Leaving aside Yellowhammer, Thomas Cook, and the various car manufacturers, the argument that low-productivity businesses are the ones holding the economy back and need to go bankrupt is really questionable. People are free to move jobs. You just have to pay them more. Evidently the wage growth has not yet caught up enough.
The other approach would be to encourage staff from overseas, which the government has spent years discouraging and has now specifically chosen to make harder for Europeans.
> We could get this right, unf we have got to the point where we are choosing not to.
> I am not sure what a solution is, after all these types of temp companies only exist to skirt existing labor laws, suggesting these laws may defy economics a bit too much.
The solution is to limit the labour pool or, in other words, limiting immigration.
> Pulling back from globalization would, but that is bad economics and bad for national security.
How is it bad economics? And what is your benchmark for success? Are you optimising for GDP, for quality of life, GDP per capita, what?
> Or perhaps we should just continue waiting until the rest of the world develops and the supply of labor finally becomes constrained.
> People have been saying that for decades but we seem unable to achieve it.
That’s because for decades, we’ve also been destroying low volatility, decent paying jobs via outsourcing and automation and concentrating high paying secure employment into fewer regions.
> If we work hard to bring all these manufacturing jobs back, won't this just increase the cost of goods by a great deal, and make people upset because of that?
Yes. That's the fundamental reason those jobs went overseas in the first place: it was too expensive to keep them in the US.
> it still seems like US workers will not accept wages that will keep prices as low as they are now
I think that's correct.
> I guess it's better to have a job but be unable to afford the the latest and greatest toys, than it is to just not have a job at all.
The problem is not that the worker won't be able to afford the latest and greatest toys; it's that nobody else will be buying what the worker is producing, because it will cost too much. Which means bringing back those kinds of jobs is simply not a realistic proposal at this point.
> If you can't afford the labor costs, then your business doesn't get to exist. That's the way the market works.
True for a small local business, but with larger outfits an entire department gets outsourced to a cheaper country. This brings the headache of extra overhead, project management, travel and difficulty in scheduling meetings due to time zones, but at certain scale the companies can handle that.
Do we as a society
* want an economic policy that disadvantages small businesses in favor of large businesses?
* want to initiate a long-term migration of entire departments and then companies and then industries offshore?
If we as a society are completely okay with this, then this seems like a reasonable economic policy.
> Because it won't work. Tell a company to pay higher wages for the same positions by bringing them home, and that'll push them toward automation even faster.
We're nowhere close to 100% automation. To create a successful return of manufacturing jobs doesn't mean replacing every single job that went overseas.
> Because it won't work. Tell a company to pay higher wages for the same positions by bringing them home, and that'll push them toward automation even faster.
We're nowhere close to 100% automation. To create a successful return of manufacturing jobs doesn't mean replacing every single job that went overseas.
> Alternatively stop exporting jobs and outsourcing joining a race to the bottom.
Isn't that's just one half of the problem. Isn't the importing of labor the other half of the problem.
We've exported jobs and imported labor. That's a double whammy for workers and can't help but put downward pressure on wages. But it's great for the wealthy elites. Exploit cheap labor overseas and cheapen labor at home.
> In general, there's just not the political will to actually make things here, and the press tends to push the narrative that anyone who thinks we should is stuck in the past.
We make a surprising amount of high-tech stuff, but it tends to be bespoke and expensive or very automated. Mass employment manufacturing is down to a few car plants owned by Nissan and Honda whose future is in doubt over Brexit. This is partly due to terrible industrial relations in the 1970s and 80s.
> there just isn't a free labour pool available to move into manufacturing
Does the government care about manufacturing? They closed the mines and moved towards a "service economy" last I heard..
> who wants to give up their job to go on to a production line, or wants that for their children? Forcing people out of better paid more valuable jobs into
There are northern towns that would love those jobs. Their children are currently at lidl checkout counters and behind pub bars.
Lump of Labor is a fallacy, people do find new jobs, and productivity does improve the economy. But none of that implies that the displaced people will be better off in the end!
Similarly, free trade agreements are economically efficient, and boost per-capita GDP. But even aside from implementation issues (i.e. agreements that go far beyond lowering tariffs), there's no particular reason that the extra money ends up benefiting the same people who get hit by outsourcing.
If anything, the studies I've seen say that being displaced by automation or outsourcing causes a permanent wage decline. The original Luddites were right - they probably saw lower wages for their entire lives thanks to automation.
Pretending that overall growth inherently means an economy which works better for the majority of people is frankly dishonest, especially (as you say) in a country so opposed to helping the displaced.
> Ah, the ideal of perfect labour mobility. Even if we did remove the legal and economic restrictions, we still can't achieve perfect labour mobility without breaking down a person's social ties to family, friends and community. Although some neoliberals have put a lot of effort into doing so.
I wasn't arguing for the ideal of labour mobility. I was pointing out that in its absence, the reality of almost unrestrained job mobility creates a huge disparity between employers and employees.
>In this regard at least, the globalisation of manufacturing is a force for good.
Is it? How? The jobs are still heading to the cheapest economies and they are the cheapest economies because they provide the least amount of workers rights/environmental protections etc.
They may run out of countries to move to eventually, but it's at least equally likely that those countries where wages/conditions had risen when demand was high will have those improved wages/conditions slashed again once the demand has moved elsewhere and the jobs will simply rotate between whichever of these economies is able to offer the least protected, worst paid and move malliable workforce at any give time.
The other approach would be to encourage staff from overseas, which the government has spent years discouraging and has now specifically chosen to make harder for Europeans.
> We could get this right, unf we have got to the point where we are choosing not to.
This has systematically been the Brexit approach.
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