No Agreement On Outsourcing: Is It Helpful Or Harmful To U.S.?

[54anickel]

http://biz.yahoo.com/ibd/040402/feature_1.html

By now, everyone has seen the concerned TV news anchors reporting day after day about all the jobs that America is losing to places like China and India.
It's true that more U.S. firms, needing to watch expenses, are moving their service jobs to countries with low labor costs. This practice, dubbed "offshoring," can save companies about 40% on their total costs of operation.

But some researchers and politicians are saying the media drumbeat may be out of synch with what's really happening - that offshoring will actually lead to more U.S. jobs.

Why the controversy? Unlike the loss of U.S. factory jobs in the 1980s and 1990s, offshoring is affecting white-collar workers, particularly in the information technology field. These are jobs that Americans didn't expect to see exported.

more...

[ramapo]

1. Hard to see how it's helpful

The loss of manufacturing jobs, while having been politically more acceptable, set a terrible precedent for the US. The loss of white collar jobs is even worse as there is nothing to replace them and it is hard to see how this trend can be arrested without starting trade wars.

The migration of manufacturing jobs, whether from the North to the South, the South to Mexico, or somewhere in between to the Far East, has had an overall negative effect. The Northern cities have never recovered from the loss of manufacturing jobs, once the basis for a healthy low-to-middle class in the North.

The South did prosper for a time from this migration but now manufacturing is moving on again to cheaper pastures.

The positive aspect of the manufacturing job loss was the lower price of goods, which has in turn provided all Americans with increased purchasing power. But we have paid a price while becoming, perhaps far more than is healthy, dependent on foreign manufacturing.

The off-shoring of the service sector affects a wide spectrum of workers from low-wage, entry-level customer service through the highly skilled and compensated technology providers.

The only benefit of this trend is to the corporate bottom-line. I'm in the technology field and have watched outsourcing grow over the past few years. I have not seen or heard of ONE instance where a new job was created from the money saved from off-shoring. The only shift has been in requirements for project managers where these individuals need to be more skilled (and thus compensated) in order to deal with offshore projects.

Previous seismic shifts in employment have been positive. Manufacturing replaced agriculture. White collar replaced blue collar.

There is no "new" thing generating good jobs to replace those lost offshore. There is a proliferation of low-wage, low-benefit service jobs in retail, health care, etc. I liken this to a pyramid scheme. Keep building Wal-Marts, generating jobs, until the whole mess collapses from its own weight.

Large chunks of the "food-chain" for workers are being lost and I believe the entire ecosystem is thereby at risk. We have created a scary future.

[library_max]

2. Outsourcing may lead to more US jobs?

For who? Pawnbrokers? Bankruptcy lawyers? Red ink manufacturers? Jack Kevorkian?

Corporations are looking for the employees who will work the hardest for the least under the worst conditions, ending inevitably in wage-slaves working slave hours for starvation wages under sweatshop conditions. If they can't have Dickens-era foundries and Upton-Sinclair-era sweatshops in America, they'll have them somewhere else. How could this possibly be good for anybody in the long run?

Extensive coverage of this issue here:
www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=104&topic_id=1321709

[54anickel]

3. Answers on Outsourcing

http://money.cnn.com/2004/03/11/commentary/dobbs/dobbs/index.htm

The following is a guest column by Rory L. Terry, an associate professor of finance at Fort Hays State University.

NEW YORK (CNN) -- A great deal of effort is being expended to convince us all that the outsourcing of jobs under the rubric of free trade is a good thing. I would like to discuss some of these arguments.

Our labor force is not better trained, harder working, or more innovative than our foreign competitors. The argument that we will create new jobs in highly paying fields simply is not true. We have no comparative advantage or superiority in innovation. To assume that we are inherently more creative than our foreign competitors is both arrogant and naive. We are currently empowering our competition with the resources to innovate equally as well as we. Consider the number of new non-native Ph.D.s that leave our universities each year; consider our low rank in the education of mathematics and the sciences; and consider the large number of international students enrolled in our most difficult technical degree programs at our most prestigious universities.

big snip>

The costs of the decision to outsource are not borne by the decision maker. As a society and as a country, we experience many costs from outsourcing, including the loss of jobs, social costs, higher costs of raw materials and loss of national sovereignty. Loss of jobs reduces the tax base, creates high unemployment benefit costs, and raises the cost of government retraining programs. Displaced, unemployed workers have higher rates of child and spousal abuse, alcoholism, bankruptcy, divorce, etc. As China and India and other large populations grow, they demand huge quantities of oil, gas, steel and other basic raw materials. These costs are born by all of us -- every time we fill our gas tanks, for example. And as a nation, we lose our ability to make independent decisions that are in our best interest when we are dependent on foreign debt and foreign manufacturing. This is a classic externality.

