Comments on: Mysteries of the middle class http://blogs.reuters.com/chrystia-freeland/2013/06/28/mysteries-of-the-middle-class/ Sun, 28 Jul 2013 14:34:09 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: dbrown101 http://blogs.reuters.com/chrystia-freeland/2013/06/28/mysteries-of-the-middle-class/#comment-12879 Wed, 03 Jul 2013 16:23:34 +0000 http://blogs.reuters.com/chrystia-freeland/?p=1994#comment-12879 A single answer, labor market, only applies if all the other factors are eliminated. As I look around the largest factor is the growing service sector, including government and education, from which no productivity is evident. I have a large number of neighbours who are school teachers and get to see them leaving late, get home early, take summers off, endless teacher development days, the stress of rigorous courses such as Canoe Camping and their retirement in their early fifties. With all due respect to Messrs Pessoa and Van Reenen but the fact that global labor markets are allowing us to import cheap socks from China doesn’t seem to have the slightest impact on these individuals productivity.

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By: Belisarius1 http://blogs.reuters.com/chrystia-freeland/2013/06/28/mysteries-of-the-middle-class/#comment-12875 Tue, 02 Jul 2013 17:26:09 +0000 http://blogs.reuters.com/chrystia-freeland/?p=1994#comment-12875 “Closing the borders” certainly is not the answer. However, joining the first-world economies (i.e. the NATO region + the wealthy Asian nations, such as Japan and S. Korea) into a single free-trade zone, and controlling imports into that zone, would certainly help. This would reverse some of the most pernicious effects of globalization, without throwing out the baby with the bathwater. It would engender an international labour market that is significantly more “fair” (as productivity, efficiency and quality, rather than a low cost of living, would rightly become the primary competitive assets). It would also reduce over-utilization of fossil fuels in frivolously shipping manufactured goods across the globe when they could just as easily have been produced near where they will be sold, while still allowing for a trade in raw materials that are abundant in some regions and scarce in others.

“Smashing the machines” is equally simplistic and misguided. Mechanization/automation has the potential to significantly enrich all of our lives (e.g. by offering more leisure time), if we could only find the political will to distribute its fruits more intelligently. Mandating more vacation time and shorter hours in all affected industries would be a move in the right direction – of course, this kind of thing would have to be done jointly by all advanced countries so as to avoid a flight of investment and jobs from any one economy.

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By: Belisarius1 http://blogs.reuters.com/chrystia-freeland/2013/06/28/mysteries-of-the-middle-class/#comment-12873 Tue, 02 Jul 2013 14:02:33 +0000 http://blogs.reuters.com/chrystia-freeland/?p=1994#comment-12873 “Closing the borders” as such certainly is not the answer – but perhaps joining all of the first-world economies (i.e. the NATO region + the wealthy Asian nations such as Japan and S. Korea) into a single free trade zone, and controlling imports into that zone *is* part of the answer. This may allow us to reverse some of the more pernicious effects of no-holds-barred globalization without throwing the baby out with the bathwater. It would engender an internationalized labor market that is more “fair” (i.e. where skill, efficiency and quality of work, rather than a low cost of living, are one’s primary competitive assets), and mitigate the overuse of fuel in frivolously shipping items across the globe that could just as easily be procured or manufactured next-door to where they are sold.

Smashing the machines is similarly simplistic and misguided – mechanization/automation has the potential to enrich all of our lives by allowing more leisure time, if we simply organized the distribution of its benefits more intelligently. Let’s consider mandating more vacation time and shorter workdays across all affected industries.

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By: thesafesrufer http://blogs.reuters.com/chrystia-freeland/2013/06/28/mysteries-of-the-middle-class/#comment-12871 Tue, 02 Jul 2013 01:17:33 +0000 http://blogs.reuters.com/chrystia-freeland/?p=1994#comment-12871 We should be worried about the detrimental effects of Big Government’s influence on the decay of society.

The middle class is fine. The problem is that Big Government’s destruction of the education system prevents people from acquiring the skills to join the middle class.
The problem is that Big Government destroys the dignity and pride of employment by creating inescapable dependency in government programs. The problem is that Big Government prevents people who live irresponsibly from suffering the consequences of their actions by making endless excuses and redistributing precious tax dollars to them.

