End Trade Adjustment Assistance

by Don Boudreaux on May 28, 2011

in Other People's Money, Seen and Unseen, Trade

Here’s a letter to the Wall Street Journal:

The Trade Adjustment Assistance program rests on the principle that consumers whose demands for American-made products help to create jobs for American workers should pay to train these workers for other jobs if these consumers ever shift their demands from American to foreign suppliers (“Dispute Threatens Key Deals on Trade,” May 28).

The merits of this program are doubtful.  If the value to workers of this fringe benefit (for that’s just what it is) were greater than its cost, it would be supplied privately on the market.  Enough employers would respond to worker demand for a ‘retraining’ fringe by offering, along with wages and other fringes, a promise to pay to retrain workers who lose their jobs to any import-related decline in demand for these firms’ outputs.

Of course, being costly like all other fringe benefits, provision of this fringe benefits would result in lower wages and lower values of other fringe benefits paid to workers.  Also like other fringe benefits, though, if the value to employees of this benefit is greater than its cost, employers competing for workers would be obliged to offer it.

But we see very few employers offering worker-retraining fringes – strong evidence that the value of these benefits to workers falls short of the cost of supplying them.  As such, it is unjust to force taxpayers to pay for a benefit for these workers that these workers themselves, through their own actions on the market, reveal is not worth its cost.

Sincerely,
Donald J. Boudreaux

UPDATE: My buddy Dave Rose, at the University of Missouri – St. Louis, sent to me this e-mail:

Regarding “If the value to workers of this fringe benefit (for that’s just what it is) were greater than its cost, it would be supplied privately on the market.”

I’d put it differently. I’d say

“If one claims that the value to workers of this fringe benefit is greater than its cost even while it is not supplied privately, it is incumbent those making such claims to demonstrate the market failure problem at work.”

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{ 55 comments }

vidyohs May 28, 2011 at 2:18 pm

“”We have a duty to help American workers meet the challenge of global competition,” said the panel’s chairman, Sen. Max Baucus (D. Mont.), during a Thursday hearing on the U.S.-Korea Free Trade Agreement. “

I am sorry, but no “we” don’t. We have no more duty to help Texas workers meet the Korean challenge than we do to help them meet the Californian challenge.

I never heard of the TAAP, when kicked over, does every government rock reveal another scurrying bunch of victims with their hands out?

Gil May 29, 2011 at 9:34 pm

Sorry for what?

Babinich May 30, 2011 at 6:24 am

“We have a duty to help American workers meet the challenge of global competition,” said the panel’s chairman, Sen. Max Baucus (D. Mont.), during a Thursday hearing on the U.S.-Korea Free Trade Agreement. “

I totally agree. Reform the tax code!

vidyohs May 30, 2011 at 3:29 pm

As a start that would be a good thing.

Dan May 28, 2011 at 2:23 pm

Not that I am for retraining, but a study on the effect of retraining from a mass layoff could be done. Ford did this 6or8 yrs ago. A condition of their mass layoff with the union. education was paid for and up to two yr salary should the laid off individual take the deal and remain in their training program.
I don’t want, yet another, govt mandate of added costs onto businesses. Why in the he’ll would a business hire people when the costs are soooooo great?

Dan May 28, 2011 at 3:35 pm

Any new mandated cost on business, especially like this, that would add greater costs to employment is destined to create higher unemployment for sustained periods.
If Obama and his cronies love Europe so much, go live there.

vidyohs May 28, 2011 at 8:29 pm

Dan,
When a private company voluntarily provides retraining for its employees who have been left redundant by foreign competition or even by domestic innovation, who among us can disapprove? Certainly not you and me.

My beef with the whole concept is the typical tack taken by government. Somehow I must be made to pay for the retraining of people who are total strangers to me, and for whom I take no responsibility. Even though the government may be subsidizing a private company’s retraining program, it still makes no difference to me. My dollars are being confiscated against my will, and given to another entity to do things that I have no interest in doing or providing funding for.

Run-amok government.

Chris May 28, 2011 at 9:36 pm

But would you say the same thing if your job suddenly became redundant? Do you have money set aside for retraining right now?

Ken May 28, 2011 at 10:58 pm

Chris,

“But would you say the same thing if your job suddenly became redundant?”

