Revised Project 1: “America first” immigration reform may put America last, economically

The RASIE Act, immigration reform proposed by U.S. Senator for Arkansas, Tom Cotton, and back by President Donald Trump, was introduced to diminish the number of low-skilled, unskilled and non-citizen immigrants taking American jobs. The sectors that have highest number of foreign workers are seen in agriculture, construction and services. It is no coincidence that low- to medium-skilled jobs are dominated by immigrants. The high number of foreign workers in these sectors is not due to non-citizens taking Americans’ jobs. Rather, it is because of the work conditions.

“Low-skilled jobs are low status, pay low wages, and are physically challenging,” Dean and Professor of Public Interest Law and Chicano/o Studies at the University of California, Davis, Kevin Johnson said. “Employers often say that they cannot get U.S. citizens to fill these kinds of jobs.”

The main aim of the RAISE ACT is to protect American taxpayer workers, taxpayers, and the economy. However, the repercussions of this reform could instead worsen the U.S. economy. If enacted, a rise in low- to medium-skilled job openings will occur. This will put a strain on businesses to operate with fewer employees. An attempt to operate with fewer employees working longer hours or increasing the wage to attract workers will in turn increase the cost of goods and services. This could potentially send many companies out of business. If the government decides to offer incentives to encourage Americans to take low- to medium-skilled jobs, it will be out of their pocket, or the Americans taxpayers’ pockets. Neither is desirable. Nor is this reform.

The proposed merit-based immigration system will prioritize immigrants based purely on the skills and knowledge they bring to the U.S. The proposed merit-based immigration proposal is modeled on the current Canadian and Australian systems. The reason behind modeling these two countries is that Canada and Australia attract highly skilled workers and see healthy growth, productivity and income per capita.

The skills-based system rewards applicants points based on individual merit. The system rewards points in areas such as higher education, English language ability, high paying jobs, and past achievements. The various ways that migration and population growth can be linked to Canada and Australia’s productivity and income per capita growth include, supply of labor; capital, investment; government expenditure on services and taxation; competition; natural resources, land and environmental externalities; and international trade.

The RAISE act doesn’t take into consideration the aging population. The U.S. population is aging rapidly as baby boomers enter old age and retirement. The Population Reference Bureau reported the number of Americans aged 65 years and older is projected to more than double from 46 million today, to over 98 million by 2060. The 65 years and older group share of the total population will rise to nearly 24 percent from 15 percent. An aging population has a direct impact on the labor force. This will result in a dependence on immigrants to replace current workers and fill new jobs.

In fact, The Raise Act would have the opposite desired effect of what the Trump administration propose the legislation will do, and sharply reduce legal immigration, and increase illegal immigration. The graphs below show legal immigration as a percentage of population since 1850.

Both graphs demonstrate The RAISE Act would be a significant reeducation in total legal immigration, and it would have no direct impact on illegal immigration. It is almost certain that more restricted access to legal immigration for family members of current immigrants would result in higher levels of illegal immigrations by those family members.

Deputy Dean and Director of the Public Law and Policy Research Unit at Adelaide Law School at the University of Adelaide in Australia, Alexander Reilly, said increasing skilled migration at the expense of family migration can impact on the desires for family reunion of existing U.S. citizens.

“In Australia, parent migration is very difficult,” Reilly said. “It may be that partner and child migration, which is currently considered a matter of right here, will have quotas or waiting lists imposed.”

A problem Reilly sees in Australia with independent skilled migration is that migrants find it hard to get jobs in their area of expertise and end up unemployed.

“Skilled migrants’ success is better if they have family support, so merit-based migration definitely needs a strong family component.”

Johnson agrees, believing a merit-based immigration system that halves the number of legal immigrants entering the country will unintentionally increase the number of undocumented immigrants.

“The goal of the U.S. government is to reduce legal immigration from one million a year to 500,000 a year, and this reduction will be seen in family immigrant visas,” Johnson said. “With the current limits on legal immigration, this has bought in roughly 11 million undocumented immigrants to the U.S.”

“Making legal immigration even more restrictive will increase the likelihood that those who want to immigrate lawfully will resort to doing so illegally.”

In 2015 to 2016, Australia accepted 189,770 permanent migrants through its skilled and family immigration streams, and settled 18,000 refugees and humanitarian migrants. Sixty-seven percent of migrants came through the skilled stream, and 30.8 percent through the family stream. These numbers add almost one percent to the Australian population each year, a much larger proportion than the U.S. admits through its migration program.