[library_max]

4. Kick.

:kick:

[fortyfeetunder]

5. a chain reaction to disaster in the US

Let's see unemployed people (and not collecting unemployment bennies) can't pay taxes.

Taxes that can't be paid drain the government of funds used to provide services to the populace..like public safety (police and fire), transportation, health care, occupational safety and health protection, environmental protection, and so forth.

So more people who work for the government become unemployable too. They can't pay taxes either.

In the private sector, when people get laid off and can't find work, were do they go when the money runs out?

Only the independenly wealthy have more options for survival.

It's beginning to look like a third world country.

[Robert Oak]

6. My 2 cents

We have a group, completely devoted to exposing the "trading of Americans" for cheaper foreign counterparts as being basically analagous to the slave trade. There are a series of books and articles, websites, from world leading thinkers referenced on how "outsourcing"
is not good for America, not in terms of bottom line dollars for a 1st world economy (it's fantastic if you're in the controlling elite though!)

We've tried to post references to serious analysis, with references
and statistics to back up their claims...and the picture is bleak
I'm afraid for the middle class. We also try to expose corporate
sponsored think tank research's biased use of statistics and misleading indicators.

links in signature.

[54anickel]

7. Welcome to DU Robert Oak. A very interesting site you have posted.

I am looking forward to spending some time there in the near future. Thanks for posting. :hi:

[Robert Oak]

11. Get involved and thanks

There are over 100 groups on the web on just this issue.
The key is to organize everyone to the level of the 60's.
There is no real organization of the middle class...
and hence, even though 80% of Americans didn't want
the PNTR, congress voted for it anyway....so much more is needed
to have our representatives to do the people's will.

This is going to mushroom and we need your involvement, or vice versa
(noslaves is also a portal)

[library_max]

8. Kick.

:kick:

[Frodo]

9. There's also the foreign policy issue to consider.

I seem to remember that one of Clinton's ideas with NAFTA was that, by improving the economy of countries like Mexico (and paying what are there decent wages) we would develop trading partners.

Instead of sending cash to some third world nation we send them a factory to employ their people.

I've seen both parties make these kinds of points. I'm not sure how to read it.

[library_max]

10. NAFTA and outsourcing are two different issues

NAFTA is a set of rules governing trade between certain countries. Outsourcing does not require NAFTA or any other such trade agreement. Clinton was right that we need to raise working and living conditions in other countries, especially those that border ours. The problem with outsourcing is the same problem with global manufacturing - it is being done largely outside the realm of rules and standards, leading to a global "race to the bottom" where countries compete to see who can offer the cheapest labor force to work the longest hours under the worst conditions.

[BR_Parkway]

12. Anyone know where they are getting 6.4 million jobs insourced?

I'm having a debate with someone who is throwing around "facts & figures" that aren't backed up, I want to rebut, but can't find any basis for all the quotes

http://www.ofii.org/facts_figures/

The 6.4 figure is interesting, and I want to slam some freeper with it against their unsubstantiated claim that 6 jobs are insourced to every one outsourced

[MatthewStLouis]

13. Outsourcing is draining the lifeblood from our economy...

When companies ship jobs overseas not only are jobs lost: money leaves the U.S. economy. Americans need to wake up, buy American, and keep hiring American!

Thanks.

P.S. W's new slogan should be "Retrain for what?" stamped on a burger flipper... Can you imagine the effect if everyone brought a burger flipper to every Bush event...

[Robert Oak]

14. Slogan

LET THEM RETRAIN = LET THEM EAT CAKE

17. HEE HEE

"LET THEM RE-TRAIN" = "LET THEM EAT CAKE"

This had been running through my mind for weeks. It's so funny that someone else thought of the same!

16. Specifically...

You are more right than you know, when you really look at all the impacts

The housing and mortgage planners have based their models on white collar job growth and immigration growth.

Outsourcing nukes this model.

