income data has grown slower than the obviously more accurate tax return data collected by the Bureau of Economic Analysis
Lastly, this claim about stagnant wages implies that we could raise incomes by 80% overnight just through redistribution. As they say, if something sounds too good to be true, it probably is.
According to FRED, they define it as
You are right on the shrinking households:
Also, I never implied that we should/could raise incomes by simply giving money to the lower class taken from the upper class.
kernals12
Banned
Well, if wages were flat but production was rising, all that money would have to go somewhere.Where'd I say real wages haven't increased?
You said that
and I asked what that has to do with wages (maybe a better way to phrase it would be aren't there better metrics to prove your claim like real wages).
According to FRED, they define it as
You are right on the shrinking households:
Also, I never implied that we should/could raise incomes by simply giving money to the lower class taken from the upper class.
And I did include real wages in my chart, more accurately, real compensation.
There are two ugly theoretical issues being swept under the carpet here, both revolving around utility preference. Neither particularly on topic as regards tarriffs.
With regards to Gini income inequality, whether you prefer an unequal or an equal society, the scale of analysis of talking about societies obscures the communities and life histories of workers. Namely, it is fallacious to conduct an analysis at the level of the system, when community and individual trajectories matter to the actually living subjects. You can escape this fallacy by abandoning any pretention of speaking about the interests of working people, however, a similar analysis happens in relation to capital. System wide analyses of capital obscure the preferences of individual agents: perhaps firm X would be quite happy to emiserate firm Y. This is normally considered to be an essential element of a freer capitalist market. If you want to make an argument about some competitive strategies being "cheating", then that's a preference argument, and if you choose to argue that system wide effects should dictate which preferences are enshrined then you are being dictatorial. Slight contradiction in defending money preference through dictatorship but…
Secondly with regards to workers' preferences about whether they would enjoy having their life trajectories radically disrupted, their communities as unemployed slums, the substance abuses of meaninglessness, the evaporation of their unions and the great (potentially impossible) task of unionising new industrial sectors… these preferences are not ranked order utility money preferences. Ranked order utility money preference is an academic assumption used to simplify analysis in marginalist economics. It is, frankly, the field specifying assumption that leaves economics divorced from the intractable problem of real utility preferences, and from the problem of "value" that plagued political economics, and is the chief point of attack made on that important 19th and 20th century critique of political economy. This is important because who gets what money legitimises or delegitimises preferences into ranked order preferences. It is also important because who gets what money, admittedly through various long social and cultural percolations, legitimises or delegitimises burning the local policemen and occupation of factories under workers control.
Who gets what money is also important because rational market preferences by workers means that they will "always" find something else to do with their labour if they're unemployed, including destroying it. Saying that dislocated workers and communities will "find something else" is necessarily a truism. Whether they rank order prefer that something else is also necessarily a truism: they choose to do that, whether it is burger flipping, unemployment or suicide. Whether they actually prefer that something else is unanswerable in economics (field specifying assumption, remember), and so we have to have recourse to politics, sociology, political economy, etc. Using economics to claim that a marginal economic preference is indicative of a political compromise is bad argument. Finally, in relation to wage statistics, the real wage is comprised of an arbitrary consumption bundle, and necessarily so unless you want to attempt a Marxist value flow analysis over time.*1 This real consumption bundle isn't a ranked order preference scheme, but an arbitrary and politically constructed bundle of consumption: again, a dictated account and thus necessarily political.
And for the posters defending free trade, remember that justifying free trade is a political issue. If you are continually resorting to system wide analyses without looking at sector, firm, community or individual worker ranked order and political preferences then you are attempting to dictate a political choice through a fallacious argument. The point of economics is to present free trade or tarriffs as an argument specifying what has or will happen, and leave the preference as to the desirability up to others. And failing to present smaller levels of analysis is invidious. Whether I ought to be free to beggar my neighbour or myself is a political question, even if we can demonstrate that the effects of a tarriff is that I necessarily do so.*2
yours,
Sam R.
*1 This universally results in emiseration, and the political importance of rates of emiseration plus the difficulty of compiling the statistic, the availability of simpler measures (total wages versus market cap + government spend; rates of unionisation) means for the political questions asked there's little reason to compile such. Also it informs workers how to manage capital, whereas bundle based income inflation measures inform capital how to manage labour.
*2 You can tell that I have a political position here on the beggaring others, but it certainly isn't free trade or tarriffs.
With regards to Gini income inequality, whether you prefer an unequal or an equal society, the scale of analysis of talking about societies obscures the communities and life histories of workers. Namely, it is fallacious to conduct an analysis at the level of the system, when community and individual trajectories matter to the actually living subjects. You can escape this fallacy by abandoning any pretention of speaking about the interests of working people, however, a similar analysis happens in relation to capital. System wide analyses of capital obscure the preferences of individual agents: perhaps firm X would be quite happy to emiserate firm Y. This is normally considered to be an essential element of a freer capitalist market. If you want to make an argument about some competitive strategies being "cheating", then that's a preference argument, and if you choose to argue that system wide effects should dictate which preferences are enshrined then you are being dictatorial. Slight contradiction in defending money preference through dictatorship but…
Secondly with regards to workers' preferences about whether they would enjoy having their life trajectories radically disrupted, their communities as unemployed slums, the substance abuses of meaninglessness, the evaporation of their unions and the great (potentially impossible) task of unionising new industrial sectors… these preferences are not ranked order utility money preferences. Ranked order utility money preference is an academic assumption used to simplify analysis in marginalist economics. It is, frankly, the field specifying assumption that leaves economics divorced from the intractable problem of real utility preferences, and from the problem of "value" that plagued political economics, and is the chief point of attack made on that important 19th and 20th century critique of political economy. This is important because who gets what money legitimises or delegitimises preferences into ranked order preferences. It is also important because who gets what money, admittedly through various long social and cultural percolations, legitimises or delegitimises burning the local policemen and occupation of factories under workers control.
Who gets what money is also important because rational market preferences by workers means that they will "always" find something else to do with their labour if they're unemployed, including destroying it. Saying that dislocated workers and communities will "find something else" is necessarily a truism. Whether they rank order prefer that something else is also necessarily a truism: they choose to do that, whether it is burger flipping, unemployment or suicide. Whether they actually prefer that something else is unanswerable in economics (field specifying assumption, remember), and so we have to have recourse to politics, sociology, political economy, etc. Using economics to claim that a marginal economic preference is indicative of a political compromise is bad argument. Finally, in relation to wage statistics, the real wage is comprised of an arbitrary consumption bundle, and necessarily so unless you want to attempt a Marxist value flow analysis over time.*1 This real consumption bundle isn't a ranked order preference scheme, but an arbitrary and politically constructed bundle of consumption: again, a dictated account and thus necessarily political.
And for the posters defending free trade, remember that justifying free trade is a political issue. If you are continually resorting to system wide analyses without looking at sector, firm, community or individual worker ranked order and political preferences then you are attempting to dictate a political choice through a fallacious argument. The point of economics is to present free trade or tarriffs as an argument specifying what has or will happen, and leave the preference as to the desirability up to others. And failing to present smaller levels of analysis is invidious. Whether I ought to be free to beggar my neighbour or myself is a political question, even if we can demonstrate that the effects of a tarriff is that I necessarily do so.*2
yours,
Sam R.
*1 This universally results in emiseration, and the political importance of rates of emiseration plus the difficulty of compiling the statistic, the availability of simpler measures (total wages versus market cap + government spend; rates of unionisation) means for the political questions asked there's little reason to compile such. Also it informs workers how to manage capital, whereas bundle based income inflation measures inform capital how to manage labour.
*2 You can tell that I have a political position here on the beggaring others, but it certainly isn't free trade or tarriffs.
elkarlo
Banned
There in lies the problem. If other places have terrible wages and conditions, how can US workers compete?
What would need to be done woukd be tariff any country that doesn't meet something close to Us working and later environmental standards.
Otherwise as you said you're playing against cheaters
GeographyDude
Gone Fishin'
Growing up in Houston suburbs, my first real job was in Oct. 1981 when I worked at a department store for the Christmas season and was kept on through March. I was unable to find another job.
A good friend of mine graduated from high school in June 1982, was unable to find a good job, he did work cooking in a restaurant, and joined the U.S. Navy where he served honorably.
And yet, no older adult told us jack shit.
No one said, actually we’re in a recession, this is not a normal economy. Or . . . it’s always been a numbers game, now more than ever, by all means, keep trying, don’t blame yourself, don’t get down on yourself because of the economy.
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GeographyDude
Gone Fishin'
That’s kind of the gist of the matter. Free trade is supposed to be win-win, not a race to the bottom.
Globalization has lifted the living standards of many people in China. I’m less sure about other countries. I have read that regular farmers in Mexico we’re outcompeted by U.S. agribusiness ! ? ! Going to look up that one.
kernals12
Banned
Nobody ever looks at the other side of that: Mexicans Got Cheaper Food Thanks to Subsidized American Farmers
kernals12
Banned
We don't need to compete. We live in a world of scarce labor and endless demand for stuff that requires labor.
It depends. Putting tariffs on steel is not necessarily going to help American industries that use steel...
IMHO another issue is that some countries are more able (or willing ?) to redistribute wealth within their societies than others.
IMHO countries that can more easily re distribute / transfer wealth to segments of their population that loose out when a trade deal makes the country as a whole better off are more likely to benefit from free trade than countries that are less likely to redistribute / transfer wealth amongst their populations.
GeographyDude
Gone Fishin'
Now, that last part is not supposed to be part of free trade, or it’s supposed to be figured in the accounting with I suppose the exact amount of subsidy being added on as a tariff at the border.
It does show that things get complicated. Not insolvable, but complicated.
marathag
Banned
Apples and Avacodoes, to a degree.
2/3rds of all Mexican Farms are under 12 acres, with a few percent of megafarms
Sorry I can't find a USDA chart exactly like the one for Mexico, but you can see that small Farms in the USA are almost half of the land set for farming.
A Small Farm, according to USDA census is a farm that is 179 acres or less in size, or earns $50,000 or less in gross income per year, so that's a bit different than the above chart
The average farm size in the USA is 434 acres
It's just brutal economics of scale, a tiny plot can't compete with a small sized US farm, let along a megafarm.
In the US, 'A' from the top chart is considered to be Gardens, not a 'real' farm
GeographyDude
Gone Fishin'
This might be the way to square the circle.
In fact, I’ll go a step further and say I am a believer in what I’ll call the coming automation crisis. And I see some version of UBI (Universal Basic Income) as the only full and complete solution, and tilt toward an ownership society version, say, where every month you get a good, middle-class level of shares in the S&P 500. I do welcome non-UBI solutions.
And a partial solution which I don’t hear talked about near enough is, what if it became a societal norm that if you worked too much more than 40 hours a week, people would look at you kind of askance, as if it was a sign you were in over your head and weren’t doing as good a job of managing and delegating as you should? And/or if we got what we almost got in Dec. 2016, that it you make less than $47,000, you get time-and-a-half for overtime whether you’re classified as “hourly” or “salaried.”
kernals12
Banned
If robots automated everything we wouldn't need any income. We would be in a Star Trek style society where everything could be conjured up for free at the push of a button.