A Purely Theoretical Thread About Job Creation

[Det_ard]

Begin with the premise that there must be a shortage of US labor before labor can effectively organize or demand anything. As long as it is more profitable to produce anything overseas or with foreign labor, companies' managements have a fiduciary responsibility to hire foreign labor to increase profits.

"Labor" isn't one uniform commodity. Right now there is a shortage of many types of labor in the US, even in the Detroit area. There is however a lack of of low/no skilled jobs and an abundance of candidates for that type of work. Should we aspire to create more dead-end menial jobs for Americans, or let others in developing countries do that type of work and aim a little higher here? I'd say aim higher, for the days of high pay for low skill work are gone. Try to make manufacturers hire low skill workers at high wages and they'll simply do what they've been doing and substitute automation for strong backs.

My solution would be to end the economically treasonous NAFTA type agreements and substitute import taxes for personal income taxes. It would suddenly make more financial sense to produce more in the US. Fining the hell out of anyone caught cheating by hiring illegals would raise some additional income and help employers understand the virtues of hiring US workers too. When it becomes more practical to hire US workers than to make something in China, US workers will be in short supply and be able to demand a larger share of the national economic pie.

Well, workers better make a huge amount more than they do now, since prices of everything will shoot up the minute you tax imports and require companies to produce in high-cost areas. It makes no more sense to restrict trade between the US and other countries than it does to restrict trade between Michigan and California, or between Detroit and Warren. The arguments for free trade are classic and generally well-understood, but here's short video from Milton Friedman addressing the concerns about Japan and Steel, from [[judging from the leisure suit wearer in the audience) the mid-70s.

[oladub]

Det_ard: "Labor" isn't one uniform commodity. Right now there is a shortage of many types of labor in the US, even in the Detroit area. There is however a lack of of low/no skilled jobs and an abundance of candidates for that type of work. Should we aspire to create more dead-end menial jobs for Americans, or let others in developing countries do that type of work and aim a little higher here? I'd say aim higher, for the days of high pay for low skill work are gone. Try to make manufacturers hire low skill workers at high wages and they'll simply do what they've been doing and substitute automation for strong backs.

I think that you are correct about higher wages driving automation forward but i wasn't suggesting that manufacturers be made to hire low skill workers at high wages. I was instead suggesting that if the federal government created a situation wherein manufacturers would find it to their own advantage to hire US workers, the competition for US workers would drive their wages up. This would make more sense then paying them to be on unemployment. The prices of some goods and services would go up but they would be offset by reduced spending for social services and unemployment. Getting back to automation; someone has to build the automation equipment and run it. Those would be higher paying jobs.

Well, workers better make a huge amount more than they do now, since prices of everything will shoot up the minute you tax imports and require companies to produce in high-cost areas. It makes no more sense to restrict trade between the US and other countries than it does to restrict trade between Michigan and California, or between Detroit and Warren. The arguments for free trade are classic and generally well-understood, but here's short video from Milton Friedman addressing the concerns about Japan and Steel, from [[judging from the leisure suit wearer in the audience) the mid-70s.

Prices would go up in imported goods and services but since we import so much more than export, we have the better hand if anyone wants to have a trade war. I did watch the Friedman video. He is wrong in assuming that dollars will all come back to buy US goods and services. Some of those dollars come back to gain control of US industry [[e.g. Chrysler) and other dollars come back to buy treasuries we have to pay interest on. Some of those dollars, in short, come back to own us.

An import tax would, among other things, raise the price of oil since 70% of our oil is imported. What easier way to encourage the production of other domestic sources of energy we have plenty of? There would be less cause for cap and trade and government subsidies for other types of energy if imported oil were taxed higher. Remember that I started out suggesting that import taxes offset individual income taxes so most everyone would have a bit more money in their pockets to buy either higher taxed oil or a domestic car not relying on imported oil. Also, almost too good to be true, if import taxes caused us to focus a bit more on domestic energy production and technology, our leaders wouldn't have as much need to be meddling in the middle-east.