Posted on 08/19/2003 10:13:15 AM PDT by luckydevi
Exporting Jobs by Walter Williams (August 19, 2003)
Summary: It'd make far more sense for Americans to start attacking the real sources that have contributed to making foreign operations more attractive to those at home. It's more effective than caving to the rhetoric of leftist and rightist interventionists who mislead us with slogans like, "How can any American worker compete with workers paid one and two dollars an hour?" when in reality our real competition is mostly with European workers earning a lot more.
[www.CapitalismMagazine.com]
Among George Orwell's insightful observations, there's one very worthy of attention: "But if thought corrupts language, language can also corrupt thought." Let's look at a few examples of corrupted language, thought and information.
Pretend you're a customs inspection agent. There's a cargo container awaiting a ship bound for foreign shores. You ask the shipper, who works for a big corporation, what's in the container. He answers, "It's a couple of thousand jobs that we're exporting overseas to a low-wage country."
What questions might you ask? How about, "What kind of jobs are in the container?" or, "Are they America's high-paying jobs?" Most people would probably say: "You're an idiot! You can't bundle up jobs and ship them overseas!"
A job is not a good or service; it can't be imported or exported. A job is an action, an act of doing a task. The next time a right- or left-wing politician or union leader talks about exporting jobs overseas, maybe we should ask him whether he thinks Congress should enact a law mandating U.S. Customs Service seizure of shipping containers filled with American jobs.
Let's turn to the next part of the exporting jobs nonsense, namely that corporations are driven solely by the prospect of low wages. Let's begin with a question: Is the bulk of U.S. corporation overseas investment, and hence employment of foreigners, in high-wage countries, or is it in low-wage countries?
The statistics for 1996 are: Out of total direct U.S. overseas investment of $796 billion, nearly $400 billion was made in Europe (England received 18 percent of it), next was Canada ($91 billion), then Asia ($140 billion), Middle East ($9 billion) and Africa ($7.6 billion). Foreign employment by U.S. corporations exhibited a similar pattern, with most workers hired in high-wage countries such as England, Germany and the Netherlands. Far fewer workers were hired in low-wage countries such as Thailand, Colombia and Philippines, the exception being Mexico.
The facts give a different story from the one we hear from the left-wing and right-wing anti-free trade movement. These demagogues would have us believe that U.S. corporations are rushing to exploit the cheap labor in places like the Democratic Republic of the Congo, Rwanda and Ethiopia. Surely with average wages in these countries as low as $10 per month, it would be a darn sight cheaper than locating in England, Germany and Canada, where average wages respectively are: $12, $17 and $16 an hour.
Let's look at a few of the reasons why some U.S. corporations choose to carry their operations overseas. Much of it can be summed up in a phrase: less predatory government and the absence of tort-lawyer extortion. While foreign governments can't be held guiltless of predation, their forms of predation might be cheaper to deal with than those of our EEOC, OSHA, EPA and IRS. Plus, tort lawyer extortion and harassment in foreign countries is a tiny fraction of ours. With each tort lawyer extortion and expansion of predatory regulations at federal, state or local levels of government, foreign operations become more attractive to U.S. corporations. Free trade helps make those costs explicit. American workers are just about the most productive in the world -- however, our government and legal establishment have reduced that productive advantage.
It'd make far more sense for Americans to start attacking the real sources that have contributed to making foreign operations more attractive to those at home. It's more effective than caving to the rhetoric of leftist and rightist interventionists who mislead us with slogans like, "How can any American worker compete with workers paid one and two dollars an hour?" when in reality our real competition is mostly with European workers earning a lot more.
Yes, only if you run around screaming that the sky is falling and we're all going to die at every new development, good or bad, are you really perceptive and not naive.
Do you know there was a thriving black middle class in inner city Los Angeles before the manufacturing jobs first started leaving. Not every kid is mentally, emotionally, realistically ready for college. That is especially true in the inner city, or the rural areas.