Immigration is the largest contributor to population growth in Canada since the early 2000s. Canada’s permanent immigration program is divided into three main streams: economic, family and humanitarian. In 2015 to 2016, Canada admitted 271,845 permanent immigrants. Of this number, the economic stream accounted for 60 percent of migrants, family made up 24 percent, and the remaining were humanitarian migrants. These proportions have remained fairly stable over the past 15 years.

In Australia, there are two pathways for skilled migration. The first, general skilled migration, requires applicants’ occupations to appear on a skilled occupations list. Most of these occupations are in professional areas such as medicine, engineering, or trades. The list is updated regularly based on an assessment of Australia’s economic needs at the time. The second pathway is for skilled migrants with an employer sponsor. This pathway is open to migrants with a wider range of skills. Employers must demonstrate they have a skilled position available and there are no Australians willing or able to take up the position.

A merit-based immigration system will transform the U.S. immigration system from primarily family-based to employment-based. Under the U.S.’s current system, most employment-based immigrants are highly skilled, but make up only 14 percent of those who receive green cards. Under the RAISE Act, employment-based immigrants would make up the majority of those who receive green cards.

In the proposed points system for the U.S., applicants would earn points for meeting criteria to do with age (preference for persons between ages 26 and 30) and having a degree. Extra points would be awarded for degrees earned in the U.S. and in a STEM (science, technology, engineering and mathematics) field. Nobel Prize winners, professional athletes and English language speakers would also receive extra points.

Johnson said that while the Australia and Canada case studies were worth reviewing, the U.S. has its own history and political, social and economic forces that contribute to immigration pressures and flows that may not exist in Canada or Australia.

“Australia and Canada don’t operate in the same context as the U.S., so those main factors must be considered in any reform of U.S. immigration law,” Johnson said.

When asked if the RAISE Act will reduce poverty, increase wages and save taxpayers millions of dollars, as stated by President Trump, Johnson replied, “There is no empirical evidence to support this claim.”

 

References

Camarota, S. A. (2015, September 10). Welfare Use by Immigrant and Native Households: An Analysis of Medicaid, Cash, Food, and Housing Programs (Report.). Center for Immigration Studies. Retrieved October 4, 2017, from Center for Immigration Studies website: https://cis.org/Report/Welfare-Use-Immigrant-and-Native-Households

Infographic: Annual average growth rate, natural increase and migratory increase per intercensal period, Canada, 1851 to 2056. (2017, March 30). Government of Canada. Retrieved October 04, 2017, from http://www.statcan.gc.ca/daily-quotidien/170208/g-a001-eng.htm

Mather, M. (2016, January). Fact Sheet: Aging in the United States. Population Reference Bureau. Retrieved October 04, 2017, from http://www.prb.org/Publications/Media-Guides/2016/aging-unitedstates-fact-sheet.aspx

Reilly, A., Paquet, M., & Johnson, K. (2017, September 17). RAISE Act: Global panel of scholars explains ‘merit-based’ immigration. The Conversation. Retrieved October 04, 2017, from http://theconversation.com/raise-act-global-panel-of-scholars-explains-merit-based-immigration-82062

Salerian, J. (2006, May 17). Economic Impacts of Migration and Population Growth (Report.). Retrieved October 4, 2017, from the Australian Government, Productivity Commission website: https://www.pc.gov.au/inquiries/completed/migration-population/report

Singer, A. (2016, August 02). Immigrant Workers in the U.S. Labor Force. The Brookings Institution. Retrieved October 04, 2017, from https://www.brookings.edu/research/immigrant-workers-in-the-u-s-labor-force/

Stone, L. (2017, August 3). Everything You Need To Know About The RAISE Act Without Reading It. The Federalist. Retrieved October 4, 2017, from http://thefederalist.com/2017/08/03/everything-need-know-raise-act-without-reading/

The White House, Office of the Press Secretary. (2017, August 2). President Donald J. Trump Backs RAISE Act [Press release]. Retrieved October 4, 2017, from President Donald J. Trump Backs RAISE Act

U.S. Congress, Senate – Judiciary. (2017, February 13). Congress.gov (T. Cotton Sen., Author) [Cong. S.354 from 115th Cong., 1st sess.]. Retrieved October 4, 2017, from https://www.congress.gov/bill/115th-congress/senate-bill/354/text

How millennials are changing the economy

As baby boomers reach retirement, millennials are now reaching their prime working and spending years. Over the next five years, the purchasing power of millennials is projected to increase 133% from $600 billion to $1.4 trillion. With the millennial generation being the largest of the generations in U.S. history, their impact on the economy will be significant.

