Exporting America: false choices

Cnnfn ^ | 2/9/2004 | Lou Dobbs

[hotdogjones]

Looks like Lou is pissed. Ok folks what do you think about his points ?

[lelio]

Number one: We're not creating jobs in the private sector, and that's never happened before in our history.

Lou's fighting the good fight and doesn't have to resort to the WSJ's characterization of a demon infested child. I wouldn't even call that demonization, it was just childly idiotic.

[pdjplano]

Valid points all around, IMO. The question is what to do about it? What legislation can be enacted that will allow the US job base to expand, and still continue to trade without getting into massive tariff wars?

One solution is to reduce/remove corporate taxation, especially FICA and Medicare matching taxes and free companies from the tax headaches that prevent hiring and that drive up the cost of labor. Another is to come up with solutions to the health care cost explosion so that employee overhead is reduced. Yet another is to limit the H1B and L1 Visas and "guest worker" programs so that Americans are put in those positions over others.

I went to a job seeker meeting tonight at my church with some friends, more to see what people are going through and what their views are on outsourcing then about a job for myself (as I'm running for a job in Congress in November :)). The opinion of many was that the employers see a massive decrease in cost in using foreign labor, and that much of that is related to employee overhead and tax advantages by keeping their labor pools small in the US.

The concern by all present in that meeting was that outsourcing has taken many good paying jobs from college graduates and that new jobs have not been created to take their place that are even close in compensation to what they had before. Not a single person there was looking for a handout or an excuse though, they were all just looking to get back into the labor pool and start contributing, many having done that in other areas outside of where they were, and where they have trained to be.

Finally, the "get more education" and "worker re-training" lines got huge laughs from the group, given that most had bachelors or higher degrees in engineer, computer science and MBAs...

[TomasUSMC]

Lou Dobbs is a Patriot. He was the first and only one to announce on National TV that he was going to call the WOT War on Islamist. That took avocado sized cojones. And now he is taking on the Dems, the Repubs and the Fed Chairman because this country's economic books are bankrupt and no one is worried. He and Tancredo could start a Right Wing third party easily and now is the time with the elections being so close.

[FITZ]

India's tariffs are 3 times ours and China isn't importing our stuff --- both those countries are doing very well in this global economy --- and we're not --- so tariffs and restrictions obviously don't hurt.

[Lael]

I went to a job seeker meeting tonight at my church with some friends, more to see what people are going through and what their views are on outsourcing then about a job for myself (as I'm running for a job in Congress in November :)).

No matter if you are running as a Republicrat or a Democan,

IN THE NAME OF G-D, stop this INSANITY!!!

[meadsjn]

According to the Bureau of Economic Analysis the change in seasonally adjusted U.S. Per Capita Personal Income from 2001 to 2002 was as follows:

All categories: +2.0%

Non-government workers: +0.2%

Government workers: +6.3%

Government employment appears to be a booming field.

And the taxpayer peasants get to fund the offshoring of their jobs through OPIC, the EX/IM Bank, corporate tax credits for foreign investments. The Clintonoids started the raping of the taxpayer, but it seems to be working as well for the neo-cons.

[Hop A Long Cassidy]

>>>"One solution is to reduce/remove corporate taxation, especially FICA and Medicare matching taxes and free companies from the tax headaches that prevent hiring and that drive up the cost of labor. Another is to come up with solutions to the health care cost explosion so that employee overhead is reduced. Yet another is to limit the H1B and L1 Visas and "guest worker" programs so that Americans are put in those positions over others."

Great points. If we look at the cost of hiring U.S. workers we will see that the costs have been going up for years. The wage component is going down somewhat but the benefits part is going up for both U.S. employers and the workers. And, it's the health component that is the big part of that. OSHA, EPA, EEO type regulations are another dimension for the employers, along with lawsuits that can shut down whole industries.

If we completely forget about foreign labor competition for just a second, we can see that the cost of U.S. labor may be pricing itself out of the market of employers. Our labor prices have been going up faster than the employer could raise his prices. Today the employer doesn't have that much pricing power because there is too much supply (in general).

