My point was that the conclusions that some people (I thought you fell into this categoryu but I can’t be bothered to parse through this thread to figure out if you are) come to when it comes to comparative advantage and sanctity of free trade relies in part on the notion that comparative advantages don’t really shift very much.
I was totally joking about the second part. I understand pretty well that there is not a finite number of jobs in the universe. However, I do think there is a limit to the releative number of unskilled jobs in our economy. We simply don’t need very much unskilled uneducated labor anymore and to the extent we have a native unskilled uneducated workforce in this country that is already underemployed, there is soemthing close to (but not quite) a zero sum game.
If illegal unskilled labor crosses the border and works the orange groves in california, they are not taking jobs from any Americans because unless the government stepped in, to save those groves, we would start importing all our oranges from South America. If that fellow takes his pay in oranges and sells them on the freeway offramps, he is once again not taking any jobs away from Americans.
If an illegal alien is a nanny for a middle class family that wouldn’t be able to afford a nanny if they had to pay an American nanny, that is not taking a job away from an American (it may increase the size of the labor force because it makes it easier for both parents to pursue a career but that woman (lets just admit that we are talking about the mothers and not dance around that issue) is probably not competing in a low skill or unskilled job where we really do have structural limits on job growth).
If an illegal alien takes a job as a construction worker then he probably is in fact taking jobs away from our low skilled labor force. You can’t export those jobs and there is a limit to how many of thsoe jobs we can have. They might marginally lower the cost of housing but they do in fact reduce the number of jobs available to our unskilled labor force.
Then you are admitting the USA will have from now on tens of millions of people earning substandard wages, forever? Do people really believe a nation can sustain this, eventually there will be riots in the streets. I don’t believe for one millisecond it has to be this way, cheap labor oversees made huge profits that went mostly to the top.
[/QUOTE] Dangerosa’s commitment to helping the less fortunate does her credit, but to survive by performing personal services for the rich and successful is a damn poor substitute for a steady job with a good wage or salary, and benefits. Riots in the streets? I doubt that will be the final destination of the path we’re on, but I wouldn’t be surprised to see general corruption, as usually happens when the working class is undervalued and has no alternative. We’ll be like Mexico, with a largely poor population working for the entrepreneurial elites.
You understand, though, that the arrival of Jose to do this job results in a corresponding increase in the demand that creates jobs in the first place, in productive capability, and in the potential for entrepreneurship and innovation? After all, a certain percentage of Joses could go on to start their own companies.
This is why I always ask “So where do jobs come from?” in these threads, because it’s the part of the equation invariably forgotten by the protectionists; jobs come from the demand for goods and services that people create. The arrival of a new person means one more person to compete with for jobs, but also means one more person whose productivity is advancing the economy and whose demand for goods and services necessitates the creation of jobs.
Perhaps. But if Jose is an illegal, that means he’s most certainly being paid below-market wages, and may be getting paid under the table (cheating the government out of its share of taxes). Couple that with the fact that he’s probably more interested in being a conduit for his wages to be sent back home than he is in establishing a normal life in the country where he’s employed, and the amount of goods and services that he will demand is not likely to be as optimal as if a citizen had been employed at market wages in his stead.
The bulk of the increased demand is likely to end up in the hands of the employer, who isn’t as likely to spend his labor cost savings to the degree that several legal workers would spend it if they had received the money saved in wages.
To what Dangerosa and msmith537 were saying about jobs being disposable, and the freedom to retrain, I think this is valid in principle. But what’s different now is that in “traditional” readjustments, the people who were hit hardest by off-shoring were blue collar workers who, in theory, could easily retool to do some other kind of job; take for example the buggy whip maker who got a job at the Ford plant. Now it’s hitting white collar types who have university degrees and years of experience in their fields. It’s true we were told not to expect lifetime employment at the same company on the Japanese model, and for most of us that would have been a bad thing anyway, because in good times we tend to increase our salary by changing employers, especially in the first fifteen years of the career. It’s also true, however, that a lot of us were advised to do IT, or engineering, or somesuch, because that was so obviously the place to be and was thought to promise job security for life. I wonder how the advice given to the title character of The Graduate, to go into “plastics”, has held up?
