I think you are misinformed about the size of offsourcing to China (a shocker I know). The total value of imports from China in 2009 was 300 billion dollars. The size of the U.S. manufacturing/industrial sector was ~3 trillion in that year. So let’s be generous and say that every dollar of that value would have been replaced by US manufacturing, resulting in 10% growth. There are about 15 million people employed in manufacturing, so if we increase that by 10% it’s 1.5 million new jobs. As you’ve noted, we are about 10 million jobs short. So even best case scenario regarding manufacturing in China, we would still be in one heck of a mess.
You are just misinformed about what has happened with manufacturing in the United States. There were 5 million more people employed in manufacturing 30 years ago than there are now. There jobs didn’t go to China, they didn’t go to India, they didn’t go to anywhere. They were taken by robots and other efficiency improvements. Erecting trade barriers isn’t going to change that.
No you haven’t seen anything of the sort, but that’s aside the point.
I came looking for some surprise iron clad argument in favor of offshoring that hasn’t been rigorously knocked down by plenty of people in the past and I figured the SDMB would deliver the goods. That has not even come close to happening. However, I did not come away without learning something shocking: I had zero idea that opposition to offshoring had actually swelled to 62%.
There must at some point be some pro-offshoring argument that doesn’t shatter into shiny little shards at the flick of a finger. Or maybe the 62% of Americans who now oppose offshoring are more correct than those 90% of economists who support it…
which can be explained by the fact that said 62% actually consists of Americans who work in the real world and face real life every day, while those 90% of economists sit in their ivory towers right next to those Harvard liberals that the Right calls “elitists” (only because they’re liberals). Liberal elitists, free market elitists, all the same thing, just like action figures vs dolls.
But I’ve also heard those 62% being referred to as idiots on here, so what can I say. Watch your back*, though - those poll numbers suggest your free market argument is losing ground and alienating voters. You keep alienating us (yes, I am part of “us” - that 62% of “dumb” voters) with callous arguments that fail to show any benefits of offshoring and fail to refute the vast and obvious drawbacks, and that 62% might grow to 70 or 80%, or worse, translate to serious voter anger that forces politicians to listen to them. Overwhelming majorities tend to result in that.
In the future, consider actually addressing and refuting the objections to offshoring. There was absolutely none of that delivered here, much less in a way that reassures any voter that globalism benefits them beyond cheap TVs that they still cannot afford.
You, sir, have work to do if you want to save offshoring as a viable and acceptable business practice. You may write off the opposition’s arguments, such as mine, but you ignore the size and growth of the opposition at your political peril. And I can reasonably assume, with all the vim and vigor you’ve put into this, that you have a few dogs in this hunt.
In any case this is LJ… signing off.
I mean this in a political sense, at the ballot box. God forbid I be misconstrued as issuing some kind of threat.
Le Jacquelope, do you seriously think that you can get Portugal, Spain, the UK or France to cut off all the current trade agreements they have with their ex-colonies, except for the US and Canada (which apparently you reckon acceptable)? Seriously? Last time I looked, Brazil was both the B in BRIC and a Portuguese ex-colony, and both Spain and Portugal had policies of trying to assist their ex-colonies on political, social and legal issues in the measure in which the ex-colonies want that assistance and the measure in which the mother countries can provide it, and methinks the Brits aren’t going to drop the Commonwealth any time soon (India is a member)… while I’m not familiar with the details of France’s relationships with their ex-colonies, I kind of hope it’s not along the lines of “we’re not talking to you any more!”
I thought it was comparing US factory workers to Chinese factory workers. The US factory worker created 8 times more value than the Chinese factory worker. If the currency float does in fact raise the chinese factory worker’s monthly wage to $500/month, American workers become a LOT more competitive. Everything is incremental, a shift in currency will make American workers cheaper than they used to be when compared to Chinese workers (or Chinese workers will be less of a bargain). It seem obvious to me that this would lead to jobs flowing back to the US from China.
Maybe I wasn’t clear. What types of products are made by the “average American factory worker” vs the “average Chinese factory worker”. Is more value being created because of the products themselves? Products requiring more skill and or education? Think of all the plastic junk that gets made in China vs the high end medical stuff made in the US. I don’t think that the workers are necessarily interchangeable.
But that doesn’t even matter, because the choice isn’t between China and the US, the choice is between China, the US, and every low wage country in the world. If the cost of Chinese labor goes up, then I move shop to Vietnam*, not the US.
*or any number of other low wage countries in the world.
I can’t find a link but The CEO of Duke energy was a huge Obama supporter and he supported a cap and trade solution but the one proposed by the Democrats was just too draconian. The Duke CEO wanted to gradually phase in a cost on carbon emission as opposed to having one spring up fully formed overnight. Part of his proposal included nuclear energy I believe, so you might not like the proposal at all.
Even if a ASAP (as opposed to over time) cripples our economy?
You are talking about externalities generally. We can put a price on that but if we exact that price overnight, we will see more people freeze to death in the winter and die from heat in the summer because energy prices will go up 25-100% depending on where you live.
I think you are unnecessarily linking two issues, the currency peg and environmental issues.