Yes. I have been laid off and didn’t receive any retraining. I ended up having to take a job making substantially less (about 40% less) than what I was making.

“Do you have money set aside for retraining right now?”

Yes. Only a fool doesn’t save money. Even the year that I got laid off and only made $8000 that year, I still manage to save over $1000. There is no excuse, EVER, not to set aside money for ANY emergency, not just retraining. Shit happens on a regular basis, not preparing for it is failing to act like a responsible adult.

Regards,
Ken

Captain Profit May 29, 2011 at 1:01 pm

“if your job suddenly became redundant”

For example, suppose you were a detroit auto worker and after forty years of watching your employer underperform in the market while paying you as if you were the most productive laborer on the planet, you suddenly found that out of nowhere they determined that your services were no longer required…

Chris May 29, 2011 at 4:29 pm

So your example is one where the employer created unrealistic expectations together employees but then suddenly, it’s all the employee’s fault? Really Captain?

Captain Profit May 31, 2011 at 10:08 am

@Chris
No, my example is one where the worker is blissfully unmindful of current events. Really.

Dan May 28, 2011 at 10:52 pm

Hence, the terminology of ‘mandated’. And, I agree, even a voluntary program but with govt subsidies is problematic. If company A does it of own free will and accord, then kudos to them. That’s very nice. But I take issue with this constant bombardment from govt about adding costs to businesses or to federal obligations. It is out of control.

WhiskeyJim May 28, 2011 at 11:46 pm

All research on retraining outcomes I’ve seen have been failures.

Does anyone know of valid research showing a retraining program works?

People get jobs. Schools do not, unless they would look much different than they do now. One possibility is for the school to forge alliances with companies and provide lower cost ‘apprentices’ to prospective employers applicable to their schooling.

I know of such schools. They are in effect offering a fringe benefit to prospective employers, which is a version of the point that Don makes in the post. Many university graduates go to those schools after they receive a fluff degree from a government run school.

SheetWise May 29, 2011 at 1:29 am

“Does anyone know of valid research showing a retraining program works?”

Yes. These programs employ people who are unable to find work in their chosen profession, and employ them teaching other people how to do that type of work (the work they can’t find, or are incompetent at). It works for the trainers.

Dan May 29, 2011 at 10:58 am

Ford did it 6 or 8 yrs ago. Worked for my family member, but I don’t know how many of the 30thousand stayed with the retraining and/or found success.

Scott G May 28, 2011 at 2:59 pm

Excellent letter Don, however I think you left one or two points out. For example:

“If the value to workers of this fringe benefit (for that’s just what it is) were greater than its cost, it would be supplied privately on the market.”

It already is supplied by the privately and publicly on the market.

People who lose their job often pay for THEIR OWN retraining! This can happen by taking lower pay at a future job, taking classes at a school, and taking time off work to learn new skills. What could be more fun that a career change into a new field?

Also, the public already pays the unemployed how many weeks to retrain themselves on any topic their heart desires, while reading Cafe Hayek and searching for a job. will.

I would suggest another angle and point out that what we have now is better for workers because it gives them the freedom to train themselves rather than requiring them to show up for some silly government mandated re-training class which will likely start of with a DMV-like queue, forms to fills out and NO phone number to find out more about the program. Unemployment insurance provides more freedom to individuals to TAILOR their re-training. This new program will make them less free and less-well off.

Also, how about telling the politicians that this program insults the dignity of individuals to re-train ourselves? “I can re-train myself, thank you.”

(I’m trying to develop a new bourgeoisie market rhetoric. Got fight back these politicians with more rhetoric).

Mao_Dung May 28, 2011 at 8:56 pm

“What could be more fun that a career change into a new field?”

Dumb. You’re saying getting laid off is fun. What a troll.

Scott G May 29, 2011 at 11:01 am

Yeah, you’re right. It’s not going to be fun for some people to change careers. On the other hand, it might be sort of fun for others. I guess I’m more of an adventurous type and like learning new stuff. I think a career change would be fun, but then again maybe I’m not being realistic.

My comment above was experimental. I was trying to counter political rhetoric with spin, and I admit this statement would likely be a flop. I’m an engineer, not a politician.

Thanks for pointing this out to me.

