# Offshoring - the snake that is eating itself. **URL:** \ **Category:** Great Debates\ **Created:** [October 3, 2010, 2:51pm UTC](https://boards.straightdope.com/t/offshoring-the-snake-that-is-eating-itself/555912 "2010-10-03T14:51:53Z")\ **Posts on this page:** 20\ **Page:** 2
**Author:** ![John\_Mace](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/john_mace/32/185_2.png) [@John\_Mace](https://boards.straightdope.com/u/John_Mace)\ **Post date:** [October 3, 2010, 7:41pm UTC](https://boards.straightdope.com/t/offshoring-the-snake-that-is-eating-itself/555912/21 "2010-10-03T19:41:13Z")
> [@Le\_Jacquelope](#): > > Let’s put that in perspective, shall we? That’s $100 more a month than a lot of long term unemployed Americans are making. And $100 more than even more Americans than that will be making when the benefits expire under the coming Republican Congress. Would you like to deny that this is true? Or is this another one of those “features, not bugs” that you’d like to tout? That’s an average. If you want to compare that wage to the US, then compare it to the average. Even with the unemployed factored in, the average is still orders of magnitude larger. > [@](#): > > Look, man. You’ve been preaching about the benefits of offshoring and you have not shown one example. You have dismissed our off-the-charts unemployment rate as a non-fact. Our “off-the-charts” unemployment rate is due to being in the biggest recession in 60 years. It has little to do with offshoring. > [@](#): > > You have failed to show proof of your claim that trade barriers harm a nation’s economy, and you have dismissed a huge counter example in the form of China, whose economy is absolutely booming as a result of its trade barriers. Cite that its economy is booming as a result of its trade barriers? > [@](#): > > America’s economic statistics have deteriorated since offshoring started taking off. Ditto. Let’s see a cite for this. > [@](#): > > Aside from lower prices (on some things), none of the benefits offshoring was supposed to bring us, has materialized. If you believe I’m wrong, then show us the benefits. I say your emperor has no clothes. What other benefits was offshoring supposed to produce besides lower prices? There is certainly some advantage to companies serving certain markets to have facilities near those markets, but cost savings is the _sine qua non_ of most offshoring of manufacturing jobs. ---
**Author:** ![Oregon\_sunshine](https://avatars.discourse-cdn.com/v4/letter/o/50afbb/32.png) [@Oregon\_sunshine](https://boards.straightdope.com/u/Oregon_sunshine)\ **Post date:** [October 3, 2010, 8:28pm UTC](https://boards.straightdope.com/t/offshoring-the-snake-that-is-eating-itself/555912/22 "2010-10-03T20:28:54Z")
I hear (read) a lot of talking but it’s really simple: (and China isn’t involved at all, big strawman there lol) People need jobs, and jobs are being taken away from US citizens and given to people in other countries. This really is the bottom line here, though some would try to argue otherwise. The manufacturing jobs which would pay a semi-skilled wage to relatively uneducated people are being shipped away, not really adequately replaced by the minimum wage mc-jobs which are left behind. > [@](#): > > We didn’t have much offshoring in the 1950s and only one worker was needed to finance a house and a car. Yeah… what about this point? Everybody I know works like a dog (mom and dad both, unless one person got REALLY lucky in employment) and can hardly afford anything of value… this is becoming more and more common and it’s the result of a combination of 1) companies removing higher paying American jobs and reducing wages for the ones still available and 2) charging higher prices. When we see the $$millions that large corporations rake in juxtaposed with the average American’s life these days it’s fairly apparent what’s going on. It’s obvious that the continuing deregulation of industries has resulted in jobs lost and also massing wealth into the hands of a tiny few while skimming more and more off of the wages and efforts of the common worker. Why is this trend something that’s acceptable? Companies should have strict standards of how they pay their workers and should make decisions based on the good of everyone associated with that company, not just the board or stockholders. Don’t we have some sort of human responsibility to one another, or does the “free market” absolve us of that? As a nation, we should protect our people, and if we expect everyone to have jobs (which we implicitly do, with work requirements for every single government assistance program including food) then there should be JOBS FOR EVERYONE and if companies aren’t willing to scale back executive pay in order to raise the United States’ standard of living, then they aren’t team players. Eliminating American jobs should not be an acceptable behavior unless in the direst of financial emergencies. Companies that do this basically hate America, because if you love this place you want it to be good for EVERY American, not just you and if you want it to be good for only you, then you are not a very nice person. ---