Millennials grew up during a time of major technological advances, globalization and economic disruption. Because of this, they have a very different set of behaviors and experiences.

Millennials came of age in the midst of a lagging economy, and many carry large debt loads, largely from college tuition. Consequently, this is why millennials tend to focus on fulfillment and meaning in their lives. The also prefer to sacrifice money for convenience, too.

The effects the 2008 subprime crisis had on the economy delayed millennials’ ability to “grow up”—many have delayed buying houses, having children and making large purchases, such as a car. For the first wave of millennials (those born before 1990) who could find jobs, those jobs were less than well-paid. Due to the lack of financial autonomy, for the first time since 1960, 31.6 percent of people aged 18 to 34 are still living with their parents.

Millennials, also known as Gen Y, are moving to cities straight after college. For the first time since the 1920s, U.S. cities are growing faster than everywhere else on the country combined. This migration is driving the success of the economy.

The trend is impacting transportation, housing, and home ownership. Millennials are using public transit 40 percent more and cars 23 percent less. They are twice as likely to participate in the “sharing economy”, like ride-sharing and apartment rentals.

When it comes to consumerism, millennials are skeptical of advertising, and don’t rely on traditional marketing. Trust is vital to earning their business. Many conduct research through the internet and social media to learn about a product.

By 2020, 30 percent all retail sales will be to millennials, said CEO of “The Robin Report” and co-author of “The New Rules of Retail”, Robin Lewis.

With changing spending behaviors and habit, retailers have been forced to approach the millennial market differently to baby boomers. Convenience and flexibility are important to millennials. In response, many retailers are implementing news ways of payment and providing unique experiences to cater for Gen Y. Examples of this are self-checkout kiosks and paying with their mobile device instead of having to take out their wallets.

Another aspect that millennials want from retailers is a personalized experience. To cater for millennials shoppers, retailers have had to get creative. Some well-known examples include Coca-Cola replacing their logo with the most common names, and Nordstrom opening a store with no merchandise. Instead, stylists pull stock from other mall-anchored stores and its website.

If one thing is clear from analyzing millennials’ spending habits, it’s that their love for technology, convenience and experiences will help grow the economy. These factors will be drive competition within many sectors and industries, and if companies don’t keep up, they risk going out of business. This is the new reality for producers of goods and services.

References
http://www.businessinsider.com/top-brands-are-marketing-to-millennials-2013-8?op=1
http://fortune.com/2015/05/27/7-facts-every-business-should-know-about-millennials/
https://investors-corner.bnpparibas-am.com/investment-themes/please-mind-generation-gap/

Buenos Aires’ Port is Getting a Makeover

Ports are obviously a very important aspect of trade. Having large ports in big trade cities makes the process of importing and exporting a whole lot easier. Since ports are a big factor in economic value, they have become increasingly important. So important, in fact, that the main port in Buenos Aires, Argentina just got cleared for a revamping project of $200 million dollars to help improve the conditions, size, and value of the port.

Source: Los Angeles Times

Because the port of Buenos Aires is in a heavily populated area, they continue to receive more and more trade imports to keep up with their economy. This revamping project will not only allow Argentina’s ships to get access to more trade countries, but also increase capital during cruise season. A win win situation. That being said, they are using a lot of their revamping money to turn their port into an experience for consumers. They are now offering a variety of services including but not limited to transportation services and restaurants (there are no further details on what these services will do besides cater to cruise ship goers). Argentina is utilizing their port in a really strategic and effective way so that they can garner more trade access as well as appeal to tourists coming in and out during cruise season.

Soure: http://www.cruisemapper.com/ports/buenos-aires-port-103

A big part of the improvement plan, according to Gonzalo Mórtola, the head of the General Ports Administration (AGP), “is to make ports self-financing so that the state no longer has to provide any money for them” (portstrategy.com) The way he will do that, however, is still not announced to the public.

Before the improvement plan was announced, Argentina was already known for having a very strong port system. It is one of the strongest port contenders in Latin America and the Caribbean. In fact, in 2013 it joined the Green Awards ports program: “The Green Award is well-known in the maritime world for its reputable certification of ships that apply the best practices and exceed the industry statutory regulations in terms of safety, quality and environmental stewardship.” Argentina earned the first Green Award port in South America, and continues to ensure that they effectively maintain their Green Award efforts. Because they are a part of this, they receive a 10% discount on vessel dues for their Green Award ships. For Argentina, and Buenos Aires especially, this a big feat considering that where the port is located is a very metropolitan area. The port is putting forth its best efforts to maintain the greater good of the population within that area, and the country as a whole, and ensuring a clever and strong revamp in order to gain more global capital.

