# 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:** 5
**Author:** ![BrightNShiny](https://avatars.discourse-cdn.com/v4/letter/b/7bcc69/32.png) [@BrightNShiny](https://boards.straightdope.com/u/BrightNShiny)\ **Post date:** [October 4, 2010, 4:07am UTC](https://boards.straightdope.com/t/offshoring-the-snake-that-is-eating-itself/555912/81 "2010-10-04T04:07:51Z")
> [@John\_Mace](#): > > Well, you need to be more precise when you talk about benefits. Oh, and you know what? I’ve gone back through my previous posts, and I never actually mentioned the Chinese benefits until my first post discussing them. So, don’t lecture me on being precise. ---
**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 4, 2010, 4:50am UTC](https://boards.straightdope.com/t/offshoring-the-snake-that-is-eating-itself/555912/82 "2010-10-04T04:50:56Z")
> [@BrightNShiny](#): > > Why don’t you actually present an argument? OK, the USD:RMB exchange rate is, and will remain driven by Chinese domestic interests. The USD:RMB exchange rate is not pegged, but currently fluctuates between tight limits. I’m guessing, but it may be that the program allows the RMB to appreciate say 3-5% per annum. Now lots of non-Chinese interests want that to rise a lot faster. But the domestic agenda probably demands that the RMB will remain undervalued for a long time. There’s plenty of hard cash, China’s accumulated foreign exchange reserve are over 2.4 trillion dollars. That’s 50% of China’s GDP, 12% of US GDP, and 30% of the world’s reserves today. I think China knows it’s interest are in (progressively) rectifing the imbalance. You want your customers to be able to buy your inventory. However floating the RMB against a basket of foreign currencies isn’t the solution because the RMB isn’t the problem they are trying to tackle. China faces managing the fundamental change of a populace of 1.3bil people with a majority engaged in subsistence agriculture barely half a century ago to consumers with aspiration for cars, DVDs and mobiles etc. They need the cash and the strong economy so as to manage that transition. Rectifying the exchange rate to address the balance of reserves, placating US/western interests but leaving Chinese consumers with the same standard of living they currently have isn’t a consideration. The challenges include past PRC central policies and practices have distorted production, primarily in labour but also land and the environment. Labour costs have been artificially low, with many workers not being paid their minimum entitlements. This is depressing domestic demand. The Chinese government wants consumption at home to rise. As Chinese workers earn more, that will reduce the competitiveness of China’s exports even as it boosts demand at home. My view is that the strategy is aimed to take China from being a low-cost exporter into being the world’s biggest market. Your decadence in funding that program is appreciated. If that steps on US toes, then so sorry, please accept this box of bandaids. When the economic boot was on the other foot, the US was never reticent about sinking the slipper in. ---
**Author:** ![BrightNShiny](https://avatars.discourse-cdn.com/v4/letter/b/7bcc69/32.png) [@BrightNShiny](https://boards.straightdope.com/u/BrightNShiny)\ **Post date:** [October 4, 2010, 6:58am UTC](https://boards.straightdope.com/t/offshoring-the-snake-that-is-eating-itself/555912/83 "2010-10-04T06:58:07Z")
> [@penultima\_thule](#): > > OK, the USD:RMB exchange rate is, and will remain driven by Chinese domestic interests. > > The USD:RMB exchange rate is not pegged, but currently fluctuates between tight limits. I’m guessing, but it may be that the program allows the RMB to appreciate say 3-5% per annum. > > Now lots of non-Chinese interests want that to rise a lot faster. But the domestic agenda probably demands that the RMB will remain undervalued for a long time. > > There’s plenty of hard cash, China’s accumulated foreign exchange reserve are over 2.4 trillion dollars. That’s 50% of China’s GDP, 12% of US GDP, and 30% of the world’s reserves today. I think China knows it’s interest are in (progressively) rectifing the imbalance. You want your customers to be able to buy your inventory. However floating the RMB against a basket of foreign currencies isn’t the solution because the RMB isn’t the problem they are trying to tackle. > > China faces managing the fundamental change of a populace of 1.3bil people with a majority engaged in subsistence agriculture barely half a century ago to consumers with aspiration for cars, DVDs and mobiles etc. They need the cash and the strong economy so as to manage that transition. Rectifying the exchange rate to address the balance of reserves, placating US/western interests but leaving Chinese consumers with the same standard of living they currently have isn’t a consideration. > > The challenges include past PRC central policies and practices have distorted production, primarily in labour but also land and the environment. Labour costs have been artificially low, with many workers not being paid their minimum entitlements. This is depressing domestic demand. The Chinese government wants consumption at home to rise. As Chinese workers earn more, that will reduce the competitiveness of China’s exports even as it boosts demand at home. > > My view is that the strategy is aimed to take China from being a low-cost exporter into being the world’s biggest market. Your decadence in funding that program is appreciated. > > If that steps on US toes, then so sorry, please accept this box of bandaids. > When the economic boot was on the other foot, the US was never reticent about sinking the slipper in. Well, okay, that’s a great argument for why it’s in Chinese interests to keep the peg. Since I’m not Chinese, it’s an equally great argument for why the US should force the issue. I don’t think that letting their currency appreciate will harm the Chinese economy (although it may harm specific sectors of it), but I have to put US interests over that of the Chinese. So, you have basically made my argument for me. Finally, I would like a citation that the current Chinese policy is to let their currency appreciate 3-5% annually. As far as I can tell, they let their currency appreciate slightly when people start kicking up a fuss and then yank it back down when the fuss has passed. ---
