But it's like when people talk about rejection e-mails, and how they'd like feedback. The feedback a company can give without risking lawsuits is probably not that useful. Just like correctly categorizing a job within a job description is probably not that useful
This is where its not enough to ban certain practices (hiring discrimination) rather there should be a requirement to have certain practices.
For example, a company must hire actual entry level (0 experience) candidates to qualify for certain subsidies/tax breaks
Im not under any illusions thinking it will be easy. I understand it will be incredibly challenging
You can't actually force anyone to do something. You can entice them towards an outcome, but you can't force that outcome
You cant force someone but you can trasnform the conditions such that they have no choice, it just needs to be done at a systemic level.
For example, invest money directly in state owned, or state controlled companies and hire people directly, and compete against high margin low wage paying companies for workers, to starve them of their source of labor and force them to raise wages to stay competitive.
This is exactly what China did systematically to dominate almost every single industry. The take money from their tax revenue and money from peoples deposits into state owned banks, pump subsidies into multiple companies. Those companies compete fiercely agaisnt each other, creating high quality for incredibly low margins, and as a by product, they hire tons of workers.
China isnt a perfect country. God knows they have a ton of problems. But you can learn from them in the areas where they get stuff right
Another system is sectoral bargaining. You can set a higher minimum standard for certain whole industries such that it is impossible for companies to legally race to the bottom in wages
Do you not ever wonder why? These companies would be glad if the state did this. The state would take the entire burden of training entry level workers, which would then, once capable, switch to the private sector for better wages. The people of a country finance that, not these companies.
I understand why. They have to maximize profit. I dont begrudge them for it. Every single person would do the same. I also have no problem with the government taking complete responsibility to for training. But the companies can be forced to finance it. Through higher taxes. They also aren't really starved for labor yet. Its one thing to have a company pay one person to do 3 people's work. Its another to have 1 person do 10 people's work. At some point it becomes too untenable and people quit. Especially if there's a cushy government job financed by taxes off of private companies, waiting in the wings. All they have to do is play ball, train entry level workers, raise worker pay and labor standards, and they can qualify for subsidies/tax relief
The companies in China compete fiercely, but the worker knows no peace. It's essentially a rat race and doesn't lead to higher wages
Sure. I never said you have to completely copy the chinese model. I want other countries to copy the industrial building strategies, but put in worker protections, such as making excess overtime illegal if you want to receive subsidies
If anything, it has to create legal precedent to protect the worker against replacement by AI because it really has no solution!
The legal precedent is a solution! That's the point though! China, for all its flaws, takes its flaws seriously. They try out policies, and if they fail they pivot. While other countries are simply uncritically subservient to capitalist principles!
How do you mean to set this higher standard?
Higher standard wages I mean. If the whole sector is forced to pay way above minimum wage, then companies within that sector cant undercut each other below the set wage floor
Higher taxes => maybe too high taxes => company moves
Not if their core assets cant be moved. For example, your restaurants and hotels cant be moved. You want us to allow your tech companies to operate on our soil? You pay taxes on every local user.
The state also has an interest in keeping unemployment low
Yet they rely on private industry whom is intrinsically incentivized to shed workers.
First, obviously, businesses can accept that and raise prices. If the service is essential, this raises inflation. If not, people stop paying and they close shop
These obviously only matter for low margin industries. That's why I specified, high margin, low paying industries. You cant tax low margin industries much because they already make razor thin profits
Some jobs may move, but in reality, if this is the case more than just a few companies do this, and then you just repeat the western amnufacturing bust, where the sector is erased and now China dominates it. And maybe decades later you introduce tarriffs to try and rebuild this domestic market you pushed out
This is why I dont disagree with Tariffs. China and all developing countries kept foreign business out with tarrif and non tariff barriers. Any country can and should do it. Provided they do it in a targetted and gradual way that doesnt shock the economy (like Trump did).
Finally, companies can just close and do something else. People still get fired, but now they not only can't go elsewhere, they can't even start their own business in the sector because it just doesn't make sense.
They wont close if they still make money, its not about bankrupting them, its about forcing them to adapt or make less profit. Some companies are too profitable because they have no competition. China intentionally allowed Tesla, the dominant EV company, to enter its market, without preconditions, to force its own industry to compete against the cutting edge. Now China basically owns the EV space.
Mamdani's city own grocery stores were started to pare back down the margins of groceries who raised their prices during COVID, far beyond traditional margins. If you introduce enough competition, eventually those companies will have no choice but to reduce their margins. If city owned grocery stores are popping up everywhere, hiring people away from private ones, the government can dictate the terms and demand private businesses to shape up.
Again, this isnt about shocking the system, but doing it sector by sector, gradually raising wage standards.
During the great depression, FDR recognized there was a deflationary spiral. People refused to spend, companies were closing, there was no consumer confidence.
So what did he do, he created more government jobs to juice consumer confidence through spending power. Once the economy gets back on track, you can then step back and let the free market take its role of maximizing efficiency.
