You think only workers have problems? What about investors who lose their money? Should the state help them out? I know a couple of people who lost their lives savings when the dotcom bubble burst. One couple was already retired and too old to go back to work. The other guy was planning on retiring soon but has had to prolong his years as a worker. The money of these investors ended up in the pockets of some workers who were hired. Should the workers give the money back because the investment did not produce as hoped? These investors are working class people who invested and risked their money but lost it. Without people like them ther would be no jobs. You need to incentivate investment to create jobs.
If the net U.S. payroll stays the same, we’ll be OK. But if it declines, then we have serious problem here, no matter how much people in other countries may benefit. It might just be the case that many of us, raised with middle class expectations and having embarked on middle class careers, will be cast into the depths of working poverty. That’s a hard pill to swallow. It wasn’t so bad for the buggy whip maker who could get a job a the Ford factory. But I’m not sure that type of changeover would be possible today.
No more than a company has a right to make money off Sanjay or me.
This is true.
I don’t know about that. I am pretty skeptical that the minimum wage is what is hurting us.
[quote\I guess the problem is the difference in cost of living here vs. India[/quote]
Bingo. At least for me. Salaries are higher in Boston than in Cleveland, but I don’t see a huge rush to get the hell out of Boston, even though the labor is cheaper.
The problem here is that, as is claimed in this thread, our higher cost of living is artificial based on protectionism in the first place. We live in a bubble, of sorts. I don’t wish to dispute this (which is not to say I think it is true, I just don’t care to argue the point), but remain skeptical that we should just let corporations do as they may.
I’m not sure what I’m saying, either. 
John Mace, I am not sure what you intend to get out of me answering it when I have stated pretty clearly that I don’t know where I stand on the issue. But if it will make you happy,
There is no change in gross employment in the second scenario, firstly, only in where the employed are. Secondly, the labor and production values stay inside our legal system in the first scenario even if we’ve imported technology or goods, while in the second scenario this is not the case.
I might be slightly happier if foriegn labor was paid comparably to indigenous labor. Of course, this would defeat the whole purpose. As we see, there is no “it’s all good because everyone is better off.” Truth is we’re not. The majority of labor prices here must drop to compete, but businesses expect to maintain if not increase profits. I find this one-sidedness unacceptable, and this, IMO, is likely the motivation behind protectionism: we do what we can to keep our profits high, just like businesses do. I find the double standard a little bit off-putting.
If we seek to avoid protectionism, then there needs to be a different mechanism. When UPS workers find out their ass-busting is making the company billions and billions of dollars, they tend to feel that they should get a little more, too. Since this is natural behavior in capitalism, I’m not inclined to argue. Yet this is what drives the cost of labor up.
Of course if you waltz into a depressed economy your dollars will go farther. But there’s a reason we don’t all move to India to be rich. Can you speculate on that at all?
If work in general becomes too scarce and poorly paid, then we might see a political shift toward Western European style socialism. There would have to be a shifting of wealth, or else we would experience terrible social instability, not to mention a crime wave that would make 1970’s New York City or 1990’s L.A. look like Bedford Falls. You can’t have a few million rich people and 260 million living on Wal-Mart wages, it’s just not going to work.
Most Eurpean countries would kill to have the unemployment rate of the US, even at its most recent worst level. A sure way for us to have a European style unemployment rate is to emulate European policies.
Thanks. My point in this was that laws are a way of steering the profit driven behavior of corporations into ways conforming to the public good. In the illegal alien case, we would have to talk about the justification of such laws, which would be a hijack.
So, to get back on topic, the justification for a law against sending jobs offshore would be to increase the expense to companies of doing this. This might be a good thing to do if it improves the society under the government, and a bad thing to do if it decreases this value. Protectionism in general is bad, I think, because it hurts the whole society more than it helps the few who benefit.
Voyager:
It’s true that many of the anti-outsourcing folks here assume, without proof, that outsourcing is bad for the overall economy. But there is also the issue of individual freedom involved. If I want to do business with a Candadian or a Mexican or a Thai national, the gov’t simply does not have the right to stop me unless there is some significant national security issue invloved.
When the outsourcing involves a company not violating the laws of its country, and not violating human rights of its employees, I agree. However, do you think it legitimate for the government to prevent, through law, a US company outsourcing work to a factory using slave labor?