Right now, with no manufacturing jobs in these areas, you can work at Wal-Mart, or McDonalds for near minimum wage, or deal drugs.
You tell a kid with no father, living in a blighted neighborhood filled with graffiti, chained up houses, that there are no jobs that will allow him to support himself or a family, but he can stay home with mom and work near minimum wage, or he can make more selling drugs in an hour than he can make during two weeks making fries at Burger King, and you get what we have in the inner cities.
We have to have these manufacturing jobs. They are what keeps lower middle class families together. If you tell a young man that his labor is worthless, he treats the system the same way. The fat cat who shipped the manufacturing jobs to Bangladesh in order to pocket a $10,000,000 bonus may think he is safe in his gated community, but for how long?
All the ones I talked to figured they had a maximum life expectancy of 35 before they were forced to find something else to do. Most wanted to be out before 30. A few were intending to bail out as soon as they finished whatever educational certificate/degree they were working on. I onlt ever ran into one who just thought it was great and a lot of fun and wanted to do it forever.
Did any of those girls have a Plan B ?
Most were college students studying nursing or business of all things. A couple wanted to set up their own "club" using their savings. All of them were extremely thrifty and were busy doing things like setting up college accounts for their kids (if any) and investing like mad. The only thing they spent money on were their costumes -- which became a tax writeoff.
Of course, this was over a decade ago. I'm sure the ones nowadays aren't quite as intelligent with their money. Making $1000+ a night can be quite addictive if you're not careful with the money. Then it goes away, poof!
You are trying to tell me that free trade is to blame for the problems in the inner city, as opposed to say, oh, I don't know: socialism/welfare, lack of education, lack of role models, and no cultural incentive to be decent citizens? You people just couldn't stop at blaming 9/11 on free trade, could you?
1) Offshore workers are much cheaper than their American counterparts, even after taking into account communication costs, inefficiencies of their work, etc. Even computer coding. It's true that early on, there were some monumental problems with Indian code. But today, many companies that outsource have had outsourcing a priority since day 1. Companies founded in Mountain View contract out some coding immediately. Whenever you try to offshore some development after you've had it going for a while somewhere else, there are going to be problems. They don't know your rules for documenting, variable naming, libraries, etc.
2) EPA and tort lawyers move some jobs offshore, but it's not that many. And none in call centers or computer programming, which are what most people complain about.
3) Companies have a duty to their shareholders to maximize profits, not maximize American jobs. It's sort of ironic that the biggest shareholders in most companies are pension funds of workers. For their workers to be able to retire, they need high returns from their stock investments. In order to secure this, they reward companies who cut costs, and one way for companies to cut their costs is by moving employees overseas.
4) Many computer companies need to move some workers overseas. They simply cannot compete with companies that do so. Add to this that many computer companies are truly global. Take SAP. It's German. It may move workers from the US to India. Can we complain? Suppose Oracle, a US company, produces software targeted for the South African market in the US, and it moves this development to India? Can we complain? What if SAP moves that development? The problem with tariffs for software is that it's hard to figure out exactly where the software was produced. If SAP wants to sell software in the US, how can we know if it was coded in Germany or Ireland or India? Or Canada? And many enterprise software companies generate 1/3 to 1/2 of their revenues in foreign countries. Wouldn't there be retalitory tariffs? Wouldn't this force them to form subsidiaries and move development offshore so that they would have no US code in their foreign software?
5) What would happen if we ordered state pension funds to have a social obligation and not fund companies that were exporting jobs, but instead only buy stock in less profitable companies?
Yall just wait, the drugs and crime will be comming your way.
This is absolute nonsense. The history of or country is basically one where poverty was the norm. People were poor but decent. Get a clue.
I'm jobless and I'm not out there slingin' bags of toot and weed. Why not? 'Cause my peoples wouldn't approve.
Are you black? Are you saying that drugs and crime are in black communities because of free trade?
Yes, but now it's OK to hate rich people. It's OK to blame everyone else for your being unemployed. It's OK to commit crime in cyclical economic downturns.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.