Hence, your statement "draining the lifeblood" could be correctly stated "draining the lifeblood out of our HOMES"

It boils down to either you have a vibrant white collar job market and import workers from India and pay them well (and they buy nice houses)

OR

you have outsourcing....

15. Outsourcing "pin" which pops the "housing bubble"?

Is to the housing industry. i have written one story on this, and am working on a second, more specific story.

All housing growth projections were based on an influx of immigrants who move up to white collar jobs, and similar growth of the younger set, into white collar jobs.

BUT white collar jobs are now moving en-masse to India. At least, in large part.

The house builders have no way to send their product over the Internet to India. It's hard to digitize a house. Moreover, those Indians will never be able to afford a US house on a 6000 dollar a year salary. And why would they move here, they would lose their job?

I'm afraid outsourcing is finally the (unexpected) pin which pops the housing bubble?

[library_max]

18. One last kick.

:kick:

[Robert Oak]

19. ACTION ALERT DOJ changing H1-B VISA rules

LOOPHOLE put BACK into H1-B VISA..
this is the technique to fire Americans and hire cheaper foreign
counterparts, "imported" into the US via this visa.

http://forum.noslaves.com/index.php?showtopic=96&st=0&#entry232

[Lil Timmy]

20. Internationalism?

Seems to me there might be a whiff of racism in some of these calls to limit outsourcing. Sure, it is the job of the US gov. to put America first, but is it the job of a company? Indians and Mexicans need jobs too.

[library_max]

21. It isn't racism.

Companies are relocating jobs because they can get people to work under slave conditions for slave wages. We need international labor standards similar to those in the US. We need to bring Third World workers up to our level, not vice versa. For more explaination of this, see the following:
The Global Race to the Bottom

[Robert Oak]

22. Not Racism

Mexican Americans and Indian Americans (and pretty much
everyone who is an American except American native Indians
can claim this) are also getting traded for cheaper foreign labor.

We think it is the job of US companies to support the nation-state
in which they prosper. Supposedly they pay US taxes...
with the type of reasoning that a US corporation does not have
to employ it's citizens, that philosphy extends to this conclusion:
why do they have to pay taxes anywhere?
What do they owe to any nation state?

If the answer is nothing, then I think we need to examine
the corporate entity...for I certainly do not want to be "governed"
by a multi-national CEO and a multi-nationals corporate agenda.

[bws]

23. So what do you do

So jobs are getting outsourced. How are you proposing we stop this? It seems to me that outsourcing is inevitable -- it's companies finding the lowest cost, which is what they do. If they don't, then they are losing money. If you stop outsourcing, then you are shutting our country away from all that valuable trade with other countries. If you shut us away from all the other countries, then we will not be nearly as productive of a country. How could we compete against these other countries that allow such trade if we shut them out?? You have to realize that America will not always be the number one best country, and if another country can produce a good more efficiently, that's basically why we have trade in the first place.

Yes, it hurts telling people that the best thing to do is retrain. But that sort of has how things have always been. Back when people used to have to graph by hand, and they invented calculators, many people had to retrain then too. We still have skills that are much more valuable than other countries: many people have resorted to hanging up when they hear an Indian on the phone when they call dell support because the Indians the caller has dealt with in the past couldn't speak good English. So they just hang up until they get someone who "sounds" American.

We COULD restrict trade to only those countries who have employment standards, which is I guess the best way to stop outsourcing? I just don't see it happening though. Try and remember that our country loses a lot when we restrict trade.

I'm not an Eco major or anything like that, so a lot of this stuff I'm not sure about. I went to a "debate" about outsourcing, and it was sad because the two professors ended up agreeing on just about every aspect. Yes, I don't like it, but I still don't think there is much we can do. Maybe someone else can tell me where all my professors are wrong, but I've grown to agree with them.

[Robert Oak]

24. Hypnotized by corporate propaganda

well, with that reasoning the labor rights organizations
one hundred years ago would have just said "nothing we can do"
about child labor, workplace safety conditions, benefits, the
40 hour workweek and so forth.

The government's role is regulation and there is plenty we can do.

Unfortunately the "free trade mantra" and "corporate sponsored
rhetoric" is hypnotizing the nation, almost the level of say an
advertisement on TV convinces one you "MUST HAVE" that car
in order to be "cool".

www.rescueamericanjobs.org, the IEEE, the many bills proposed
by congress representatives and modifications of trade policy
(which absolutely are not "free" or equal trade but biased trade
in favor of China and multinationals) to stop the trading of American
citizens for cheaper foreign counterparts.