By the way, my invitation for a weekend of fun, water skiing in Lake Tahoe, and surfing in Santa Cruz is still open to you. All expenses paid for vacation. What could be more fun? I’m hoping you won’t call me a troll anymore though.

Scott G May 29, 2011 at 11:28 am

Mao_Dung,

Have you read Dr. Boudreaux’s latest column, “Habit of the Lip,” in the Pittsburgh Tribune Review?

http://www.pittsburghlive.com/x/pittsburghtrib/opinion/columnists/boudreaux/s_736343.html

It’s pretty good. I especially like these two paragraphs:

“We talk admiringly about businesspeople, rather than disparagingly, as was the practice among our ancestors and as most of us today speak of porn actors or pimps.

Even if, by some calculus, porn acting and pimping were proven to be valuable activities to society at large, self-respecting people would avoid those professions. Who wants to be spoken of disparagingly? And self-respecting people certainly would not encourage their children to pursue those livelihoods. Who wants their children to be burdened with such shame?”

Notice he uses the word shame. That’s really important.

For example, one might feel ashamed to be called or thought of as a troll – just like you did to me. I like hanging out here at Cafe Hayek and I wish you would respect that. Also, please don’t call me or my comments dumb. That hurts my feelings too. The water skiing isn’t going to be much fun if you’re calling me or my ideas dumb.

Mao_Dung May 29, 2011 at 1:16 pm

My late father used to say that you should never disparage a worker, even a ditch digger. Boudreaux is the shameful one to suggest that someone who works as a porn actor is worthy of scorn or shame. In a very unlibertarian way, he wants to impose his Victorian sense of morality on others. If a person feels obliged for economic, or other reasons, to do something against their own morals, then that IS a problem.

If the pay were (much?) better, I’d think that many more people would act in a porn film. I suppose he feels the same way about the Playboy playmate posing for the monthly centerfold. I’d find it hard to believe he never looked at one of those.

I don’t feel like leaving a particularly long comment now. I will just say that I don’t like calling people dumb or trolls, except in retaliation, or if my mood goes sour. That may be childish of me. I’m not perfect. If you are an engineer, then clearly you are not dumb, although a particular comment or essay may be dumb including my own.

I can tell that you are a generous person who wants others to enjoy life regardless of whether they agree with you politically in a general way. That make you a better person than most of the rude, opinionated egotists that slosh around here regularly.

Scott G May 29, 2011 at 4:04 pm

Mao_Dung,

You’ve made some solid arguments today and you seem like you’re in a pretty good mood. You’re right, if the pay were high enough many more people would act in porn films. I’d have to think carefully what the number would be for me; maybe 2 million after taxes if it were safe.

Porn actors do provide a valuable service. I once heard that 50% of the customers at Holiday Inn watch porn. I’m thinking that most of these are men who are on business travel.

It doesn’t seem like Boudreaux is himself shaming porn actors and pimps in his column (he doesn’t often share his more personal and radical views at this site), but I’m pretty sure he wouldn’t want his son to become a porn star or a pimp. I believe he’s saying that many people feel that porn acting and pimping are less dignified careers.

I’m glad you and I have found something we agree on. In my ideal voluntarist paradise there would be a place for you to freely live your life as you see fit, a place for porn actors and pimps to freely live their lives and a place for me to freely live mine.

Hope your upbeat mood continues.

Sam Grove May 29, 2011 at 5:47 pm

Even if, by some calculus, porn acting and pimping were proven to be valuable activities to society at large,

We don’t need calculus. The market for porn exists, therefore is of value to someone.

vidyohs May 29, 2011 at 7:39 pm

“Value to someone”!

Holy Toledo, I see an opening for a “Debbie does economics” rap video!

Investors, please line up to the right.

Scott G May 29, 2011 at 10:24 pm

Great point Sam!

vidyohs, that cracks me up!

Scott G May 28, 2011 at 3:04 pm

Also, my open letter to David Henderson regarding the teaching of economics, John Papola style provides a theoretical model for teaching and re-training in other fields. The gist is that part-time school is much less costly that it was in the past.

http://www.studiohayek.com/2011/05/open-letter-to-david-henderson.html

vikingvista May 28, 2011 at 3:06 pm

Employers do better. Instead of expending part of their employees money on retraining programs that the workers may or may not want, they let employees keep that money and choose to purchase their own retraining if they should so choose. That an employee chooses to spend all his income on consumer goods rather than saving for a possible future education, is his business.