With the improvement plan set in place it will be interesting to see what this does for Argentina’s economy. In fact, seeing as European trade and Latin American trade don’t even compete, they should consider banning together and coming up with ways to innovate and ensure the utmost efficient level of import and export trade. After all, with the approval of a plan such as this, Argentina should get all the advice it can get to ensure it makes the right moves and builds out the right strategies.

http://www.latimes.com/travel/cruises/la-tr-cruises-argentina-port-improvements-20171029-story.html

http://www.portstrategy.com/news101/world/south-america/all-change-for-buenos-aires

http://www.greenaward.org/greenaward/703-buenos-aires-is-the-first-green-award-port-in-south-america.html

What would be the potential impacts as China is banning American trash imports?

On July 18, China claimed that it would stop taking foreign shipments of waste goods, such as plastic and paper, from foreign countries.According to a Reuters report, China wrote in a statement to WTO that “to protect China’s environmental interests and people’s health, we urgently adjust the imported solid wastes list, and forbid the import of solid wastes that are highly polluted.”

An BloombergView article said China has practiced imports of trash for more than 30 years, and it is a significant contributor to the rise of the Chinese economy. The Chinese environmental authorities estimate that more than 5,000 tons of garbage imported every year. The CNN Money calls it “a $5 billion annual business that is now in danger of sinking.” However, this is not a new trend. In 2013, the Chinese government launched “Operation Green Fence” Program to block imports of illegal and low-quality waste through improved inspections of container ships. In February 2017, Chinese customs officials initiated “National Sword” program to reduce illegal shipments of industrial and electronic waste. According to Resource Recycling Inc, in 2013, it costs about $2,100 per container that was rejected by China and shipped back to Los Angeles/Long Beach port.

The idea of shipping trash to China originates the balance of trading and maybe also the thought that the United States should not let empty ships going back China. Thus, America fills the return-trip containers with recycled cardboard boxes, waste paper and other trashes. The Economist said it is a double-win solution. It said America can earn a return from their waste, while China can have a constant supply of cheap recycled materials.

However, the issue is the quality of trash.

“We found that large amounts of dirty wastes or even hazardous wastes are mixed in the solid waste that can be used as raw materials. This polluted China’s environment seriously,” China’s WTO filing said. The Chinese government criticized Americans for not separating trashes ahead , and the Chinese government said failing to handle trash separation in the United States increases pollution in China.

On the other side, the critics said most of the waste consumed by China’s recycling industry comes from domestic sources, not imports. Adam Minter, the author of “Junkyard Planet”, wrote in an article on BloombergView this July to argue that China’s government has long played up stories about foreign waste, partly to deflect attention from unmanageable garbage problems at home.

Who will be the loser in this trash ban? The answer is everyone, including China, America, the environment, and global economy.

It is for sure not a good news for Americans. Jeff Harwood, an Olympia-area recycling center manager in Washington,  tells Washington state’s KIRO-TV in 2013 that the problem is American does not have market for recycling goods. It is still true today. Minter claims that “on average roughly one-third of the stuff that’s tossed into U.S. recycling bins can’t be made into new products domestically.” Moreover, Winter wrote in his book that in Foshan, China, the salary of a recycling worker is 100 dollar per month plus rooms and boards. The cost of recycling process would be much more expensive in America. He also claimed that it is cheaper to ship trashes from America to China than to transport them from Los Angeles to Chicago through railway.

It also has potential to hurt Chinese economy. For China, The trade of trash imports is a more than half of the $1 billion a year business to recycling industry. Although China today is not as eager to recycling materials as it was decades ago, the ban still will drastically decreases the demand. Minter wrote in July that imported recyclables are cleaner than their Chinese counterparts, and banning them will force many Chinese recyclers to shut down and thousands of workers losing jobs. Moreover, recycling materials imported from America is also much cheaper than the ones in China. As the Chinese economy still heavily rely on manufacture, the ban might also causes the rise of goods.

The ban might could not even protect the environment or improve the public health. As China bans its trash imports, its 29 million tons of paper and 7 million tons plastic scrap still need to find place to go. They might end with landfill that does not have effective recycling ability as China has.

At the last, the ban will also affects the price of paper and plastic globally. It would be “chaotic for the global recycling industry,” said Bill Moore of Moore & Associates, an Atlanta-based paper recycling consultant.

