Quotes That Catch My Fancy
By Pejman Yousefzadeh Posted in Economy | Free Trade — Comments (6) / Email this page » / Leave a comment »
IN the days before Tuesday's Republican presidential primary in Michigan, Mitt Romney and John McCain battled over what the government owes to workers who lose their jobs because of the foreign competition unleashed by free trade. Their rhetoric differed -- Mr. Romney said he would "fight for every single job," while Mr. McCain said some jobs "are not coming back" -- but their proposed policies were remarkably similar: educate and retrain the workers for new jobs.
All economists know that when American jobs are outsourced, Americans as a group are net winners. What we lose through lower wages is more than offset by what we gain through lower prices. In other words, the winners can more than afford to compensate the losers. Does that mean they ought to? Does it create a moral mandate for the taxpayer-subsidized retraining programs proposed by Mr. McCain and Mr. Romney?
Um, no. Even if you've just lost your job, there's something fundamentally churlish about blaming the very phenomenon that's elevated you above the subsistence level since the day you were born. If the world owes you compensation for enduring the downside of trade, what do you owe the world for enjoying the upside?
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Quotes That Catch My Fancy 6 Comments (0 topical, 6 editorial, 0 hidden) Post a comment »
What do you owe the world if you enjoy the upside and not the downside?
Probably just enough to put a little toward a retraining program for the others.
No one of good character leaves behind a wasted life - John McCain
It's simple.
Without the retraining programs and extended unemployment services offered through programs like TAA (Trade Adjustment Act) there would be a huge outcry from organized labor and displaced workers against free trade.
You'd see very protectionist candidates elected in fairly short order and any free trade agreements quickly dismantled.
These programs are needed simply to make free trade programs possible in my opinion.
Even if they were not I think they are a good idea. The more educated workers we have the better the United States as a whole is.
... if outsourcing does what it's supposed to do -- i.e. provide similar quality products or services for significantly less money -- then it's a net positive. However, outsourcing often doesn't do what it's supposed to, at least in IT, because the additional overhead costs are far larger than initially estimated.
Differing opinions on the effects of NAFTA. Too bad some of you haven't had the opportunity to be personally affected by your employment heading elsewhere. I was fortunate to have enough seniority to retain my position. The EPI has a differing oping than CATO........http://www.epi.org/content.cfm/briefingpapers_bp147
Creates winners and losers. Even if losers are compensated for there real losses free trade makes the group better off.
In fact, some form of short term compensation for the losers is a great way to gain support for free trade in general.
I think helping to educate and retrain displaced workers is a good idea.