fbpx
01 / 05
Free Trade Empowers Women and Tariffs Hurt Them

Blog Post | Gender Equality

Free Trade Empowers Women and Tariffs Hurt Them

As globalized market competition made household appliances increasingly affordable, it reduced the burden of housework...

Woman with outstretched arms at a harbor holding a white work helmet

It is an underappreciated fact that women are hit particularly hard by the United States’ ever-increasing tariffs on imports and burgeoning trade war with China (and, possibly, other countries as well).

Recently another set of tariffs on imports took effect, raising prices on hundreds of goods especially important to women, including foodstuffs and appliances. It may sound trite—or worse—to associate these goods primarily with women. But economic history clearly shows that labor-saving appliances and ready-made food products save women time, thereby expanding their opportunities, and allowing them to improve their education and skills, pursue employment outside the home, and do other things they value.

Consider just one appliance that the administration’s tariffs have hit especially hard: the washing machine. Just a century ago, women would spend at least one full day of their already overburdened week soaking, stirring, boiling, wringing, hanging, deodorizing, starching and then folding and ironing their household laundry.

Today, the washing machine reduces the amount of weekly active work on laundry to around an hour. As University of Cambridge economist Ha-Joon Chang has noted, “Without the washing machine, the scale of change in the role of women in society and in family dynamics would not have been nearly as dramatic.” Yet the U.S. recently placed a 25 percent tariff on Samsung and LG washing machines from South Korea, and has tariffed the foreign steel and aluminum used in American-made washers. As a result, the price of these machines has already increased 17 percent.

The new tariffs will increase the cost of countless goods that have freed women’s time and dramatically improved gender equality, helping make two-earner households possible. Consumers will see heftier price-tags on vacuum cleaners, sewing machines, refrigerators, dishwashers, kitchen waste disposers, blenders, food processors, toaster ovens, microwaves, kitchen ranges and ovens, slow cookers, and virtually all other appliances. (The full list of products targeted by the latest tariffs is 194-pages-long.) The increase in cost will represent an abrupt change for the worse after global trade liberalization had previously lowered the cost of many those same goods over the past decades.

The tariffs will thus target and raise the cost of appliances that have been key to women’s empowerment historically. Thanks in part to the affordability of everyday kitchen appliances, cooking has changed from a necessary, labor-intensive task to a largely optional activity in the United States. Back in the days of churning butter and baking one’s own bread, food preparation consumed as much time as a full-time job. But by 2008, the average American spent around an hour on food preparation each day, and from the mid-1960s to 2008, women more than halved the amount of time spent on food preparation. Yet women still cook more than men in the United States, and so any increase in the cost of kitchen appliances is a tax on items that women use the most.

As globalized market competition made household appliances increasingly affordable, it reduced the burden of housework, enabling more women to participate in the labor force and obtain economic independence In 1900, the average American woman spent nearly 47 hours a week on housework; by 2011, that had fallen to just over 26 hours a week. While some of that change can be explained by more equitable divisions of household labor, women’s housework hours have decreased faster than men’s have increased. In other words, a lot of the credit for freeing women’s time is owed to labor-saving technologies—and ultimately, to the market-driven innovation and global competition that make time-saving devices available and inexpensive. That is one reason why, as an upcoming policy paper of mine argues, markets have improved the lives of women even more so than for men.

Of course, women are far from the tariffs’ only victims. Trade wars increase costs for all Americans, and the latest round of tariffs will likely slow down the entire U.S. economy’s growth this year by 0.1 percentage point. That means fewer jobs and lower salaries in addition to higher prices.

Still, women have a particularly strong claim to offense regarding current U.S. trade policies. The administration should immediately deescalate the trade war, and return to the free trade goals that the president espoused this summer. “No tariffs, no barriers, that’s the way it should be,” he opined at the time. Such a policy would indeed be far superior not only for economic growth and consumers’ wallets, but for the nation’s women.

A version of this first appeared in The Hill.

Associated Press | Labor Productivity

Productivity Surge Helps Explain US Economy’s Resilience

“Chronic worker shortages have led many companies to invest in machines to do some of the work they can’t find people to do. They’ve also been training the workers they do have to use advanced technology so they can produce more with less.

The result has been an unexpected productivity boom.”

From Associated Press.

Blog Post | Science & Technology

AI, Tractors, and the Slow Diffusion of Labor-Saving Devices

Productivity and economic growth are a tide that lifts all boats, whether we're talking about agricultural machinery or ChatGPT.

“You can see the computer age everywhere but in the productivity statistics,” wrote economist and Nobel laureate Robert Solow in a 1987 book review. While computing was making massive strides in the 1980s and ’90s—cumulating in the internet mania and dot-com bubble and its burst—it took a long time before we saw large, economy-wide impacts of this revolutionary general-purpose technology. Computers, internet, and (smart) screens have made the modern world unrecognizable from what it was just a few decades ago, but the process took a lot longer than most techno-optimists suggested then—and their followers are suggesting now.