It doesn’t but recognizing that trade wars like any other kind of war exacts a price from all sides we would be wise to pick our battles rather than jump into total war.
And you’re never going to get any significant number of reasonable people to agree with you that thwarting economic forces over the long term is good for anyone. We should punish China because it is cheating but the SLOW migration of low skill jobs overseas is INEVITABLE. The problem is that China is cheating so that the migration of jobs is happening almost overnight and our economy simply cannot change fast enough to accomodate the loss of such a large chunk of our manufacturing sector. We still have a huge manufacturing sector but if you eliminate defense manufacturing, there isn’t a whole lot there.
We would appear pretty irrational.
Yes that guy owns 7% of Newscorp. So? Rupert Murdoch’s family owns about 47% of Newscorp.
Fox News doesn’t bash environmentalists because of some saudi shareholder, they bash environmentalists because that is what conservatives do. They take an argument that has 90% of the evidence behind it and puts it on equal footing with pro business arguments that have 10% of the evidence behind it. Its the mentality that apologizes to BP for pressuring BP to pay for the damages caused by the BP oilspill. Its the sort of mentality that for years created reasonable doubt about the carcinogenic effects of smoking. Its just what they do, they want incontrovertible proof that something is bad before they will lift a finger to stand in the way of commerce to prevent that harm.
I once had an oil exporting nation as a client. They are not very worried about alternative energy eating their lunch. These guys don’t rely on oil revenues to fund their day to day expenses. If oil production stopped tomorrow, the Saudi family would STILL be one of the richest families in the world for generations to come.
We all get asked for cites, its how this site works. Especially this forum.
Republicans aren’t entirely retarded. They know they are peddling bullshit. When things looked really bad and we were staring into the abyss, all those die hard supply side politicians lined up with everyone else to vote for KEYNESIAN stimulus spending. They don’t really believe their own bullshit unless it helps reduce their taxes.
I gotta agree with John. You’re throwing too much stuff out there at once, its hard to understand which argument you are making at any one time. I understand that this is all linked but if you can’t break it down into discrete issues you aren’t going to be able to make a coherent argument.
This is not like other forums, we do change minds here form time to time. Heck we changed a mind in 2006 and again in 2008.
"Between 2001 and 2008 alone, China displaced 2.4 million U.S. jobs, and 60 percent of those were in the manufacturing sector. Since China joined the World Trade Organization in 2001, the U.S. has lost 5.5 million manufacturing jobs, said Scott. "
"The widening U.S. trade deficit with China will displace over 500,000 net jobs in the U.S. in 2010, according to Robert E. Scott of the Economic Policy Institute. "
Now some of those jobs were headed to China no matter what the playing field looked like but China’s illegal trading practices, its currency manipulation and the effects of lower Chinese safety and environmental regulations accounts for some significant percentage of those job losses.
YOU are misinformed about what happened with manufacturing in the United States, a lot of those jobs did in fact go to China. When people thought about building a new factory with robots and efficiency improvements, they built them in China instead of here at least in part because of relaxed work safety regulations, almost non-existant environmental regulations, and a currency peg that keeps Chinese operations undeservedly cheap relative to the rest of the world.
You need to dig deeper into articles like this to get to the truth. This article appears to based on this study. I see three major problems.
Problem the first:
So he didn’t measure any actual job losses. It’s all based on a model which may or may not be accurate. I go with “may not be” because of
Problem the second:
The model just doesn’t make a lot of sense.
Unfortunately for them, there’s no reason to believe that the type of manufacturing sent to China has any relation to the average type of manufacturing done in the U.S. Using the average without any sort of research justifying doing so is a poor practice. Thus, there is little reason to believe that this model accurately represents job loss.
Problem the third:
This is the cardinal sin of outsourcing opponents. The assumption that the economic pie is static in size, and can not grow. It is absurd to think that every dollar of manufacturing done in China and exported to the U.S. is a dollar of manufacturing not done in the U.S. It’s just wrong. Say X=US Manufacturing with no trade, and Y=Chinese manufacturing with no trade, and Z=US+Chinese manufacturing with free trade. Z is greater than X+Y.
Thus, when the study uses Chinese exports as the value lost by the US it is flat out wrong, and makes no sense.
I am not surprised however, since the EPI is a biased organization:
This is what I am talking about when I say you are misinformed about economics. There is no way an article based on this study should have been cited.
Some of them do, but most of them don’t. Imports from China are still a small fraction of the size of U.S. manufacturing. The great majority of manufacturing consumed by the U.S. is made in the U.S.A. I showed you this in the post you quoted, but you failed to quote it for some reason. Allow me to repeat myself:
The total value of imports from China in 2009 was 300 billion dollars. The size of the U.S. manufacturing/industrial sector was ~3 trillion in that year. So let’s be generous and say that every dollar of that value would have been replaced by US manufacturing, resulting in 10% growth. There are about 15 million people employed in manufacturing, so if we increase that by 10% it’s 1.5 million new jobs.
Outsourcing is a red herring for U.S. manufacturing job loss. We’ve lost jobs in manufacturing because we’ve gotten much much better at it, not because we’ve exported them to China.
Cite for the drop in the bucket proposition? If all those automated plants were built here in the USA, then I hear you. But they weren’t they weren’t for every plant they closed here, they didn’t open anotyher plant ehre, they opened a lot of them in China.
A lot of stuff is based on models. We can reach reasonable conclusion based on these models even if they are imperfect. I don’t see why this model is fatally flawed.
Their methodology talks about segregating the job losses and imports along over 200 industry gruops. Sure there is no way to prove that the specific job that was created in China was actually replacing a job lost in California and Texas but they correlated the increase in the import of specific items to the loss of jobs in that sector.
“The computers, electronic equipment, and parts industries experienced the largest growth in trade deficits with China, leading with 627,700 (26%) of all jobs displaced between 2001 and 2008.”
For example, I once had a sewing factory in Long Island City. I closed it down but I kept filling my orders by placing myorders with a factory in China. They hired more people as a result of my orders. I doubt that there was anything that could have been done to save those jobs here in the USA but there are jobs AT THE MARGINS that would have stayed here instead of being relocated to China but for the unfair trade practices.
I agree that Z>X+Y, thats just common sense econ 101. But you seem to think that it is not possible for X to decrease as a result of Y increasing. Sometimes Y increases faster than Z which means X decreases.
The US may not lose 100 jobs for every 100 jobs that get outsourced to China but they don’t lose ZERO jobs either. Because China is so much cheaper, you can create a lot more jobs for every job lost here in the US and this is going to happen no matter what but our economy is capable of generating enough new jobs to handle that sort of pressure unless the rate of job loss is too high and perhaps the rate of job loss would be too high in any event but at least some of the excess job loss here is the result of the currency peg.
WHOA, wait a minute!!! EPI is biased because it focuses on the interests of low and middle income Americans when it analyzes economic policy? If trade didn’t actually hurt the low and middle income Americans than why the fuck would they be biased? Why wouldn’t they be as indifferent as youare if there is no actual negative impact to trading with China, or if indeed there is a beneficial effect as you say. Do you think they are looking for a scapegoat?
What are you talking about? People source article all the time without reading the primary source material (which is not cited or lnked in the article as far as I can tell). After readin the source material in your link (it does appear to be the absis for the article’s conclusions), here is the methodolgy that you seem to think is so fatally flawed:
Unless you have majored in economics, I probably took just as many econ courses as you did but my econ professors left me with the impression that these theories were only as valid as the assumptions underlying them.
Sure you can poke holes in any econmic study if you are trying to prove that its not surgically accurate, you can do that with any economic study.
Show me a study that shows that there hasn’t been job loss as a result of trade with China and lets see if I can’t poke some holes int that study. The only thing that makes this study less credible to you is that you don’t like its conclusions.
And you think 1.5 million jobs is inconsequential? Don’t you think that 1.5 million new jobs might create other jobs for people who will sell goods and services to those 1.5 million people?
Total number of unemployed in USA is less than 15 million people. 1.5 million more manufacturing jobs would have the first order effect of reducing unemplyment to 8.5%. I don’t know what the effects of all those additional employed people would be but I bet its at least another 1.5 million jobs.
Now, I don’t think China has unfairly taken anywhere near 1.5 million jobs but 500,000 jobs doesn’t seem outlandish. And frankly I don’t care if its a million or a hundred thousand jobs that we are losing to China because of unfair trade practices, we should not tolerate it simply because we are afraid that retaliation because we are afraid of a trade war.
We have without a doubt lost manufacturing jobs to automation in much the same way that we have lost agricultural jobs with the intriduction of combines but we have also without a doubt exported jobs to China. Our trade deficit with China went from about 80 billion in 2001 to about 240 billion in 2006 (its been flat to dropping recently). Some people may be overstating the effect of outsourcing (and perhaps grossly overstating the effect of unfair trade practices 9the only part of trade i want to cut)) but the effect is in fact there.
My problem isn’t that we are losing these jobs per se. We will eventually lose those jobs anyway (at least we should hope so, otherwise our economy is just treading water), but the rate of job loss is faster than our ability to adjust, faster than our ability to migrate into new industries, faster than our ability to assimilate new technology into some form of commercial enterprise and whatever pain was headed our way in any event has been exacerbated by the unfair trade practices.
Automation certainly has something to do with it but when something that is as non-labor intensive as assembling iphones is being done in China instead of here, where the labor component of the cost is relatively modest, it makes you wonder. Its not like people are putting on sterile suits and assembling iphones by hand.
Well, yes, considering your suggestions mirror many of the mistakes that were made back in the 1930s that ended up exacerbating and prolonging the Great Depression.
Default on our debts?
Tariffs?
Trade wars with our major trading partners?
Protectionism?
The federal prison industry produces 100% of all military helmets, ammunition belts, bullet-proof vests, ID tags, shirts, pants, tents, bags, and canteens. Along with war supplies, prison workers supply 98% of the entire market for equipment assembly services; 93% of paints and paintbrushes; 92% of stove assembly; 46% of body armor; 36% of home appliances; 30% of headphones, microphones, speakers; and 21% of office furniture