I don’t say that this refutes absolutely the points made by Dangerosa and msmith537; but it does mean that the transitions we have to make are a lot more difficult, and they take a lot longer. This is where “society” comes in, because too many people just aren’t going to be able to do it without some kind of governmental assistance.
At the global level I think Susanann is right about overpopulation. What we’d like to see is that the low wage workers overseas will begin to agitate for, and receive, higher wages through worker solidarity. In fact we are seeing that here and there. If the offshore workers command higher wages, then, even if First World wages come down a bit, increased spending power offshore means more exports, and more jobs for us. But, if the population of the world’s poor continues to increase, then obviously the workers there have a lot less bargaining leverage. There’s always someone else willing to take your job if you don’t think you’re being paid enough. So with things as they are we might not see a very meaningful increase in Third World wages, in the end. And that is very bad.
That was the old model. I know of quite a few companies, which have created thousands of jobs, started by people immigrating - more Vijay than Jose in my field, but same deal.
But today Vijay will hire a handful of people in Santa Clara, and have the rest of the work done in India. That reduces the benefit of him coming here by a lot. I can’t blame him. But the infrastructure that creates allows companies that have long term US standing to do the same thing. They create the impression (and perhaps the reality) that it will be harder and harder to find a job in the US, and then they complain that no one wants to take engineering in college.
It all makes perfect economic sense in the short run, like all disasters.
What people like you forget is you are taking a snapshot of a moving train. We are heading in a direction toward long term unemployment, lower wages and a far lower status. China is on an upward swing. We are going down. Chinese wages are going up. They are developing a middle class. Our wages are dropping. Our middle class is being decimated.
There are incredible profits being culled, but the workers in America are not getting them. We are developing a class structure like the gilded age. Fabulously wealthy living in gated separate communities while the rest toil for peanuts.
So would you prefer he stay in Bangalore and hire no Americans at all?
Which benefits the USA more, Vijay moving to Sunnyvale, hiring 10 Americans and 60 Indians, and generating profit and innovation in Silicon Valley; or Vijay staying in Bangalore, hiring 90 Indians, and generating profit and innovation in India?
I personally, as a software consumer, give not a flying shit if my software was made by a company incorporated under the laws of Karntaka or under the laws of the State of California. So it might be best for the folks in California if Vijay takes up residence there. If he doesn’t mind the cold, I would personally prefer he start his company in Waterloo or Oakville; then it benefits me as a resident of southern Ontario. Better 10 Canadians and 60 Indians than just Indians, at least from my selfish perspective.
I hate to say this, because it sounds horrible. But I had a very disappointing experience in my career. I worked for a IT consulting company and was a consulting manager. At one point I had about 60 people working for me (I co-managed with another guy). Our folks were server, desktop and network folks.
This was the 90s. There was money to be had. There was also really low unemployment, so we did have a few mouth breathing morons working for us, but most of our folks were decent enough not to embarrass us in front of clients. With money to be had, our firm - and a lot of firms - paid “bench time” - even if you weren’t billing at a client, you got paid. It was a sweet deal.
We encouraged folks to use their bench time to train. Sometimes classroom. Often self study. We had lots of materials and a lab.
Even when we sent people to class, less than 50% would ever pass the related test - sometimes with us paying for multiple tries. Self study was worse, they wouldn’t even bother to check out the materials or show up to work in the lab. Out of 60 people, I had THREE certify in the two years I did the job. Certification brought a bonus. And we had lots of people with bench time - particular as 1998 turned into 1999 and 2000.
The ones that made me angriest were the ones that said they had difficulty with self study (understandable), but showed an interest. So I went to bat for them and got them funding for classroom. And they couldn’t be bothered to study for that either. There was a definite attitude of “showing up should be good enough, what more do you want?”
I like training programs. I like governmental assistance. I think these things are positive in theory. In practice, I’ve lead 60 horses to water and watched 57 of them either not drink at all (most common) or not master drinking. I don’t have great confidence that too many people will be able to do it WITH training.