**Author:** ![Dangerosa](https://avatars.discourse-cdn.com/v4/letter/d/22d042/32.png) [@Dangerosa](https://boards.straightdope.com/u/Dangerosa)\ **Post date:** [October 3, 2010, 9:48pm UTC](https://boards.straightdope.com/t/offshoring-the-snake-that-is-eating-itself/555912/23 "2010-10-03T21:48:12Z")
But why do I have a human responsibility to my coworkers in China. Or my coworkers in Ireland or Thailand or Japan or… Why do I have a responsibility only to my fellow Americans? I’m currently managing (well, project managing) two people overseas in addition to half a dozen in the U.S. Are they less worthy of employment? ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [October 3, 2010, 10:22pm UTC](https://boards.straightdope.com/t/offshoring-the-snake-that-is-eating-itself/555912/24 "2010-10-03T22:22:50Z")
> [@John\_Mace](#): > > Putting up trade barriers just makes US companies less competitive in the world market. Many US companies sell more of their products outside the US than they do inside the US. Protectionism will just shrink those companies and put Americans out of jobs. You can make wonderful TVs in the US, but if only a few people can afford to buy them at $4,000 a pop, all you have is unsold inventory. Do you deny that China has put up significant trade barriers - in currency manipulation and other areas? We are in a trade war already, and you seem to be a pacifist. Now, the best way of striking back is unclear, but the fact we run such a deficit means that we have some ammunition. ---
**Author:** ![BrightNShiny](https://avatars.discourse-cdn.com/v4/letter/b/7bcc69/32.png) [@BrightNShiny](https://boards.straightdope.com/u/BrightNShiny)\ **Post date:** [October 3, 2010, 10:31pm UTC](https://boards.straightdope.com/t/offshoring-the-snake-that-is-eating-itself/555912/25 "2010-10-03T22:31:04Z")
> [@Voyager](#): > > Do you deny that China has put up significant trade barriers - in currency manipulation and other areas? We are in a trade war already, and you seem to be a pacifist. Now, the best way of striking back is unclear, but the fact we run such a deficit means that we have some ammunition. If it were up to me, we’d impose a tariff on Chinese goods that compensates for their artificial currency peg. We could phase in the tariff over a period of say, ten years, to give everyone time to adjust. ---
**Author:** ![John\_Mace](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/john_mace/32/185_2.png) [@John\_Mace](https://boards.straightdope.com/u/John_Mace)\ **Post date:** [October 3, 2010, 10:48pm UTC](https://boards.straightdope.com/t/offshoring-the-snake-that-is-eating-itself/555912/26 "2010-10-03T22:48:22Z")
> [@Voyager](#): > > Do you deny that China has put up significant trade barriers - in currency manipulation and other areas? We are in a trade war already, and you seem to be a pacifist. Now, the best way of striking back is unclear, but the fact we run such a deficit means that we have some ammunition. First of all, I don’t think countries compete with each other, economically. Companies compete with each other. GM and Ford don’t compete, together, with Toyota. GM competes with Ford just as it competes with Toyota. All countries have some trade barriers. Is China an outlier in the barriers it has erected? They are, afterall, members of the WTO. It’s certainly no secret that most economists think the Chinese currency is undervalued. It’s not my understanding that most economists think we should impose tariffs to retaliate. ---
**Author:** ![BrightNShiny](https://avatars.discourse-cdn.com/v4/letter/b/7bcc69/32.png) [@BrightNShiny](https://boards.straightdope.com/u/BrightNShiny)\ **Post date:** [October 3, 2010, 11:07pm UTC](https://boards.straightdope.com/t/offshoring-the-snake-that-is-eating-itself/555912/27 "2010-10-03T23:07:00Z")
> [@John\_Mace](#): > > All countries have some trade barriers. Is China an outlier in the barriers it has erected? They are, afterall, members of the WTO. It’s certainly no secret that most economists think the Chinese currency is undervalued. It’s not my understanding that most economists think we should impose tariffs to retaliate. There’s a decent argument that China’s currency peg meets the definition of prohibited subsidy under the WTO. It’s something the US should litigate. And plenty of economists think we should do something about the currency peg. While a lot seem to settle on political pressure and diplomacy (although I have yet to see any benefit from either), there are a number of prominent economists (such as Krugman) who think we should treat the currency peg as an illegal subsidy and implement counter-tarrifs. ---
