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traineraz
Here's the introduction from the CFR:

QUOTE
The openness of the United States to trade and technological innovation, as well as the flexibility of its labor market, has fueled impressive growth. In such an economy, workers are routinely displaced. Most find new jobs in a reasonable amount of time. But for workers with a long tenure at their previous employer, these new jobs often pay wages much lower than those they earned before. For this group, displacement is much more than a temporary setback.

In The Case for Wage Insurance, Robert J. LaLonde recommends rethinking traditional trade adjustment assistance to address this problem. He argues that existing programs, including retraining and unemployment insurance, do too little to help displaced workers whose new jobs pay substantially less than their old ones. Unemployment insurance, for example, makes up for lost income during unemployment but not for reduced income after reemployment. To fill this gap, Professor LaLonde proposes to shift resources from existing programs to a displacement insurance plan—effectively, a generous earnings supplement for a number of years—for workers facing a long-term reduction in wages.

Ultimately, well-designed displacement insurance could ease long-tenured workers’ fears of job and income loss, thereby diminishing opposition to free trade and other policies perceived as at fault. In this way, it could help Americans continue to enjoy the benefits of trade and openness, and help the United States maintain its competitiveness and leadership in the global economy.


Follow the link if you want to read the full report. I've only read the executive summary so far.

In a nutshell, the author is proposing that we deal with the loss of manufacturing and service jobs to cheap overseas labor by creating a new tax (I assume . . . the money has to come from somewhere, funding is not addressed) to provide a new type of long-term welfare program, all so today's workers won't feel the pinch of their jobs leaving the country quite so acutely and won't be so "resistant" to globalization.

I found no mention on what happens to the next generation, as our population continues to grow in leaps and bounds, when those manufacturing and service jobs aren't here when THEY graduate high school.

Apparently, raising taxes and distributing checks strikes the author as a better idea than drafting policies to keep those jobs in the United States. Perhaps he thinks we can all get MBAs?
Provenance
I prefer to discuss absinthe. That's why I joined an absinthe forum.
SoulShade
Your in the Monkey Hole smarty.
traineraz
QUOTE(Provenance @ Jun 29 2007, 02:44 PM) *

I prefer to discuss absinthe. That's why I joined an absinthe forum.

I suggest not commenting in or reading discussions in the political subforum.
Absomphe
QUOTE(SoulShade @ Jun 29 2007, 06:13 PM) *

Your in the Monkey Hole smarty.


You're the one in need of smarts, SS. harhar.gif
SoulShade
My cover's blown, again!

I thought being a transparent male was in vogue.
Absomphe
Only if you're blonde.
Nymphadora
Hey!!! viking_emoticon.gif
Shabba53
The economic argument (not saying MY argument) is that any shift of manufacturing jobs will allow workers to further educate themselves and enable them to work in different, higher paying jobs.

In the same vein, for future generations, there won't be as much of emphasis on manufacturing and service jobs, which will lead to less interest in them, which will lead to less demand for those jobs. Those future generations will insert themselves where they are needed, as they have in previous generations.
traineraz
That would work well if the average American had a college degree, and the US were the financial services (and similar) headquarters of the world.

However, only about 27% of Americans have been to college at all (many of whom did not finish), and a substantial percentage didn't finish high school.

That's where I take greatest issue with the loss of manufacturing base. There are fewer and fewer low-skill jobs to employ uneducated workers, and more and more uneducated workers to employ. These days, a high school diploma doesn't even guarantee that the holder can read, write, or solve basic arithmetic equations.

Meanwhile, the entire point of "wage insurance" is to reduce worker objection (protests, boycotts, strikes) to their jobs being moved out of the country.
Shabba53
True. However, those same schools of economic thought argue that the loss in manufacturing jobs opens the door for those people to gain further education in order to get other jobs. There's flaws in every economic argument, as something that can look good on paper could have disasterous real life consequences.