Our site has lots of educational materials and action items as well.

[bws]

26. hah, you're probably right

Thanks for the site. I've been trying to read over some of the stuff they have there when I have the time. Sorry if my view seems "Hypnotized by Corporate Propaganda" but I go to UT, and pretty much anytime someone talks about this issue, its someone from the business school(which is just about entirely conservative). I'm always definitely open to changing my opinion because the one thing I know is that I don't know everything, you know?

You make a very good point about having international labor standards. I definitely see how that would help out. It would still restrict trade(severely), but I suppose the benefits would be much greater for keeping jobs here. One of the things the people in the business school preach is how the minimum wage is bad for our economy, and how wages should just establish an equilibrium price(instead of having that price floor), but I think many people agree that having a minimum wage is good. That's a bit outside the scope of this conversation, but I guess my point was trying to show that international labor standards would help. So yeah, I guess I agree with you Robert_Oak.

I simply don't agree with the fact that retraining isn't a part of outsourcing. If the jobs are getting outsourced(as in, if we do nothing), then retraining is absolutely necessary, so I sort of don't agree with you there library_max. Because if you retrain into a job that can't get outsourced, they can't force you to work 70 hours, no? I might be missing something there, but it seems that if outsourcing does continue, then retraining will be a must, no? Hopefully it won't come to this and outsourcing will be stopped though.

[German-Lefty]

28. Global Minimum Wage = Really Bad Idea

It sounds like a good idea but think of this scenario:

XLand is a small developing country. Through international institutions the West has mandated that in order to trade with them workers must be paid a Y USD in minimum wage.

Due to some instability in the region the XLand Dollar (XLD) falls 50% against the US Dollar (USD). So now everyone earning minimum wage there should get a 100% pay raise, or their jobs must be terminated.

If there is a lot of economic damage due to this, it could cause their currency to fall further. A cycle of destruction.


I've heard people argue the best thing we can do for them is insist they have collective bargaining rights. This should give them enough power to get a fair wage.

[library_max]

29. Wouldn't the IMF be able to do something about this?

Assuming, as the original argument does, that they have been "fixed" to defend workers' interests rather than attacking them.

[German-Lefty]

31. I'm not sure what they could do.

If some outside force aggressively bought up the falling currency you might be able to prop it up I guess. I'm not sure that's always possible or a good idea.

Argentina had a USD reserve. They blew it. Should the US have to print dollars to bail their currency out?

I've heard people argue that we should go back to when countries would lock exchange rates via treaties. I'm not sure if that's a good idea. If some country blows all their money and tries to print more, or takes on some debt, or starts a war, their currency should be punished because of it.

Sure in the EU we can do it, in fact we can use the same currency, but only because we can trust the other countries not to screw stuff up too bad and we share institutions like the ECB.

Anyway I think its way more important to push trading partners to respect worker rights directly, most importantly the right to form unions and collectively bargain.

[redqueen]

35. Couldn't that minimum wage be a living wage

indexed to the costs of living in that country and in that country's currency (i.e. not set arbitrarily by the US)?

Would that fix the problem you described?

[library_max]

37. Excellent idea, thanks. /nt

[JDPriestly]

48. Retraining is irrelevant because of U.S. age demographics

Sorry this is so long. I'm pretty bitter.

The U.S. population is aging, and age discrimination, although illegal, is the rule in the workplace. Many white collar people who lose their jobs to outsourcing are over 40 or 45. I'm 60. I and others my age are highly skilled at the work that we have done over the course of our lives. We are also emotionally mature and more patient and wiser about life than younger people. You'd think we'd be in demand. We aren't.

When we apply for promotions or new jobs, employers tell us that we are "overqualified," "overeducated," or that we don't have the specific skills they need. These are euphemisms for "You're too old."

When I was 30, the local McDonald's and the phone company were willing to hire me for entry level jobs although I had a Master's Degree. They wouldn't hire me today to mop their floors even if I lied and said I was a high school dropout. They wouldn't even give me a job as an unpaid intern. Why? Because it isn't worth their while to train me -- not even for the lowest level work. Companies calculate that older workers won't stay long enough to justify the cost and trouble of training. Believe me, this is no conspiracy theory. That is what my last employer told me when I asked for a promotion.

