The Harsh Truth About Outsourcing

Business Week ^ | March 22, 2004 | Paul Craig Roberts

[Southack]

"Real hourly wages (your preferred metric)"

No, my preferred metric is non-adjusted, flat U.S. Dollar wages.

I entertain inflation-adjusted metrics simply to humor the inevitable Marxists who tromp onto Free Republic claiming that by this or that calculation we are "progressively impoverishing ourselves" each year.

And lets face it; that's what you want to prove. Each of you wants to somehow find some arcane calculation by which you can show that Americans get poorer and poorer each year.

You probably don't even realize that what you are trying to do is to promote and advance Marxism, but "Capitalists getting poorer each year" is *precisely* what Karl Marx claimed in Das Kapital.

[Southack]

"The bone of contention is whether or not capitalists are behaving in the way Karl Marx predicted. You are using average wages to *prove* that Marx was an idiot. Well, Marx was an idiot but the average wage does not prove it, as a matter of fact, it is ammunition for the Marxists. Why so? Because the data shows very clearly that there has been only a *slight* positive change in the average wage over the course of 40+ years."

You aren't grasping the fundamentals here. There are two types of data being discussed: actual Dollar wages and calculated, inflation-adjusted hypothetical wages.

What I've done is to show that *both* types of those wages/data have INCREASED in direct contradiction to Karl Marx's claim that every capitalistic socieity would grow progressively poorer each and every year...and I've shown this for *both* types of data because Marx's fans will use *either* type of data based upon whatever suits them most conveniently at the time (they'll also use "debt" and various random gauges of "wealth"...anything that they can get their hands on that might even remotely make it appear as though Americans are getting poorer instead of richer).

Actual U.S. Dollar wages are UP. Likewise, inflation-adjusted hypothetical U.S. wages are also up. Ergo, Marx has no possible case to make.

[Nick Danger]

Would there be any increase in real wages in the past year if the CPI was computed under the old system?

Probably "yes." Here's why:

If you used "old" CPI methodology, you would get a 0.5% reduction in estimated real wages. But a 1% tax cut swamps that.

I don't think this is worth arguing about. Whether it's up or down a half a point may make it possible for one set of protagonists or the other to beat their chests and crow "It's up!" or "It's down," but what the Hell really is the difference between minus half a percent or plus half a percent? We're talking 130 bucks a year or something like that. BFD.

The real issue is that during the 1970's, when average wages were supposedlly so "high," most of the increase was being eaten up by taxes. The actual wage earner barely saw half of it.

[Southack]

"Thanks to a whole bunch of things; techonology, unfair trade, and just blatant stupidity; there really isn't a limit to what can be outsourced to other countries."

That's naive. Drop the foreign exchange value of the U.S. Dollar by another 20% and there will be next to nothing outsourced. Ditto for a large financial scandal due to outsourced *data* being stolen in a foriegn land in order to rip off large amounts of American capital. Nor does your infinite outsourcing claim begin to conceptualize time to market or quality. It certainly doesn't explain how to deal with 60+% annual employee turnover (e.g. in India), much less why company executives would deign to deal with new flunkies in foreign lands in opposite time zones for project after project.

[sarcasm]

A tax cut has nothing to do with wages earned. Federal taxes are also only one part of the picture - state and local tax increases have, in many cases, eaten up any savings. I certainly haven't seen any increase in after tax income since the Bush tax plan was enacted.

[Starwind]

Southack post #50 No, real wages in the U.S. have steadily increased even after inflation.

Southack post #167 Did "real" U.S. wages go up or down?"

Then you affirmed your selection of hourly real wage data in:

Southack post #164 Yes, the point of contention was whether hourly *wages* had risen or fallen, after all. And your source shows an inflation-adjusted *gain* in U.S. wages.

And I asked you in my post #168 to be specific about "inflation adjusted wages" - to which you never replied.

But now I'm supposed to believe that unadjusted wages are your preferred metric.

Southack post #241 No, my preferred metric is non-adjusted, flat U.S. Dollar wages.

(those last would be called nominal or current dollar wages)

Regardless, you have no credibility at this point. Let's face it. You don't know what your position is or was. You've changed it repeatedly to deflect scrutiny of your weak argument.

