Skip to comments.America will continue to bleed jobs
Posted on 02/01/2003 11:27:51 PM PST by FightingForFreedom
Wages will not equalize between U.S. and foreign countries for a very long time, if ever. The problem is supply differences. The 100 million or so American workers are vastly outnumbered by the potential number of Chinese, Indian, and other developing nation's manufacturing and knowledge workers. The standard of living differential is also too great. The balancing act for U.S. and multi-national businesses that are outsourcing our jobs is to make sure they don't kill the golden goose (the American consumer) before they've generated an even bigger goose to take to slaughter in China, India, and other targeted markets. Remember, producing cheaply means nothing if there's nobody to buy the products. And no one has been as well-trained as the American consumer to buy, buy, buy, no matter how much in debt one becomes! As a software engineer, I've seen this problem coming for at least 5 years now, but it was well masked by the artificial high-tech bubble through March 2000. I'm not sure that there is an answer at this point -- the genie is out of the bag, so to speak. Once one company in an industry has convinced the govt to open a market in one undesirable country or other, all other companies with which it competes are forced to do the same. Bottling up the genie is notoriously difficult.
Provided I were given the choice, yes I would, which is exactly what I'm saying. I'm better off buying goods I actually want at lower prices as opposed to higher ones. The whole country is better off when I am forced to constantly reevaluate the value of my work to the public. Only a free market can do that, not tariffs, quotas, gov't job programs, tax-credits, or well intentioned and naive politicians.
Yes. In fact just last century it wasn't uncommon for a man and his sons to spend 14 hours a day working the fields. Oh, how I yearn for the good ol' days.
There is one rule for the industrialist and that is: Make the best quality of goods possible at the lowest cost possible, paying the highest wages possible.
-- Henry Ford
"I believe in the dignity of labor, whether with head or hand; that the world owes no man a living but that it owes every man an opportunity to make a living."
-- John D. Rockefeller
"The high wage begins down in the shop. If it is not created there it cannot get into pay envelopes. There will never be a system invented which will do away with the necessity for work."
-- Henry Ford
Hey Big Mouth! What do you do for a living...BTW?
These are real people with real families and with hopes a dreams. I can wait to see how you put bread on the table.
You are nuts. Have you made a household budget? Do you live with your parents still? Are you in high school? This post is exhibit A, in "Why FR is not really worth reading anymore."
FYI I have been in a few fast food places and there are MAJOR attitude problems there which is why people are avoiding them and they are losing money.
Sorry to be so blunt.
The goods you are buying are not the same. I have been having trouble buying good clothes and shoes. Most casual clothes are made very cheaply- Abercombie & Fitch style yet cost nearly the same as real clothes. I still have a pair of black dress shoes that I bought for $80 abt 20 years ago. Recently I bought some shoes that I felt were of equivalent quality. They were made in Holland and cost $200. Yes you can buy leather shoes for $80 still but they are unwearable. Some people can't tell differences in quality. But for those who know, what is being made in China is not the same as your typical US made shoe of 20 years ago.
Then why is it taking very costly government programs to support the "NAFTA displaced workers"? You know they keep extending that original 18 months they were provided free education, computers, living expenses, etc? Who is paying for them? What's the point of having cheaper prices if we have to have higher taxes to support all the welfare and unemployed?
Because we don't have the guts to tell former Lucent unionized factory workers that making telephone switches based on 25 year old designs at $30/hr. only works in cloud-cookoo land?
I think alot of these relative wage analyses are faulty. They compare the Silicon Valley programmer with what the Indian programmer is paid. This is not the best basis of comparison.
Compare a programmer in the US Midwest (much cheaper) with what the Indian service bureau charges (not what the programmer is paid). I bet the advantage is near 2:1 or 4:1, not 10:1. Also take into account that remote programming IS more costly and frequently has quality control problems.
If the Philipine or India programmer increases their wages at all (which they will... They will get parity with European programmers soon I'm sure), the cost advantage will not persist.