That’s a really good question. Mu gut reaction is to say yes, but I don’t think I would actually commit to that.
I don’t think the US government is compelled to influence how other countries treat their citizens. I believe that US consumers are capable of making the moral decision as to whether or not to buy goods produced by slave labor in other countries.
Well, that’s the tradeoff. My understanding is that in most European countries, taxes are heavy, and there’s much less of an income gap between the richest and poorest people, “poorest” in this case including even those who have no “wages” per se being unemployed. I know everyone bitches about taxes, but if I had to be unemployed I’d much rather do it in Europe than here. Maybe some of the European members can shed some light on what it really means to be unemployed and out of money over there. In America that circumstance would generally mean that you become homeless, or live in your car, or perhaps move in with your parents. I know that being on the dole sucks in Europe just as it does here, but does it suck as badly?
Of course not.
Dunno. Maybe, yes. I trust the FDIC insurance on most banks is a Good Thing, yes? Or do we not count savings accounts as investments?
I’m not sure what this has to do with cutting costs by relocating to other countries. These risks are there with or without that movement.
No, you are coflagrabulating two very different issues.
Should the government impose penalties to corporations who buy products or services abroad or impose protectionist tariffs? The answer is NO.
Should the government impose trade sanctions on countries which do not respect human rights? This is a very different issue and not the subject of this thread. If the USA has imposed a trade embargo with Cuba for whatever reasons, then fine, no one is allowed to trade with Cuba but the purpose of that us to do with Cuba and companies are still allowed to trade with the ret of the world.
How about you get into that position first before commenting on people’s intelligence. When was the last time you searched for a white-collar decent paying job? You are talking out of your ass about this. You can devote 100% of every goddamn day into looking for a job but if there isn’t one to be found, it won’t matter. As for the “let them lay me off like they were going to anyway” comment, when you are facing training your replacement or a shit unemployment check, you will stay in the job as long as possible. Really, don’t let your total lack of experience about this type of situation dissuade you from posting bullshit.
To start off, I’m not an economist, either.
First issue - what’s happening in the world economy?
Now, suppose we make a simplifying assumption: that there is a fixed amount of wealth in the world.
I propose that in the short term, this is a valid approximation because goods and funds zip around the world quickly, while changes in wealth occur slowly by comparison.
So, what is happening now seems likely to cause the overall standard of living in developed countries to decline while it probably will rise in the developing countries. And because the developing countries constitute the greater part of the population of the planet, our decline is likely to be more pronounced than their improvement, at least at first. (The percentage of wealth siphoned off by the plutocracy may increase, but it still isn’t that much of the total gross product of the respective economies, so I don’t think it matters much for this argument.)
I’ve been thinking for several years that this is a likely scenario, and it ain’t gonna be purty. (Of course, there are always other factors, so no single, static model can predict what will happen.)
I know this has been mentioned before in this thread, but I wanted to take a different perspective on it.
Maybe we could have avoided some of the pain of this redistribution of wealth if we (developed countries) had put more effort into assisting the developing countries over the past 50 years or so – and thereby ameliorating the long-term disruption of our own economies.
Now, I think the sky is going to fall, and there isn’t much we can do but hunker down and trudge through it.
(I admit, I keep hoping that there will be a nice long-term economic recovery and this is just a nightmare, but I think it’s actually going to get much worse even if we have a recovery in the short term.)
Second issue - What happened to IT jobs?
I know there are a lot of IT folks out of work (including me) and they’re blaming it on moving jobs offshore. But I think we have to consider what happened to the IT job market in the late 1990’s. I was not in IT at the time (should have been – I’d have probably $500,000 more socked away than I do now), but I know that there was so much IT talent sucked into the Y2K conversion that something had to fill the vacuum.
So I haven’t looked it up, but surely there was a major expansion of the IT workforce by the year 2000, and there never was enough permanent work for that many in that field. I predicted in 1997 or 1998 (I forget now) that there would be a job crunch in IT as soon as the Y2K conversion was over. And I still think that’s a major reason for the current glut of IT workers, in addition to the .com bust and (coincidentally and really only recently) offshoring of IT work.
Third issue: What’s the moral thing to do?