**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 4, 2010, 8:40am UTC](https://boards.straightdope.com/t/offshoring-the-snake-that-is-eating-itself/555912/84 "2010-10-04T08:40:22Z")
> [@BrightNShiny](#): > > Well, okay, that’s a great argument for why it’s in Chinese interests to keep the peg. No, that’s an argument why China needs to maintain a growth strategy that would melt any western economy. Add in effects like the Lewis tipping point and a the One Child policy, and on environmental grounds we’d rather they didn’t power that growth via cheap fossil fuels. > [@](#): > > Since I’m not Chinese, it’s an equally great argument for why the US should force the issue. You don’t have a mechanism. Not through the WTO. Not even threatening to default. And why would you do that anyway? Given the size hole the US dug for itself, the only growth strategy you’ve got is to hitch your cart to China. Why you’d want to decouple from that? > [@](#): > > So, you have basically made my argument for me. No. I’d characterise your argument as the hegemonist’s “China (and the rest of the developing economies) must maintain their current station so the US way of life can be maintained.” [/quote] Finally, I would like a citation that the current Chinese policy is to let their currency appreciate 3-5% annually. [/QUOTE] That, as stated, was my guess. It’s based on discussions with FX traders I know. The People’s Bank of China doesn’t put their FX policy on the net. Will stand corrected but I’m not sure the US Fed does either. ---
**Author:** ![Baboonanza](https://avatars.discourse-cdn.com/v4/letter/b/f475e1/32.png) [@Baboonanza](https://boards.straightdope.com/u/Baboonanza)\ **Post date:** [October 4, 2010, 12:45pm UTC](https://boards.straightdope.com/t/offshoring-the-snake-that-is-eating-itself/555912/85 "2010-10-04T12:45:51Z")
> [@Le\_Jacquelope](#): > > Not the unemployed, who are earning $0. At least Chinese farmers have their food covered. Except for when there’s a bad harvest and they starve of course. Why the hell do you think these leave their farms to work horrendous hours in factories? > [@BrightNShiny](#): > > You should ask yourself that. Why is it so important to you that we participate in regimes that artificially incentivize driving manufacturing overseas? Why is it so important to you that we create these non-free trade regimes? What do you have against letting the market decide where manufacturing should go? If anybody wants to lower the living standard of Americans, it’s you, not me. I’m honestly suprised at how many lengthy post you’ve managed to make on this subject without any real understanding of the issues. **China is not competing with the US for manufacturing jobs**. China is competing with all of the other dirt poor countries that would love to get those outsourced jobs, like Indonesia. If you really think that the absence of Chinese currency pegging would result in the jobs coming back to the US then you’re an idiot, the jobs would just move to another country that’s even less developed than China. Besides that you seem to have completely ignored the fact that the American standard of living is as high as it is _because_ of the outsourcing of manufacturing. And even if you did somehow manage to bring all those jobs back to the US the people doing them would be just as poor as they are now because they still wouldn’t be able to afford anything made on American soil. If you want prosperity for the American people bringing that sort of commodity manufacturing back to the US is insane. You cannot compete with the third world on unskilled labour prices and forcing the move with tariffs will make you poorer, not richer. If you want continued prosperity for the American people you must look to the future, not the past. Instead of trying to create jobs for all the unemployed unskilled labourers you need to reduce their number through education (good education for everybody, not just the top 10%) and look to support high-tech and knowledge based industries that aren’t cometing directly with the third world. ---
**Author:** ![Dangerosa](https://avatars.discourse-cdn.com/v4/letter/d/22d042/32.png) [@Dangerosa](https://boards.straightdope.com/u/Dangerosa)\ **Post date:** [October 4, 2010, 1:06pm UTC](https://boards.straightdope.com/t/offshoring-the-snake-that-is-eating-itself/555912/86 "2010-10-04T13:06:48Z")
> [@Baboonanza](#): > > **China is not competing with the US for manufacturing jobs**. China is competing with all of the other dirt poor countries that would love to get those outsourced jobs, like Indonesia. If you really think that the absence of Chinese currency pegging would result in the jobs coming back to the US then you’re an idiot, the jobs would just move to another country that’s even less developed than China. I pay $5 an hour for Chinese resources. $7 for Thai. $7 for Malay. $20 for resource in Northern Ireland. $40 in Canada (don’t have to pay for health care! Which is a big part of the U.S. load) $80 for those in the U.S. Yeah, change the balance for China and I’ll send less of my work to China. But you’ve got to knock down the cost of U.S. labor and increase the cost of labor in Northern Ireland and Canada before that job comes back to 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 4, 2010, 1:34pm UTC](https://boards.straightdope.com/t/offshoring-the-snake-that-is-eating-itself/555912/87 "2010-10-04T13:34:40Z")