I am a fellow victim. I got downsized in electronics the last go around. I am now in IT. There is plenty of work out there to do. I answered an add in the paper last fall after particpating in another doom and gloom HIB FR post. I got an interview on the first ad I saw and probably would have been offered the job if I had really wanted it, but it would have lateral job transfer. The search commitee did say competition for postition was extremely competitive.
That's what a free market and consumer choice is all about. Especially with the Internet, we have an entire world of options at our fingertips.
I used to buy $250 handmade shoes from Russell Mocassin Company in Wisconsin, shipped to California. They were excellent shoes, but I'd wear down the heels and soles after 6-12 months and have to pay $20 each time to get them repaired locally. Now I buy $20 shoes from Payless Shoe Store. They look fine and fit fine. Even though they completely wear out after 6-12 months, I just buy a new pair of shoes; it's cheaper and easier. I have no idea where in the world the Payless shoes are manufactured, and I could care less. I'm the consumer, and it's up to shoe manufacturers to meet my specific needs in order to earn my money, or I'll simply find a different producer.
No, No, No, and No.
FYI I have been in a few fast food places and there are MAJOR attitude problems there which is why people are avoiding them and they are losing money.
I avoid ones that provide lack of service and a clean environment, but the whole industry isn't plagued with bad service and bad attitudes. Burger King and McDonalds have some tired worn out stores.
Two or three decades ago people were saying exactly the same thing about Japan. They were writing books about how Japan would soon overtake the U.S. and become the economic superpower of the 21st century. They were saying that the U.S. had no chance to keep up unless we changed our business and social culture to match "Japan Incorporated".
Well, Japan's government subsidies and directed investments and guaranteed life-time jobs and propped-up banking system and real estate bubble eventually took their toll. Our relatively-freer society, in which great failure as well as great success is possible, has left Japan in the dust. Japan is still a highly developed nation with good prospects ahead of it, but it's not about to overtake the U.S.
China is the same. It has made huge strides as its leaders have freed up its economy, but that's mostly because it started from disastrous communist-created level. It still has a long way to go, especially when it comes to individual freedom and initiative and a stable legal system that protects contracts and property rights and which financially rewards success.
If the U.S. continues to add regulations and governmental restrictions and taxes, and if we insulate ourselves from trade with the rest of the world, and if China ultimately turns into a free society, then perhaps it will become the premier economic force fity years from now.
But if we repeal taxes and rules and red tape, and tear down barriers to free trade, we'll just keep lengthening our lead. The entire world will be richer as a result, but we'll be richest of all.
I don't fear that kind of a future.
It appears that between 1970 and 2000 the median per capita income of men was stagnant (again using that inflated CPI number), while for woman it close to doubled. So that suggests that woman have become more productive and are working longer. However, the percentage of over 20 adults working full time of the total work force only increased by from about 57% to 63%. So it appears that the main change on a median basis is that woman working full time are making a lot more for each hour that they work. That is hardly surprising. There are all those female lawyers and doctors out there now. It should also be noted that the average household size has decreased since 1970 from about 3 per household to 2.5. So there is more median household income to go around per person.
Overall, I suspect these factors are a wash, and families at the median correcting for woman working longer hours (I don't think men are), on a per household member basis are about 50% better off than they were 30 years ago, as I said before after reverting to a more accurate CPI figure as a deflator.
Of course, the big, big change is that the top third earners are massively better off. and the bottom third only marginally better off. That is why I insisted on using median numbers. Using mean numbers would give an excessively rosy picture as to the economic status over time of the average American.
I hope that helps.
I started this thread with a simple posting last night -- my first on FR. My apologies to FR -- I actually thought I was just posting a reply to another article -- didn't understand how the forums were organized. Imagine my surprise when I woke up today to find all the replies here.
Contrary to the claims of some of the less "tolerant" postings, I am the furthest thing from a Marxist I can imagine. I am not anti-trade, nor for overall protectionism.
