A relatively minor reason: At least in USA, folk traditions of decorative painting and the like are not a viable way of making a living because folk art can be shipped in from other countries (Russia, etc) for a fraction of the price. As a result, there is no real reason to develop a uniquely regional visual art form, and those already existing are maintained exclusively by hobbyists and older people. Exceptions include clannish groups like some Native Americans and the Amish.
What I reported was Basic Economic History 101. Google “Smoot-Harley” yourself to find the US maximum if you are that interested.
I lived in Japan for part of the 1950s and 1960s and I would say probably all agricultural imports were subject to tariffs, often of over 100%. All expats- men, women and children- envied those who had US military PX privileges, believe me. Off the bases fresh US oranges were a fricken luxury for God’s sake. Also, imported passenger vehicles were subject to prohibitive tariffs so high that only the wealthy could afford to buy such cars as the Mustang, which sold over 2 million elsewhere 1964-1969.
This was before the Japanese hit our by then low-to-no-tariff post WW2 auto market in the 1970s, without reciprocal lowering of their own barriers. Same with electronics. Everyone agrees that Japanese quality was the best, but to this day no one seems to appreciate that if our tariffs had been as high as theirs that that quality of theirs would not have mattered nearly as much. John Connally tried to base a presidential nomination bid largely on the issue of Japanese tariff non-reciprocation, but it did not resonate with the electorate, most of whom had become attached to high-quality Japanese goods at competitive prices. I guess I should add that Japan also enjoyed much lower labor costs than ours back then, although some (especially US labor!) might not consider that advantage to be any more fair than the unequal tariffs.
I would have agreed with this 20 years ago. And I think it’s still true in a lot of situations. But, I’m not sure if it will hold to be true much longer, mainly because of the arrival of widespread international capital mobility. It’s much easier for the private sector in a country to raise funds internationally then it was 20 years ago, and most trade-restricted regimes are going to restrict capital mobility as a matter of course. Which means that it’s theoretically possible that a country will have less industrialization now under a protectionist regime than it would have under a non-protectionist regime. A lot of countries (like China and India) did accomplish a lot of industrialization using a protectionist model, but I’m not sure how long that model will continue to work for countries that are starting from scratch.
There’s also the increasing availability of de-centralized infrastructure (e.g, solar cells, mobile phones, power generators, etc.), which means that increasing amounts of infrastructure that used to be done by the government can be foisted off onto the private sector in a country. If a particular protectionist regime makes it more difficult to get this private infrastructure in place, and a country doesn’t have the money to do the infrastructure itself, then that could retard industrialization from where it would have otherwise been.
So, my view is that while protectionism was a very useful tool for industrialization in the past (and it could still be right now in some situations), I’m finding it increasingly difficult to believe that it generally can be used today to industrialize an impoverished country that’s starting from scratch.
What are your thoughts?
Why should we allow that capitalist class access to our markets?
If they want to take their ball and go home we can kick them off the field. We have no obligation to accommodate the capitalist class at the expense of the working class. Do we?
Which is why Trump is pushing both immigration AND trade.
Yeah, but moderate minimum wages don’t do much to benefit anyone either. If you want a minimum wage that will actually lift minimum wage earners out of poverty, it’s going to cause massive unemployment. If you want a feel-good, ineffectual political football to toss around every four years, sure, that’s not going to help or hurt much either way.
Your link studies an $0.80 difference. Do you think the outcome would be the same if it were an $8 difference? Or $80? Do you really think the fry cooks in NJ making $5.05 were considerably better off than burger flippers in PA making $4.25?
When I was in high school, minimum wage had just recently been bumped up to $5.15/hr. As a teenager, I was working 39.5 hours a week because they couldn’t give me full time without it costing them a lot more. Nowadays, there are adults with families to support working at McDonald’s, and they’re lucky if they get 25 hours a week. I’m not saying raising the minimum wage to $8.50/hr (in IL) was the cause of that drop in hours. But it sure didn’t help. Are people in general better off than they were when MW was $5/hr? Are minimum wage earners better off even? I’m not convinced.
I’m not anti-minimum wage. But I am a skeptic.
Really? Nobody is arguing for an $80/hour minimum wage and nobody thinks that an $80/hr minimum wage wouldn’t have employment impacts.:rolleyes:
This article says that your article is full of shit.
How negative? And how high is the minimum wage? Do you think a $2 minimum wage would have negative impacts? Do you think that there are employers that would like to pay less than $2 if they could? That would never happen you say? You ever hear of tips minimum?
Can you cite all these great peer reviewed papers that say that any and all minimum wages hurt employment to some significant extent?
Oh, yeah. That Seattle study has been heavily criticized for its methodology. IIRC, one of the main complaints is that they included cities which weren’t subject to Seattle’s minimum wage ordinance (because they aren’t part of Seattle), but didn’t distinguish between non-Seattle job losses and Seattle job losses.
There is a consensus but it doesn’t say what you think it says. The consensus is NOT that free trade is always an unmitigated good for any particular country. The consensus is that it is good for global welfare and that it increased national welfare but there is also a consensus that free trade creates winners and losers and in the case of America the winners are a largely a small population of capitalists and a relatively small and diffused benefit for the average consumer coupled with a large cost imposed on the working class.
The cost to the working class (and consequently the general wage levels in the country) may very well exceed the cost benefit to consumers. Leaving the benefit to capitalists to make up the deficit.
Right, because the Japanese and Korean auto industries never grew up. :dubious:
And why should American politicians give a rats ass about the poor in Fudan province when their constituents are getting on the line for government cheese?
There is this this thing called export tariff rebates when you re-export items that had been subject to tariffs. People use it for VAT and stuff like that too. So the effect of those tariffs on intermediate items can be made to disappear (at least in theory) when you re-export those tariffed items.
