How the 'Losers' in America’s Trade Policies Got Left Behind

[Theodarzna]

This doesn't make sense to me. The assumption is that it is high paid jobs that are primarily getting outsourced, which is pretty counter-intuitive, since high paid jobs are exactly the jobs for which you need very skilled specialists, lower skilled people willing to work for cheap.

They are higher paying than the jobs at Wal-Mart. The reason for their outsourcing is to find cheaper labor.

More over the jobs that replace them are insecure, low pay, with poor to no benefits.

Are you being deliberately obtuse?

[NED funded]

I don't see how this article confirms your claim. This one, however, supports mine:

http://www.pewresearch.org/fact-tank...d-for-decades/

Unless I'm reading that wrong it's saying that those that are not in the upper quintile, are either seeing stagnating wages or decrease in wages, which in turns reflects on their purchasing power, because the price of essential goods is increasing. So I think it supports my st

This doesn't make sense to me. The assumption is that it is high paid jobs that are primarily getting outsourced, which is pretty counter-intuitive, since high paid jobs are exactly the jobs for which you need very skilled specialists, lower skilled people willing to work for cheap.

Working at a factory> working at walmart/burger king/ Mc

This still sounds like a point of view to me. The fact that the observed flow of the work force as a result of competition with foreign corporations is towards lower-skilled jobs, rather than similar jobs, demonstrates that something is wrong with domestic job market, not with trade liberalization itself.

Trade liberalization affects domestic job markets.

It is not protectionism if you tax companies underpaying workers and saving on that, no matter what workers: domestic or foreign. Protectionism would be explicitly favoring hiring domestic workers and introducing penalties, tariffs or increased taxes for hiring foreign workers - which is something I would never advocate for.

Unless I understand the term wrong.

- They are not underpaying their workers, it's just how labor market forces react to increased competition.
- Your tax punishes companies for outsourcing jobs.

[breadisfunny]

no one cares about the little guy.

[Shadowferal]

Trade liberalization has never benefited anyone in the past century but the already wealthy few.

[Krigaren]

I find it interesting that people on the right are all for the "free market" and against government protectionism, but the moment new globalist trade deals go into place that challenge the viability of American businesses, those same people are all against the free market and all for protectionism.

That said, I'm a lefty economist who believes that regulations and certain amounts of protectionism are required facts of life in the global marketplace.

[paralleluniverse]

Krugman is a trade economist, and he's right.
1. Trade liberalization is a good thing in principle but has significant distributional impacts.
2. So optimal policy is trade liberalization plus government making the winners compensate the losers.
3. Such compensation is opposed by Republicans who want to cut taxes on the rich and gut the welfare state, but supported by Democrats.
4. TTP isn't even about trade but rather intellectual property protection.
5. Overall, this is a small economic issue, not a huge deal.

So the reason trade liberalization doesn't work is because of Republicans.

Also, most average middle-class people work in services, not manufacturing, and probably benefit slightly from trade liberalization and cheap consumer goods.

[Theodarzna]

I find it interesting that people on the right are all for the "free market" and against government protectionism, but the moment new globalist trade deals go into place that challenge the viability of American businesses, those same people are all against the free market and all for protectionism.

That said, I'm a lefty economist who believes that regulations and certain amounts of protectionism are required facts of life in the global marketplace.

Must Republican politicians love free trade, that have merely discovered their voters do not.

[Deleted]

I find it interesting that people on the right are all for the "free market" and against government protectionism, but the moment new globalist trade deals go into place that challenge the viability of American businesses, those same people are all against the free market and all for protectionism.

That said, I'm a lefty economist who believes that regulations and certain amounts of protectionism are required facts of life in the global marketplace.

What people on the right supports free trade?

[NED funded]

What people on the right supports free trade?

Reaganites.

[Deleted]

Reaganites.

They aren't right wing

[May90]

Unless I'm reading that wrong it's saying that those that are not in the upper quintile, are either seeing stagnating wages or decrease in wages, which in turns reflects on their purchasing power, because the price of essential goods is increasing. So I think it supports my st

Simply from graphs, we see no decrease. Not to mention that it isn't a very good reasoning at all, because there are many more factors affecting wages than just globalization.

Working at a factory> working at walmart/burger king/ Mc

Maybe. But why would people go from factory to Walmart, rather than another factory or other jobs of similar, or higher, level?

Trade liberalization affects domestic job markets.

Yes, but not directly. Rather, it introduces a new variable to it, and the domestic job market reacts on it. The way it reacts on it isn't defined by trade system, it is defined by the domestic economy.

- They are not underpaying their workers, it's just how labor market forces react to increased competition.
- Your tax punishes companies for outsourcing jobs.

I fail to see how, when outsourcing makes them pay the same tax as employing native citizens.

[Krigaren]

What people on the right supports free trade?

I didn't say anything about free trade?

[NED funded]

Simply from graphs, we see no decrease. Not to mention that it isn't a very good reasoning at all, because there are many more factors affecting wages than just globalization.