> [@Dangerosa](#): > > Yeah, change the balance for China and I’ll send less of my work to China. But you’ve got to knock down the cost of U.S. labor and increase the cost of labor in Northern Ireland and Canada before that job comes back to the US. I wonder how it was that U.S. unemployment was under five percent just back in 2002, when all the same differences in labour costs still existed. Amazing, that. Why, you’d almost think there was more to it than just the hourly price of labour. ---
**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 4, 2010, 1:52pm UTC](https://boards.straightdope.com/t/offshoring-the-snake-that-is-eating-itself/555912/88 "2010-10-04T13:52:42Z")
> [@Oregon\_sunshine](#): > > 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. Pretty much. This has turned into the pro-offshoring side proposing a whole list of fantasy cause-effect scenarios that haven’t materialized while ignoring the ones that have, if it doesn’t suit their cause. (Like saying that all trade barriers result in Smoot-Hawley disasters while ignoring the fact that trade barriers have contributed to China’s exploding economy.) > [@](#): > > 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. There will always be people unable to get a higher education. Pro-offshoring people are of the Social Darwinist mentality that says to leave them behind. Essentially let them die. Even China is not that bad; at least their low skilled people have farm work. 800 million of them, no less. > [@](#): > > > [@](#): > > > > 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? I believe the film “Zardoz” explains perfectly where this will ultimately go. Today’s pro-offshoring sycophants are calculating that they’ll be on the luxurious side of that great divide. > [@](#): > > 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? See, that’s what I’m talking about. The free market fantasy is flawed because it has no humanity. There’s no pity, zero compassion and no concept of community spirit in that concept. You cannot rule human beings with inhuman systems of thought. It’s like using computers to judge who’s a perfect mate for you. > [@](#): > > 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. The free market concept is a sociopathic concept. ---
**Author:** ![Dangerosa](https://avatars.discourse-cdn.com/v4/letter/d/22d042/32.png) [@Dangerosa](https://boards.straightdope.com/u/Dangerosa)\ **Post date:** [October 4, 2010, 2:06pm UTC](https://boards.straightdope.com/t/offshoring-the-snake-that-is-eating-itself/555912/89 "2010-10-04T14:06:32Z")
> [@RickJay](#): > > > [@Dangerosa](#): > > > > Yeah, change the balance for China and I’ll send less of my work to China. But you’ve got to knock down the cost of U.S. labor and increase the cost of labor in Northern Ireland and Canada before that job comes back to the US. > > I wonder how it was that U.S. unemployment was under five percent just back in 2002, when all the same differences in labour costs still existed. Amazing, that. > > Why, you’d almost think there was more to it than just the hourly price of labour. Yep, a lot more to it than that. ---
**Author:** ![Baboonanza](https://avatars.discourse-cdn.com/v4/letter/b/f475e1/32.png) [@Baboonanza](https://boards.straightdope.com/u/Baboonanza)\ **Post date:** [October 4, 2010, 2:07pm UTC](https://boards.straightdope.com/t/offshoring-the-snake-that-is-eating-itself/555912/90 "2010-10-04T14:07:47Z")
> [@](#): > > Even China is not that bad; at least their low skilled people have farm work. 800 million of them, no less. Congratulations, that is the stupidest argument in the whole thread! You know why people in the US don’t practise subsistence farming? Because it’s one of the shittiest, most gruelling and unstable way to make a living there is. Seriously. It’s one step above being a vagrant or casual labourer. > [@Le\_Jacquelope](#): > > There will always be people unable to get a higher education. Pro-offshoring people are of the Social Darwinist mentality that says to leave them behind. Essentially let them die. In a successful economy there can easily be more than enough low-skilled jobs. Not everything can be out-sourced, someone has to do the cleaning, table waiting, street cleaning etc. In fact, if you reduce the number of low-skilled workers the market will react by increasing low-skilled wages. ---
**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 4, 2010, 2:12pm UTC](https://boards.straightdope.com/t/offshoring-the-snake-that-is-eating-itself/555912/91 "2010-10-04T14:12:26Z")
> [@Baboonanza](#): > > > [@Le\_Jacquelope](#): > > > > Not the unemployed, who are earning $0. At least Chinese farmers have their food covered. > > Except for when there’s a bad harvest and they starve of course. Why the hell do you think these leave their farms to work horrendous hours in factories? If we had a bad harvest we’d be starving, too. > [@](#): > > I’m honestly suprised at how many lengthy post you’ve managed to make on this subject without any real understanding of the issues. Brightnshiny understands it perfectly. You’re the one with the unrealistic fantasies and disproven misconceptions about the market and its relationship to human beings. > [@](#): > > **China is not competing with the US for manufacturing jobs**. **Yes, China absolutely is competing with the US for manufacturing jobs**. They’re taking the jobs that we used to have here, making products that used to be made here. Another one of your serious misconceptions about the market. > [@](#): > > China is competing with all of the other dirt poor countries that would love to get those outsourced jobs, like Indonesia. If you really think that the absence of Chinese currency pegging would result in the jobs coming back to the US then you’re an idiot, the jobs would just move to another country that’s even less developed than China. Which is why I am in favor of tariffs against low-wage nations. They work for China, they’ll work for us. > [@](#): > > Besides that you seem to have completely ignored the fact that the American standard of living is as high as it is _because_ of the outsourcing of manufacturing. Incorrect. It would be higher if we did not outsource manufacturing to low wage nations. We would have a much stronger lower class, with more wealth in their hands to spend in the market. Your claim is not based on any facts. > [@](#): > > And even if you did somehow manage to bring all those jobs back to the US the people doing them would be just as poor as they are now because they still wouldn’t be able to afford anything made on American soil. Incorrect. You tried to make this point before, specifically about TVs, and I showed you a link to where TVs are undergoing price drops right now because few people can afford them _and their production is being offshored to low wage nations_. If those jobs came back to the US they would simply put the TVs on layaway and get them later. Another current example that shows your argument is wrong: China’s factory workers can afford their own goods. Why wouldn’t American factory workers be able to? Also, yet another historical point of fact that totally ruins your argument: do you remember Henry Ford? He raised the wages of his workers to enable them to buy his stuff. It worked, too. History itself condemns your argument. Plus, you continue to ignore the other point I made: when the US dollar inevitably collapses from all these trade deficits and debts, the working class will be unable to afford ANY imported goods. But you seemed to evade that when I pointed it out. > [@](#): > > If you want prosperity for the American people bringing that sort of commodity manufacturing back to the US is insane. You cannot compete with the third world on unskilled labour prices and forcing the move with tariffs will make you poorer, not richer. Unsubstantiated by logic and, most importantly, history. > [@](#): > > If you want continued prosperity for the American people you must look to the future, not the past. Ah yes, a marketing slogan. Look to the future, not the past. In the past we decided that 1+1=2. You propose to us a future where 1+1=5. You propose a future of ignorance. You know what happens to those who ignore the lessons of history, right? > [@](#): > > Instead of trying to create jobs for all the unemployed unskilled labourers Who have always been and will always be there no matter what you do to try and starve them to death or uplift or make them go away… > [@](#): > > you need to reduce their number through education (good education for everybody, not just the top 10%) and look to support high-tech and knowledge based industries that aren’t cometing directly with the third world. This argument you propose has already proven not to work. Education is now insanely expensive. How are the poor going to be able to afford it? You need a college education to get a job as a receptionist. It doesn’t matter how educated you are. You’re still competing with equally educated workers overseas who are earning pennies on your dollar. This is why we are losing biotech research (innovation) jobs to low-wage nations like India and solar tech research jobs to low-wage nations like China. All high-tech and knowledge-based industries are competing directly with the third world. If every American everywhere gets a PhD in some high-tech field, that’s a hundred million of us at least. There will never be enough jobs for them. Your theory is doomed. Plus, America is already moving from the “innovate here, produce over there” loser mentality to the “innovate over there” mentality. That’s the future your argument holds for this country. ---
**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 4, 2010, 2:27pm UTC](https://boards.straightdope.com/t/offshoring-the-snake-that-is-eating-itself/555912/92 "2010-10-04T14:27:29Z")
> [@Baboonanza](#): > > > [@](#): > > > > Even China is not that bad; at least their low skilled people have farm work. 800 million of them, no less. > > Congratulations, that is the stupidest argument in the whole thread! You know why people in the US don’t practise subsistence farming? Because it’s one of the shittiest, most gruelling and unstable way to make a living there is. Seriously. It’s one step above being a vagrant or casual labourer. Congratulations, you’ve just posted the most ridiculous point in the whole discusson! No one wants to do that work because it’s unnecessarily _dangerous_. Construction jobs are no worse than farm jobs; but in farm jobs you have the problems of heat stroke, death by machinery, and basic things that workplace safety laws could and do prevent on a construction site. The difference between the farm industry and construction is that the farm industry is immune to both minimum wage and workplace safety laws and if that were to change we wouldn’t have so many people running away from it. > [@](#): > > > [@Le\_Jacquelope](#): > > > > There will always be people unable to get a higher education. Pro-offshoring people are of the Social Darwinist mentality that says to leave them behind. Essentially let them die. > > In a successful economy there can easily be more than enough low-skilled jobs. Not everything can be out-sourced, someone has to do the cleaning, table waiting, street cleaning etc. In fact, if you reduce the number of low-skilled workers the market will react by increasing low-skilled wages. Congratulations you just posted the most _deluded_ argument in this whole thread! Companies lay off low-skilled workers and drive their existing workers to work even harder. If there’s not enough of them they go hire immigrants. Which Republicans try very hard to keep around in order to depress wages. And I’m surprised that you haven’t argued that old saw here that if window washing wages go up so do prices and soon workers won’t be able to afford anything ever. (Or are you sensible enough to see that argument is wrong?) Okay, assuming you can spin your way out of all those problems with your argument, how about we do a math problem… why don’t you calculate those hypothetically raised wages and tell us how that pays for rent and food and health insurance? Let’s leave out electricity, car payments, gasoline… ---
**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 4, 2010, 2:32pm UTC](https://boards.straightdope.com/t/offshoring-the-snake-that-is-eating-itself/555912/93 "2010-10-04T14:32:17Z")
> [@Dangerosa](#): > > > [@Baboonanza](#): > > > > **China is not competing with the US for manufacturing jobs**. China is competing with all of the other dirt poor countries that would love to get those outsourced jobs, like Indonesia. If you really think that the absence of Chinese currency pegging would result in the jobs coming back to the US then you’re an idiot, the jobs would just move to another country that’s even less developed than China. > > I pay $5 an hour for Chinese resources. $7 for Thai. $7 for Malay. $20 for resource in Northern Ireland. $40 in Canada (don’t have to pay for health care! Which is a big part of the U.S. load) $80 for those in the U.S. > > Yeah, change the balance for China and I’ll send less of my work to China. But you’ve got to knock down the cost of U.S. labor and increase the cost of labor in Northern Ireland and Canada before that job comes back to the US. Reduce the cost of labor in the US to $5 an hour and we’ll be even poorer than the Chinese. The cost of labor is pushed up by the cost of living here. High enough tariffs would force those jobs to come back, too. Those employers who cannot be arsed to hire labor in a civilized country should not be selling their goods to a civilized country. If you want to prop up the economies of undemocratic low wage hell holes like China then I say go live there. America can take care of itself with its own workers; we always have. Meanwhile you guys can choke to death on China’s unbreathable air and poisoned water. ---
**Author:** ![treis](https://avatars.discourse-cdn.com/v4/letter/t/bc79bd/32.png) [@treis](https://boards.straightdope.com/u/treis)\ **Post date:** [October 4, 2010, 2:46pm UTC](https://boards.straightdope.com/t/offshoring-the-snake-that-is-eating-itself/555912/94 "2010-10-04T14:46:15Z")
> [@Le\_Jacquelope](#): > > > [@Baboonanza](#): > > > > Except for when there’s a bad harvest and they starve of course. Why the hell do you think these leave their farms to work horrendous hours in factories? > > If we had a bad harvest we’d be starving, too. > . Haha what? Crops fail all the time in the U.S. and nobody starves. We are rich enough to have ample stores, and are rich enough to buy food from other countries if we need to. ---
**Author:** ![Baboonanza](https://avatars.discourse-cdn.com/v4/letter/b/f475e1/32.png) [@Baboonanza](https://boards.straightdope.com/u/Baboonanza)\ **Post date:** [October 4, 2010, 2:51pm UTC](https://boards.straightdope.com/t/offshoring-the-snake-that-is-eating-itself/555912/95 "2010-10-04T14:51:32Z")
> [@Le\_Jacquelope](#): > > If we had a bad harvest we’d be starving, too. No, because we’re rich enough to import the food if we need it. Then the poor in the third world starve instead because the prices go up. > [@](#): > > Brightnshiny understands it perfectly. You’re the one with the unrealistic fantasies and disproven misconceptions about the market and its relationship to human beings. Good argument there, very persuasive. > [@](#): > > **Yes, China absolutely is competing with the US for manufacturing jobs**. They’re taking the jobs that we used to have here, making products that used to be made here. Another one of your serious misconceptions about the market. > > Which is why I am in favor of tariffs against low-wage nations. They work for China, they’ll work for us. > > Incorrect. It would be higher if we did not outsource manufacturing to low wage nations. We would have a much stronger lower class, with more wealth in their hands to spend in the market. Your claim is not based on any facts. Jobs would be created in the US sure, but THE PRICE OF EVERYTHING WOULD GO UP ACCORDINGLY! All of these modern consumer products are only affordable to average American because they are made with out-sourced labour. What you are proposing would simply create an internalised economy that would be completely uncompetetive with the rest of the world and eventually require state funding to prop up. > [@](#): > > Incorrect. You tried to make this point before, specifically about TVs, and I showed you a link to where TVs are undergoing price drops right now because few people can afford them _and their production is being offshored to low wage nations_. > > If those jobs came back to the US they would simply put the TVs on layaway and get them later. That wasn’t me, but your counter-arguement is idiotic. So TVs would become less affordable, but it’s okay because people could just go into debt to by them? That’s not an improvement. Besides, the reason TVs aren’t selling isn’t because they are too expensive. It is more to do with that fact that the economy is recovering from a debt bubble and people are reigning in consumer spending while they pay off debt and some stability returns to the system. TVs are a complete luxury item, especially when everyone owns one already. > [@](#): > > Another current example that shows your argument is wrong: China’s factory workers can afford their own goods. Why wouldn’t American factory workers be able to? That’s not an example, that’s an unproven assertion. Cite? > [@](#): > > Also, yet another historical point of fact that totally ruins your argument: do you remember Henry Ford? He raised the wages of his workers to enable them to buy his stuff. It worked, too. History itself condemns your argument. Here you seem to have taken one isolated action and applied it to the global economy without any regard to context. When Ford was producing motor cars the US economy was more like India or China: lots of low-skilled labour, a much, much lower standard of living, low worker benefits, low wages and a non-existent consumer economy (by modern standards). The same outcomes