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.
That comment wasn't directed at you in particular, but to the emotional crowd.
Walter puts up a good target. Either he's right, partly right or wrong. But the target's clear. Instead of worrying about whether he's a libertarian or a conservative, shoot at the target - his thesis that tort lawyers and goobermint are the causes of "exporting jobs", and that those jobs are largely going to Europe, not Asia.
Thanks dennis ... it's a keeper.
This only benefits the selfish bureaucrats, the predatory tyrants in the 3rd World, and the greedy CEO's and a few upper-level types in U.S.Corporations.
The end result is an America gradually reduced to a 3rd World level.
The truth will set us all free.
Eitther we fund government as the fonders intended or we lose the Republic. And it really is that simple.
How diferent things were when I was young. Anyone any color could get a job that if they stuck with and worked hard would get them into the middle class. No more those days are none and we blacks and whites and whatevers will paid dearly because of it.
If there are no strings then here will be his chance to prove it. I for one hope he comes through.
So how do we fight it? That's what Walter is talking about.
Imagine what would happen if we reduced the size of goobermint (and its taxes) by about half. And then changed our taxation system to 100% retail sales tax.
From the first action, cutting goobermint, we could expect a minimum of a 25% cost reduction in American products. Taxes add zero value to products, but are definitely included in costs. What cost $1.00 would now cost 75 cents.
From the second action, eliminating all taxes except retail sales taxes, we'd get a further 25% reduction off the base cost of products - because all that tax is passed along to the consumer in the form of higher prices. So what cost 75 cents would now cost 50 cents. A hefty sales tax would go along with it, of course, probably around 25%.
BUT - while the cost of American goods has gone down by half, the Chinee goods are taxed just like the American goods. American goods no longer have their taxes "built in". Imported goods become vastly less attractive.
Meanwhile, with the alphabet soup agencies off our backs, Americans be come more productive and more cost efficient. So our costs will probably be less than 50% of costs in today's market. The US wins and we skewer foreign competition.
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