I’d like to see that question answered as well. gaffa himself has provided a statistic that directly contradicts his own thesis.
gaffa, let me ask you something: Just what do you think causes economic growth? Why do we have so much more stuff today than we did 100 years ago? How come our lives are better, our products better and more numerous, and our standards of living so much higher?
Oh hell, I’ll give you the answer: It’s because we have become more efficient at making things. Automation is a big part of it. But so is the evolution of corporations, the modern banking system, free trade, better education, and increasing health and longevity of workers. In short, it takes fewer people to make something of value today than it did 100 years ago, or even ten years ago. We’re constantly getting better at making things with less effort. And yet, viewed as a long-term trend, unemployment is not going up.
In a healthy economy, unemployment tends to hover between 5% and 10% - this represents the static snapshot of people who are not working because they are in transition between jobs. In a healthy capitalist society, jobs are constantly being destroyed and created. So you will always have some percentage of the population unemployed. This is a good thing, or new businesses would not be able to find labor.
Right now, unemployment is going up. But it’s not because of automation or outsourcing - it’s because of a general decline in economic output. When the present crisis passes, new jobs will be created because demand for new things will increase, and because the larger available labor pool means it’s easier to start new enterprises.
You also seem to think that when one country pays its workers more than another country, that necessarily means that jobs will flow from the highly-paid country to the lower-paid country. But this is not the case at all. How come? Because in a free market, people are paid what they are worth. If workers in America are paid more than workers in Vietnam, that’s because workers in North America are worth more. They are more productive. They create more value per hour of labor than the Vietnamese workers do.
Now, this is not true in all industries, and certainly the rise of, say, garment manufacturing in Vietnam may cause a decline of jobs in garment manufacturing in the U.S. In industries where goods are easy to ship, require little training to make, and yet have a high percentage of labor costs, cheap labor in faraway countries may have a competitive advantage. But even then, all is not equal. Factories in 3rd world countries have to operate in harsher conditions. They may not have good power sources, or good roads to move materials around. There are higher shipping costs. Political instability is an added risk which the company must account for. All this makes Vietnamese workers worth less than American workers, even if they are doing identical jobs. This is why some jobs will simply not be exported, even if there is cheaper labor elsewhere.
But in any event, if a 3rd world country has a comparative advantage in cheap labor, that just means Americans get to buy those goods for less money. This frees up extra capital that would have gone into those goods, which can then be used to buy other goods. For example, food costs have plummeted over the years. Poor people, who used to spend a very large fraction of their income on food, now have money with which to buy iPods and laptop computers. So now we have eliminated low-paying, back-breaking farm labor with automation and outsourcing, and used all that money to create jobs making computers and writing software. Higher pay, more productivity, better working conditions, and more stuff for poor people.
I’m not sure how you can possibly spin this as a bad thing.