Each of you wants to somehow find some arcane calculation by which you can show that Americans get poorer and poorer each year.

I'm using the same 'arcane' data you used, just graphed, no calculations.

You probably don't even realize that what you are trying to do is to promote and advance Marxism,

And now the Marxist straw-man argument. I accept your ad-hominem attack as your concesssion.

[Southack]

"But now I'm supposed to believe that unadjusted wages are your preferred metric."

Yes. Your logical flaw was in making an assumption without asking for clarification. You assumed that simply because I was humoring some posters by using *their* preferred metric that it was *my* preferred metric.

Had you simply asked, I would have set you straight from moment one.

Instead, you continue to make bizarre assumptions and draw ridiculous conclusions as if your new goal has become to find some semantic or pedantic rhetorical flaw in my posted words rather than flesh out facts and broad concepts in the topic for this thread as well as in the underlying anti-capitalist undercurrents of said topic.

[Southack]

"Regardless, you have no credibility at this point. Let's face it. You don't know what your position is or was. You've changed it repeatedly to deflect scrutiny of your weak argument."

Rubbish. My *position* has remained the same all along: Marx is wrong. Capitalistic socieities do *not* progressively impoverish themselves year after year. Showing that U.S. wages have INCREASED is merely one of many *methods* to support my position above.

There is no change at all in my above position, much as you would wish it to so be. Your additional ramblings are similarly flawed, as well.

[Nick Danger]

I certainly haven't seen any increase in after tax income since the Bush tax plan was enacted.

Oh, come on. You used to be Mr. Data. Now you offer yourself up as a 'sample of one'? Is this Rhetoric Night, or are we gonna stick to facts here?

A tax cut has nothing to do with wages earned.

In that sense, neither does the CPI. If we're going to correct for inflation effects though, let's toss in the taxes as well, because they are not an insignificant part of how people spend their money... and they do not appear in the CPI. To someone looking at his paycheck, the fact that tax rates went down looks just like a raise.

Why bother with this anyway? The most you can win quibbling about this is a half of a percentage point... $130 a year to an average production worker. To Hell with it. Let's call it "flat" and be done.

[Southack]

You probably don't even realize that what you are trying to do is to promote and advance Marxism

"And now the Marxist straw-man argument. I accept your ad-hominem attack as your concesssion."

How sad. You don't even understand that which is truly a straw man argument or not.

A "straw man" argument is one in which you set up a position that is easily topled over.

NEWSFLASH: debunking Marxism is hardly something that is easily toppled over. I've posted U.S. government wage data, Marx's own words, and substantial evidence of wealth accumulation by Americans in order to show that Marx was wrong. That's no straw man. Q.E.D.

[Southack]

"A tax cut has nothing to do with wages earned."

But a tax cut has a lot to do with "wealth accumulation."

If we are accumulating wealth, then we aren't growing more poor. If we aren't growing poorer, then Marx is wrong.

[Starwind]

Yes. Your logical flaw was in making an assumption without asking for clarification. You assumed that simply because I was humoring some posters by using *their* preferred metric that it was *my* preferred metric.

(sigh) I didn't assume. You volunteered the data to me!

---

To: Starwind

BLS Shows Average Real Wages Higher in 2004 Than in 1964

Your BLS source shows a net *rise* in wages if you go back beyond the stagflation spike of the early 1970's (when unemployment was high and far fewer women and minorities were available to the skilled labor pool). Click on the link above to illustrate.

159 posted on 03/20/2004 10:44:05 PM PST by Southack (Media bias means that Castro won't be punished for Cuban war crimes against Black Angolans in Africa)

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and

---

To: Starwind

Likewise, *this* official U.S. government source also shows U.S. wages rising since 1959 even after being adjusted for inflation.

161 posted on 03/20/2004 10:47:17 PM PST by Southack (Media bias means that Castro won't be punished for Cuban war crimes against Black Angolans in Africa)

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Had you simply asked, I would have set you straight from moment one.

LOL! I did ask! You never replied!

---

To: Southack

And your source shows an inflation-adjusted *gain* in U.S. wages.

Please be specific. I do not see an "inflation adjusted" gain in the CES0500000051 '70-'04 data I posted. That data series shows a loss in real wages. ...[snip]...

