Showing posts with label fairy tales. Show all posts
Showing posts with label fairy tales. Show all posts

Sunday, January 29, 2012

They're not your father's manufacturing jobs

Here's an awesome anti-Yglesias screed where the author states the following:

I support high employment in manufacturing. The reason is that I believe that people are paid more if they work in manufacturing than if they work in other sectors.

And the following:

 People get something for nothing if they switch from employment in services to employment in manufacturing -- well the data show they lose big if they move the other way. 

 This guy is saying that there are, in his words, "labor market rents" in the manufacturing sector.

I think what the recent evidence shows though is that there WERE labor market rents in the manufacturing sector.

These rents came from the power of unions. But (1) they weren't a free lunch, as they were partly paid for by higher prices to consumers. (2) These rents are, to a large extent, gone. Virtually every story I've seen about new manufacturing jobs talks about the two-tiered wage schemes where the incumbent workers earn the higher wages and better benefits and the new workers get significantly lower hourly wages and weaker benefits.

 Globalization is bringing this about and it's not going to go away. "Labor market rents" to unskilled (and indeed many skilled workers) are not sustainable as more and more countries join the global system.

I see little benefit in glamorizing and subsidizing manufacturing jobs in a specific way, as they are more and more $15/hour positions with limited upsides.

Of course, I don't even agree with the general notion that the government should be actively planning where its citizens will work.

I do see a role for subsidizing basic research. I have views about subsidizing the acquiring of skills, but my position in academia probably makes them suspect so I'll just leave that alone.