would not necessarily be true in the current US economy. All it shows is that having a wealthier low-middle class creates a better consumer market and in turn drives economic growth. But that’s not what anybody is arguing. > [@](#): > > Plus, you continue to ignore the other point I made: when the US dollar inevitably collapses from all these trade deficits and debts, the working class will be unable to afford ANY imported goods. But you seemed to evade that when I pointed it out. Again, not me. Let me paint 2 scenarios: - High tariffs placed on imports to protect American jobs. The working class can no longer afford foreign imports. Dollar collapses due to nobody having any use for Ddollars anymore. - Dollar collapses. The working class can no longer afford foreign imports. What you’re proposing would lead directly to what you are actually railing against! > [@](#): > > Ah yes, a marketing slogan. Look to the future, not the past. In the past we decided that 1+1=2. You propose to us a future where 1+1=5. You propose a future of ignorance. You know what happens to those who ignore the lessons of history, right? > Who have always been and will always be there no matter what you do to try and starve them to death or uplift or make them go away… > > > [@](#): > > > > you need to reduce their number through education (good education for everybody, not just the top 10%) and look to support high-tech and knowledge based industries that aren’t cometing directly with the third world. > > This argument you propose has already proven not to work. > > Education is now insanely expensive. How are the poor going to be able to afford it? You need a college education to get a job as a receptionist. > > It doesn’t matter how educated you are. You’re still competing with equally educated workers overseas who are earning pennies on your dollar. This is why we are losing biotech research (innovation) jobs to low-wage nations like India and solar tech research jobs to low-wage nations like China. All high-tech and knowledge-based industries are competing directly with the third world. > > If every American everywhere gets a PhD in some high-tech field, that’s a hundred million of us at least. There will never be enough jobs for them. Your theory is doomed. Plus, America is already moving from the “innovate here, produce over there” loser mentality to the “innovate over there” mentality. That’s the future your argument holds for this country. Yeah, much better to block trade and move into a backwards, internalised, uncompetetive economy while the rest of the world advances around you. In twenty years the US would be like 80s era Soviet Russia :rolleyes: ---
**Author:** ![Baboonanza](https://avatars.discourse-cdn.com/v4/letter/b/f475e1/32.png) [@Baboonanza](https://boards.straightdope.com/u/Baboonanza)\ **Post date:** [October 4, 2010, 3:01pm UTC](https://boards.straightdope.com/t/offshoring-the-snake-that-is-eating-itself/555912/96 "2010-10-04T15:01:41Z")
> [@Le\_Jacquelope](#): > > > [@Baboonanza](#): > > > > Congratulations, that is the stupidest argument in the whole thread! You know why people in the US don’t practise subsistence farming? Because it’s one of the shittiest, most gruelling and unstable way to make a living there is. Seriously. It’s one step above being a vagrant or casual labourer. > > Congratulations, you’ve just posted the most ridiculous point in the whole discusson! > > No one wants to do that work because it’s unnecessarily _dangerous_. Construction jobs are no worse than farm jobs; but in farm jobs you have the problems of heat stroke, death by machinery, and basic things that workplace safety laws could and do prevent on a construction site. The difference between the farm industry and construction is that the farm industry is immune to both minimum wage and workplace safety laws and if that were to change we wouldn’t have so many people running away from it. > > > [@](#): > > > > In a successful economy there can easily be more than enough low-skilled jobs. Not everything can be out-sourced, someone has to do the cleaning, table waiting, street cleaning etc. In fact, if you reduce the number of low-skilled workers the market will react by increasing low-skilled wages. > > Congratulations you just posted the most _deluded_ argument in this whole thread! Companies lay off low-skilled workers and drive their existing workers to work even harder. If there’s not enough of them they go hire immigrants. Which Republicans try very hard to keep around in order to depress wages. And I’m surprised that you haven’t argued that old saw here that if window washing wages go up so do prices and soon workers won’t be able to afford anything ever. (Or are you sensible enough to see that argument is wrong?) > > Okay, assuming you can spin your way out of all those problems with your argument, how about we do a math problem… why don’t you calculate those hypothetically raised wages and tell us how that pays for rent and food and health insurance? Let’s leave out electricity, car payments, gasoline… What the hell is the point you’re trying to make here? On the one hand you are arguing for protectionist tariffs to bring home low-paying jobs while at the same time arguing that low paying jobs are shit and people don’t want to do them. And what is the point of bringing immigration into the debate? Obviously nothing will help if you just continually import enough immigrants to keep low-skilled wages depressed. ---
