Friday, March 1, 2013

Viable Opposition: "JOLT"ing America Back to Work

Lastly, how about manufacturing?

While things have picked up significantly since the bottomless pit of the Great Recession, openings in April 2012 dropped to 246,000, down 20 percent from the previous month where openings hit a post-recession high of 308,000.  Keep in mind that we must keep this data in perspective; looking back to the early part of the millennium, manufacturing job openings exceeded 440,000 when this data was first recorded.

Actually, this graph may help explain some of the issues facing those who manufacture things for a career:

Apparently, America just doesn't make things any more, either that, or it takes a whole lot less Americans to make what we actually do consume.

This illustrates how manufacturing job losses have led to higher unemployment since the GFC, with a limited number of these compared to demand of these goods they have gone to cheaper wage countries. The argument is usually that if jobs go to countries better specialized for them then everyone benefits, however in Aperiomics this is only true for Biv countries in a positive sum game. When resources are scarce a job lost to another country may be a Roy negative sum game where that country minimizes their losses, other consumers might minimize their costs by buying cheaper goods from them. However this can now be at the expense of the original workers who don't just fail to make as a high a profit, they can experience losses such as losing their homes over this. For example in a Biv country if someone else gets a job instead of a person then that person can usually get a job somewhere else, this can then be a process where people work where they are most skilled with Pareto optimization. In a Roy country if a person misses out on a job there might not be another one so they might starve or lose their home. This can also be regarded as Pareto optimal, that those best suited to survive do so while others perish. This can then be a version of Darwinism or survival of the fittest. In a wealthy country most survive so the fittest tend to become more wealthy than those less fit, not perish. So in a Roy recession or quasi depression the strategies are different, the government needs to minimize losses to return to Biv prosperity. Letting people go bankrupt or starve is very wasteful as is a Roy economy that used to be Biv. For example in the Great Depression many assets and skills became nearly worthless and so people lost their savings and skills looking for work. When the Great Depression ended then these skills and assets were still degraded when they would have been better off preserved. This is then like a Biv forest going through a drought, plants get damaged by exposure to the elements as the big plants die or get knocked over by Roy animals. The ecosystem can be badly damaged even if it rains next year, the forest might take a long time to regrow and even permanently lose some plants and animals. 

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