“Mixed paper prices would plummet in the U.S., North America and in Western Europe because all the mixed paper we’re pumping out in residential [programs] would have no home,” Moore explained. “So that would be chaotic at the local government level, at the MRF level, at the collector level. It would be complete disruption.”

 

China Decides To Take Out The Trash, but At What Cost?

The world has a lot of recyclables, especially Americans. When I say a lot, I mean billions worth. According to Bloomberg, “by the mid-2000s, scrap paper was among the leading U.S. exports to China by volume.” China has been the largest importer of the world’s recycled goods for some time now as a result of the hunger it’s manufacturing boom caused. In order to feed the consumerist beast of The United States and others, China needs the scrap to keep up without breaking its bank. It is cheaper for China to import recycled scrap as opposed to making steel, paper, cardboard, etc. on their own so it seems like a win-win for the country. In July of 2017, China’s government announced it will stop eating up a majority of the world’s recyclables and will no longer be the world’s recycling bin. The government made this decision due to environmental concerns. Reuters reported that China told the World Trade Organization that in order “to protect China’s environmental interests and people’s health, we urgently adjust the imported solid wastes list, and forbid the import of solid wastes that are highly polluted.”

The environmental concerns are outweighing the trade benefits for China and they have for some time time now. In 2013, according to The Economist, the Chinese government launched Operation Green Fence to try and lessen the amount of foreign, low-quality waste from entering the country. This new announcement by the Chinese government is proposing to cut off a majority of recyclable imports for the sake of the environment. China is facing a $5 billion loss in trade with this proposal according to a report by The Economist. As of 2016, Reuters stated that China imported $3.7 billion worth of waste. This decision to choke scrap imports will rattle the global economy significantly.

Not only will China be heavily affected, but the United States will be too. Exporting waste takes work and work means more American jobs. Bloomberg reported that 40,000 Americans have jobs due to the exportation of recyclables. When China blocks the trading of trash, about 40,000 Americans will be left without a job and the American landfills will fill back up. The cost is significant as well. There could be a trickle-down effect here into individual American homes as well. If it begins to cost too much for smaller recycling companies, or even some larger ones to pay for more workers or equipment, this could mean the separation of waste could fall directly on the individual. The loss of this huge benefit to the trade deficit between China and the United States will leave many cargo ships empty of exports to take back to China.

With that being said, the recycling market will remain afloat, but domestically and at a smaller scale. According to Dylan de Thomas, vice president of industry collaboration for the Recycling Partnership, “the really large waste and recycling companies have a vested interest in the recycled fiber and plastic markets.” Not only large companies, but the general public in the United States has a vested interest in recycling as well. Due to America’s own concern for the environment, we may only see a small effect on the American economy as whole, but only time will tell if the United States can pick up where China left off or have to figure out a new strategy.

 

The Unbalanced Pyramid: The Illicit Economy Behind China’s Lifting of One-Child Policy

Heralded as a powerhouse to propel the world into the future, China has long been regarded as having one of the most sound demographics to power its economy. Recently, the country has announced that it is lifting the controversial one-child policy, which has been in place since 1979 as a means to control the population at a time when China was still poor and undeveloped. However, remnant effects are being felt by the country in 21st century, in the form of a destabilized demographic.

What would happen when your family is told that you are only allowed one child, and in some cases at most one son after having a daughter, in a country where sons are traditionally viewed as being more virtuous than daughters?

(An old propaganda poster supporting One-Child Policy: “Executing the One-Child Policy Is A Part of the Country’s Foundamental Principles.”)

 

Some simple math will tell us that male babies born will outnumber the female ones, and this is exactly the problem Chinese Millennials and Gen Zs face as they approach adulthood. In his article, BC Cook outlined the threats he thinks the Chinese society faces as a result of the One-Child Policy. The most pronounced issue, he argues, is the problem of “online brides”, or brides from neighboring Asian countries who come over to be married to Chinese single men who cannot find a wife.

Now, online dating is not illegal, not even in China. “However,” Cook argues, “Chinese men finding foreign brides and starting families is exactly what the Chinese government was trying to avoid. So the one-child, male-only mandate from the government has backfired.”

On one hand, there is a markedly obvious imbalance in the “supply and demand” of domestic brides, as a direct result of the One-Child Policy. On the other, the Chinese philosopher Mengzi summarized in a proverb: “Dishonor to the family has three forms, and having no child is of the worst.”(不孝有三,无后为大)The Chinese traditional culture heavily focuses on the idea of continuing one’s lineage by starting one’s own family. To this day, this idea still permeates all levels of Chinese society. Where demand exists supply must be sought, and in this case, in the form of online brides from Thailand, Vietnam, Laos, Cambodia, etc.