The Welfare States and its disastrous effeects are preventing people from entering the middle class and nothing else.

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By: michaelwind http://blogs.reuters.com/chrystia-freeland/2013/06/28/mysteries-of-the-middle-class/#comment-12870 Mon, 01 Jul 2013 23:20:55 +0000 http://blogs.reuters.com/chrystia-freeland/?p=1994#comment-12870 chrystia freeland you are a five start journalist,and your work is perhaps the best that i have read,on todays agenda,i thank you and the best wishes to you… ps.i only read top 30 papers in the world.

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By: Bob9999 http://blogs.reuters.com/chrystia-freeland/2013/06/28/mysteries-of-the-middle-class/#comment-12869 Mon, 01 Jul 2013 20:06:49 +0000 http://blogs.reuters.com/chrystia-freeland/?p=1994#comment-12869 Another way to put it is that one part of the flexible labor market issue that has been completely ignored is the question of externalities. Company A may be able to increase its profits by moving production to China, but, in doing so, Company A imposes costs of others in the form of lost wages and lost spending by wage earners. It may be that, if transaction costs were zero, a way could have been found to pay Company A not to move production to China; however, transaction costs are not zero, so that didn’t happen. One transaction cost that might be addressed — and this is another way of looking at the point of the article — is the cost of overcoming the dogma that moving production to a low labor cost area is always wealth maximizing. That appears not to be the case. Thus, we know that effects of labor market flexibility may be negative, but we found ourselves in the position of the economist who lies in bed awake at night wondering if what works in practice can be made to work in theory.

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By: ThomasPCole http://blogs.reuters.com/chrystia-freeland/2013/06/28/mysteries-of-the-middle-class/#comment-12868 Mon, 01 Jul 2013 18:17:44 +0000 http://blogs.reuters.com/chrystia-freeland/?p=1994#comment-12868 If British de-unionization means a fall in productivity, why hasn’t the United States suffered a similar fall in productivity besides having even lower unionization rates?

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By: sandrasl http://blogs.reuters.com/chrystia-freeland/2013/06/28/mysteries-of-the-middle-class/#comment-12867 Mon, 01 Jul 2013 04:40:37 +0000 http://blogs.reuters.com/chrystia-freeland/?p=1994#comment-12867 Good news to read.

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By: wildcat27 http://blogs.reuters.com/chrystia-freeland/2013/06/28/mysteries-of-the-middle-class/#comment-12866 Mon, 01 Jul 2013 00:42:48 +0000 http://blogs.reuters.com/chrystia-freeland/?p=1994#comment-12866 Huh, economists are finally starting to see that globalization is not good for the ordinary worker. Any blue collar worker ten years ago could have told them that while they were watching factory doors close just as walmart so happened to be flooding the country with cheap Asian imports. It always boggles my mind how smart people can use data to blind them to simple and obvious truths! I hope it doesn’t take another decade for our idiot political classes to drop the debate over cyclical measures of economic relief and discuss structural reforms to the labor market.

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By: AdamSmith http://blogs.reuters.com/chrystia-freeland/2013/06/28/mysteries-of-the-middle-class/#comment-12865 Sun, 30 Jun 2013 20:12:25 +0000 http://blogs.reuters.com/chrystia-freeland/?p=1994#comment-12865 When every item on every store shelf in Europe says “Made in Asia” how can Europe expect to keep its citizens employed?

A protective tariff is the only way for the west to put its hundreds of millions of citizens to useful work.

Same for the USA.

The dogma — the catechism not to be questioned by the faithful — is that protective tariffs are evil. What nonsense.

Alexander Hamilton designed the American system of protective tariffs that were in effect all the way from George Washington’s term until President Bill Clinton signed NAFTA.

Those 200 years, under the protective tariff of Alexander Hamilton and George Washington, saw America rise to become the mightiest economic power in all history.

There is no other way for Europe to keep its people employed than a 20% protective tariff on all manufactured goods.

Anything else will lead to social disaster for the middle class. The goods on the shelves in European stores must say Made in Europe.

There is no other way.

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