At the moment, there pretty much has to be an American presence for a lot of companies. But it is still a net loss. In the old days he’d be competing against a traditional company, and win, but possibly build the market so there was a net growth in jobs. Now he does that, still wins, and there is a net loss in jobs in the US.
That illustrates the dilemma. As consumers we are all for lower prices from sending things overseas. But we also wear producer hats, and if you lose your job directly or indirectly from this it is not going to sound like such a good idea after all. Like I said, the worst problems come from short term optimization.
What’s even more disheartening is when they hire you basically to be just a warm body to do some routine task, but then they include you in a development training program and you’re ecstatic. You eagerly open the shrink wrapped IDE and training manual they give you and dive in even before the one-week, full time training program. And you actually learn enough to go beyond the bounds of what you’ve previously done as a programmer, writing a quick and dirty, back of the envelope program that doesn’t just plow through some numbers or print an invoice, but actually makes decisions and solves a complex problem. But then, your IT organization goes to a strict buy-not-build model and all that’s left is support. You never get to really use the training that was so enthralling, but instead are told to support systems and processes of which you know nothing.
Not that this happened to anyone I know, of course.
Even more to the point, I’m not talking about mere skill acquisition; the development jobs just aren’t there. So it’s not just learning a new technology, but completely changing careers. In a world where even IT success is really more about typical business skills like presentation, management, and coordination, can the stereotypical back office computer wizard, who tends to be lacking in those abilities, learn to change? I’m not too optimistic.
Wait, let me get this straight; what you’re telling me is that if an entrepreneur with a neat idea for software moves to the United States and hires 10 Americans, that’s a net loss in jobs, as opposed to him staying in India and hiring no Americans at all.
I’m sorry, but that just makes no sense at all.
There’s no point in complaining that he’s hiring fewer people that a white guy would have if he’d started a software company in Palo Alto back in 1979. We’re talking about now. Do you want the Vijays of the world to be able to start their companies in California to take advantage of the various advanges the USA offers, or do you want him to stay in Bangalore? Your choice.
Of course it’s not going to seem good if I lose my job. It won’t seem good if you lose your job for ANY reason; it matters not why it happens. Losing your job sucks. Nobody’s denying that. Losing your job is an awful experience; I’ve gone through it.
The question, which lies unanswered (it always does) is how raising tariffs and trade barriers is going to result in a net gain of jobs. There is piles and piles and piles of evidence, study, theory and common sense that demonstrates that it generally doesn’t. The government can’t be overly worried about protecting one person’s job; we have to run society in such as way as to try to ensure the maximum possible number of people are doing okay. Protecting a specific job usually means costing someone else something.
Thought experiment; suppose for some obscure Constitutional reason, tomorrow Illinois found itself to be an independent country. Would it benefit the people of the new Republic of Illinois to immediately erect trade barriers between themselves and the rest of the USA? Would it be wise of the USA to do the same - to cut off residents of Illinois from immigrating to Indiana or Ohio, to outlaw certain uses of Illinois-based products and services, and all that sort of thing? Do you really think people would be better off for doing all that?
Is Jose any more inclined to start his own company than unemployed Joe?
Jose isn’t doing work that joe wouldn’t do, Jose is doing a job for $15/hour that Joe has done for $30/hour his entire life until Jose showed up offering to do the same work for $15/hour.
Our economy is not a closed system for some purposes and an open system for others. Jose comes in, makes money and takes it back to guatemala with him where he can buy a small ranch with what he earns in one construction season.
Speaking to the OP topic directly, I’ve read numerous reports lately in reputable sources like The Atlantic and The Economist that affirm some permanent losses in a couple of aspects. First, people who are laid off during a recession generally don’t get back on track salary-wise. They suffer a loss in lifetime income over the remainder of their career. Second, people who enter the job market during a recession likewise see their wages depressed for their entire career relative to someone who entered the job market during boom years.
I can’t help wondering if some of this will shake itself out when the baby boomers retire, and the apocryphal buggy-whip assemblers no longer appear in the unemployment statistics.
