Posted on 01/15/2004 6:50:24 AM PST by xsysmgr
"Manufacturing jobs" has become a battle cry of those who oppose free trade and are sounding an alarm about American jobs being exported to lower-wage countries overseas. However, manufacturing jobs are much less of a problem than manufacturing confusion.
Much of what is being said confuses what is true of one sector of the economy with what is true of the economy as a whole. Every modern economy is constantly changing in technology and organization. This means that resources -- human resources as well as natural resources and other inputs -- are constantly being sent off in new directions as things are being produced in new ways.
This happens whether there is or is not free international trade. At the beginning of the 20th century, 10 million American farmers and farm laborers produced the food to feed a population of 76 million people. By the end of the century, fewer than 2 million people on the farms were feeding a population of more than 250 million. In other words, more than 8 million agricultural jobs were "lost."
Between 1990 and 1995, more than 17 million American workers lost their jobs. But there were never 17 million workers unemployed during this period, any more than the 8 million agricultural workers were unemployed before.
People moved on to other jobs. Unemployment rates in fact hit new lows in the 1990s. None of this is rocket science. But when the very same things happen in the international economy, it is much easier to spread alarm and manufacture confusion.
There is no question that many computer programming jobs have moved from the United States to India. But this is just a half-truth, which can be worse than a lie. As management consultant Peter Drucker points out in the current issue of Fortune magazine, there are also foreign jobs moving to the United States.
In Drucker's words, "Nobody seems to realize that we import twice or three times as many jobs as we export. I'm talking about the jobs created by foreign companies coming into the U.S.," such as Japanese automobile plants making Toyotas and Hondas on American soil.
"Siemens alone has 60,000 employees in the United States," Drucker points out. "We are exporting low-skill, low-paying jobs but are importing high-skill, high-paying jobs."
None of this is much consolation if you are one of the people being displaced from a job that you thought would last indefinitely. But few jobs last indefinitely. You cannot advance the standard of living by continuing to do the same things in the same ways.
Progress means change, whether those changes originate domestically or internationally. Even when a given job carries the same title, often you cannot hold that job while continuing to do things the way they were done 20 years ago -- or, in the case of computers, 5 years ago.
The grand fallacy of those who oppose free trade is that low-wage countries take jobs away from high-wage countries. While that is true for some particular jobs in some particular cases, it is another half-truth that is more misleading than an outright lie.
While American companies can hire computer programmers in India to replace higher paid American programmers, that is because of India's outstanding education in computer engineering. By and large, however, the average productivity of Indian workers is about 15 percent of that of American workers.
In other words, if you hired Indian workers and paid them one-fifth of what you paid American workers, it would cost you more to get a given job done in India. That is the rule and computer programming is the exception.
Facts are blithely ignored by those who simply assume that low-wage countries have an advantage in international trade. But high-wage countries have been exporting to low-wage countries for centuries. The vast majority of foreign investments by American companies are in high-wage countries, despite great outcries about how multinational corporations are "exploiting" Third World workers.
Apparently facts do not matter to those who are manufacturing confusion about manufacturing jobs.
If we had a "trade surplus," you think that would make you happy- I'd be happier if we weren't financing trade and governmetal debts with foreign capital.
There you have it. In addition, a free market economy will always overwhelm a protectionist barrier over time. Always. That's why the economists tend to agree that tariffs are useful for short-term objectives, like protecting new industries, and short-term national security measures.
They won't work permanantly. The laws of economics wear them down.
This is not a political position, any more than the periodic table is a political position. It just is.
So what I would like to see is that we have a system that understands this and prepares people for the inevitable. Better education, focus on reducing infrastructure costs, efficient regulation (yes, we need some of that), lower taxes, training that change is a way of life, a business friendly society. As it turns out, the US does better than most countries, but not because of any grand plan or recognition that this is the situation.
And in the end it is all about standard of living for the populace.
Well, well. In your view
people either work for the
central committee,
or people are sheep
to be sheared by whatever
company needs wool?
DON'T ENCOURAGE ME.
(But, if you're up for it, I
have one final thought...)
Everyone can see
that, say, Apple benefits
if Apple users
think they're cool and smart.
(While actually being
dense to buy Apples...)
It seems clear to me
that on a large scale the same
demographic games
get played about jobs.
People unhappy about
corporatism
get played as commies,
and people who play along --
either as "solid"
employees or as
"hard driving" entrepreneurs --
get reinforcement,
just as Las Vegas
gives comps to make their losers
think they've gained something ...
Soon enough, people
cheering corporatism
can't even perceive
they are at odds with
democracy because their
emotions blind them...
"American working class and middle class who serve in our armed forces are the America lovers these days. They show it by their actions while our "investor class" cares only about profits even if they come at the expense of the America he lives in.
"GWBush's scheme to legalize illegal alien lawbreakers is a grossly unpatriotic insult to our working class and middle class. The same pool that our fighting forces are drawn from.
I will add for the benefit of our "Jesse Jacksons" that of course the American working class and middle class includes all races and ethnicities. So "Jesse," we're talking Americans here not race or ethnicity.
If you are talking services, fine, they are putting the Internet to use. But simply assembling something overseas and shipping it back here is the result of zero technological innovation.
Not exactly true.
Out-sourcing overseas works
in large part because
companies can still
be responsive to quick trends
thanks to high-tech ships
and very fast planes
that shuttle vast loads of freight
all over the globe.
And this high-volume,
high-speed shipping system works
only because of
satellite systems
for weather and routing, and
modern advances
in the design of
ships and planes. Technology
makes the modern world.
LOL!!! You can easily remedy the situation. Just call your broker:
TOYOTA MOTOR (NYSE:TM)
HONDA MOTOR CO (NYSE:HMC)
SIEMENS AKTIEN (NYSE:SI)
Did you really think Americans couldn't own these companies? I just did a quick check and less than 10% of the shares of these companies are controlled by insiders and institutions. So back up the truck, my friend. LOL!!!
No, Toyota is owned by the SHAREHOLDERS. Whatever profits are not poured back into company operations, are remitted to the SHAREHOLDERS -- be they Japanese OR Americans -- in the form of dividends.
And thank you for your classic contribution to it...
Have a look for yourself regarding top institutional holders (a lot of American firms):
http://finance.yahoo.com/q?d=t&s=TM
I have no idea who could provide you a list of the names and nationalities of each individual stock owner. I can tell you that of Toyota's 1.70 billion shares outstanding, 1.50 billion of them (88%) are floating in the market, available for purchase. (This information is also available on the link above.)
That means that you or I or any American can buy these shares. If private Japanese investors own 95% of Toyota, it's only because they bought 95% of the stock.
If Americans would save and invest more, instead of leading the world in consumer debt, we could own more of these companies.
Duh....Obviously.
Japanese investors are more nationalist, they don't truest non-Japanese companies, and want to own Toyota more than do non-Japanese. Japanese have outbid the others.
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