(“It sure would be nice to have a sibling, Mr. Xi!”)

Disregarding the ethical arguments, this aspect of the One-Child Policy’s remnant effects certainly has created social-political implications where the imbalance of a very sensitive supply-and-demand relationship sought balance elsewhere. “There is a limit to how much we can legislate human behavior,” summarized Cook, articulating his belief that the Chinese government has disrupted an instinctive economy of basic human needs.

It is very unlikely that the Chinese government will step in to regulate the online dating industry as a result, because online dating has created an in-demand economy across China. Still, the influx of foreign brides, many of whom are still undocumented, has most definitely created implications for the government.

Not only does supply create its own demand. Demand creates supply where necessary, too.

It’s Complicated: on U.S.-China Film Industry Relationship

It’s Complicated: on U.S.-China Film Industry Relationship

Yutai Han

(Image: ChinaFilmInsider.com)

With dazzling lights and glamour, the annual U.S.-China Film Summit kicked off yesterday in Los Angeles. Among the attendees are several leaders of the industry and Chinese directors, all working to achieve the same end: how to tap into the Chinese film market.

Admittedly, film is of the highest prestige of our society at large. It is the equivalent of Shakespeare in Victorian England, except that now the movie business is globalized and glamourized, serving human vanity and desires, and in turn the quality of films varies significantly. But generally speaking, the best films of the industry, produced by the highest caliber of crews and casts, and distributed by the savviest companies, attract audiences and money in a highly profitable way. A lot of them originates from Hollywood, a heavily industrialized dreamland of capital and talent from the very start, exporting formalized stories of dreams to the whole world. As a major trade surplus, cultural exports made up for 4 percent of the U.S. GDP.

Similar to every economic story, the cards reshuffle when China becomes a player.

It was 1994 when mainland China opened its market to Hollywood with a quota of 10 films annually, which in effect led to a mass of people going to Hollywood blockbuster productions and a domestic revitalization. By 2020, the Chinese film market might surpass North America to be the world’s largest. It’s fair to say that now, the two biggest players in the film industry are the U.S. and China. Under the current deal set in 2012, China exhibits 34 overseas films per year. Some successful candidates are: Warcraft, a $47 million domestic box office and $213 million in China; A Dog’s Purpose, a $64 million domestic box office and $88 million in China. Note that these two productions had Chinese partners, and guess who—it’s Tencent and Alibaba! The promotion of Warcraft was wild. With the attention-grabbing subway poster and targeted mobile advertisement, and paid promotions among review channels, one literally cannot escape. This age of wide-spread and shameless marketing lays ground for propaganda films, such as the $848 million grossing Wolf Warrior 2, the biggest mega-blockbuster yet with a murky net of more than 20 producers and distributors that doesn’t fall short from CDOs.

The more alarming phenomenon is the nationalist and propagandist element of the film was able to fully manifest through the film medium and utilized by the film’s promotion people. The film was not necessarily propaganda but it was a chant of populist heroism, which could be utilized as propaganda. One outspoken critic received death threats. Films, as Slovenian Marxist philosopher Slavoj Zizek puts it, are “ideology at its purest”. It seems to me that it’s unlikely that Hollywood can march further into the Chinese film market, because under the obvious clash of interests, there exists an ideological tension. Even domestically produced Film or TV shows can be called off at the last minute, as one film, Feng Xiaogang’s Youth, was unfortunately delayed due to sensitive topics of Vietnam veterans being depicted as homeless. Other than that, the film is a personal project for the director to recount his most glamorous days as a young artist embedded within the military. Inside sources say that the market is not regulated by the Administration alone, but by some senior members who have the power to shut down speech. From now on, the future is downward. After Wolf Warrier 2, Chinese production companies convinced themselves that the most profitable way to make films is to make such films that “coincidentally” go along with the party’s authoritarian control. The stagnating Chinese film market can be partly attributed to this mentality. But on the other hand, films can also not be about promoting any ideology, but about love, loneliness, memories, the future and the universal human condition. Think Hong Kong cinema master of romance, Wong Kar-wai. His films sold good enough and especially among the Pan-Asian market to receive a Cannes. It is therefore not fair to regard the Chinese film market as impenetrable, and Chinese companies as corporate minions. If Hollywood and the liberal politicians try hard enough to look at China’s issues, that is. We need to restore cinema as “art manifest”. The road is long and bumpy, but we shall soldier on.