SheetWise May 29, 2011 at 1:41 am

Certainly, we all make compromises.

What you’re suggesting is that everyone is free to make their own compromises, and structure their lives in such a way that they believe will effect their safety and happiness. How quaint.

The opposing argument is that we need to make collective compromises — we must all compromise the same thing. This “collective” contract makes it easier to broker, legislate, and bestow “benefits” … how convenient.

vikingvista May 29, 2011 at 4:44 am

That’s right. Because what people really want, is to have someone else make all of their decisions for them.

a_murricun May 28, 2011 at 5:08 pm

This “re-training” thing irritates me.

If American workers have the skills to produce the goods involved, but somebody in a loincloth on the far side of the world can produce the goods to the same quality cheaply, then maybe, just maybe, the issue is one of skills and training.

Then we come to the matter of computer engineers and programmers – H-1B visas and the like. The usual case is that skilled Americans are replaced (Oh, no, not directly in so many words, but de facto nonetheless) with foreigners of lesser skills. So we can infer that a) Americans are overskilled and underutilized, or b) skills don’t matter as much as “cheap” does.

It is truly an insult to an American graduate engineer will tons of current experience to be told that they need “re-training”.

I’ll tell you who needs re-training. It’s the lawyers, pols and beancounters who badmouth American professionals.

Captain Profit May 29, 2011 at 1:18 pm

> So we can infer that a) Americans are overskilled and
> underutilized, or b) skills don’t matter as much as “cheap”

Or we can skip the melodrama and conclude that labor of all types is subject to the same bang/buck equation as every other commodity.

DF Sayers May 28, 2011 at 8:23 pm

“If the value to workers of this fringe benefit (for that’s just what it is) were greater than its cost, it would be supplied privately on the market.”

There are plenty of reasons this may not be the case. If its a niche demand (let’s be generous and assume 25% of employees would trade wages to this end), the value of creating a program for this training are doubtful.

“employers competing for workers would be obliged to offer it.”

Is this really the case? It seems like workers are far more interested in other benefits – such as healthcare and retirement funds – which are being slashed in many industries, or simply aren’t there yet. Why should we expect training to suddenly supersede these other benefits? And would you apply the same logic to these benefits – that is, that where healthcare is being discontinued, the workers didn’t want healthcare? The only place where this seems like a reasonable assumption are high-pay, in-high-demand jobs, and unionized shops. With unemployment the way it is, the “competition for labor” argument is looking weaker all the time – seems like workers would much sooner keep quiet and lose benefits rather than negotiate to pay more for their benefits, simply because they wouldn’t want to “rock the boat” lest they be laid off next.

“But we see very few employers offering worker-retraining fringes – strong evidence that the value of these benefits to workers falls short of the cost of supplying them. As such, it is unjust to force taxpayers to pay for a benefit for these workers that these workers themselves, through their own actions on the market, reveal is not worth its cost.”

Well, you argued that Wal-Mart should only have to respond to consumer demand. Are you using a different model here?

Besides – the prevalence of unpaid internships, and the rarity of paid apprenticeships, seems to expose a lot more about this market: namely, that (in internships) workers have to “pay” 100% of their wages for x amount of time just to receive the training. I’m sure some markets are different, but in many cases, the labor is just as productive (perhaps sometimes more productive, where interns aren’t yet burnt out) than fully-skilled laborers who are receiving wages. Maybe firms simply know that they can get free labor in the form of unpaid internships, rather than set up an alternate system like the one mentioned above.

WhiskeyJim May 29, 2011 at 12:01 am

See my post above regarding schools. Since retraining results are dubious at best, I believe it is the schools providing training that could be more effective.

We hire who we know, and sometimes by referral of those we trust.

IMHO, more of the same publically funded schooling is not the answer.

Gil May 28, 2011 at 9:50 pm

I don’t think it justifies the policy, but I think that the argument is not that the benefit to the workers exceeds the cost, but that the benefit to all of us, collectively, of having more trade without more unemployment exceeds the costs.

