Outsourcing Jobs To Low Cost Labor Markets Destroys The Consumer Base

[Yavin4]

Greedy global corporations run by self-interested managers whose only talent is to cut costs so that they may enhance their own compensation do not see that outsourcing jobs to low cost labor markets or insourcing low cost from abroad only serves to destroy the purchasing power of the consumer base. See today's horrible retail sales report as evidence.

Sure, for a while, you can convince central banks to lower borrowing costs to near zero and allow consumers to borrow money to replace the lost wages, but the consequences for doing so is the reason for the current crisis that we are all experiencing right now. In this past decade, it was far easier to borrow $500K than it was to earn $50K. That situation is economically unsustainable.

Let me give you a personal example. My local college offers courses in .net development. In the past, I have taken several other programming and database classes at this school, and I am tempted to further my education in .net development. However, I am not going to enroll because most .net developer jobs are being sent overseas. Thus, I'm not going to enroll. This deprives the school of money, which deprives the instructors of additional cash, which means they spend less, and the school hires less administrators. And so on and so on.

Our economy won't stabilize until we address this labor arbitrage between nations. The larger problem is that these global corporations have a choke hold on our policy makers who are far more concerned about campaign contributions than they are about making sound economic policies.

[Hello_Kitty]

1. Doesn't take a rocket surgeon to figure out.

Suppressing U.S. wages + depending on U.S. consumer to drive world economy + heavy U.S. consumer debt = global financial meltdown. I just wish the Flat Earth Globalism brigade on DU would figure out this simple equation.

[Warpy]

2. Those of us on the malcontent left have been telling them that

for years, that eventually they'd reach a tipping point where everyone became afraid that either their job would be offshored or enough of their customer base would lose jobs to offshoring that their business would suffer and that the 2/3 of the economy that is consumer driven would grind to a halt.

Unfortunately, magical thinking had taken over, the thinking that someone else would always be hiring and that traditionally low paid, dead end jobs would take up the slack and keep the consumer market thriving.

We knew that wouldn't happen. We knew that depressing wages by union busting, offshoring, and a transition to nothing much out there but McJobs would eventually depress the whole economy, and it has.

They kept it going a lot longer than I thought they could by offering such free and easy access to debt. Now people are not only insecure, they're insecure and drowning in debt.

Until and unless they do something at the bottom of this economy, it won't make any difference how strong the banks get. No one will be able to borrow and no one will be able to repay what they've already borrowed.

Economies work from the bottom up, not the top down. It's just time for us to relearn that lesson for another generation or two until the rich manage to buy themselves another Congress.

[OhioChick]

5. Well said. n/t

[KittyWampus]

3. but that's where the credit industry comes in

[aquart]

4. Yuh think?

[anonymous171]

6. Stop being so xenophobic. Free trade is good for everyone.

[Yavin4]

7. Regulated Free Trade Is Good For Everyone

Labor arbitrage is not. Destroying a consumer base by sending decent paying jobs overseas will eventually destroy the economy.

[anonymous171]

8. There is no such thing as "regulated free trade." nt

[Yavin4]

12. Yes, There Is

See farm subsidies.

[ihavenobias]

13. Right. Regulated trade (aka, Fair Trade) is much better than "free" trade. n/t

[anonymous171]

14. Mix Fair Trade with some protectionism and I will agree.

"Regulated Free Trade" is a contradiction in terms. You cannot regulate trade that by definition cannot be regulated.

[Mari333]

11. I saw it back in the Raygun era

he promised everyone, glowingly, that by giving the multi national corporations HUGE tax breaks, they would be ever so nice and create wonderful jobs with all that money and rebuild america..
nope..they didnt..they took their tax breaks and ran like little greedy fucks and outsourced their jobs and factories overseas and to mexico , so that they could pay the workers 20 cents a day and keep the profits for themselves..
at the time, I told my husband, who was a union man, 'well, eventually, there wont be anyone left HERE in the USA to BUY their shit...'
and thats whats happening now...
fuck em. even if I could buy their shit, I wont. every multi national corporation that outsourced jobs can sit on it and twist in the sun now. and I will laugh heartily at the fuckers.

[Elwood P Dowd]

15. We're not practicing free trade.

We have signed numerous outsourcing/investment scams that have hijacked the name "Free Trade".

[eridani]

18. Only for bosses everywhere. The race to the bottom is bad for everyone else n/t

[AzDar]

9. See: Ford, Henry...

[hobbit709]

10. Even that reactionary old bastard Henry Ford knew that.

He knew that if he didn't pay his employees enough so that they could buy one of his cars, he wouldn't be selling many cars.

[The2ndWheel]

16. Don't forget about the few hundred greedy regional governments

We have global corporations, and regional governments. The problem is that the situation is backwards. That's why corporations have so much power. They're able to play all those governments against each other.

[Wednesdays]

17. K&R

:kick: