From Dave Budge:
Mark, when are you going to answer the questions about tariffs, unions and minimum wages? That’s your run and hide m.o. I’ve asked you several times.
From me:
Bring it over to my place. We’ll have at it. I’ll set aside special space for you later today.
I’m not exactly sure what questions I am supposed to be answering, but I think it has something to do with tariffs, unions and minimum wages harming working people. I’ll wait.
Hiking on Thursday.
Piece of Mindful 
You think I need space? I have at least a half dozen blogs I can write on.
You’ve repeatedly said that the things listed above are good for American workers. I’ve asked you to provide some citations and make an argument – since it’s mostly wrong. But you wont; do the work and until you do I’m call the idea that they are good for Americans bullshit.
Now, either make the argument or quite asserting it.
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I will do so. Hell, I think I’ll do it tonight. This should be fun, even as I detest delving into such detail. Some accountant I am.
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I make the case that tariff’s, unions, and minimum wage are generally better for “workers” than their absence. The term “workers” sounds Marxist, but it is not. It is merely a handle. I am a worker. So is almost everyone I know.
Tariffs: The purpose of tariffs is to protect domestic markets from foreign competition. Obviously not all domestic markets should be protected, and not all tariffs are good, and they can obviously be abused. But there is much negative fallout for domestic workers from unregulated trade with countries with lower wage rates than our own. There has been a decline in manufacturing jobs, which tend to pay better wages than other sectors. This sector also tended to hire people with less education. While this lowers the price of goods, it also lowers the price of labor, leaving domestic workers with lower wages as a result.
Even for those jobs that are not outsourced, there is always the ability of employers to threaten workers with outsourcing, thereby keeping wages lower than they would have been. Investment dollars that would have gone into U.S. plant and equipment has gone overseas. Those workers driven out of manufacturing move into service jobs, and those who traditionally held service jobs – low skilled and young workers, are displaced.
Unemployment right now is somewhere between ten and twenty percent, measured by the old yardsticks used before Clinton/Bush. The largest employer in the country is Wal-Mart. We are not better off due to lack of tariffs.
Unions benefit workers. It’s all right there in the numbers. Manufacturers fear unions, and have been running from them ever since the word “strike” was first uttered. They ran from the north to the south to Japan to South Korea to the Philippines to Vietnam and Sri Lanka, all in search of workers who work cheap and are not allowed to organize. Generally, merchants and manufacturers are short-sighted and unpatriotic, and care very little for their work force. They only provide what they must. Unions are part of “must” (as are tariffs) that we impose on them for all our good.
Union workers are better off than non-union workers in all measurable ways – they have higher wages, better benefits, including health care and pensions. Not only has that, but the mere threat of a union benefits non-union workers. Wal-Mart has recently been improving its crappy health care benefit for fear of unions.
It may well be true that a unionized work force cannot compete with, say, dollar-a-day workers in China. That’s where tariffs come in. They should not have to compete with them. We are a nation of 330 million people and can easily have a robust domestic market without having to outsource our manufacturing. We don’t need to sell Chevy’s in the Philippines or have our shampoo made in China to prosper. We can make and sell to ourselves if need be. There will be fewer billionaires, but as a whole we’ll be much better off.
The federal minimum wage, which is currently as high has it has been since 1981, affects about ten percent of the work force, most of them over twenty years of age. There have been no studies of any measurable worth to ‘prove’ the notion that increasing a minimum wage decreases employment in that sector. (Far more responsible for unemployment in the low-wage sector is de-unionization, outsourcing, and the resulting downward displacement of workers.) Increasing this wage has a ripple effect, in general raising all wages. This is a good thing. The more workers earn, the better off all of us are – even those of us who manage their paltry investments or do their taxes.
Without a minimum wage, without a minimum level that we will tolerate, there will be people who are working full time who cannot afford the necessities of life. Because there are too many of us, because the lower classes produce too many babies, because we don’t educate them well enough, we are saddled with people of high potential who never realize it. It’s a massive problem brought about by ethnic histories (slavery), immigration of people from lands where conditions are even worse that here (former Mexican corn farmers displaced by NAFTA, for instance, or Salvadorians and Vietnamese we bombed out), and, of course, that part of the population that generally underachieves – they are always with us.
There will always be those among them who will take someone else’s job for a buck less a day. You might argue that this is the proper functioning of a market, but government steps in at that point and says “No – we will not let you hire people for such wages. We will not tolerate sweatshops.” If a job cannot provide a living for a man, then we do not allow that job to exist. Better for all of us that we use public assistance to care for these people than to allow them to be exploited.
That’s the logic anyway.