I am for a return to our consitutional principals, for free markets, low taxes, elimination of progressive taxes, if not all income taxes, and large-scale deregulation.
While I generally favor free markets, it seems they are causing the very problem the founders envisioned. I do not believe in blindly holding fast to a belief while ignoring the consequences of an action is positive. The rapid lowering of trade barriers with virtually every low wage country has consequences. I posted the message because I fear that we as a nation are entering an era of severe economic and social problems caused in large part by the wholesale movement of our top-paying jobs to super-low wage countries. Here's the problem as I see it.
We've already seen the loss of a large segment of our manufacturing jobs. Fine, say the free traders. The rest of us get identical products for much less money. True. And look at the bright side. We have thousands of former manufacturing workers to greet us at WalMart.
According to the Business Week article (about jobs moving overseas) posted here and other places, the next to go are our IP (intellectual property) jobs, such as software, biotech, engineering and artistic design, etc. IMO, it actually would be easier to keep manufacturing jobs in the U.S., within the context of a complete free trade world, than it is to keep IP development jobs here. The reason is that the labor portion of many manuf jobs are a very small component of the total product cost, overshadowed by such things as legal liability, and compliance with environmental and other regulations. So, if we eliminated these "problems" by relaxing our own regulations (but who wants dirty air and water), or forced similar regulations on our competitors with $2 a day wages (through the WTO, presumably) we might actually be able to keep some manufacturing in our country.
But, what about intellectual property development? Software, hardware design, biotech, and even legal research -- yeah, the lawyers are not home free either. Just wait until the large law firms start training large legal staffs in India to do their non-courtroom research work at $6K a year instead of $120K.
IP development takes hands, or rather, brains-on labor. It can be sped up by design or development tools, but in essence - it's one brain against another in the world of open competition. If I can buy a brain in China for $10 a day or in India for $40 a day, how can an American compete? I don't think many Americans would be happy making $40, or even $80 per day, assuming we can be 2X as productive, or work 16 hour days.
Consider this. What happens once all the IP devel jobs are shipped out of the U.S., the next generation of students will not study those fields because there's no job potential. How, then, is America to maintain it's lead in technology development? Will we even stay in the game? Consider me a neanderthal, but I don't believe that the concept of the nation-state is dead.
I don't have an answer to these trends and perceived problems. Wholesale protectionism is not the answer. That would simply tank our economy. But, look forward to a giant backlash as more IP workers are displaced from their $60K and up jobs, with nowhere to go but Walmart. My best guess at an answer to this is for the U.S. to create a two-tiered trading system. I have no problem with complete and open trade with other countries with similar standards of living, environmental regulations, and salary levels. That might even force a reduction in business-killing regulations, as we attempt to compete with those countries.
The error you make is that you say it is some segment of our population that is better off. That is not necessarily true. I give 2 (extreme) examples.
(1) Assume that an ultra rich guy owns a company outright. He employs 1000 employees. He moves all their jobs offshore. They are all laid off. The government pays them unemployment. His company does not make products used by American consumers. Who benefits? (a) The foreigners who now have jobs, the rich guy, and the foreign purchasers of the goods. Who loses? (b) The former American employees and the taxpayers. In this example, the "segment" (in the American economy) better off is the one rich guy. Who sits might or might not inject that money into the American economy. If not, that money "disappears" from the perspective of the (American) economy overall.
So you say, but wait. My example cheated. 1st, it is unlikely that some "rich guy" is the owner. And 2nd, I stated that products made are not used by American consumers (in the example). True, today most corporations are "owned" by mutual funds. And if the goods were consumed by American consumers, then those consumers would potentially be better off.
(2) Assume that
an ultra rich guy a mutual fund owns a company outright. The company employs 1000 employees. He The CEO moves all their jobs offshore. They are all laid off. The government pays them unemployment. His company does not make products used by American consumers. Who benefits? (a) The CEO, the stockholders, the foreign employees, and the consumers. Who loses? The laid off employees and the taxpayers.