Again, I don’t think this justifies the policy (I think saving to be more robust to career challenges is the resposibility of the individual and is not a proper government function); but it’s not refuted by the lack of a retraining fringe benefit.

nailheadtom May 28, 2011 at 10:07 pm

Sadly, Americans with lots of experience and expertise become redundant by failing to garner as many votes as their opposition in elections at various levels across the country. However, having received training in lobbying while in government service, they are ready and able to move on to that new career and in the unlikely event that their services aren’t wanted in that industry, there is always room for them on government commissions and investigative bodies. Still, it’s just not the same for folks like Tom Daschel, Blanche Lincoln and Russ Feingold.

WhiskeyJim May 28, 2011 at 11:54 pm

There is an argument to be made that as workplaces change ever more rapidly and people change jobs more frequently, employers may begin using their connections to help laid off or misfit workers find new jobs.

The reason they would do that would be because they see former workers as potential ‘alumni’ or stewards or representatives of the firm and its principles. Like customers, the best past employee is a happy one, and their number is increasing.

I still insist folks of any age can learn new trades. It is connections and trust that get jobs more than knowledge.

kyle8 May 29, 2011 at 8:59 am

Here is where I have to disagree Dr. Not on the merits of your argument, but on practical politics. Such retraining programs may have a small efficacy, are fairly inexpensive, and are a definite value when trying to promote free trade to an often ignorant, suspicious, and lied to public.

In other words, doing away with such small programs for the sake of a pure economic efficiency may be penny wise and pound foolish.

We are a far, far, ways away from having any sort of libertarian, free market zeitgeist in this country, so we have to advance by fits and starts. If this allows us to sell fewer trade restrictions then it is fairly innocuous.

Don Boudreaux May 29, 2011 at 9:24 am

True enough; I agree with you. But my job isn’t to craft political strategy; it is to do economics and to teach it as best as I can.

kyle8 May 29, 2011 at 1:44 pm

Noted

DG Lesvic May 29, 2011 at 1:35 pm

By the way, congratulations to Dallas Weaver for getting his response to Neal Gabler published in the LA Times. Don and I (and Mises) didn’t make the cut, but we were ably represented by Dallas, one of our best.

SheetWise May 29, 2011 at 2:34 pm

The greatest training program we could implement would be simply repealing all minimum wage laws. In the absence of minimum wage laws, employers and employees could freely sample new opportunities instead of pretending that the workplace is going to return to some past perfect equilibrium.

vikingvista May 29, 2011 at 4:56 pm

A most excellent point.

Nemoknada May 29, 2011 at 7:18 pm

” If the value to workers of this fringe benefit (for that’s just what it is) were greater than its cost, it would be supplied privately on the market. ”

You know what would be helpful? A light on your car that you could light to indicate that you are having trouble and need assistance. Like tying a handkerchief to the radio antenna, back when cars had radio antennas and people had handkerchiefs. I can’t imagine a driver who wouldn’t appreciate such a light or wouldn’t be willing to pay the very small additional cost it would impose per vehicle. Yet, somehow, there is no such light on any car. We have flashers, but they indicate that you are stopped, not that you need help.

You know what else would be helpful? A company fringe benefit that provides retraining if you lose your job because the company’s business is failing. Yet, for some reason, such a benefit does not exist.

Now, far be it for me to try to divine what’s in the mind of corporate managers, but it could be that the semiotics of providing customers or employees with something they can use when you fail outweighs any consideration of the value of the benefit to the recipient.

In the case of retraining benefits, the value that is lost when employees are not retrained lies in their not quickly becoming customers of some OTHER business (because they have no money to shop there). It also lies in the price increases that must be imposed by the companies for which they their retraining would qualify them to work, increases they must impose because of a shortage of qualified workers. So not retraining workers costs us ALL money as consumers. Could there be a better reason for us all to fund the retraining effort?

And if you are suggesting that there be something like commercial “retraining insurance,” a quick look at the risk profile will make it clear that the insurable events are not randomly enough distributed to make an actuarial pricing mechanism possible. Public funding is the only way to provide this mutually beneficial service.

vidyohs May 29, 2011 at 8:11 pm

Nemoknada, I don’t know about having a device on your auto to signal other drivers that you need help. Gosh, we have On-Star, Cell Phones, and if nothing else, how about stepping out of your auto and waving your hands, pray publicly, keep a big magic marker in your auto along with some stiff paper and write on it, “Need Help”, so you can hold it up.