For example (just to play devil's advocate again), the job loss insurance could have a reverse effect in that it may persuade people to not further their education, as they can just fall back on this insurance. Similar to social security disability. There are plenty of people who need and deserve it, but there are rampant abuses as well.
traineraz
How many 40-something high-school dropouts who were laid off from their $30-hour auto-manufacturing jobs have gotten their GED and a college degree and started exciting new careers in accounting or technical support?

It's a lovely image, but I haven't seen evidence of it actually happening with any frequency.
Shabba53
But we also don't have any reason to believe this option would be any better. Just like the whole debate going on right now regarding nationalized healthcare.
traineraz
I was commenting on the argument you cited in support of wage insurance,

QUOTE
the loss in manufacturing jobs opens the door for those people to gain further education in order to get other jobs.


Such an argument assumes that all people are of equal ability. While people should be given equal protection and equal responsibility under the law, that doesn't mean that all people have equal abilities or ambitions. Some 40-year-olds are easily able to re-educate and reinvent themselves for new careers. Some can barely read, and are either unable or unmotivated to learn further. Sadly, there are more of the latter than the former.

The long-term success of a wage insurance program depends upon people who have this wage insurance going back to school in their middle age and getting re-educated for a new career, as you point out. However, it's essentially a long-term welfare program, with no requirement for education or other opportunity-or growth-seeking. It allows workers to go from a $30/hour unionized manufacturing job to a $8/hour McJob without significant loss of income, while everyone else pays their bills for them.


Shabba53
QUOTE(traineraz @ Jul 10 2007, 08:13 PM) *

Such an argument assumes that all people are of equal ability.

Not necessarily. What it does is recognizes that the development and transition from a predominanctly manufacturing economy to a technological one will inevitably lead to job loss and would force people to further educate themselves, if they can, or if they want to.

If not, then they will not have a job.

Economics is not a charitable school of thought. It basically relies on the 'survival of the fittest' mindset. It recognizes that if people cannot adapt, they will become useless to that society.

QUOTE
It allows workers to go from a $30/hour unionized manufacturing job to a $8/hour McJob without significant loss of income, while everyone else pays their bills for them.

So, is that a good thing? This seems to bolster the argument against the insurance.
Shabba53
QUOTE(traineraz @ Jul 10 2007, 08:13 PM) *

I was commenting on the argument you cited in support of wage insurance,

I've never been in support of the wage insurance, I was commenting on the fact that in a pure economic model, people would be forced to go back to work to re-educate themselves, whether they wanted to or not. That's the nature of a capitalistic society.
Shabba53
You know, the more I re-read your posts, I think we're both arguing the same side of the coin, but not realizing it. blink.gif
Jaded Prole
Economics is the study of economic systems, Corporate economics is certainly "survival of the fittest" but it is not the only alternative.

Speaking of Healthcare, Michael Moore, (like him or hate him), really tears into the corporate run media and Let's 'em have it about their lies and complicity in several vital areas.
traineraz
QUOTE(Shabba53 @ Jul 11 2007, 05:09 AM) *

QUOTE
It allows workers to go from a $30/hour unionized manufacturing job to a $8/hour McJob without significant loss of income, while everyone else pays their bills for them.

So, is that a good thing? This seems to bolster the argument against the insurance.

Perhaps you didn't notice, but I've been vehemently against wage insurance from the outset.
Shabba53
QUOTE(traineraz @ Jul 11 2007, 12:33 PM) *

Perhaps you didn't notice, but I've been vehemently against wage insurance from the outset.


As have I. harhar.gif

However, I don't think drafting any policy to keep those jobs in the states would be a good alternative either. Doing so would actually hinder economic development, expanding the negative effect to even more people.

And JP, I'm specifically talking about Classical economics (see Wealth of Nations/Division of labor), Chicago School economics which deals with free markets and capitalism, as well as Keynesian economics, which deals more with demand for goods and services. There are obviously other schools of thought, but these are much more widely accepted as closer to reality.

I'm not at all talking about corporate economics.

Regarding Michael Moore, he is correct in bashing the media. I hate the level of bias in the media. However, Moore's presentations are admitedly just as biased, only in the other direction.
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