**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 4, 2010, 3:15pm UTC](https://boards.straightdope.com/t/offshoring-the-snake-that-is-eating-itself/555912/97 "2010-10-04T15:15:41Z")
> [@treis](#): > > > [@Le\_Jacquelope](#): > > > > If we had a bad harvest we’d be starving, too. > > . > > Haha what? Crops fail all the time in the U.S. and nobody starves. We are rich enough to have ample stores, and are rich enough to buy food from other countries if we need to. That is, until they decide their people need the food more and start embargoing it. Like the Saudis did with oil in the 1970s. > [@Baboonanza](#): > > > [@Le\_Jacquelope](#): > > > > If we had a bad harvest we’d be starving, too. > > No, because we’re rich enough to import the food if we need it. Then the poor in the third world starve instead because the prices go up. Until they decide to embargo us. > [@](#): > > Jobs would be created in the US sure, but THE PRICE OF EVERYTHING WOULD GO UP ACCORDINGLY! All of these modern consumer products are only affordable to average American because they are made with out-sourced labour. What you are proposing would simply create an internalised economy that would be completely uncompetetive with the rest of the world and eventually require state funding to prop up. _Sigh_ Your argument is high on theory and deficient on the facts. China’s working class can afford all the cell phones and cars made there. Especially now since they went on strike. > [@](#): > > That wasn’t me, but your counter-arguement is idiotic. So TVs would become less affordable, but it’s okay because people could just go into debt to by them? That’s not an improvement. Speaking of idiotic, your argument shows what little you know of the word ‘layaway’. Look up the concept before you post another one of your _ahem_ ‘points’. Layaway is not debt. It is not even in the same universe. Debt is post payment for services/goods delivered. Layaway is pre-payment in advance. Here’s another history lesson for you. For the last 30 or so years consumer debt has EXPLODED as people’s incomes declined over that time period. To buy those cheap offshore-produced TVs and other consumer goods, people put it on credit cards and took out home equity loans. Then in 2008 all that credit collapsed and sales went right into the tank. So, really, what are you talking about here? Your fantasy scenario that higher wages mean more expensive products (_disproven by the example of China_) or your confusion about history which has shown that people go into ruinous debt to afford cheap labor-made products in spite (or maybe even because) of offshoring? > [@](#): > > Besides, the reason TVs aren’t selling isn’t because they are too expensive. It is more to do with that fact that the economy is recovering from a debt bubble and people are reigning in consumer spending while they pay off debt and some stability returns to the system. In other words, they’re waiting to buy TVs _when they can afford it_ without going into debt. :rolleyes: Way to go, disproving my point by coming back around and making it. > [@](#): > > TVs are a complete luxury item, especially when everyone owns one already. > > That’s not an example, that’s an unproven assertion. Cite? Chinese consumers are booming. [http://edition.cnn.com/2009/BUSINESS/04/28/china.consumer/index.html](http://edition.cnn.com/2009/BUSINESS/04/28/china.consumer/index.html) From this, do you think they’re having problems affording their own products? Car sales there are up _17 percent_. Proof enough? [quote] > [@](#): > > Here you seem to have taken one isolated action and applied it to the global economy without any regard to context. When Ford was producing motor cars the US economy was more like India or China: lots of low-skilled labour, a much, much lower standard of living, low worker benefits, low wages and a non-existent consumer economy (by modern standards). The same outcomes would not necessarily be true in the current US economy. All it shows is that having a wealthier low-middle class creates a better consumer market and in turn drives economic growth. But that’s not what anybody is arguing. Wrong again. I’ve been arguing for a wealthier low-middle class. I’ve mentioned the need to shift this economy to a trickle-up system several times here. > [@](#): > > Again, not me. Let me paint 2 scenarios: > > - High tariffs placed on imports to protect American jobs. The working class can no longer afford foreign imports. Dollar collapses due to nobody having any use for Ddollars anymore. > - Dollar collapses. The working class can no longer afford foreign imports. > > What you’re proposing would lead directly to what you are actually railing against! How do you figure? In either case we won’t be able to buy foreign imports. We’ll have to make the stuff here. That’s exactly what I want. > [@](#): > > Yeah, much better to block trade and move into a backwards, internalised, uncompetetive economy while the rest of the world advances around you. In twenty years the US would be like 80s era Soviet Russia :rolleyes: What makes you think that if we block trade with cheap labor nations and lower trade barriers with nations that have equitable wage, human rights, environmental and workplace safety laws, that we would become like 80s era Soviet Russia? Where did you get that argument from anyway, no wait lemme guess… the Dollar Tree? Show me the historical basis that shows that blocking trade with cheap labor nations and lowering trade barriers with, say, Europe and Canada, would reduce us to the 80s era Soviet Union. I’d like to see how you figure this out. ---