**Author:** ![BrightNShiny](https://avatars.discourse-cdn.com/v4/letter/b/7bcc69/32.png) [@BrightNShiny](https://boards.straightdope.com/u/BrightNShiny)\ **Post date:** [October 3, 2010, 11:10pm UTC](https://boards.straightdope.com/t/offshoring-the-snake-that-is-eating-itself/555912/28 "2010-10-03T23:10:47Z")
Instead of tariffs, how about this? The US could require all dollar conversions to either go through the US or a list of specially designated banks. The US would set the rate for the conversions, and it would set the rate specifically so that US goods were cheaper abroad and foreign goods were more expensive when purchased in the US. ---
**Author:** ![RickJay](https://avatars.discourse-cdn.com/v4/letter/r/bb73d2/32.png) [@RickJay](https://boards.straightdope.com/u/RickJay)\ **Post date:** [October 3, 2010, 11:19pm UTC](https://boards.straightdope.com/t/offshoring-the-snake-that-is-eating-itself/555912/29 "2010-10-03T23:19:29Z")
> [@Le\_Jacquelope](#): > > GDP? Is that all you’ve got? GDP is not the same was wages or standard of living. China is now the world’s SECOND largest economy. Or did you miss that fact, too? Did you miss the fact that they have four times as many people? The Chinese are, by American standards, amazingly poor. > [@](#): > > We didn’t have much offshoring in the 1950s and only one worker was needed to finance a house and a car. That’s because houses were much smaller and not as well appointed and, to be honest, many Americans still couldn’t afford them; “Leave it to Beaver” was not a representative example of American life at the time. In 1955 the average American made, in inflation-adjusted dollars, about $26,000. Today the average American makes about $42,000. People were not better off in the 50s. ---
**Author:** ![BrightNShiny](https://avatars.discourse-cdn.com/v4/letter/b/7bcc69/32.png) [@BrightNShiny](https://boards.straightdope.com/u/BrightNShiny)\ **Post date:** [October 3, 2010, 11:21pm UTC](https://boards.straightdope.com/t/offshoring-the-snake-that-is-eating-itself/555912/30 "2010-10-03T23:21:51Z")
> [@RickJay](#): > > In 1955 the average American made, in inflation-adjusted dollars, about $26,000. Today the average American makes about $42,000. People were not better off in the 50s. Can you provide median figures? Given the change in wealth inequality over the past few decades, I’m not persuaded by average figures. ---
**Author:** ![Le\_Jacquelope](https://avatars.discourse-cdn.com/v4/letter/l/e0b2c6/32.png) [@Le\_Jacquelope](https://boards.straightdope.com/u/Le_Jacquelope)\ **Post date:** [October 3, 2010, 11:23pm UTC](https://boards.straightdope.com/t/offshoring-the-snake-that-is-eating-itself/555912/31 "2010-10-03T23:23:05Z")
> [@BrightNShiny](#): > > > [@John\_Mace](#): > > > > All countries have some trade barriers. Is China an outlier in the barriers it has erected? They are, afterall, members of the WTO. It’s certainly no secret that most economists think the Chinese currency is undervalued. It’s not my understanding that most economists think we should impose tariffs to retaliate. > > There’s a decent argument that China’s currency peg meets the definition of prohibited subsidy under the WTO. It’s something the US should litigate. > > And plenty of economists think we should do something about the currency peg. While a lot seem to settle on political pressure and diplomacy (although I have yet to see any benefit from either), there are a number of prominent economists (such as Krugman) who think we should treat the currency peg as an illegal subsidy and implement counter-tarrifs. I wonder what John Mace would say if America said we have a right to do exactly what the Chinese have done… raise tariffs and peg our currency? Turnabout is fair play, right? What gives China the right to do things we can’t? Maybe we should enact a bunch of legal Government subsidies of our companies the way China does, too. It works for them. It’ll work for us. ---
**Author:** ![Le\_Jacquelope](https://avatars.discourse-cdn.com/v4/letter/l/e0b2c6/32.png) [@Le\_Jacquelope](https://boards.straightdope.com/u/Le_Jacquelope)\ **Post date:** [October 3, 2010, 11:25pm UTC](https://boards.straightdope.com/t/offshoring-the-snake-that-is-eating-itself/555912/32 "2010-10-03T23:25:16Z")
> [@BrightNShiny](#): > > > [@RickJay](#): > > > > In 1955 the average American made, in inflation-adjusted dollars, about $26,000. Today the average American makes about $42,000. People were not better off in the 50s. > > Can you provide median figures? Given the change in wealth inequality over the past few decades, I’m not persuaded by average figures. That argument is especially hollow considering that $26,000 went a lot further than it does now. Just look at the cost of gasoline back then. Or housing. Or a car. Or food. I already posted citations showing that American wages are not keeping up with inflation. ---