So, you say, employers would be more willing to hire older people if the older people took the financial burden and risk of retraining on themselves. Dream on. At the age of 50, I went back to night school and retrained for four years. I worked full-time during the day, went to school with people less than half my age at night, took rigorous courses, and graduated with honors. But, when it was time to get a job, I couldn't even get interviews. Finally, I was hired, but only to perform a narrow range of tasks in my new field that were similar to those I had done in my previous career. I was being hired for the skills I had, not for my potential to develop new skills. My employers (three of them) did not even want to invest a little time interacting with me so that I could supplement skills I had brought from my previous career by learning from their advice and experience. Those employers, however, spent hours and hours talking with and training young people who had utterly no previous work experience to do tasks I could have learned in far less time.

So, you say, it is probably my personality. You figure I'm a grouchy old person, set in my ways, hard to get along with, etc. No, I consistently get top ratings on performance reviews for my personality -- for being flexible and easy to get along with. It's just the sad truth. With the exception of Walmart "greeters," employers do not want to hire, associate with, or train older workers to do new tasks.

I'm lucky because my health is excellent. Many people my age also struggle with serious physical disabilities -- overweight, diabetes, skeletal or nerve deterioration, heart disease, Parkinson's disease, cancer, etc. Retraining is even more of a waste of time for them.

To sum up, retraining is expensive and useless for displaced workers over 55, and it is futile for those of us who are over 45. I suspect that we make up a large portion of the white collar workers whose jobs are being outsourced.

Many of us are taking early retirement or starting consulting businesses. But, those choices take money, and people who choose those alternatives have to take the money from their personal savings and pension funds. That means they are living now on money they will need later. As unemployment trickles up, up, up the economic ladder, the future looks very bleak for older Americans. The worst of it is that older Americans tend to be too proud to admit even to themselves just how bleak.

[library_max]

25. Retraining has nothing to do with it.

Jobs aren't being moved overseas because Asian workers have training American workers don't have. Jobs are being moved overseas because Asian workers are willing to work longer hours under worse conditions for much, much less money. Is there a training course that teaches American workers how to work seventy-hour weeks for chicken feed? Because that's the "retraining" they'd need.

What we need is to develop international labor standards. We have the structure and mechanism for such standards in our trade agreements and institutions such as the WTO. Currently, those are being used by corporations to bully Third World governments and degrade labor and environmental standards, but the devil is in the details - they could be rewritten and reworked to turn the situation around. Currently, the US has the economic power and prestige to lead in this endeavor. That's not going to last much longer the way things are going.

[JM]

38. Find other ways to cut costs

that are less detrimental to local tax bases.

Perhaps a telecommuting tax credit would be more beneficial? I have never understood the corporate-penis-envy approach to business, where one company's building is larger than another's. Save the overhead and let employees work from home. The ancillary savings potential is enormous as well. Less infrastructure cost on roads from fewer cars. Less oil importing. Less pollution. Return of the local community stores as opposed to the enormous malls.

Corporations could easily make more profits and employ more people locally by doing this if they want to or are given the proper incentive to.

I do know they are worried about productivity of workers at home, but I am sure there is technology available to ensure employees are doing their jobs. If it isn't there yet, it would be quickly out of necessity.

The added bonus to doing this is it helps terror-proof the economy. A distributed work base makes it harder to take out important businesses that are located in one place.

JM

[bonemachine]

27. If it's helpful or not

really depends on whose perspective you look at it from...

Now, I still say that if we only allowed companies to outsource if they met congruent labor and industrial standards, then we might be getting somewhere. And they could still offset some costs due to the difference in cost of living.

[brokensymmetry]

30. Outsourcing is a disaster in the making.

China is becoming the center of manufacturing activity for the world. To an ever greater extent, we in the US neither feed, nor clothe, nor otherwise supply ourselves in any area.

We are building up a staggering debt to foreign nations - including China.

Are we prepared for the day when China is the worlds greatest power? With 1.3 billion highly capable people - and a government that protects the growth of their industry behind trade barriers - why would we not expect them to supplant us? Especially when we are helping them do so with outsourcing!