**Author:** ![RickJay](https://avatars.discourse-cdn.com/v4/letter/r/bb73d2/32.png) [@RickJay](https://boards.straightdope.com/u/RickJay)\ **Post date:** [October 4, 2010, 3:26pm UTC](https://boards.straightdope.com/t/offshoring-the-snake-that-is-eating-itself/555912/98 "2010-10-04T15:26:17Z")
> [@Le\_Jacquelope](#): > > Also, yet another historical point of fact that totally ruins your argument: do you remember Henry Ford? He raised the wages of his workers to enable them to buy his stuff. It worked, too. History itself condemns your argument. What nonsense. You’re telling other people they lack facts and you quote urban myths to support your claims? Henry Ford raised worker wages because they weren’t high enough to retain workers; his plants (like most factories at the time) suffered from almost comical levels of turnover; the average employee lasted just 3-4 months and most of the departures were people quitting. He jacked wages up because it was cheaper than constantly retraining and hiring temporary labor. Ford himself said: [QUOTE=Henry Ford] There was…no charity involved… We wanted to pay these wages so that business would be on a lasting foundation. We were building for the future. A low wage business is always insecure. The payment of $5 a day for an eight-hour day was one of the finest cost-cutting moves we ever made. [/QUOTE] The idea of making things affordable for the middle class was a fundamental tenet of capitalism before Henry Ford, but the idea that the factory makers should be able to afford what they make is… well, it’s idiotic. How can you apply that universally? Should every Boeing worker be able to afford his own 777? > [@](#): > > Education is now insanely expensive. How are the poor going to be able to afford it? You need a college education to get a job as a receptionist. Obviously this is not true, as most Americans do not have degrees, and yet most have jobs. But the point being made - rather obviously, I think - was that the U.S. economy would be much helped by MORE investment in education and training. **Make it more affordable.** ---
**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 4, 2010, 3:28pm UTC](https://boards.straightdope.com/t/offshoring-the-snake-that-is-eating-itself/555912/99 "2010-10-04T15:28:38Z")
> [@Baboonanza](#): > > What the hell is the point you’re trying to make here? On the one hand you are arguing for protectionist tariffs to bring home low-paying jobs Woah, woah, woah. Stop right there. Bring home low-paying jobs? What? I’m talking about bringing home manufacturing, biotech research, solar engineering, and tech jobs. What are you talking about? Manufacturing has never been a low paying job in America. Neither has biotech research, software testing (I started out in that industry at $20/hr in the 1990s) or programming, all of which are just some of the good paying jobs that are going overseas. Paralegals are another one. Low-paying jobs? Really? I hope you put some barbecue sauce on that “stupidest argument in the whole thread” comment of yours or else you’re pretty much choking on it right now. > [@](#): > > while at the same time arguing that low paying jobs are shit and people don’t want to do them. That was regarding farm jobs whose lack of appeal is not their low wages as much as all the unnecessary hazards. You’re getting lost here, confusing high-paying jobs that are going overseas with one domestic job sector that is poorly regulated and fraught with low wages AND dangers to one’s life. > [@](#): > > And what is the point of bringing immigration into the debate? Because… because… well… it’s highly common in a large number of low-paying service jobs, from hotels to maids to farming? (Ask Meg Whitman if you don’t agree. 😃 ) > [@](#): > > Obviously nothing will help if you just continually import enough immigrants to keep low-skilled wages depressed. If low paying domestic offshore-immune jobs are the China shop, immigrant labor is the bull. Not talking about its effects on those job-types is just downright senseless. ---
**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 4, 2010, 3:38pm UTC](https://boards.straightdope.com/t/offshoring-the-snake-that-is-eating-itself/555912/100 "2010-10-04T15:38:59Z")
> [@RickJay](#): > > > [@Le\_Jacquelope](#): > > > > Also, yet another historical point of fact that totally ruins your argument: do you remember Henry Ford? He raised the wages of his workers to enable them to buy his stuff. It worked, too. History itself condemns your argument. > > What nonsense. You’re telling other people they lack facts and you quote urban myths to support your claims? What urban myth? > [@](#): > > The idea of making things affordable for the middle class was a fundamental tenet of capitalism before Henry Ford, but the idea that the factory makers should be able to afford what they make is… well, it’s idiotic. How can you apply that universally? Should every Boeing worker be able to afford his own 777? [http://www.ford.com/about-ford/heritage/milestones/5dollaraday/677-5-dollar-a-day](http://www.ford.com/about-ford/heritage/milestones/5dollaraday/677-5-dollar-a-day) > [@](#): > > Henry Ford had reasoned that since it was now possible to build inexpensive cars in volume, more of them could be sold if employees could afford to buy them. The $5 day helped better the lot of all American workers and contributed to the emergence of the American middle class. In the process, Henry Ford had changed manufacturing forever. You’ll want to re-word your argument now. Or maybe you’ll want to read the “My Life and Work”, particularly the “Wages” chapter. If I still had that book I’d quote the actual passage for you. You’d be advised not to bet against me on whether Ford intended to raise wages to help his workers buy his cars. Stopping labor turnovers was definitely a part of his plan, but not the only part. Ford was that one thing you consider a curse word: _socially conscious_. > [@](#): > > > [@](#): > > > > Education is now insanely expensive. How are the poor going to be able to afford it? You need a college education to get a job as a receptionist. > > Obviously this is not true, as most Americans do not have degrees, and yet most have jobs. But there are receptionist job ads looking for college degrees; more now, since there are 5 people fighting for every 1 job. > [@](#): > > But the point being made - rather obviously, I think - was that the U.S. economy would be much helped by MORE investment in education and training. **Make it more affordable.** And how do we do that? Tuition is going up faster than inflation. [Previous page](https://boards.straightdope.com/t/offshoring-the-snake-that-is-eating-itself/555912.md?page=4) [Next page](https://boards.straightdope.com/t/offshoring-the-snake-that-is-eating-itself/555912.md?page=6)