**Author:** ![penultima\_thule](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/penultima_thule/32/3833_2.png) [@penultima\_thule](https://boards.straightdope.com/u/penultima_thule)\ **Post date:** [October 3, 2010, 11:31pm UTC](https://boards.straightdope.com/t/offshoring-the-snake-that-is-eating-itself/555912/33 "2010-10-03T23:31:26Z")
> [@Le\_Jacquelope](#): > > I wonder what John Mace would say if America said we have a right to do exactly what the Chinese have done… raise tariffs and peg our currency? Turnabout is fair play, right? What gives China the right to do things we can’t? > > Maybe we should enact a bunch of legal Government subsidies of our companies the way China does, too. It works for them. It’ll work for us. Peg the USD against what? Gold? _“What gives China the right to do things we can’t?”_ Well you can, but self interest and the example of Smoot Hawley would suggest you’re a whole lot better off not doing that. ---
**Author:** ![Le\_Jacquelope](https://avatars.discourse-cdn.com/v4/letter/l/e0b2c6/32.png) [@Le\_Jacquelope](https://boards.straightdope.com/u/Le_Jacquelope)\ **Post date:** [October 3, 2010, 11:33pm UTC](https://boards.straightdope.com/t/offshoring-the-snake-that-is-eating-itself/555912/34 "2010-10-03T23:33:25Z")
> [@RickJay](#): > > > [@Le\_Jacquelope](#): > > > > GDP? Is that all you’ve got? GDP is not the same was wages or standard of living. China is now the world’s SECOND largest economy. Or did you miss that fact, too? > > Did you miss the fact that they have four times as many people? > > The Chinese are, by American standards, amazingly poor. Not as poor as our unemployed, who are earning $0 versus the Chinese farmer’s $100. And certainly not as poor as our homeless. > [@](#): > > > [@](#): > > > > We didn’t have much offshoring in the 1950s and only one worker was needed to finance a house and a car. > > That’s because houses were much smaller and not as well appointed and, to be honest, many Americans still couldn’t afford them; “Leave it to Beaver” was not a representative example of American life at the time. Unemployment in the 1950s was [3%](http://www.dailymarkets.com/economy/2008/11/16/us-unemployment-rate-from-1950-to-present/). From what I understand that’s better than full employment. That’s called an employee’s market. We haven’t seen an employee’s market in a decade or more. ---
**Author:** ![Le\_Jacquelope](https://avatars.discourse-cdn.com/v4/letter/l/e0b2c6/32.png) [@Le\_Jacquelope](https://boards.straightdope.com/u/Le_Jacquelope)\ **Post date:** [October 3, 2010, 11:36pm UTC](https://boards.straightdope.com/t/offshoring-the-snake-that-is-eating-itself/555912/35 "2010-10-03T23:36:50Z")
> [@penultima\_thule](#): > > Peg the USD against what? Gold? > > _“What gives China the right to do things we can’t?”_ > Well you can, but self interest and the example of Smoot Hawley would suggest you’re a whole lot better off not doing that. Obviously China is proving that Smoot Hawley does not apply in this situation. I mean, really, it’s right there in our faces: China’s economy is growing by leaps and bounds because of or in spite of their Government subsidies and import tariffs. I’m sure you understand the difference between China’s trade barriers and what happened with Smoot-Hawley, right? Self interest says we should raise tariffs against China to bring those manufacturing jobs back. The current solution is not working. Free trade is not working. Why must we continue on with what does not work? ---
**Author:** ![BrightNShiny](https://avatars.discourse-cdn.com/v4/letter/b/7bcc69/32.png) [@BrightNShiny](https://boards.straightdope.com/u/BrightNShiny)\ **Post date:** [October 3, 2010, 11:36pm UTC](https://boards.straightdope.com/t/offshoring-the-snake-that-is-eating-itself/555912/36 "2010-10-03T23:36:59Z")
> [@penultima\_thule](#): > > Peg the USD against what? Gold? > > _“What gives China the right to do things we can’t?”_ > Well you can, but self interest and the example of Smoot Hawley would suggest you’re a whole lot better off not doing that. You can set an artificial exchange rate, just the way China does. And your reference to Smoot-Hawley really just makes our point. We don’t have free trade with China. If Smoot-Hawley shows that free trade is a good thing, then we should be figuring out how to get to a point where we do have free trade with China. Additionally, the tariff proposal isn’t a permanent one. The tariff goes away as soon as China stops manipulating their currency. ---
**Author:** ![Le\_Jacquelope](https://avatars.discourse-cdn.com/v4/letter/l/e0b2c6/32.png) [@Le\_Jacquelope](https://boards.straightdope.com/u/Le_Jacquelope)\ **Post date:** [October 3, 2010, 11:40pm UTC](https://boards.straightdope.com/t/offshoring-the-snake-that-is-eating-itself/555912/37 "2010-10-03T23:40:17Z")
> [@BrightNShiny](#): > > You can set an artificial exchange rate, just the way China does. > > And your reference to Smoot-Hawley really just makes our point. We don’t have free trade with China. If Smoot-Hawley shows that free trade is a good thing, then we should be figuring out how to get to a point where we do have free trade with China. > > Additionally, the tariff proposal isn’t a permanent one. The tariff goes away as soon as China stops manipulating their currency. I say we don’t lower those tariffs until China stops pegging their currency AND lowers their tariffs, too. ---
**Author:** ![even\_sven](https://avatars.discourse-cdn.com/v4/letter/e/dfb087/32.png) [@even\_sven](https://boards.straightdope.com/u/even_sven)\ **Post date:** [October 3, 2010, 11:46pm UTC](https://boards.straightdope.com/t/offshoring-the-snake-that-is-eating-itself/555912/38 "2010-10-03T23:46:28Z")
Americans- even poor Americans- are lightyears better off than your average Chinese person. For example, let’s look at Chinese college students. I taught what would be the equivalent of a low-ranked state school. Most of my students were the children of farmers or factory workers. I think it is pretty representative of your average Chinese college experience outside of the elites. Students in my college slept 6 people per a dormitory. They did not have hot water or showers in their dorm buildings- once a week they would go to the public shower to wash their hair. They washed their clothes by hand, hanging them to dry. It wasn’t too big of a burden because most students only had a few changes of clothes. No students had a car. Indeed, few professors did. Only one or two of my students had ever been on an airplane, and the vast majority had never been outside of their home city. The few students with computers became very popular, but most students relied on public internet cafes. Students did not generally go to restaurants or bars, although for a treat they might grab some street food once in a while. Many of my students would save money by eating vegetarian food, although all expressed a desire to eat meat every day. On breaks, most students helped their parents farm. China is growing so fast because they have a long ways to go, and a lot of people are suddenly able to afford basic consumer goods. China’s large working population and a huge injection of cash coming from privatizing formally public lands is fueling a lot of their growth. ---
**Author:** ![penultima\_thule](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/penultima_thule/32/3833_2.png) [@penultima\_thule](https://boards.straightdope.com/u/penultima_thule)\ **Post date:** [October 3, 2010, 11:47pm UTC](https://boards.straightdope.com/t/offshoring-the-snake-that-is-eating-itself/555912/39 "2010-10-03T23:47:00Z")
> [@BrightNShiny](#): > > You can set an artificial exchange rate, just the way China does. So are you proposing that the US sets a different USD:RMB exchange rate to the the PRC USD:RMB exchange rate is? Have you thought that through? Or figured out how many minutes that situation would last? ---
**Author:** ![BrightNShiny](https://avatars.discourse-cdn.com/v4/letter/b/7bcc69/32.png) [@BrightNShiny](https://boards.straightdope.com/u/BrightNShiny)\ **Post date:** [October 3, 2010, 11:50pm UTC](https://boards.straightdope.com/t/offshoring-the-snake-that-is-eating-itself/555912/40 "2010-10-03T23:50:25Z")
> [@penultima\_thule](#): > > > [@BrightNShiny](#): > > > > You can set an artificial exchange rate, just the way China does. > > So are you proposing that the US sets a different USD:RMB exchange rate to the the PRC USD:RMB exchange rate is? > > Have you thought that through? Or figured out how many minutes that situation would last? I’m only proposing it facetiously. My preferred method to dealing with this is WTO litigation followed up by tariffs. I just find it tiresome that whenever someone complains about China on these boards, we get a raft of people telling us how good free trade is. Extolling the virtues of free trade isn’t a response to complaints about China since there is no free trade regime with China today. [Previous page](https://boards.straightdope.com/t/offshoring-the-snake-that-is-eating-itself/555912.md?page=1) [Next page](https://boards.straightdope.com/t/offshoring-the-snake-that-is-eating-itself/555912.md?page=3)