Tag Archives: jobs

Port Automation

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It’s coming to west coast ports, and the unions don’t like it.

The push over the last decade by international maritime ports to fully automate operations has sparked the ire of many US longshoremen whose high-paying jobs and way of life are at stake. The trend also sets up a battle between their unions and companies and governments who see automation as a cleaner, more efficient and more cost-friendly alternative to the current system.

Never mind that west coast ports—three in particular, Long Beach, Los Angeles, and Oakland—do 40% of the nation’s (not just the west coast’s) container traffic and so costs there have sharp impact on the nation’s economy.

Never mind that the west coast ports often are subject to expensive longshoremen union work slowdowns.

The Washington Council on International Trade this week released a report that attempted to quantify how severely the [2015] slowdown directly impacted Washington state businesses. That final price tag: $770 million.

Never mind that west coast ports often are subject to even more expensive longshoremen union strikes, including illegal strikes.

Never mind that longshoremen union strikes against west coast ports often turn violent.

The automation will reduce costs—good for the shippers and ultimately for us consumers—and increase profits—which means jobs, albeit different ones and with lags for the different jobs to develop.

And robots don’t do work slowdowns, robots don’t strike, robots don’t get violent when they don’t get their way.

A Thought on Free Trade

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…which I’ll assume for this post is structured between participant nations as fair trade, since it’s possible to have free and unfair trade, and it’s unfair trade that should be anathema.  Not all free trade is unfair; the parameters of any trade agreement, parameters that make the trade fair or unfair, are matters of mutual agreement (or perhaps not so mutual in the case of unfairness) among those participants.

Don Boudreaux triggered my thought with his piece in US News & World Report.

It’s true that trade destroys some particular jobs. … Being concentrated in a handful of industries, jobs lost to trade are easy to see. But the same trade that destroys jobs also creates jobs elsewhere in the American economy. These job gains, being spread across many industries, are difficult to see. But they are real.

In fact there is a net gain in jobs, albeit it’s a small net.  Being diffuse, that gain doesn’t get noticed any more than do the sets of jobs themselves.

Foreigners who sell to Americans get dollars in return. And like Americans who are paid in dollars, foreigners either spend or invest their dollars. When foreigners spend their dollars, American exports rise. More jobs are created in American industries that export.

And

American jobs are created also when foreigners invest their dollars. For example, when the Canadian company Tim Hortons opens new stores in the United States, not only are American workers employed to build or refurbish these stores, Americans are also employed to staff them. Or when Koreans use dollars to buy stock in Apple or Caterpillar, these companies become better able to expand operations.

About those last two quotes.  Those outcomes also apply from the trade partner’s perspective.  Simply swap in “partner” and “partner currency” and swap out “American” and “dollars” as applicable in those two paragraphs to see the application.

Both (all—there’s no need to suppose only bilateral arrangements) sides to international trade agreements make absolute gains, just as in a domestic free market economy, all citizens participating in a freely agreed exchange make absolute gains.  Even though among those individual participants, one man has a net outflow of his money, and the other man has a net outflow of his goods he’s presenting in trade, both men have gained from their trade.

This is where the demand of some who are pleased to call themselves economists in the Trump administration go so badly wrong.  Their demand for balance in absolute terms—no import/export imbalance, no greater outflow of money than inflow—is impossible to achieve in a truly free and fair international trade environment.  Balance requires trade to be a zero-sum gain.  Free trade isn’t, though; all participants gain from free, fair trade.  Balance not only cannot be achieved, it’s undesirable.

The Left Gives the Game Away

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Again.  Buried at the bottom of a Wall Street Journal piece on the auto industry’s effort to get the Obama administration’s last-minute (almost literally) attempt to make permanent fuel standards (also last minute because the underlying research wasn’t even going to be complete until 2018) is this rationale from Roland Hwang, at the National Resources Defense Council’s Director, Energy & Transportation Program, as paraphrased by the WSJ.

relaxing standards could hurt Americans depending on clean-car technology jobs.

Because EPA regulations are all about creating jobs and not about mitigating pollution.

Foolish

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Bill Gates, the co-founder of  Microsoft and world’s richest man, said in an interview Friday that robots  that steal human jobs should pay their fair share of taxes.

He said, and he was serious,

Right now, the human worker who does, say, $50,000 worth of work in a factory, that income is taxed and you get income tax, Social Security tax, all those things.  If a robot comes in to do the same thing, you’d think that we’d tax the robot at a similar level.

No, I wouldn’t.  Leave aside his blithe assumption that that money is the government’s in the first place, and not the property of the human worker.  Leave aside his blithe assumption that the government needs the money.  Leave aside his blithe assumption that a human worker should be taxed for a stranger’s current retirement and medical needs (Gates omitted the Medicare-related taxes also collected) instead of his own future retirement and medical needs.  Leave aside Gates’ omission of the employer’s payroll taxes on that human worker’s labor.

The whole point of automation is to hold down costs, is to be competitive with other companies, and an outcome of all of this is lower costs to the consumers who are using—in some cases dependent on—the goods and services being sold.

Recode, citing a McKinsey report, said that 50% of jobs performed by humans are vulnerable to robots, which could result in the loss of about $2.7 trillion in the US alone.

Loss to whom?  One “loss” is to government revenues—but there is no submission of a justification for Government’s need for the revenue.  Another loss seems more real: to the private sector.  The money isn’t lost, though, it’s misallocated—to unnecessarily high cost labor, which translates into unnecessarily high cost to consumers.

Besides—the robots already pay taxes, at every company along the production path that leads to a completed robot: costs of acquisition of that stage’s components—from the mine on up—and income tax on their part of that stage company’s income, and on the final assembly’s cost allocation in the production of the final good or service.

Human workers don’t pay much of this at all.  This is just another backdoor effort to prop labor costs artificially above the value of the labor.  And it’s foolish.

A Terrible Nightmare for Bureaucrats

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Here’s Joe Pizarchik, ex- Office of Surface Mining Reclamation and Enforcement Director in the Interior Department, for all of the Obama years:

My biggest disappointment is a majority in Congress ignored the will of the people.  They ignored the interests of the people in coal country, they ignored the law and they put corporate money ahead of all that.

Wow.  Just wow.  Because the people, exercising their will in electing the majority of Congress—all the members of Congress, come to that, every single one of them—had their will ignored when the majority that they elected executed on their will by rejecting a bad regulation.

Again, wow.  Just wow.  Because that Congress, in executing on the will of the people by acting within a previously enacted law and rescinding a regulation, ignored the law.

A third time, wow.  Just wow.  Because Congress, in acting on that Congress-passed law and rescinding a coal job-killing regulation, acted against the interests of the people in coal country, people whose livelihoods were threatened by that regulation.

Of course Pizarchik worked for seven years—seven years!—on his regulation, only to have Congress get rid of it.  That’s not fair!

Now he’s working on a replacement rule for submittal under a future President:

I believe there’s a good chance that, in a legal challenge, that a court will overturn Congress’ actions here as an unconstitutional usurpation of the executive branch’s powers[.]

Never mind that the Executive Branch’s rule-making authority is solely a delegation from Congress and that the Executive Branch is required to remain wholly within the scope of the law which its regulation is intended to implement.

Plainly, eighth-grade civics was not a safe space for Pizarchik.

And there’s this pit of worry: Ross Eisenbrey, Policy Director in OSHA from 1999 to 2001 asks

Why would an administration risk putting all the years of effort into a rulemaking, all the political capital to do it, knowing somebody could take the rule to district court and have it blocked in an instant because the judge says it’s similar enough?

Why, indeed?  It is to hope.

 

h/t Don Surber