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mechagodzilla | 10 months ago

So applying this to China and the USA - the USA has a median household income of ~$80k, and China, in terms of purchasing power parity, has a median household income of $32k. China has a workforce of ~775M people vs 163M people in the USA. The USA has ~7M unemployed people. For the USA to stop importing goods from China, we would need to 1) stop consuming those goods altogether (even if they're intermediate goods that go into things we do manufacture), or 2) employ US workers to make those goods instead of whatever they're currently doing (either employed or unemployed).

Employed Americans largely earn a lot more than employed chinese people, and there just aren't very many unemployed Americans. Based on the value of imports to the US from China vs Chinese GDP($440B vs $17.8T), we import about 2.5% of their output, or the equivalent of ~20M people's output if we naively scale. I don't think there is any way around the fact that significantly reducing imports from other countries means we significantly reduce our consumption in absolute terms (i.e. we have a poorer standard of living), just out of spite for other countries.

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AnthonyMouse|10 months ago

> the equivalent of ~20M people's output if we naively scale

Or about 12% of the US labor force. Meanwhile the 12th percentile US income is ~$22,000, i.e. less than the $32k median in China, and half of the jobs there are above that median.

Obviously these numbers are all useless napkin math and none of it really works like that, but the premise isn't inherently absurd. If China is subsidizing manufacturing in order to capture manufacturing jobs and those jobs pay more than what many in the lowest quartile of the US are currently making, there are people who could be made better off by having those jobs back, and they'd still only be paid about what we're currently paying to China.

And this before considering the general arguments about advantages to proximity of manufacturing, e.g. being able to talk to the people in the factory in your timezone in your language assists in product development so the location of the factory has an easier time developing new products. Which allows not just the manufacturing jobs but the whole rest of the company to be there, instead of those jobs starting to get eroded going forward.

SideQuark|10 months ago

The US manufactures more than ever, and the % of GDP in manufacturing has been flat for 70+ years now. The jobs didn’t leave, so they’re never coming back. They got automated. Just like we need vastly less farmers than in 1900 to farm more than ever, we need vastly manufacturing jobs to manufacture more than ever.

dullcrisp|10 months ago

Back of the napkin, we could spend 3% of the federal budget to pay each of those 20 million people an extra $10k a year, and avoid destroying some 10% of the global economy. If we wanted to do that, I guess.

aj7|10 months ago

No one will hire the people you are describing. We had 3.5% unemployment, before Trump began destroying the world economy. People in most fast food restaurants are making $30k. In fact the “entry level workers” and “illegals” were relatively happy. It’s the middle class workers who vary between desperate and enraged, because $45-$65k does not approximate the expectations raised in their childhood. What I’m saying is vastly oversimplified, but you get my drift. There is tremendous housing shortage, due to government policies that surreptitiously favored rising prices for incumbent homeowners, and corporate speculators. Healthcare is apportioned according to education level. Food is remarkably expensive.

supportengineer|10 months ago

It should be easy to reduce our consumption, the average American is consuming an enormous amount of useless junk.