Last year had a strong 1990s feel to it: 2023 became the year of AI worries, with ChatGPT and other large language models making a bid for disrupting all manner of industries. Writers, musicians, lawyers, editors, physicians, graphic designers, and more were some of the professions seemingly at risk of losing their livelihood to machines that quickly replicate their work at a fraction of the cost.

We should draw two conclusions from these large language models and past technological transitions: First, some of their features are truly remarkable and can very well compete with (some) lawyers, writers, musicians, or graphic designers over the next few years. Second, radical, labor-saving technologies are slow to diffuse across the economy, so these mainly middle-class professions are probably safe from mechanization and automation a while longer.

Take the iconic horses-to-tractor transition in agriculture over the 20th century. From invention and commercial availability, tractors took decades to overtake horses. The same was true for steam engines, that iconic energy invention powering the Industrial Revolution—which itself was both one of most radical and life-changing events in all of human history and pretty dull on account of its slow changes.

“Over the sweep of history the tractor has indeed had an immense impact on people’s lives,” The Economist said in December 2023, “but it conquered the world with a whimper, not a bang.” In all ages, tech innovations have defused across societies slowly: the old technology remains relevant for decades. Even in the 1930s, two to three decades after the first tractors were built, there was more equine than mechanical horsepower on American farms. Scholars usually put the cutoff point for when tractors overtook horses on farms after World War II, a generation or more after they were first employed.

The story in The Economist also highlights the connection to real wages and overall economy. Productivity and economic growth are a tide that lifts all boats. A rule of thumb is that labor-saving technology gets adopted only once it makes sense to replace labor with machines. That happens when the machines get good enough, the cost of running them falls sufficiently, or the alternative uses for labor get high enough.

For the first few decades of the tractor’s existence, they weren’t obviously better than the source of literal horsepower that preceded them. They were expensive to run, were not that powerful, and couldn’t do many things that a horse could. For one, they compelled farmers to purchase gasoline—a resource they didn’t have—rather than putting horses out to grazing on land or having children (or cheap labor) tend to the animals—resources that they did have. And during the Great Depression in America, cheap labor wasn’t that hard to come by.

In time, those trends reversed; real incomes and better-paid manufacturing jobs bid labor away from the farms, and the demographic transition to smaller families meant that children couldn’t be routinely relied upon to, for example, care for the animals. In economic speech, the optimal size of farms grew, and on these larger farms the now much better tractors came into their own right.

In contrast, the labor that large language models like ChatGPT purport to displace is often highly remunerated, while the costs of running the operations are pretty low, which suggest that artificial intelligence (AI) might displace some such workers.

Yann LeCun, chief AI scientist at Meta/Facebook, is less convinced. In an interview with Wired magazine’s Steven Levy, LeCun says that “chatbots can produce very fluent text with very good style. But they’re boring, and what they come up with can be completely false.” For Reason magazine last year, I reflected on the promise of ChatGPT along similar lines: “Bad writers, cheating students, lazy professors, and journalists echoing press releases have clearly met their match. But the more human, creative, authentic storytelling that is the center of all meaningful writing has not.”

The tractor attempted to compete directly with a farming industry routinely employing over a third of the labor force in the 1800s and early 1900s in the United States, constituting some 15 percent of gross domestic product. What is the total addressable market for large language models and by extension general AI? Statista estimates that the market size of AI in the United States, a $27 trillion economy, is some $100 billion—a fraction of a percent. Even if that grows seven-fold this decade in line with projections (nothing to scoff at!), that’s also not as revolutionary as most pundits have claimed in this the first year of their widespread adoption.

Solow, who died late in 2023, might have repeated his statement about this new form of the computer age. Like the computer in the 1990s, the onset of AI and large language models make more media puff and noise than they have real-world, real-economy impact.

There is some suggestion that adoption of new technology and consumer items happen somewhat faster today than, say, in the 1940s or 1980s, but not by a lot. Still, what is more likely to happen than mass white-collar unemployment is that we’re going to have a symbiosis for a while. The old human-labor technology and the new machines will coexist, and human workers will gradually employ the machines in different ways. An evolution, not a revolution.

At the end of the day, writes Mike Munger for the American Institute for Economic Research, ChatGPT is just a calculator. And like calculators did, it will obsolete some human labor. And that will be fine.

Wall Street Journal | Labor & Employment

Companies with Robots Now Need Human “Robot Wranglers”

“Rutenberg, a robot technician and trainer at Amazon, is among a new class of workers responsible for corralling and managing the robots, fixing minor maintenance issues and keeping tabs on their locations. The professionals say the machines they work with tend to perform their tasks with precision but often also a little naiveté.”

From Wall Street Journal.