Now if we add foreign labor competition back in to the equation, we should see frustrated employers who feel they've been getting ripped off by employees (high benefit and lawsuit costs) and by the taxing and regulating authorities (i.e. government). Its these prices that have been increasing the workers' costs and leading up to this pent up demand to go find lower cost markets.

Now all of sudden the labor markets of China and India have been discovered. In the current edition of Information Week (a computer publication) we see many of the large American technology consulting companies raising their offshore staffing. Accenture is raising their current 8,000 offshore count to 30,000 by 2005 (real soon now). Here's some others: EDS from 8,700 to 20,000 by 2005, IBM from 10,000 to 14,000 in 2004 (very soon now). These are big numbers, rapid growth and just a few of the larger firms.

And, its not just the large firms that are doing outsourcing. I have heard of several tiny companies following this offshoring method. It's become the "in" thing to do. However, I think they will be disappointed by the huge amount of overhead involved in checking and integrating work.

Most of this offshoring has been started by immigrants (mainly Indian or Chinese professionals) who work in management spots within the American companies. They see this as a way to visit the old country or be a hero with the relatives. Many of these offshore companies started as brother-in-law contracts. But now it is big, legitimate business.

IMO, the solution is as you suggest. I don't think we should disallow these companies from going offshore. Instead, we should get rid of the disincentives to hire workers in the U.S.

Also, the dropping exchange rate of the U.S. dollar makes our labor cheaper. We are already 30 per cent or so cheaper than the Euroweenies compared to just a few months ago.

The U.S. should be a manufacturing giant (or at least the main assembly hub), but instead we have chosen to hollow out our industries.

Hopefully we'll get it together.

Hoppy

[The Duke]

Hey, good luck in this year's election! I visited your web site and we need as many like you running this country as possible.

Were I a resident of Texas I would be offering more than moral encouragement, and may anyhow. :)

[Cronos]

Our principal trading partners, Canada, China, Japan and the European Union, all typically maintain annual trade surpluses and pursue balanced trade.

And are any of these economies stronger than the US? Lessee, China -- communist dictatorship with 900 million poor and hyped up economic figures, the EU with 10% unemployment (20% in some of the new states like Poland), Japan: in a prolonged recession, Canada -- heading the way of the EU.

[Cronos]

India's tariffs are 3 times ours and China isn't importing our stuff --- both those countries are doing very well in this global economy --- and we're not --- so tariffs and restrictions obviously don't hurt.

both doing well? Both have more than 50% poverty (China fudges it's figures) and their definition of 'poor' isn't the same as ours -- by our definition they would have 3/4 poor. Both economies are growing at 8% -- ours grew by 4 to 6% last year -- and our economy is far larger. Our share of global trade is over 25% -- India's share is barely 2%. Both these are developing, dirt poor nations. To compare the US with them is like comparing Mike Tyson with Oscar de la Hoya

[Cronos]

Good point about our labour getting more expensive -- and it's NOT the employee's fault -- health costs etc. rise each year, driven by frivolous lawsuits etc. the Lawyers really have s****d this country over.

[CWOJackson]

Now there is a group of folks I'd like to see out sourced...lawyers. If we would ever get serious about tort reform they would out source themselves.

[Cronos]

Instead, we should get rid of the disincentives to hire workers in the U.S.
Good post -- I think Bush is paving the way with his lower taxes and allowing the dollar to fall.

[lainde]

bump!

[hershey]

Dobbs has been a lone voice of reason in the wilderness of CNN.

[FITZ]

Back in Reagan's day, Communism collapsed in the Soviet Union and East Germany, and Communism in China would have also collapsed but free trade has helped it quite a lot --- it's not in danger of collapsing now --- China has one of the fastest growing economies.

[TXBSAFH]

Meet the rats winning issue this election year. Winning if GWB does not do something.

[junta]

"Dogma" the cement that binds the two party system together.

[katya8]

Offshoring victimizes the American people by just plain handing them over to terrorists.

I wish Lou Dobbs would focus on this!