The war on washing machines

Washing machines are a common figure in nearly every household. They’re bought by many, are made by an array of manufacturers and sold at a variety of retailers. While most people think about the features and prices of various washing machines, they never often think about where those machines come from. In comes the latest challenge for President Donald Trump.

In the last several years washing machines have traditionally been sold by three brands: Whirlpool, LG, and Samsung.

Whirlpool, a U.S. based company employs thousands of factory workers in areas such as Clyde, Ohio. As most manufacturing jobs have shrunk nationwide, Whirlpool has endured and in some instances thrived. They brought back factory operations from Mexico and Germany and even absorbed regional competitors such as Maytag according to the Los Angeles Times.

But, Whirlpool was not prepared for the competition that would arise from foreign competitors, LG and Samsung, both centered in South Korea. The two companies in recent years allegedly committed foul trade moves including trade dumping. This would lead Whirlpool to file a rare trade complaint against them. While LG and Samsung have been accused of dumping products at extremely low prices, the complaint targets their choice in moving plants to different countries to avoid paying duties the United States has imposed.

In early October, the United States International Trade Commission voted 4-0 to review the complaint and determine possible next steps.The Los Angeles Times reports that an independent panel will consider protectionist policies to recommend to Trump. Trump who in the past has gone on record to support protectionist policies in order to protect American businesses now must decide if such policies are necessary to protect Whirlpool.

The president has the authority to enact wide sweeping barriers in order to protect American businesses in the event that they were harmed by the activity of overseas competitors.

TraQline estimates that Whirlpool went from a 22.6 percent market share in 2008 to just 17.4 percent by mid 2017. Meanwhile, LG and Samsung have seen their market shares in the washing machine department grow. LG grew from 12.6 percent to 16.2 percent in that same time period. Samsung experienced the most drastic increase going from a mere 1.7 percent share to nearly 20 percent.

However, the issue is not black and white. Such wide sweeping tariffs if enacted, can go on to have ripple effects in the job industry, something Trump has also gone on record to promoting. “I’ll be the greatest jobs producer that God ever created,” said Trump in a January speech.

https://twitter.com/MashableNews/status/819223281207083009

Both manufacturers have announced plans to build factories in the United States. LG announced in February it would build a $250 million washing machine factory in Tennessee that would create 600 jobs. In June, Samsung announced plans for a $380 million factory in South Carolina that would be dedicated to building home appliances of which washing machines will be part of.

This would not be the first time that the United States government has had a battle between washing machine manufacturers. In 2013, under the Obama administration, the Times reported that the United States imposed duties on South Korea and Mexico for similar reasons. More so, in early 2017 similar duties were imposed on China. Whirlpool alleges that business had moved to China after 2013. Now the company is alleging that Vietnam and Thailand are home to manufacturing plants.

The committee must send their recommendations by December 4 and any type of action taken by Trump will undeniably be challenged by the World Trade Organization. The WTO in 2003 struck against steel tariffs imposed by President George W. Bush in a case that closely resembles this one.

This isn’t the only situation regarding protectionist policies that Trump is dealing with. He is also considering steel tariffs similar to Bush while also researching intellectual property protection from Chinese incursions.

Nonetheless, the president finds himself in another sticky situation. Both jobs and trade were focal points of his campaign and any one action taken on either side can have damaging effects on the other. It will be interesting to see where the war on washing machines goes from here. The silver lining is that disputes such as this are part of many that the WTO deals with and a firm answer could take years.

Sources:

http://latimes.com/business/la-na-ohio-trade-battle-20171005-story.html

http://money.cnn.com/2017/10/06/news/whirlpool-samsung-us-south-korea-trade/index.html

 

 

Trump’s Trade (Partial)Truth

I’ve trained myself to automatically assume that everything Donald Trump says is incorrect. It mitigates frustration and utter disbelief. It prioritizes my sanity. Most importantly, it causes me great surprise when he says something that is anything remotely near true. With Trump as our president, I keep Snopes bookmarked in my favorites bar.

One of Trump’s favorite hot topics is China. He called global warming a hoax created by China. He accused the U.S. of becoming at third-world country at the hands of China. He even tweeted that China did “NOTHING” to help the U.S. stop North Korea from creating nuclear weapons.

No matter how much I hate to admit it, though, President Trump’s take on trade with China does have an inkling of truth. In his 2017 Inaugural Address, he said:

“We’ve made other countries rich while the wealth, strength and confidence of our country has dissipated over the horizon. One by one, the factories shuttered and left our shores with not even a thought about the millions and millions of American workers that were left behind.”

