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.
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.
That's all.
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. :-)
Sheeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeesh !
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.
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