[Robert Oak]

32. It's frightening

There is the India caucus, basically "purchased" congress representatives working for a foreign nation instead of us.
They keep pushing for increases in H-1b, L-1 VISAs and outsourcing
knowing full well it's decimating the engineering professional
in the states and allowing cheap foreigner counterparts brought in.

Now we have "friends of India" in the Senate, Hilary Clinton
being 1 of the co-chairs, again trying to fire even more
Americans and replace them with cheap foreign counterparts.

a Budget deficit the IMF repeatedly issues warnings on, a war
costing billions and record foreclosures and bankruptcies.

I don't know who are government officials represent, but it doesn't
seem to have anything to do with what Americans want or even what's
in the best interest of America at any level.

(more info, links on outsourcing, etc. on our site)

[redqueen]

36. That we smile on China so much absolutely kills me

Remember SARS? Their lies about the outbreak? I heard on NPR this morning that they've arrested some of the journalists from the paper which outed the epidemic for 'corruption'.

Don't we see Castro trashed for just this kind of behavior?

:grr:

Do either China or India observe ANY child labor laws?

:mad:

[Ookie]

33. Well, that depends on whether you are the CEO

or the one being outsourced. Or maybe the one in the country who gets the job. I think the fact that the disparity between CEO and worker pay is growing is a large part of the problem. Most companies could afford to keep people on and pay a living wage, but the money grab at the top prevents it. Kinda like what's happening with our current administration and what's left of our country. I still can't figure out how ANYONE could still approve of Bush.

[Robert Oak]

34. How to people vote for bush?

There are these pods and they come from outer space and these pods
grow in your garden, but unfortunatley they are growing people
who look just like you...
but they vote for Bush and think Bush is great no matter what
the facts state...
it's...

Invasion of the Body Snatchers for Bush!

[DFLer4edu]

39. Cheap Labor

I don't believe that our government should help American companies to move jobs overseas. American's need jobs and we shouldn't help corporations take them to other countries. But on the same hand, we can't prevent them from doing so. Labor is simply cheaper in 3rd world countries. Most of the responses to this thread criticize American companies for the moving of jobs overseas, which is understandable, yet they do not propose a policy of no offshoring that would work. Adopting a policy of job protectionism will not work. It will slow down the exodus of jobs overseas, but it will not stop the flow. It will, however, hurt trade and prevent the creation of more jobs hear at home. We must use US company jobs in other countries as leverage in trade deals to boost our exports which will in the long run benefit workers.

[library_max]

40. What we really need are international fair labor standards.

(See my responses earlier in the thread). Otherwise, India and China may be happy today, but as soon as their economies get prosperous enough for workers to expect a living wage, watch those jobs move again to Indonesia or Nigeria or someplace else where people are still willing to work slave hours for starvation wages. This can be repeated ad infinitum until the entire world is back in the era of Dickens and Upton Sinclair, unless we do something now to stop it.

[DFLer4edu]

41. Great idea

I'm with you, totally, but labor will still be cheaper in other countries.

[library_max]

42. Yes it will, at least in the short run.

It will take a long time for the economies to even out. And it'll be the end of twenty dollar dress shirts and sixty cent cans of tomato sauce. But Americans have too much stuff anyway. We can't get health care or buy a house or send our kids to college, but we have closets and basements and garages full of stuff.

[DFLer4edu]

44. The short run?

I see no end in sight, even with international fair labor standards acts. What end do you see in sight to labor being cheaper abroad? The United States has become the superpower of the world and the economic powerhouse. There is no end in sight to cheaper labor abroad.

[Robert Oak]

45. solutions

It's a complex problem and on our forum, we're looking at solutions
from corporate tax reform to international labor law to trade policy to fiscal policy to
changing the definition of a corporation to incredible some national
loyalty and social responsibility.

What's the answer to stop this? There is a law from 1914 that
states labor is not for commerce, so why isn't that law being
challenged here...

[library_max]

46. When corporations can move all kinds of jobs overseas,

willy-nilly, they'll go wherever labor (actually capable of doing the job) is cheapest. In the long run, that means there will be no haven of high-paid employment, not in the US and not anywhere. People in personal service areas whose jobs can't be moved (like barbers, doctors, auto mechanics) will find their clientele shrinking to starvation-wage agricultural workers, government employees, each other, and a tiny number of top corporation executives. This will shrink their income and require them to compete by lowering prices. Government employees (teachers, police, bureaucrats, etc.) will undergo a similar phenomenon - there simply won't be enough taxable income left to pay them in the numbers and at the wages to which they have become accustomed.

