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Comment by lordnacho | Hacker News Reader

Jobs that can't be exported are safe from movement. Hairdressing and cleaning for instance. That doesn't mean the person doing it can't be an immigrant, though, so perhaps by restricting immigration you reduce competition for it.

Jobs that compete with similar jobs in other countries can potentially benefit from trade barriers. Make foreign cars expensive and there will be substitution with local cars. Long term it's worth thinking about whether there's a dependency created on that tariff.

Higher minimum wage has been mentioned. In so far as demand from the firms is inelastic you improve the lot of the minimum wage workers. Question is whether it is. Moving from 7 to 12 sounds like a big jump, and will be very dependent on what part of the country it is.

All these things depend on econometric measurement whose results I haven't come across.

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> Make foreign cars expensive and there will be substitution with local cars.

This is quite true, but the problem is those cars will be a lot more expensive. That means a small number of people employed making the cars benefit, while the vastly larger number of people buying them lose out in higher costs. This never works out to the benefit of the country as a whole and low wage earners are the ones that lose out the most. For every car those workers make, they buy dozens of other goods which, if more expensive due to trade barriers, more than soak up any increased wages they might have.

Actually it's worse than that, because often many of those workers could have been gainfully employed is other industries. Only a small minority of our theoretical car workers would actually have been unemployed in a globalized world.

It's the same with Brexit. The vote was driven by working class people on low incomes, but the impact of inflation from the fall of the pound and further economic problems when we do actually leave the EU will predominantly fall on them. Middle class people like me have enough marginal income to absorb the hit. People on low income don't.

The incremental improvements in averages aren't what's driving people to vote, though. We need to look hard at the situation in the rust belt, and figure out how we pull these people up, who have consistently lost in the game of averages and aggregation.

We currently have crazy import tariffs on Chinese made automobile tires. The result has been 1,200 jobs saved and consumers paid an extra billion dollars for tires.

There is no free lunch with trade.

https://www.google.com/amp/www.latimes.com/business/la-fi-ta...

Free trade is the free lunch.

And those 1,200 jobs are just the visible ones. The extra billion dollars probably came with further negative effects somewhere else.

(German coal mining was (or still is?) in similar territory: the subsidy necessary to keep a few mining jobs around was way higher than what those guys got paid.)

This fits into a general patterns of political problems, where small groups benefit greatly at the expense of much larger groups who all suffer very slightly. It's like the plot in Superman to steal fraction of a penny from everyone.

If you can negotiate a tax-break for your industry then it'll give you millions, but millions or even billions divided up amongst the whole nation is hard to spot for an individual.

>That means a small number of people employed making the cars benefit

But those small number of people who benefit plus the whole of people in their supply chain, people that also drive demand for whatever the other people paying more for cars are offering.

The point I'm trying to make is that international trade doesn't give any multiplying magic. Simply separate the states in your country and whatever trade between them will become "international". It would be the same trade as before with the only difference that now you don't get to tax whoever is benefiting the most, one gets to play tricks with the currency, etc. etc.

American cars are generally less expensive than foreign cars, not more. German cars are generally much more expensive than comparable American cars, and Japanese cars are usually a bit more expensive too. Both these nations have tried reducing costs by moving some of their production to places like Thailand, Mexico, and the USA (!). Labor rates in Germany and Japan are probably the highest in the world.

Making foreign cars more expensive will only make American cars a bit more expensive, due to higher demand, but in general will just raise prices for everyone.

People don't buy foreign cars these days because of cost. They buy them because of perceived higher quality, styling/performance preferences, brand cachet, etc. If they start selling Chinese-made cars here, maybe that'll change, but for now, saving money is not the reason you buy a foreign car. If you want a cheap-ass car, you buy something like a Chevy Spark or Ford Fiesta. (Worse, those cars might be made in Mexico anyway. I'm guessing the cheapest American-made car is probably a Honda Fit or some Toyota maybe.)

Re higher minimum wage. (using real numbers here, for the Netherlands)

For a support job, I want to employ a uneducated person. Just answering calls and clicking some buttons. (Could also be a student, no need for any experience etc) Costs me maybe 10 euros per hour. Why a student? Is relatively cheap and it gets the job done nicely. Now, if the minimum wage would go to 14 or more, what would happen? Would I still employ this student for the same task? Maybe (probably?) not. Maybe I will instead get a 20 euro worker with an education that can not only do support but also some development and can bring knowledge into the company.

Saying that increasing minimum wage solves problems directly is, I think, wrong, because everything might shift.

My experience is otherwise. I remember entering the job market thinking that like my parents had experienced you'd get some low/no-skill entry level job somewhere and work your way 'from the mail room' up a position of actual skill. That it was possible to 'get your foot in the door' and then get a better job based on being a known good worker and then showing you also had the skills to do more.

That doesn't work because companies outsource entire stacks of tasks. There isn't an "entry level" job anymore. There's no path inside when everyone wants experienced workers.

So what would happen is probably a 'Google customer service' level of customer service. Simply much less with the same people they already want.

Or they change the "entry level" jobs to "intern" or "recent grad" jobs. Still no experience needed, but if you don't fit the right demographic you're out of luck.

> Make foreign cars expensive and there will be substitution with local cars.

Many "foreign" cars are built in the US. Some even more so than the American brands. "The Toyota Camry is, apparently, the most American vehicle on sale in the U.S." http://fortune.com/2015/06/29/cars-made-in-america/

> Jobs that compete with similar jobs in other countries can potentially benefit from trade barriers. Make foreign cars expensive and there will be substitution with local cars. Long term it's worth thinking about whether there's a dependency created on that tariff.

Alas, that strategy of forced import substitution didn't work for India or Brazil, did it? (Or other poor countries in the 20th century?)

https://en.wikipedia.org/wiki/Import_substitution_industrial...

Sure, with fewer immigrants there is less competition for hairdresser jobs.... but there is also less demand for haircuts. Immigrants aren't just competition for jobs, they are also new customers.

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