Truth!!! Urban areas in the NorthEast used to be full of light industry that employed people of all races. On the highway to Manhattan you saw the huge neon sign for Swingline staplers etc. etc. My dad owned a light industry. Sheet metal.
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.
To go to Smith "[It is] advantageous to lay some burden upon foreign (imports)," i.e., impose tariffs.
Among Smith's reasons were "the defense of the country," "for the encouragement of domestic industry," for "revenge" and "retaliation" on nations that impose tariffs on one's own exports -- and to break open foreign markets.
Now my proposed solution actually adresses the points that cause teh flight of Capital to other nations.
In no particular order of importance.
1. Get rid of government subsidies for offshore investment of US companies. OPIC is the first such program which should go but support of World Bank programs that subsidize the outflow of Capital would be another.
2. Use tariffs on those nations which are engaged in unfair trade practices such as currency manipulation (China and India for example), those nations which refuse to open their markets to US products (China for example with its 50% tariffs on US consumer goods and non tariff barriers), those nations that subsidize competition to American Industry (airbus for example) and those nations which have slave conditions for their workers.
3. Use tariffs and other means to prevent the relocation of jobs offshore that are essential to the national defense. If necessary take control of the company seeking to export vital technology or industry by means of eminent domain (No I do not like this last option and I will only defend its use as an absolute last resort like say in the case of rare earth magnets essential to smart bomb technology). Provide a hardened, widely distributed infrastructure to supply all that is needed for our military units and civil defense that can be continued to be deployed in the event of any military attack.
4. An immediate end to guest worker programs. If people wish to come to the USA to work and make a life let them immigrate according to the rules.
5 Provide economic development zones where the corporate income tax is zero for operations within these zones. In order to operate in this zone a company must agree to only purchase American components if available and employ only American citizens or legal immigrants in these operations. These economic development zones shall be eventually be expanded to include every bit of every state once the benefits are shown I would like them to be totally implemented immediately but I realize4 that may be overreaching.
6. Scale back unnecessary regulation including the tort system. Institute a cap on punitive damages, limits on class action suits, and limits on liability to the actual percentage of liability with no plaintiff able to collect if said plaintiff was involved in the commission of a felony at the time of the alleged tort or was more than 49% negligent in the alleged tort. Note that the loser in a frivolous lawsuit shall pay the attorney fees of the winner. There are many other regulatory structures that also need to be included that need to be included such as repealing the Family leave mandate, getting rid of OSHA etc.
7. Increase the domestic content in purchases by the Department of defense and give absolute preference in non-domestic content to proven allies of the USA over say the French or Germans. The only reason any content for DOD purchase may come from non US allies is that content is not available elsewhere and is essential.
8. Do not allow expense involved in moving operations overseas to be included in business expenses under the IRS code.
9. Prosecute for perjury anyone who has made a false statement in order to employ an H1B or L1 visa worker. I will be lenient on the actual perjurer if he/she was ordered to make this false statement and he/she provides testimony to aid in the conviction of the person ordering the perjury. Just because a person is a CEO does not give them a pass on criminal behavior.
10. Prosecute anyone who orders the transfer of vital defense technology or funds a R&D project that could be of use to our military overseas except to strong allies of the USA. Make the necessary enhancements to our espionage laws so that continued support or funding of any R&D in a nation whose government has threatened the USA is guilty of espionage. The UK and Australia come to mind as meeting these criteria for being eligible for transfer of technology first. There will be other nations and a gradation of what can be transferred to which specific nation. Under no circumstances may technology be transferred to any nation whose government has threatened the USA within five years without a complete change of government or specific exemption from Congress and the administration.
11. Deport all illegal aliens immediately and take measures that prevent the entry of any more illegal aliens. Fine all companies knowingly employing illegal aliens Criminal sanctions should be imposed on anyone helping an illegal alien stay in the USA in violation of our laws.
12. Decrease the punishing levels of taxation on companies and eliminate the double taxation on corporate dividends. See effects of item 5 for how minimal this will be if item 5 covers the entire USA. Eliminate all IRS provisions that inhibit free use of independent contractors by businesses for example section 1706.
13. Eliminate the minimum wage so that the worker can be paid based on productivity. Overtime compensation will remain the same but instead of 150% of the "wage" the worker would receive 150% of the production pay. If one through 13 are enacted # 14 becomes an irrelevancy as no one will be working for that low a wage.
I not I may be expandiung #3 with some additional definition of what is needed for national defense. That is pending.
...deviation from a Constitutional tariff system and the implementation of an income tax.
It's typical rhetoric from the center-right on this subject. Williams is a mouthpiece for his compatriots who have grown fat on government incentives to go offshore with their business, not to mention millions of $ in bribes from third world countries to do the same.
The corporate suits who facilitate this exodus have no interest in this nation beyond filling their pockets. They have no identity with America. They have no code, and no soul. And neither does Walter Williams.
He will if it gets bad enough. Look for Bush to work to restrain the flood of jobs leaving the country until after the election. Then the floodgates will open and the tidal wave will commence.
The author is full of crap no matter how famous he is. A job is a service. That is exactly what it is.
Truth!!! Urban areas in the NorthEast used to be full of light industry that employed people of all races. On the highway to Manhattan you saw the huge neon sign for Swingline staplers etc. etc. My dad owned a light industry. Sheet metal.
Did somebody say Swingline stapler?
On some things he is correct on others far from it.
Tort lawyers dramatically increase the price of insurance. Our non-productive goobermint at all levels spends more than half of national gross income. The alphabet soup agencies continually find ways to hamstring and bankrupt businesses.
See my proposed solution above it is a package deal.
Outsourcing overseas makes all those things somebody else's problem. See above
There is a trend in business to "concentrate on your core competency", which tends to make businesses single level as opposed to vertically integrated. Our customers used to do for themselves what we now do for them. And as we don't do it at cost, any profit we make used to have been theirs. Added to that is the fact they once controlled their own destiny and priorities - now they don't.
My only real difference of opinion with you here is usually most companies did not account for profit for support functions now outsourced whether domestically or overseas. Thus Data Processing was always seen as just an expense. It was not seen as a contibutor to profit by supporting teh unique business approach to teh market and providing market advantage for actual sales, production or decision making. A minor point but I think a significant one.
American management has become a wasteland of butt kissers and petty bean counters. I could save money on heating if I lit a wall on fire, one at a time, and controlled the blaze. Unfortunately pretty soon I wouldn't have a house left. Same thing with the "core competency" clowns. Their focus will be so narrow and their operation so "streamlined" that any jackass can compete with them.
No argument.
So it will be with idiots providing "customer service" from India.
Then there will be a fortune to be made cleaning u the mess but in the interim is is not merely India it si also China with its 70% tariffs on US goods and many otehr diasterous trade policies.
So far the replies on this thread seem to be more emotional than factual. How about trying to deal with the arguments?
Well I can not argue for others but other tahn a ping I have kept to issues.
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