While this is an extreme exaggeration, we should be careful not to brush it off as quickly as we do his take on global warming.

China, by all means, is a global powerhouse. However, it wasn’t always that way. For years and years, communist China had a downward-spiriling economy. But between 1991 and 2013, China’s exports increased from 2% of the world’s total to almost 20% (Freakonomics). The country transformed into a leading producer as a result of its plentitude of resources available and more importantly, its cheap labor. China was able to do this so quickly because of its sheer size and the massive potential amount of slack it had to pick up.

In the 1990’s, the Ports of Los Angeles and Long Beach exploded in use due to China’s manufacturing transformation. The two ports combined currently do the most trade in the U.S. (Port of LA Communications). Jobs in shipping–working at the port, sorting, on trains, etc–all either kept or exceeded their current demand. The one part of the labor market that fell apart was manufacturing.

Globalization, trade amongst foreign countries, raises the GDP of the countries at stake. This is not without adverse distributional consequences, though. And one of its biggest dilemmas is labor.

China’s rapid production development is one of the best things to have happened to the U.S. middle class. Chinese workers are employed and producing items to be exported to other countries. People in the U.S. are happy because everything they buy is so much cheaper, thanks to the low financial cost of labor in China and the super low cost of streamlined shipping thanks to the invention of TEUs (Gabriel Kahn). The net effect of the U.S.-China trade relationship is good.

The loser is the manufacturing labor market, a potential reason for why we are currently living in a country with Donald Trump serving as president. With China producing things at such low costs, the need for low-skilled or unskilled manufacturing jobs in the United Stated became virtually nonexistent. Manufacturing workers were laid off in the masses, and plants closed throughout America. From 2000-2007, one million U.S. manufacturing jobs disappeared, 40% of which was attributable to China’s newfound success (Autor). Highly-skilled U.S. workers were just fine, but those who were educated at that level lost their work to cheap Chinese labor.

Those low-skilled manufacturing workers were now out of work and needed to costlessly reallocate to their next best opportunity. This was not easy to do because for the most part because their adaptation skills were poor, making reallocations unsuccessful. This had adverse effects on other labor markets, which served the manufacturing plants that went out of business. The wages of manufacturing jobs that did still exist were lowered because of the low cost of Chinese labor. Public transfer benefits such as medicare, medicaid, food stamps, etc., became more widely used because low-skilled workers were out of work, and their skills levels made it hard for them to reallocate without any costs.

China’s transformation into a country of mass exports adversely created job loss, wage depression, and increase in welfare spending for a particular portion of the United States: manufacturing workers who aren’t highly skilled. The growth of China into a powerhouse nation was as a majority a global good. However, much to Trump’s and my dismay, it also fully disrupted a U.S. labor market–manufacturing–for the worse.

TPP? Trump? NAFTA? What?

President Trump withdrew the U.S. from TPP after taking office, which was one of the promises he made during his campaign trail.

But if like me, you still don’t really understand what TPP is or know what it even stands for, here’s a little breakdown.

TPP, the Trans-Pacific Partnership, involves twelve countries bordering the Pacific Ocean. It was “aimed to deepen economic ties between [those] nations,” and “designed so that it could eventually create a new single market, something like that of the EU,” said BCC. It was supposed to “[level] the playing field for American workers and businesses, supporting more Made-in-America exports and higher-paying American jobs,” according to the government’s statement.

Basically, it had potential to exponentially grow the American economy, allowing trade without tariffs or restrictions between some of the most powerful nations. The Peterson Institute for International Economics estimated that the U.S. national income would increase by $131 billion a year by 2030 under TTP.

So how did people take Trump’s withdrawal of TTP?

On one side, “[big] businesses are howling that Trump is undercutting their ability to sell to the vast majority of the world’s consumers” (CNN), while on the other hand, there is praise in that Americans are being put first. In other words, critics believe that TTP would destroy American jobs.

The New Yorker argued that the trade agreement “wouldn’t have had much direct impact on blue-collar workers” due to the fact that “global shift away from tariffs and other trade barriers began in 1964 and was, largely, complete by the mid-two-thousands.” A job couldn’t determine the number of jobs available, only economic activity can.

Trump is currently renegotiating NAFTA, the North American Free Trade Agreement, which is a trade deal between the U.S., Canada and Mexico. He wants to reduce deficits between the U.S. and Mexico, because, for example, “[in] 2016, Americans bought $55.6 billion more imports from Mexico than vice versa” (qtd. in The Balance).

There is also talk that President Trump could end up eliminating NAFTA on top of TPP. A decision has yet to be made.