I think what yopu are missing is that almost all of this offshoring is not creative it is replicative. It takes 60 jobs from here and moves them to India. It doesn’t create an additional 10 jobs here and create and additional 60 jobs in india. now I don’t know how (or even if we want to) stop that sort of thing but its not entirely creative.
In the case of a business that has already been founded in the USA, yes, that’s true. But again, my point was that allowing immigrants in creates the possibiility of innovation, to which I was told “Yeah, well, he’ll probably just hire people in India.” Well, it sure beats him never coming over in the first place.
It’s ironic, though, that this complaint would come from, of all places, the IT industry, which has put more people out of work than you could even begin to count. I don’t see the denizens of Silicon Valley apologizing for creating jobs in San Jose that wiped out untold numbers of jobs across the country and the rest of the world in fields like switchboard operators, typist, print setters, bookkeepers, and a dozen or more other professions.
Wow.
If Joe was making SIXTY THOUSAND DOLLARS A YEAR doing a job that an immigrant can do just as well for $30,000, might I suggest you be glad that such a collossally ineffiecient process has been streamlined. Why in God’s name should we be paying people $60K to do a job than can be done for $30K?
Is this actually typical of most immigrants? It seems to me most of them would prefer to stay, and
The terror of immigrants taking away American money - which, again, has to come back sooner or later - is palpable. Would you support other countries preventing Americans from doing the same thing? Should Canada prohibit Americans from working in our stronger economy and running off with Canadian loot?
As a Canadian, I don’t think so. If there’s a need to hire an American to do a job here, then that person’s filling a need that needed to be filled. The country becomes a little more productive; a company has the right person to do the job. It sounds like a good thing to me. Immigrants have certainly been a huge boon to this area.
First, if it is a 100% Indian company, it would be competing mostly in the Indian market - and would have 20 years ago also. He won’t be eating into the American market, and competing here. He’ll do better competing there, but that is normal home court advantage. What I am comparing is the situation now, with limited US hiring, with the situation 20 years ago (and even 10) with lots of US hiring. Lots of this hiring back then was immigrants, but that was cool because they contributed to our tax base, and bought stuff. I know people complain about cheap programmers and engineers taking away US jobs, but in the companies I’ve worked for I’ve seen salary information, and there was no cases where immigrants were paid less. Could be when you are hiring grunt engineers, but I’ve never seen it.
I’m not saying this situation is wrong, just saying it does exist. You are saying that we shouldn’t complain about losing 990 jobs when we might have lost 1,000.
The issue is not losing a job, it is losing a job because of the actions that you and millions like you take.
I never spoke about remedies. Of course tariffs are not the answer, especially because it is tough to impose a tariff on a design being electronically transmitted from Bangalore to San Jose. I don’t have an answer, but I know that companies which do this shouldn’t get any tax credits from the US or state governments, and perhaps should be expected to pay for some of the social costs of their action from their increased profitability.
But remember I’m not saying anyone is evil in this situation. Everyone is reducing their costs and increasing their profits. It means people get squashed, just like always.
The issue is losing jobs, then. Losing a job is losing a job. **Of course **it’s the result of actions that millions of people take. It’s a free country; that’s what creates and eliminates jobs. The actions that millions of people take.
I again have to point out that while you’re wuick to point fingers (“actions that YOU and millions like you take”) you’re apparently a member of an industry that was, to put it quite bluntly, **built on destroying jobs. ** The explosion of IT jobs was the result of a demand for technology that could be used to eliminate jobs. Cisco Systems made a zillion dollars selling switches that are cheaper than the humans they replace. Microsoft, Intel et al. have made zillions more creating computing devices that eliminated the need for typing pools, administrative help, and the like.
Would you say that the computer industry has been a huge drain on the economy, given the indisputable fact that it’s eliminated hundreds of thousands, of not millions, of jobs in other industry sectors?
I wouldn’t. It definitely eliminated jobs - but because those roles were not as efficient as the solutions that replaced them.
Here’s an article from the NY Times in 1983:
Replace “computers” with “foreigners” and it’s pretty much the same thing we’re hearing today. The suggestions and predictions of the so-called experts in the article seem laughable to us now - we need the federal government to intervene in automation! And yet they sure sound familiar.