Really?

ctrl + g : wage fall

What gains have been made, have gone to the upper income brackets. Since 2000, usual weekly wages have fallen 3.7% (in real terms) among workers in the lowest tenth of the earnings distribution, and 3% among the lowest quarter. But among people near the top of the distribution, real wages have risen 9.7%.

I agree, globalization is not the main driver, but it's certainly a driver of it.

Maybe. But why would people go from factory to Walmart, rather than another factory or other jobs of similar, or higher, level?

Because there are no longer any more factories in their area, and the costs of moving to places where there is economic prosperity can blow years of their income. We've been through these already.

Yes, but not directly. Rather, it introduces a new variable to it, and the domestic job market reacts on it. The way it reacts on it isn't defined by trade system, it is defined by the domestic economy.

Too many jobs were outsourced too fast, nothing came to replaces those jobs because of the abrupt change, so people had to take what they had. Those that could afford it, went back to college, others retrained to become truck drivers, the rest had to take jobs at Walmart.

I fail to see how, when outsourcing makes them pay the same tax as employing native citizens.

Ok, so I'll repeat what I understood of your system.

Firms gain X$, pay their workers Y$ and pay in taxs Z$

So companies outsource jobs, reducing overall wages and generates profits for the firm.

Firms gain X$ + A$, pay their workers Y$ - S$ and pay in taxes Z$, where A>S

Under your system, they add S$ to the amount of taxes they pay. So they are paying more taxes, because they outsourced. That to me sounds like a punishment for outsourcing.

[Macaquerie]

I find it interesting that people on the right are all for the "free market" and against government protectionism, but the moment new globalist trade deals go into place that challenge the viability of American businesses, those same people are all against the free market and all for protectionism.

That said, I'm a lefty economist who believes that regulations and certain amounts of protectionism are required facts of life in the global marketplace.

Not to sound too "SJW" or anything like that, but I feel like the flip flop on globalization has everything to do with how the structure of international power dynamics has shifted. In the past, free trade meant that American businesses could flood in, access cheap raw materials, and force locals to pay exorbitant prices for finished goods. Nowadays, third world countries at least have some semblance of infrastructure and expertise, as they are no longer ruled by colonial regimes with an interest in purposely suppressing their economic development, and so can compete against American workers. We leveraged our global power to improve living standards at home for so long, that people became accustomed to it as the natural order of things and simply can't comprehend a situation where this dynamic is disappearing or even reversing.

[Deletedaccount1]

Poll shows the economic illiteracy of this forum.

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Trade liberalization has never benefited anyone in the past century but the already wealthy few.

That is the most false thing I've ever read.

[Shadowferal]

What people on the right supports free trade?

Those against Minimum Wage, against unions, against environmental regulations, etc the list can go on...

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Poll shows the economic illiteracy of this forum.

Or people smarter than you.

That is the most false thing I've ever read.

Live in the US?
Doesn't look like it.

[Deletedaccount1]

Or people smarter than you.

Live in the US?
Doesn't look like it.

I've linked this in similar discussions but it is always relevant.

http://gregmankiw.blogspot.jp/2009/0...sts-agree.html

The vast majority of economists of nearly every school think that free trade is a good thing. The idea that trade liberalization hasn't helped anyone but "the wealthy few" is so ridiculously ignorant that I already know that your knowledge of economics is non-existent.

To give you the most basic example of why this is wrong:

A product that is produced overseas for cheaper and is sold for cheaper in the US as a result is good for the consumer.
A product that is produced domestically for more and is sold for more in the US is bad for the consumer.

There is a net gain with free trade that almost all economists agree is good. Paul Krugman famously quipped "If there were an Economist's Creed, it would surely contain the affirmations 'I understand the Principle of Comparative Advantage' and 'I advocate Free Trade'."

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Japan is a good example of a country that blocks certain imports to protect some of its weak industries and results in consumers paying ridiculously high prices for commodities which would be better off imported.

[Shadowferal]

I've linked this in similar discussions but it is always relevant.

A libertarian's argument for outsourcing is already null and void.
Middle class jobs going over to China doesn't benefit the US at all.

A product that is cheaper doesn't matter if people don't have well-paying jobs.

[Deletedaccount1]

A libertarian's argument for outsourcing is already null and void.
Middle class jobs going over to China doesn't benefit the US at all.

A product that is cheaper doesn't matter if people don't have well-paying jobs.

How many middle class jobs go to China?

Around 12 million Americans work in manufacturing which is the primary industry which can be outsourced.

That is about 6% of the American workforce. So some number of people who work in that 6% have their jobs threatened by outsourcing. Not all of them, probably not a majority since there will still be 11 million Americans in manufacturing in 2024.

So roughly 1 million people or so benefit by having protectionist policies in place. That doesn't seem like much of a net benefit for the middle class when free trade agreements make everyday products cheaper for everyone.