Waiting for others to come up with technology that already exists seems a little luxurious, and forgetful of simple manual procedures to attract attention.

But another thing bothers me about the tone of your comment. I would ask the question of “Why do you think companies or corporations should be responsible for things they never prompted in the first place, such as training?

For instance, let’s look at a large law firm in Houston. I can’t think of a single one of them that offers OJT on the basics of the practice of law to newly hired graduates law schools, BAR qualified, and ready to go to work.

The people that go to law school are receiving their training in a field that they individually and personally chose. No one makes them go to law school and only maybe a rare few would be offered a position prior to even going to law school (who knows how this part of the Old Boy Network works, I don’t as I am not part of it).

Not having enticed an individual into going to law school, taking the BAR exam, why would a law firm be somehow committed to retraining a redundant lawyer (oxymoron I know) when they let him go because people are no longer being persuaded to sue at the drop of a hat…….which they carry to drop themselves.

I am going to be 70 in a couple of months, done a whole plethora of things, careers, through the scope of my life, and not once did I expect, seek, or was offered “retraining” at the expense of someone else. Every career change I made, retraining was either unnecessary to an intelligent person, or it was part of the bargain of employment (OJT), or part of the franchise contract.

This bullshit of providing public funds to retrain an auto assembly line worker when he becomes redundant is a sign of a nation going to the dogs. It is the socialist, looney left, mentality that assumes that you and I are responsible to fix the life of some one we don’t even know and who should have been laying the grounds for his own “fixing”, and not whining for a handout.

I can see it now, in the mid 1980s, the carburetor assembly guy is laid off because carburetors are no longer needed, so some wise bureaucrat dictates that he should receive retraining in the production of 33RPM LP music albums.

That would be par for a government program.

Statesman May 29, 2011 at 8:57 pm

Repeal all minimum wage laws and all trade agreements. Allow true free trade. Repeal all tariffs.

kyle8 May 30, 2011 at 10:29 am

What? no government micro-management of our lives! That’s just crazy talk!

Gil May 30, 2011 at 10:51 am

In other words, the West has hit a barrier – there’s nowhere else to go but down. Labour is cheaper in other countries and therre’s no magic emerging industry to soak up the unemployed workers? Then Western labour has to become way cheaper to bring the work back here.

Dan May 30, 2011 at 6:52 pm

Most companies have no problem paying compensation to employees. It’s all of the damn govt costs that are killin them.

Nemoknada May 29, 2011 at 9:31 pm

“Why do you think companies or corporations should be responsible for things they never prompted in the first place, such as training?”

I don’t. Retraining as a fringe benefit was DB’s idea. I think that’s wacko.

Nor do I think that the public should be “responsible” for retraining. But the issue has nothing to do with responsibility. It’s about creating a workforce that will pay more in taxes and enable producers to charge me less for products. That’s in my economic self-interest, so I’m prepared to chip in. Not every public expenditure is an exercise in pity, misplaced or otherwise.

Meanwhile, paying for retraining and telling people what to retrain for are two different things. A reasonable approach is a subsidy that HELP people retrain for whatever they decide the market is demanding. I’m sorry if that’s not statist enough to support your rant, but why should I be responsible for providing actual reasons for you to kvetch?

vidyohs May 30, 2011 at 9:53 am

I see the problem, we don’t read and write in the same language.

“I don’t. Retraining as a fringe benefit was DB’s idea. I think that’s wacko. “

No it was not DB’s idea. There is no way you can read his post and come to the conclusion that the TAAP is/was DB’s idea. He was merely responding to the insanity (my word) of the TAAP.

“Nor do I think that the public should be “responsible” for retraining. But the issue has nothing to do with responsibility. It’s about creating a workforce that will pay more in taxes and enable producers to charge me less for products. That’s in my economic self-interest, so I’m prepared to chip in. Not every public expenditure is an exercise in pity, misplaced or otherwise. “

The reason people become redundant, laid off, is because they have actually become a drag on a company’s productivity. The company has found a way to do the same, or more, with less people. In case you haven’t noticed “the next new thing” hasn’t come along yet, so people looking to retrain into a field new to them should have anticipated today and laid money aside, or perhaps been developing skills perpendicular to their present wage earning skills. Unfortunately, the way the world of commerce is shaking out it is evident that there are, and will be in increasing numbers, people who will never fined employment again. (I am not saying they can never be productive, but it will most likely be a their own individual start-up business, if at all. This is a fact in MHO, and one we need to face.

