Thursday, June 30, 2011

Creating jobs outside the USA

A friend read and had good points.   He pointed out to me that while transportation and regulation may make more jobs, the new jobs are often outside the USA. 

Worse, those foreign jobs cost American jobs.  This is a valid point for some industries.    This is why China has a huge industrial boom - and a huge pollution problem.

It's not true for electricity.   One of the major issues with electricity is that it does not travel well.   It needs to be produced near where it is used.  The major polluters in the US are coal burning power plants.  Regulating them will not drive their business out of the USA.

Nor is it true for regulations that require add-on products such as helmet laws for motorcycles, seat-belts for cars, earthquake protections for housing, insurance for mortgages, etc. 

The job loss from regulations only occurs to regulations that affect the manufacturing techniques of physical products.   At heart, those are all safety requirements designed to prevent loss of human life either from accidents or from pollution.

This is one of the major costs of a free market.  If you like a free market, then you LIKE the fact that other countries take the crappy, polluting industries that Americans don't want.  There is a reason why we find lead in Chinese toys and nasty stuff in their toothpaste.     We don't have to put up with that junk in America, and the loss of a few jobs is not a big worry.  In fact, China itself is experiencing wage inflation of 12% for manufacturing jobs Source.   There is no free lunch, and China, while large, has begun to run out of cheap labor.  

There is one more set of regulations - anti-discrimination and harassment rules.  These don't raise costs  - unless you break the rules.  No one shifts their business to China because they were required to hire black women.

Transportation and regulation make for better products, at a cheaper price, which save Americans more money than it costs in jobs.  Allowing people to spew poisons into the air, water and ground is not good business sense.   Worse, jobs where people die because the management doesn't care about risk are not needed.   We don't need to create a whole bunch of crappy jobs where people are exposed to cancer causing toxins.  We need GOOD jobs, not bad ones.

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