However. This assumes two things. 1st, that those other consumers are not losing their jobs. If they are, they may stop buying even if the price of the products fall. If too many companies pursue this strategy, then that scenario occurs and the economy tailspins into a depression. 2nd, that the laid off employees can find work without displacing other Americans. Problem is if the 40K/year person takes a job for 30K at employer B, which enables employer B to lay off a 35K/yr employee. That employee gets a job at 25K/year at employer C, which then lays off a 30K/year employee. And so on. This kind of game can go round and round, where in aggregate the American consumers overall start to earn less and less (because they keep getting laid off and take jobs at lower salaries.) This means they have less to spend. At that point, see the 1st problem.
That is exactly the goal of the globalists. Bring down America to bring us into the New World Order. The terms "balance of power", and "equal partners" are buzzphrases that have been used in the past to describe this.
Consider me a neanderthal, but I don't believe that the concept of the nation-state is dead.
No, but your leaders (of both political parties) do.
You just need to excuse some of us who still care about what happens to this country. We do have the right to think the way we do, even if you do not agree.
After WW2, men with high school degrees were able to get jobs to support a wife and children. Not so anymore. And along with both parents having to work, the 2 parent family is becoming a thing of the past, and a society can't stay healthy that way.
About forty years ago,rubber spatulas were discontinued. I despaired. Thankfully, they're back again. Shoddy merchandize has been sold, in the USA, since before we were even a nation. Two working parents, are more the norm, now, than they were before, for two reasons : 1) taxation 2) and this one is the more relivant reason, people want ( not need ) far more than they ever have before.
Time was, that one didn't have to graduate from grammar school, to get a job, here, that would support a family. Through time and a more and more, ever advancing society, one needed a high school diploma, then one from college, now, graduate degrees are required for some of those same jobs. Lincoln never went to law school. Factory and mine workers, who supported families on those wages, did NOT have / demand to have what people today think it is ther " right " to want to have. Guess what ? Live within your means and you don't have to earn as much. It's all relative.
The news media ( and I am now talking about newspapers and then, also radio ) were as filled with propaganda, from the start, as they are today; if not more so.
You base your positions on almost NO facts at all. Don't do this. :-)
Using credit cards doesn't mean that you have to have debt. Only morons, who have no business having / using credit cards in the first place, get into trouble.
It's calamitous, that today, people think that they have some sort of " right " to having as much as they think they should, without really working for it. More, more, more, M-O-R-E ... and they think that they're " poor ", when they don't have way more than what used to be considered " normal "; even " rich ".
You CAN buy bed linnens on line and from catalogues. Cheap is dear. Buy expensivish stuff and it'll last you decades. If you need help finding what to buy and from where, ask me in FREEPmail.
There are lemons out there. That goes for clothes dryers, phones, and everything else. The ancient Romans had a good saying about this : BUYER BEWARE . Also, you usually get what you pay for, dear. :-)
" KEEPING UP WITH THE JONESES " is a VERY old phrase, which predates the '80s, by many decades. Image has been important since the begining of time.
You REALLY need to read a very great deal more historical works about other eras.
In all places and in all times, those who get laid off, think that the economy stinks, and those who weren't, don't complain as loudly. No one, least of all me, said that this economy is wonderful ; it isn't. Wake up, a HUGE " BUBBLE " burst, were were attacked on our soil, and a wartime economy is ALWAYS " bad ". This nation has lived through far worse economic times though.
No argument from me regarding your entire post (#180). My point is that we have to straighten out our problems at home, not seal ourselves off from the world. If other nations become freer and more capitalistic while we become more socialistic, they will indeed overtake us economically. If we can remain the freest and most entrepreneurial nation on earth, others won't be able to touch us. If everyone in the world becomes freer, everyone in the world will benefit enormously.
That needs to be our goal. We shouldn't fear open trade or other (low-wage) countries. We should instead embrace competition and liberty.