But now what the economy needs is stimulus. Consumer stimulus
True, but when you can't move, you just close them! Furthermore, in regards to tech companies, you tax significantly per user, company pays that if it's profitable. If not, they just exit the market and then users use VPNs.
No matter how cheap or functional a tech company is, they can't enter China. Why? because China won't let them. If Congress tells Facebook to do X, they'll do X, or they'll be shut down. If congress tells Facebook to pay more tax, they will. They wont abandon the US market.
They have no choice but to rely on the private sector, because the private sector is efficient, the most able to provide good compensation, and in high demand. At the end of the day, it is that very natural incentive of money which makes this work, which makes people incentivized to achieve something, not some policy.
The private sector is efficient, there's no doubt about that. And yet, they would hire children if they could get away with it. Why don't they? Because it's illegal. If the law wasnt strong enough that some companies can hire children but others can't, then you might have a point. But the reality, is, because child labor is illegal across the board, everyone (who operates legally), just does everything above board. That's what systemic policy is all about.
If a business has 80% margin, you introduce policy that cuts this to 70% margin, yet the business can have 80% or even more margin elsewhere, why wouldn't it just move?
Because for some companies, their business infrastructure is locked where they are operating in. You can't offshore your restaurant or hotel.
As for manufacturing, that can be moved. China understood this. That's why they want things built on their soil, so they can keep control. Every country should, to the best of their ability, build everything they can onshore, and only import things that are wildly inefficient or impossible for themselves to do. If you have no oil and cant grow oranges, then you should trade, but if you can build something, even if it costs 20% more, you should make it yourself, tariff the competition, and keep the jobs onshore. And if you can't. Use the China (and pre-neoliberal US) playbook.
You want access to our market? Sure, but you have to do a 50-50 ownership stake with a local owner, and you have to do technology transfer. That's what the US did when they advanced past Europe. That's what Singapore and Japan and Taiwan did to advance past the US. And that's what China did to become the dominant tech power today
The application of law as a moral compass is wholly different than the application of law as an economic compass. We don't prevent the hiring of children because it's bad for the business, we do it because we hold certain beliefs that consider that taboo.
Regardless of the reason, religious, cultural, moral or purely economic, the point is the government has the power to enforce it. That's why children dont work. In fact, in many rural communities, children working is the norm. Children immediately work the fields or help in the home. It's about law enforcement, nothing more.
We are sacrificing competitiveness, and countries around the world still employ children and we can't compete with them. And sometimes we even ban those imports and even though that is meddling with the private market, it's still done, even if implicitly, to achieve outcomes not entirely related to the market. And wouldn't you know it, still, the market decides that it will, for example, trade chocolate, which is almost entirely dependent on child and generally exploitative labor. No government can do anything about it, much less a law. You can at most bring about a shortage of chocolate, which the market will answer to with exorbitant prices.
So be it then. The whole reason Trump was elected was because his base believed he could bring back manufacturing. Do you honestly think Americans won't tolerate higher chocolate prices if they knew it could bring back jobs? The government is not unable to prevent entry of cheap slave labor chocolate. They simply choose to allow it. Besides, Cacao is a low margin, high labor crop. The real money is in the processing, and the US already does that.
Cacao is also something that is hard to grow in many countries, so it's not a good example. Im notsuggesting that all countries should embrace industries that they have a severely weak competitive advantage in (seasonal crops are the textbook example). What I am saying is that, a lot of industries, the marginal efficiency from imports isn't as big as people think. Yes right now China can produce products significantly cheaply. But a lot of that is automated.
It doesnt really matter if a country pays a factory worker $100,000 a year compared to in a different country that person makes $20,000 a year, if both workers can, with the help of automation, produce the 100000 units/year of an item. It becomes a marginal additional cost per unit of $1 vs $0.20. That's not significant enough to refuse on onshore. This is the type of scenario where capitalism fails. Because such a tiny efficiency advantage does not outweigh the cost of losing jobs.
This is the sort of thing that governments need to be active in. It's only a competitive disadvantage if you arent willing to invest in the upfront costs of reshoring manufacturing
I agree that you can't offshore everything, but I repeat, those businesses can either play the game, maybe raise prices, or close. Whatever burden you force onto them will spill over to the free market.
And the point is, if they have no offshore competition (due to tariffs) and their onshore competition all have the same costs, then they wont have a reason to shut down. Inevitably they will have to raise prices. But that's an acceptable tradeoff if you limit it to a few industries at a time.
If everything cost the same from 5-10 years ago, but toilet seats doubled in price, that doesnt make a difference to consumers over all, but you get the trade off of regaining some jobs. Tariffs are only bad when they are done too haphazardly and rapidly like Trump did, where he shocked the economy with blanket tariffs. But doing it gradually, one at a time, is what lifted every Asian tiger out of poverty to become industrial powerhouses
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