EDITORIALS THE HINDU DAILY IMPORTANT EDITORIALS 23/AUG/2018 PART-2 PRESENTED BY ISHAN (EDUCATOR ON UNACADEMY)
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dls tness s gamble
ing at windmils I.Tilting at windmills Topic- GS Prelims,GSM2 Context-Donald Trump's trade war ignores the complexity of world supply chains and glosses over issues within U.S. industry PIC CREDITTHE HINDU Page-8
INTERNAL WORRIES No tariff can overturn the cost advantage Mexico has over the U.S.in labour costs The national minimum wage there is a little over $4 a day while the average worker in the U.S. automobile sector earns $18 an hour. . In effect, as Gao Feng, a Chinese government spokes man, said, "The U.S. is opening fire on the world, and on itself too." . Second, the focus on trade crucially ignores changes in the U.S. corporate structure and industrial relations over the last 30 years which have led to the phenomenon of extreme inequalities in income and wealth in the country. Ever since U.S. President Ronald Reagan launched an assault against the air traffic controllers' union in 1981,trade unions have been in retreat.
In the years that followed, legislation and the courts have made it easier to reunion organisers, to use scabs to break strikes and for employers to campaign against unionisation of workers. . As a result, less than 7% of private sector employees today are union!sed. compared to a third in the 1950s Meanwhile, as Professor Robert Reich, Secretary of Labour under U.S. President Bill Clinton,notes, "anti-trust enforcement has gone into remission" and it has become easier for large companies to merge and form giant oligopolies. At its peak in the mid-1990s,there were 8,000 publicly traded firms in the U.S. stock market. . In 2016 there were only 3,6 Recently, Apple became the first company to have a $I trillion valuation and today just 30 companies reap half of all profits produced by all publicly traded companies.
In 1975,the corresponding figure was 109. Half of all the gains registered by Standard &Poor's 500-stock index was delivered by just five companies:Apple,Amazon, Facebook, Netflix, and Alphabet, the parent company of Google The greater concentration of capital allows the giant oligopolies to raise prices which takes more of a worker's pay cheque. .Fewer companies means workers have less choice of employers and so have less bargaining power. Anti-poaching and mandatory arbitration arrangements further weaken labour's hand Moreover, the focus on short-term profits leads firms to use their capital to buy back shares, driving up share prices to benefit shareholders and top managers who have an increasing percentage of their compensation in company shares.
THE GERMANY EXAMPLE . Take Germany as a contrast. Between 2002 and 2008, when the U.S. lost one-third of its manufacturing jobs, Germany lost a mere 11%. How could this be? Since most German firms are privately owned, rather than buying back shares, they invested their capital in boosting their productivity. .German firms include worker representatives on their corporate boards, invest in apprenticeship programmes, and in relevant research and development projects. During the recession of 2008-09.instead of dismissing employees outright, German firms reduced work hours and helped retrain workers ' They thus have a deep pool of skilled labour.
. When computers and numerically controlled machines are progressively inducted into production, constant upgrading of labour skills is vital to preserve well-paying jobs. Washington has made no systematic effort to upgrade skills. Tim Cook, the CEO of Apple, constantly emphasises that his companyhas shifted production to China not because labour is cheaper there but because it has a much wider pool of skilled labour than does the U.S. Mr. Trump has neither the vision nor the inclination to address these structural problems of the U.S. economy. Like Don Quixote, Don Trump is merely tilting at windmills
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I m from U.P. I have done my graduation from university of delhi in B.sc (H) Physics.. Aspirant of UPSC CSE..