“Meanwhile, paying for retraining and telling people what to retrain for are two different things. A reasonable approach is a subsidy that HELP people retrain for whatever they decide the market is demanding. I’m sorry if that’s not statist enough to support your rant, but why should I be responsible for providing actual reasons for you to kvetch?”

I had a statist rant? Funny, I thought I was solidly anti-statist. There is that different language thing again.

Unfortunately (again) citizens find that when you take government money, you also take government rules along with them. So, for anyone to apply for a retraining fund and think that they will be able to just choose freely what to apply themselves too, is most likely unrealistic. But, who am I to judge, perhaps a fifty year old auto assembly line worker could apply himself to earning a medical degree and become a doctor; or perhaps learn to do nails and go into competition with the millions of Vietnamese who already skilled and so prolific in numbers that even they are finding themselves redundant in economic downturns.

A nation that continually finds ways to produce more with less and less actual human input is likely to find even the solid four fields (Medicine, Entertainment, Communications, and Food) so overstaffed that no new entries can be made until someone else dies or retires.

So what is the next “new thing” that may or may not happen and how successful will people be in predicting?

Frankly, though I hate to see my own prediction come true, I see the welfare state becoming larger no matter how much I dread it.

kyle8 May 30, 2011 at 10:34 am

I am not sure I agree with you. Experience shows that even in our modern economy, even with a lot of job obsolesce, and even in areas with a large influx of new labor, unemployment is very low during good economic conditions.

I am thinking of my state Texas, which boomed so much during the 2000′s that even the huge influx of Mexican workers was not sufficient. Even now while the rest of the country suffers, we have a relatively light unemployment burden.

My guess is that under favorable economic conditions people who leave outdated jobs and industries usually find even better employment elsewhere. But in poor economic conditions all problems are magnified.

vidyohs May 30, 2011 at 11:59 am

I didn’t discount the possibility of “the next new thing” being such that it absorbs all the jobless; however, I leery that it is going to happen that way. Why? Because that flies in the face of the facts that each day sees mankind able to do more with less human involvement.

“My guess is that under favorable economic conditions people who leave outdated jobs and industries usually find even better employment elsewhere. “

Doing what? As lawyers are learning here, there is only so much legal work to share around and when the sharing is done, guess what, there are still lawyers with no work. Same with restaurants, only so many of them will succeed and become profitable – most close within the year. Same with entertainment, only so many people can do it successfully and the rest you wouldn’t walk across the street to see or hear for free. Same with communications, the whole field becomes less and less needful of human involvement, and there can only be a market for just so many linemen, installers, or salespersons. Maybe the medical field will absorb them: In this one field it is hard to see how the human element can be reduced very far, if nothing else the field of nursing and nurses aids will likely grow according to the population.

What “next new thing” is likely to require more human involvement?

BTW, I also live in Texas, just south of Houston. I am very familiar with the economic conditions statewide. Being hit less than other areas of the nation does not indicate that we haven’t been hit as well. The housing industry here in particular is way down for new construction. One of my brothers is a framing contractor, and half my friends were in home building; and all are hurting and doing fighting over the repair and remodeling work that can be found.

Meanwhile the population expands and the need for workers retracts. Welfare, war, mass die offs, what will the future hold regarding that?

kyle8 May 30, 2011 at 10:08 pm

Just because you or I cannot foresee the next thing, doesn’t mean it isn’t coming.

I am not a Pollyanna, I realize that the huge welfare state we have created may crush us for decades in debt.

But on the other hand, more efficiency, more information, more idle time, these things are the building blocks of innovation, new businesses, and new ways of solving old problems.

vidyohs May 30, 2011 at 11:46 am

“I’m sorry if that’s not statist enough to support your rant”

Yes, you were not accusing me of having a statist rant.

Captain Profit May 31, 2011 at 2:37 am

Regarding Dave Rose’s comment, those who would support programs like the retraining mandate would simply point to its absence as evidence of a market failure. Their fatal conceit is the belief that when many individuals acting freely fail to value a thing as much as they do, it’s all those individuals who are wrong.

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