I notice something … this is from Ravi Batra, an economist who was so foolish as to make precise predictions about the future – he’s been discredited due to this, and rightly so, the fool. But he breaks us down into ‘classes’, not in a Marxist sense, but much broader. He says we go through periods of domination by various sectors of our society – we are dominated first by labor, followed by warriors, then by intellectuals and then by acquisitors. It’s reductionist in the extreme to do that, but there seems to be some distant ring of truth to it now. We are currently dominated by thw acquisitor class. This is painfully obvious.
We do have memories of days passed that die with our elders, and we do have to learn lessons again and again. Hence, the regulations of the late thirties repealed in the 90’s, and we get the late twenties as a result.
I am curious about this in terms of intellectuals, speaking very broadly. All of us who use our brains instead of our brawn fall into this category. But generally, we are not acquisitive. We usually serve whoever is in power, be it merchants or soldiers. What I notice about you, and Mr. Natelson, is that neither of you are getting rich off your brains, yet you are strict adherents and defenders of a system that feeds wealth upward to acquisitors.
I’ve wondered for years about this – why do intellectuals serve power?
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BTW, in case you notice, I have not ‘cited’, as you would do, but I do have access to statistics that generally back up my logic, adn I will supply that data as necessary. Most of it will come from Mishel/Bernstein/Shierholz of the Economic Policy Institute. I don’t rely heavily on it. I am not put together that way.
I’m sure you have yours as well.
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Mark,
I have a nasty case of Swine Flu so I’m going to bite this off in pieces over thee next few days.
Here’s the actual pay data from the BLS:
Now, further appealing to your Utilitarian instincts – the greatest good for the greatest number of people – it seems a bit short sighted to look only at “workers” as opposed to the population as a whole. It’s true that tariffs can and do increase wages. It’s also more true that they increase prices – which inflicts general damage to all households. Don Boudreaux makes the case for even unilateral free trade.
There can be a case made (although I don’t buy it) that tariffs make sense to ensure a level playing field – i.e. anti-dumping tariffs. There’s also a compelling argument that tariffs may be appropriate in the protection of “infant industries” (which I don’t buy either.) But in general I can recall no significant study that says protectionism makes and this is bolstered by the fact that all but a tiny group of economists see more costs in protectionism than benefits in most cases. This includes lefty stalwarts such as Paul Krugman (who actually earned his Nobel Prize studying international trade,) Joseph Stiglitz and Brad Delong.
Let’s for example look at the recent tariff on tires:
There are literally hundreds of studies that make similar conclusions (although I’ll admit that the recent tire tariff is probably the worst trade decision, including Bush’s steel tariff, in the last 40 years and is unusually “expensive.”)
If you can show me a study that is contrary to this I’m all ears. But I just don’t think that either the empirical evidence nor the theoretical basis exists.
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Not much time here – three points I want to argue:
One, the results of studies done by servants of the acquisitor class tends to favor that class. The acquisitor class does not design, invent, build, or produce products. They merely move money around. But they have tremendous power due to control of wealth.
Not many people who study the economy work for the employed class or minimum wages workers.
So I am having a small laugh as I read
Will you be around to see if these predictions come true? Will we ever know? Have we not debated reliance on economists based on predictive power? Have you not said that economists have very little of that? Is he not performing the function of a servant of wealth – to make dire predictions of what will happen if wealth is not served?
I suggest you shift your focus backward, and see what has happened to this country as imports have increased to 6% of the GDP, the manufacturing work force cut in half, Wal-Mart has become the largest employer in the naion, and good paying jobs have shrunk to 27% of total employment. ($17 per hour with health insurance and retirement of some kind.)
Second: There is such a thing as greater good, and it can be served by regulation from above. This whole notion that government is evil I think came out of the Soviet experience, which hardly applies – a backward economy where the ruling class that supplanted the Bolsheviks who had supplanted the Czars. The end result, a military dictatorship, wasn’t much different than they had under the czars.
Ayn Rand came out of that system and was scarred, and projected that what happened there would happen anywhere unless markets were unleashed. You may not be a Randian, but the overlap between Randianism and libertarianism probably exceeds 95%. Government can and does enforce regulation that enforces greater good, not the least of which is to redistribute wealth, which aggregates in a very few hands otherwise. Your baseline is that wealth that ends up in anyone’s hands is ‘earned’, and that taking it away to an extent that exceeds services received in return is theft. You unwittingly bring about tyranny.
Finally, you are arguing a no-tariff position. Few argue that. But history shows us that countries protect their markets, grow powerful, and then become free traders, especially wanting developing countries to drop barriers. That’s all we did with Mexico (protecting “intellecutal property’, of course – free trade in that commodity doesn’t serve our interests).
I’m perfectly happy with developed countries like Canada, Japan, Western Europe and Australia free-trading among themselves. But I want Ecuador to protect its markets and sell at the highest price possible, accumulate capital and build from within.
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