Scott Sumner  

Trumpism in China

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Trump's ideas are increasingly popular around the world. Here's an example from Shanghai, China, discussing China's version of Uber:

Didi Chuxing, China's dominant car-sharing company, is gutting its fleet of drivers in Shanghai to comply with the city's new regulations restricting car-sharing platforms to the use of local drivers and locally-registered cars.

The removal of drivers and cars from outside the city is Didi's first major capitulation to regulators after enjoying years of laissez-faire treatment in China.

Less than 3 per cent of Didi's 410,000 drivers in Shanghai have a local hukou (household registration) that would allow them to continue picking up passengers via the platform, according to the company.

Starting from Saturday, drivers using cars without a Shanghai licence plate will begin being removed from the Didi platform, according to three drivers who received a text message from the company notifying them of the regulatory demands.

This is actually a much bigger deal than banning Uber in America, as the urban Chinese are much more reliant on delivery services:

After the rules of "local cars, local drivers" came into effect in Shanghai last month, Didi initially allowed migrant drivers with out-of-town licence plates to continue using the platform. Many risked fines of up to Rmb50,000 ($7,300) -- as much as their annual earnings -- to do so.

Migrants from rural China usually drive their own cars registered outside Shanghai. They make up a majority of the urban workforce for car-sharing platforms as well as the delivery services that support the country's booming e-commerce sector.

Now China's top cities are cracking down on migrant drivers in order to protect local taxi companies and restrict urban population growth.

The goal is to keep people from the countryside out of the biggest cities. Unfortunately, city residents won't do this work:

Mr Ren, a manager at a company that rents out Beijing licence plates who wished to remain anonymous because plate rentals are a "grey area", said that about 20 per cent of his business comes from Didi drivers. Once the new regulations take effect, he estimates that number will drop to zero.

"No local resident would rent a plate to be a Didi driver. It is a tough job, very tiring, and Beijing residents [with Beijing hukou] have much more better choices," he said.

Similarly, if we deport illegals from America, then Americans would still not be willing to pick fruits and vegetables in the hot sun. Instead, the farmers would stop producing, and we'd buy our fruits and vegetables from Mexico.

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COMMENTS (11 to date)
Capt. J Parker writes:

Dr. Sumner means Trump's ideas have always been popular with government officials looking for votes and special interest groups looking for favors. That's why we have government granted monopolies for taxis, plumbers, lawyers, doctors, dentists, undertakers. I can't even get my eyeglasses replaced in Massachusetts without paying a tithe every two years to the optometrist cartel thanks to protectionist laws. Trumps evil genius was to recognize that the only labor group in America expected work in a competitive market are middle-class blue collar workers and to then claim that he could give them a ticket on the same gravy train that other protected workers have been on for decades. Across the board protectionism will make us all poorer - absolutely correct. But, selective protectionism was making only selective groups poorer and, surprise, those getting poorer voted for Trump.

Jerry Brown writes:

Professor, I don't know much about the Chinese labor market, so perhaps your assertion that "city residents won't do this work" could be true there.

It is not true in the US though. The first time I heard a similar statement about the US I was in my car listening to President George W Bush stating that there were some jobs that American workers just wouldn't do. I was following a city garbage truck at the time on a 2 degree day here in Hartford. You know the kind of truck where the guys stand on a little platform outside the back of the truck. I was freezing inside my car, and they were obviously enduring worse than I. But they were doing their work. And they took that job and did their work.

Many, many Americans are willing to do all kinds of work, in all kinds of conditions. Consider firefighters who risk their lives to save people they don't know. Under the worst possible working conditions. Or even a doctor who has to perform a manual de-compaction for a patient. Or anyone in the military on the front line in a war.

Stating that Americans would not be willing to pick fruits and vegetables in the hot sun is unreasonable. If you mean they would demand more in wages to do that then add that to your statement and it might make sense.

ColoComment writes:

What makes you think that automation cannot replace human hands for picking fruit and vegetables?

It's coming.

What are all those low-skilled illegal immigrants going to do when they're no longer needed for "field" work? Don't we have enough low-skilled unemployable people already here?

Lorenzo from Oz writes:

Why couldn't the old seasonal work visas be restored?

Scott Sumner writes:

Captain, Actually, that's not at all what I mean. This post is about migration, not cartels.

Jerry, You said:

"Stating that Americans would not be willing to pick fruits and vegetables in the hot sun is unreasonable."

I'm afraid that it is true. Indeed it's been tried, and American workers don't even last a full day, they usually quit after a few hours.

Sure there is some wage that would fill any job, but at that wage all those farms go out of business.

Colocomment, Yes, some day automation will replace those workers, but we aren't there yet.

Lorenzo, That's one option.

LD Bottorff writes:

Similarly, if we deport illegals from America...

I don't know what portion of the current farm work-force is here illegally. Do you? If not, how can we estimate the impact of sending illegals home?

shecky writes:

The takeaway is that a large portion of Americans feel entitled to jobs. Even jobs they've never done, and have never been too keen to do, don't demand much in the way of English language proficiency, or verifiable work history, or even legal status. If those are the jobs that you think belong to you, shouldn't you ask yourself, "What makes you so valuable to employers that you need to be given preference to these jobs?"

As far as automation goes, but it seems that automation does nothing for the job prospects of Americans workers skilled enough to compete with illegal immigrants.

Foxhuntingman writes:

Why not import fruit instead of uneducated people who can't speak English?

Jerry Brown writes:

Scott Sumner- "Sure there is some wage that would fill any job, but at that wage all those farms would go out of business."

Thank you. That is an economic statement at least. It is also very ridiculous to think that if farm workers were paid enough that Americans were willing to work there that all the farms would go out of business. And then we would all just sit around and starve I guess.

Come on. It is reasonable to say that food prices would rise. That more farm workers might be replaced by machinery. That less food would be grown here. That more food might be imported. And that some farms would go out of business because of higher labor costs.

The statement that American workers will just not do some types of legitimate work is just false. It needs to be qualified. It is used by people who want to seem wise in the ways of the world to justify importing labor at lower cost. Look around you at all the crap jobs that many Americans currently manage to do.

It really bothers me when people who believe in markets adjust their beliefs whenever the price of labor is involved.

Mark V Anderson writes:

@ Jerry Brown.

Thank you for your analysis. It is sad to see Scott taking the anti-economist point of view on this. Of course Americans would take the job of picking crops. And no doubt wages would go up, causing food prices to go up. Somehow our economy would survive. :-)

When I was an 18 year old, I would take any job that I could get. It is possible that I would've collapsed in the sun picking crops because I wasn't used to it, but I bet the same is also true for immigrants who haven't picked crops before. It's a matter of experience. But I did not have an inkling that such jobs existed, so I never even tried. It wasn't that I wasn't willing.

Scott Sumner writes:

LD, Based on what I have read, most are here illegally.

Fox, Because we gain through cheaper fruit and the migrants gain jobs better than at home.

Jerry, You said:

"It is also very ridiculous to think that if farm workers were paid enough that Americans were willing to work there that all the farms would go out of business. And then we would all just sit around and starve I guess."

Yes, that would be ridiculous, if that were what I had said. In fact, farmers would shift to crops harvested by machines. We would import fruits and vegetables. I thought that point was obvious. Please read the posts more carefully.

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