John Mace has stated on the one hand that it’s not okay for companies to violate the law, but on the other hand it doesn’t seem to be a problem if a company violates the law in a country that doesn’t bother to enforce the law. (Let’s not even consider the likelihood that the latter company is paying off the ostensible enforcers.)
Maybe the third-world country only has certain laws against child labor and dangerous working conditions because we or the World Bank or someone pressured them into it. Maybe those laws are unrealistic, in the sense that their economy just can’t support companies that provide safe environments and eschew child labor. So maybe such laws would prevent or delay the development of the economy and would perpetuate the crushing poverty of the people there. After all, those people do work in unsafe/exploitive conditions rather than, uh, starve to death.
In a totally unconscious ecological system, this would make sense. There is no morality to natural selection when the participants cannot know their own position in the system and cannot conceive of the system itself.
We human beings, however, do have some ability to understand our context and some of the consequences of our actions. That is why we even have a concept of morality.
Now, with larger social entities (governments and businesses, to name two), we seem to have gone back to the “red in tooth and claw” mentality. Basically, the argument goes, the conditions in a given community have to fall to the lowest level that the people there can tolerate.
Example – In the case of business, the argument is: if A doesn’t do it, then B will, and then A will go out of business. So A feels justified in cutting every corner possible in a given situation, and A can even feel good that there are workers jumping at the chance to work in A’s factory under those conditions. And if C even wanted to enter the market there and offer better working conditions, where is the economic advantage? How would C survive?
So, clearly, if A, B, and C are moral agents, they cannot operate with any value system that promotes basic human reciprocity. In fact, if they did subscribe to such a value system, they would have to resign and do something else.
(Yes, I know that there are businesses or non-profits that manage to sell some products that are child-labor-free or whatever, at a higher price, to select markets, but I think that is such a poor solution…)
Anyway, what it boils down to is that larger systems (governments, businesses, markets, organized crime, whatever) do not naturally promote actions that are in the best interests of individuals. They promote actions that are in the best interests of whatever system person A represents.
The historical solution to this problem (and it is a problem) is enforcement of morality. I mean this in a broad sense – catechisms, canon law, civil law, international law, whatever.
So, if I think it is wrong (and I do) for human beings to decide to place other human beings in harm’s way – even if those others are in danger of starving to death – then I have to support some alternative that allows businessperson A to make better decisions without fearing that businessperson B is going to undercut him/her. In other words, there needs to be a functional valve on the moral drain, so that the lowest level rises and lifts all boats to an acceptable level of corporate behavior. (Sorry, I couldn’t resist those cliches. :smack: )
Yes, I think this is an alternative to waiting for the market to create a “natural” tide of prosperity that then leads a community to demand better conditions.
The questions really are whether it’s a practical alternative and whether it would produce better results. Practicality I can’t answer – I don’t know how you’d implement it, really. [wild speculation]Maybe incentivize entities such as the World Bank to put some teeth into third-world labor laws.[/wild speculation]
Better results? Well, would making all businesses, in every country, abide by worker age, safety, and work-week regulations stifle business development in poor countries? There would still be poor, starving workers willing to work for a wage far below that in any developed country. So the wage might be a little higher than it would be in the absence of such regulation – does that matter, if it’s still low? Would fewer workers get jobs, thereby causing more people to starve? Or would more workers get jobs, because work-week regulations mean more positions to cover the same number of hours?
I think placing a global floor on working conditions couldn’t possibly hurt workers or the global economy, and it would certainly make me a lot more comfortable with the economic adjustment that I think we first-worlders will have to suffer anyway.
From Voyager
My standard answer to this is…let the market decide. If the consummers want to buy stuff only from countries with good workers/human rights, well and dandy. My sister checks the lables and only buys stuff based on this. Most consumers though want to pay less for products, and thats the most important factor in their decision.
Why should the US Government impose such a thing though?? Its up to the various countries to decide their own labor practices IMO…not up to the US government to impose them…which is what you’d be doing in essence if you forced US companies to neither purchase manufactured goods from certain countries, or to close plants they have established in them.
