20 February 2012

If Only There Were Some Way to Fix This

The trends in offshoring and international trade that we have described are likely to accelerate. China currently employs around 120 million people in the manufacturing sector and, although some reports indicate that wages are rising in China, those wages are still only a tiny fraction of wages in the United States. Moreover, China is expanding its manufacturing base to low-wage countries across the globe through a series of overseas economic zones. The implication for American workers is that in order to regain ground, they will need to find jobs outside of manufacturing where wages are comparable to those in manufacturing.

I know I’ve harped on this plenty of times before, so I’ll be brief:  Given the current regulatory regime in place at the federal and state level in the United States, it makes absolutely no sense to have free trade with China.  Given that citizens of the United States are legally prohibited from competing for jobs on price, ad given that employers in the United States are expected to comply with onerous regulations, it is safe to say that there is no free market in the United States.  As such, it is equally ludicrous to say that it is possible to mimic the outcomes of the free market by partially freeing up foreign import restrictions, and it is politically foolish (not to mention heartless and unpatriotic) to enact an economic policy that has had a measurable effect on closing part of the labor market to Americans.


  1. The problem is not China; the problem is automation. Automation not only kills factory jobs, it kills white collar jobs, especially information processing jobs. STEM jobs in particular. The number of engineers, scientists, accountants, et al, required to produce something is much smaller today than it was 50 years ago.

    The point is there are no other jobs to go to. The whole economy is on the path agriculture followed for the last 150 years. How many farm workers do you know?

  2. @sykes.1- automation is not inherently a problem; it is actually a sign of market maturity and growth. However, automation can be a problem if it is encouraged by governmental interference.

    I've actually addressed this subject before: http://cygne-gris.blogspot.com/2011/12/greymail-how-to-help-lower-class-labor.html