Read through this post before you start. There are three parts to this reflection. You must respond to A, and then pick B or C for the second response in your blog.
Look up the employment trends in manufacturing. (Try the Bureau of Labor Statistics). Note i.) when did manufacturing employment reach its peak, and, ii.) when did manufacturing output peak.
Remember to label your blog post – Reflection Chapter 9; and cut and paste the question your are answering.
A) What do you think would explain why manufacturing employment is declining while output increases?
Pick B or C to answer in your blog post:
B) We have a great and fairly current example of tariffs! Google “The effect of Steel Tariffs” and choose an article. Answer any four of the following questions (cut/paste what you are commenting on.)
- What would the information in this chapter predict about the effects of the steel tariffs?
- Does your article support those predictions?
- How has the steel industry responded?
- How about other industries that use steel as an input?
- Who was helped and who was harmed?
- Would you, or would you not recommend tariffs in the future?
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C) As an alternative reading here are blog posts on support of manufacturing employment by Gary Becker (Nobel prize in economics) and Judge Richard Posner: http://www.becker-posner-blog.com/2012/04/concern-about-the-decline-in-manufacturing-in-the-united-states-becker.html (Links to an external site.) and the post before this (pasted in below also).
This was a great blog with many economics oriented posts, but sadly Gary Becker has passed away. This particular pair of posts is focused whether or not trade restrictions to support US manufacturing employment are a good idea. This topic has often been in the news, so it’s a great topic to think about.
After reading these essays, comment on each of the following bullet points:
- What do you think about protecting manufacturing industries from international trade?
- Who is benefiting and losing from the tariffs on steel and aluminum?
- Why or why not do you think more people will benefit than will lose?
Copies of the posts here – below (because I worry they will disappear):
A – Manufacturing employment declines as output increases due to efficiency through technological innovation. Essentially, less humans were needed to produce more output of goods.
C –
I do not think we should protect manufacturing industries from international trade. The workers we are protecting need to adapt and innovate their skillset to suit a more current comparative advantage industry. We don’t need to make everything domestically, that takes away from specialization and efficiency of our limited resources.
When we tariff our imports like steel and aluminum, the American public loses. The government benefits by gaining some tax revenue, and the steel and aluminum industries will see a short term benefit in domestic demand gains. Long term this isn’t a sustainable market. The workers in those industries get to keep their current jobs, so that would be a benefit as well.
I actually think that more people will lose by having tariffs on steel and aluminum. The US isn’t able to realize the gains by having a free market. If there were no tariffs and free trade was to be allowed, what would the price of steel and aluminum drop to? What is the world market price of these products? With cheaper prices which domestic industries would benefit? Would that then make construction costs go down? One of our largest exports is Boeing planes made of aluminum. Would our exports see a boost if the tariffs are lifted? Tariffs shouldn’t be used as a political stunt by leaders that don’t fully understand economics and our country’s industries.
Dude.World 