And if you did manage to do this (would be a good trick if you could swing it), those workers who were ‘slave labor’? Well, they are no out of even that job, no longer earning ANYTHING, and probably out on the street. Maybe they could go back to being dirt farmers or something. Or, maybe some OTHER company, from another country will come in and start up a nice business there, ehe? So instead of the profits coming to an American company (which most likely will still employ US workers too), they can go to a foreign company. And eventually, when that US company folds because they can’t compete anymore (price you know), and lays off ALL of their workers, they can all sit around and console themselves that they did the ‘moral and ethical’ thing.
The ironic thing is…10 to 15 years down the pike, that country with its ‘slave labor’ will begin to roll. They will begin producing their own, home grown companies, their workers will become better paid with better benifits and improved working environments (because they will become more scarce, and able to pick and choose jobs, as more industries take root in the country…and a scarce asset is a valuable asset), and they will become a new market…for someone else’s country. And they will all say, what ever happened to America… Pie in the sky from me? Perhaps I’m painting an overly rosy picture, sure. Tell it to the South Koreans and the Japanese though.
-XT
p.s. Sailor, from your last post, you must be nearly as drunk as I am. “no one is allowed to trade with Cuba but the purpose of that us to do with Cuba and companies are still allowed to trade with the ret of the world” What the hell does this mean?? 
Well gee let me think. The company I worked at 4 years ago, everyone KNEW there were going to be massive layoffs. I’m sure none of them began looking for other positions. While I wasn’t laid off, I managed to find a better job with a Big-4 firm and left anyway. Well, that job started at the worst possible time - the company overhired for that year, Andersen/Enron kind of fucked all the Big-4’s, the World Trade Center fell on our offices and in general the economy sucked.
I was laid off from that job last year about this time. Fortunately I took the opportunity to save up as much money as I could beforehand. It took me 6 months to find a new job. That job fell through after 4 months so I’ve been looking for a “white collar decent paying job” for the better part of a year now.
I think it is a subject I know a little about. Would you like to take your foot out of your mouth now?
And the fact remains, if you KNOW you are being replaced, you have to be a fool to not start making preparations to be laid off.
Already your most important assumption is incorrect.
What is happening to the world economy is that automation implemented in the late 90s allows companies to produce more with less. Globalization has moved thousands of jobs overseas. This has caused a recession for the past several years as the labor force must shift to adapt to new conditions.
All indications is that the economy has started to grow again.
Why is it better to heavily tax our people and simply hand money over to poor nations instead of shipping actual jobs to those nations?
Well that’s it, isn’t it? In the 90s, there was such a huge demand for IT workers - Y2K, the Internet, etc. Anyone could get into IT with just a little training. People would leave jobs after 6 months to make more money somewhere else. Salaries were hugely inflated for what is essentially a back-office support role at most companies. Why should the IT workers make significantly more than the marketing or accounting people?
Not surprisingly, demand for new systems dropped once they were implemented. Companies, tired of paying 30% premiums to IT workers are forced to seeking overseas labor who won’t jump ship or treat the other employees like ignorant jerks.
Oh and by the way…these jobs are not being shipped to children and peasents in India working in slave-labor sweatshops. These are highly trained, highly educated professionals.
Also think about this. Whatever the job market is here in the US, it is much worse in Europe and even worse than that it third world companies. Yeah it sounds great that that Europe has such a wonderful unemployment program. That’s part of what encourages their 20% unemployment rates and reduces the flexibility of their economy.
My point was that the USA has policies (including sanctions) directed at countries with poor human rights records but the purpose of those policies is to encourage those countries to change and not to protect American jobs. Thet are two very different issues. In that context, the phrase, after correcting the typos, would be “no one is allowed to trade with Cuba but the purpose of that has to do with Cuba, and companies are still allowed to trade with the rest of the world.” I hope that makes it a bit clearer.
We’re going to wish we hadn’t sent all this stuff overseas the next time a global conflict of some sort breaks out.
Where are you living? 1939? Isolationist policies didn’t work then and they won’t work now. There is no way any nation can operate in a self contained bubble and have an economy any healthier than North Koreas.
One more point in favor of global free trade: it makes starting conflicts less desirable. What are the chances of a civil war in Europe now that thee economies are so interdependent? Isn’t that a good thing?
Trade and interdependency are good things because they force countries to find peaceful ways to resolve their conflicts as it is not generally a good idea to shoot at your customers or your suppliers. It tends to piss them off.