The great mass of the work force will end up unemployed and desperate. When they get desperate enough to work for what Nigerians or Vietnamese will work for, the jobs will miraculously come back. That's when labor will cease to be cheaper abroad - when it gets as cheap as it possibly can get here. So the only basis for hope is to set international standards for how cheap it can get, at a minimum, anywhere, while we're still the "superpower of the world and the economic powerhouse." Because even US-based corporations don't give a rat's ass about the USA. The execs that do will either have to swallow their principles or be replaced by greedy shareholders who don't, and/or by stupid shareholders who don't understand what's happening.

[mhr]

43. Republicans Worst Nightmare - People Like Myself

Unemployed 4 years!

Two College Degrees: BSEE, MBA

Special Training: FAA Certified Commercial Pilot

Military Service: Officer United States Navy

Professional Work Experience: Long and Varied

Slowly becoming impoverished!

Can't get low income jobs - too much experience, too many illegal aliens
Can't find middle class white collar jobs - outsourced or already filled

Republicans say I and others did not work hard enough, or play by the rules well enough, or stay off drugs, or a whole host of other excuses used to dismiss the misfortune of others?

The argument does not hold water and myself and others are living proof of the lie!

The American Dream Is Dying At The Hands Of Outsourcing

[rapier]

47. notes

First off the big dog in this is China. For it is China which has made such a huge crater in our manufacturing base.

Second the news anchors for the most part feign concern as they like everyone making 6 figures plus and working for a corporation KNOWS to the core of their being that globalization and 'free markets' are only way to go.

What they miss is that China isn't part of a free market system. Their currency is not part of the market system. It is pegged, or managed in relation to the dollar. More important perhaps is that their banking system is not really a market system either. The large government owned/operated banks dominate and currently about half of all their loans from this boom period of the last few years are bad, not performing.

One could say that cheap, easy and undeserved credit thrown into any manufacturing project there has amounted to a subsidy. This subsidization has amounted to a massive over investment, or malinvestment and the fruit has been the relentless price pressure which has forced ever more US and European Japanese and even Mexican producers to shut their doors or move to China or just import their goods..

I'm not here to bash China and it is impossible to know if all the above was a strategic decision but the result has been to markedly weaken the incomes of the majority of the rest of the worlds workers. That in turn has produced significant inbalances in those other economies which is causing systematic risk which could cause extreme economic and thus political problems.

Sadly this price pressure has been mistaken by Greenspan et. al. as a "productivity miracle". That miracle is simply the relentless drop in labor costs. The resultant lack of inflation has only led to absurdly low interest rates and the resultant consumption binge and speculative fever in financial assets and real estate.

In other words work and savings have been savagely attacked by our leaders in favor of 'investment' in non productive speculation or catering to excessive conspicuous consumption.

The offshoreing most certainly hasn't led to more jobs. This 'recovery' has produced something like 8 million less jobs than would be expected from all post 1950 recoveries.

What it has led to is some good 'earnings' by corporations selling the things made in China and indirectly by that pressure on wages. Importers here are actually making more profit selling their goods than China is making producing them. So someone is making good money from the offshoring but it isn't workers. It's corporate manangers and of course stock holders. Which gets us back to the news anchors and opinon leaders and all the rest of those in love with globalization and 'free markets'. Since the game has been very good to them they extrapolate and assume its good for everyone.



It isn't that "some researchers and politicians are saying the media drumbeat may be out of synch with what's really happening - that offshoring will actually lead to more U.S. jobs", THEY ALL SAY THAT Despite the irrefuteable proof to the contrary based upon 50 years of bussiness cycles which shows jobs and income have been bled by offshoreing. One might argue that those post war recoveries were an anomoly. The bizzare thing is that so many of the actual workers who have been hurt by it continue to embrace the ideology behind it.

Let me again mention that China's development, or specificly the boom in manufacturing there, has very little to do with free markets. This is a crucial thing to understand when discussing this issue. Once one understands that China has a managed economy and a mangage currency the terms of the debate switch profoundly. It isn't about free markets, it's about shifting income to the top, away from the bottom, as a matter of ideology and policy. Even if that ideology and policy end up weakening us colletively they care not because it serves them personally.