168 posted on 03/20/2004 11:33:31 PM PST by Starwind (The Gospel of Jesus Christ is the only true good news)

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And I just repeated that you never answered the very question you now claim all I had to do was ask!!!

Well...I asked once and have now pointed out the unaddressed open question twice:

---

To: Southack

...[snip]...

Then you affirmed your selection of hourly real wage data in:

Southack post #164 Yes, the point of contention was whether hourly *wages* had risen or fallen, after all. And your source shows an inflation-adjusted *gain* in U.S. wages.

And I asked you in my post #168 to be specific about "inflation adjusted wages" - to which you never replied.

...[snip]...

246 posted on 03/21/2004 5:52:26 PM PST by Starwind (The Gospel of Jesus Christ is the only true good news)

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You volunteered your data which is the same BLS data as mine. I asked you to be more specific about your claim that my data was "inflation adjusted", you never answered.

Most of us here are big boys and girls. Few of us, certainly not me, read minds. If you have a preferred data series but use something different and never respond to questions, don't be pretend to be surprised at how you represent your preferences.

It is abundantly clear you not only don't know your own position, you don't even know your own posts.

[Southack]

BLS Shows Average Real Wages Higher in 2004 Than in 1964

Your BLS source shows a net *rise* in wages if you go back beyond the stagflation spike of the early 1970's (when unemployment was high and far fewer women and minorities were available to the skilled labor pool). Click on the link above to illustrate.

[Southack]

Likewise, *this* official U.S. government source also shows U.S. wages rising since 1959 even after being adjusted for inflation.

[Starwind]

And your source shows an inflation-adjusted *gain* in U.S. wages.

Please be specific. I do not see an "inflation adjusted" gain in the CES0500000051 '70-'04 data I posted. That data series shows a loss in real wages. ...[snip]...

[Starwind]

...[snip]...

Then you affirmed your selection of hourly real wage data in:

Southack post #164 Yes, the point of contention was whether hourly *wages* had risen or fallen, after all. And your source shows an inflation-adjusted *gain* in U.S. wages.

And I asked you in my post #168 to be specific about "inflation adjusted wages" - to which you never replied.

...[snip]...

[Southack]

What an odd post. You have confused my *use* of one metric with my *preference* for one metric over another, and haven't even seen where you've led yourself astray.

Perhaps you should ask yourself what your goal is on this thread. Are you simply trying to analyze every word that I've posted in some vain attempt to find a flaw, mistake, or miscue?

Because you don't seem to be making any progress towards either the topic for this thread (or its Marxist undercurrents) or towards any of the central points of contention (e.g. are we growing richer).

[Starwind]

You have confused my *use* of one metric with my *preference* for one metric over another, and haven't even seen where you've led yourself astray.

You are the one who confused the two together. I've been consistent with real wage data series. You have now ignored for the 3rd time, the fact that the question you claim only needed to be asked, was in fact asked, and ignored by you.

Perhaps you should ask yourself what your goal is on this thread.

My posts stand for any who care to read them, as do yours for any who can read them (and your mind).

[Southack]

Perhaps you should ask yourself what your goal is on this thread.

"My posts stand for any who care to read them, as do yours for any who can read them (and your mind)."

Oh gee, that's nice.

Doesn't have anything to do with my question, but nice.
< /MOCKING! >

Now, what is your *goal* on this thread?

[Starwind]

Now, what is your *goal* on this thread?

Now, my goal is to wait until you go up-thread and honestly address your factual errors, omissions, and deflections.

[Southack]

If you can concisely identify a single factual error of mine with quotes, and name the post #, then I will address it.

On the other hand, if by "factual error" you simply mean that you are going to say anything that pops into your little head regardless of its validity, then don't be surprised if I do little else besides continue to mock either you and/or Marxism.

[WRhine]

Anyone who thinks that privately-owned capital is "ours" is a communist, or a socialist, or someone who has not really thought through what he just said.

I agree Nick. I also think that any privately-owned capital that finds a home in foreign lands is going to be SOL when it comes to any guarantees for its protection from the country that made that capital possible. Be it on military or legal terms. Fair is Fair and Risk is Risk. No blood should be shed over it. And you know what? There won't be.