I agree, its good for the 6 billion people in the world as a whole (still mostly for capitalists) but is it good for America?
Did you read my post? My point is that $0.80 is not that helpful to anyone, and thus, isn’t harmful either. An $8 raise, or an $80 raise would be quite helpful to minimum wage earners, and of course it would be a disaster economically.
At the low level and small increments we usually talk about with MW, it is an ineffectual political football and nothing else. If you wanted to use the same minimum wage concept to effect real change in the lives of minimum wage earners, it would end up being a disaster. That’s my point.
Yes, I read your post, and this is what you said:
What is the point of that statement? I seriously doubt he thinks the outcomes would be the same. I mean, I’m guessing here, but based on his posts in this thread, I think it’s pretty unlikely. So, did you actually think that someone was making the argument that the impacts from an $8 increase or an $80 increase would be the same? If you didn’t think it, then why state it this way?
I haven’t really studied economics in 25 years and my focus back then was financial markets rather than labor or trade but ISTM that the comparative advantage model breaks down when you have countries like China that are capable of meeting the world’s demand on almost everything in which they have a competitive advantage which leaves little room for the Bhutan’s of the world to develop enough of a comparative advantage in even the entry level industries like garment manufacturing to make themselves competitive with Chinese made garments.
It is easy to see the benefits of comparative advantage when the more productive economy is at full capacity and could benefit from specializing in more lucrative activity while leaving its relatively less lucrative activity to those who can’t do it as well but can still do it for less than the opportunity cost of the more lucrative activity that the more productive country is foregoing to engage in the less lucrative activity. But when you have a country like China that still has lots and lots of capacity left to do everything and then some, comparative advantage starts to break down for the non-competitive economies.
I don’t know that protectionism can help Bhutan develop enough of a comparative or competitive advantage in anything to make a difference but ISTM that at some point China will start to reach production capacity and will start to move away from the lower end stuff like garment manufacturing and dirt farming leaving an opening for less developed countries. But right now the global economy is trying to digest the industrialization of the two largest countries in the world and its a tough environment for industrialization for other less competitive countries.
There is almost nothing about economics that is certain. But the phenomenon you are talking about (increase in part time employment) is not the result of increases in minimum wage. Obamacare probably has more to do with it than the minimum wage.
No, he thinks that the fact that an $0.80 raise in minimum wage did not hurt the economy proves that a minimum wage increase that actually improved the lives of minimum wage earners would not hurt the economy. I disputed that conclusion, using the reasoning that a substantial MW increase, one that changed the standard of living for minimum wage earners, would not be so harmless. You’re welcome to refute my argument using evidence or reasoning, but “why did you even say that?” isn’t all that productive or helpful.
If $0.80 is harmless, and $8 is harmful, where in the middle do you think the cutoff point is? What is the balance of helpful to harmful here? I’ve lived through a lot of minimum wage increases. I haven’t really seen anyone benefit. In fact, unskilled workers are far worse off now, it seems, than they were in the 90s when the minimum wage was half of what it now is. Of course, I’m again NOT claiming that the increase in minimum wage is what caused those unskilled workers to be worse off now than they were. But it didn’t seem to help. So at what point does raising the minimum wage help? Is it before or after it becomes harmful to employment and the economy in general?
For protectionism to work, there has to be an industry already emplaced. Honda can’t actually overwhelm your auto sector, if you don’t have an auto sector. For some of the few bronze age economys that are still kicking, they would be asking Honda to set up a factory. I would think that you would have to be a second tier economy, before protectionism could be used as a tool in your planning.
Or is that what you already said.
Declan
That’s true. But without Obamacare, they’d be hiring half as many people at ~40 hours a week instead of the same amount at 20-25 hours a week. And that’s not really any better from an economic standpoint.
Nah, dude. When we talk about MW, there are benchmarks like poverty level or living wage level that people talk about. Nobody is talking about $80/hr.
But, to answer your question, when we have raised the minimum wage in the past, we didn’t really see any corresponding increase/decrease in unemployment. Sometimes we raised the minimum wage, and nothing happened. Sometimes we raised it and unemployment went up. Sometimes we raised it and unemployment went down.
So, what that tells us is that incremental increases in the MW may be dwarfed by other macro-economic effects with regards to the unemployment rate. We could try to perform an experiment and see if an $8 increase has the same results, but if it has bad results, then we’ve caused a lot of problems.
It would be nice if we could just come up with neat formulas to tell how much various increases would impact the unemployment rate, but economics just doesn’t work like that. These things don’t have linear relationships. A small increase could very well have beneficial effects when a larger increase wouldn’t. That’s just the way the world works. People produce models, we look at the models, and then we (hopefully) try to minimize the risk for any change in economic policy.
So, the least risk-averse policy is to slowly increase the MW until we start seeing it have negative impacts. We don’t exactly do that now in the short term, but that’s kind of what we’ve been doing over the long-term.
I’m talking about benefit vs cost. You’re saying “raise it until we see negative effects”. Will those negative effects happen before or after there’s any significant benefit to the lives of minimum wage earners?
To be blunt, what’s the benefit? Simply saying “at very low [in my opinion pointless] incremental increases, there are no measurable downsides” doesn’t demonstrate any benefit. I contend that once you get to the point where you’re actually improving the lives of those earning minimum wage, the economic costs will be pretty huge, and the benefits won’t be enough to cancel them out. Prove me wrong.
Both scenarios could happen.
Fully automated manufacturing is possible, but its not at the turn key level, and your not including parts that go into making the product, that would be sourced locally, expanding the pool of labor wealth that can be generated.
Jobs were never permanent, despite what people seemed to have thought, but the more manufacturing facilities exist, the easier the mobility becomes. A factory closing its doors, is no longer the end of the world.
Declan