Exporting Jobs

Capitalism Magazine ^ | August 19, 2003 | Walter Williams

[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.

[luckydevi]

Opinions?

[dennisw]

Opinions? .....

It's a heap of dumbass non-reasoning. Very common for slackademics to pontificate to the people who actually make America work and do the heavy lifting.

[CO_dreamer]

I think an Indian author could have written just as good of an article for a much lower price.

[fortaydoos]

"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. "

No one literally thinks jobs are exported. Setting up straw men, and using stats from 7 years ago, is the best Williams can do?

Does anyone REALLY believe that call centers are moving to India because of TORT LAWYERS? EPA regs? Get real - it is all about cheap labor and bumping short term profits.

[dirtboy]

The statistics for 1996 are:

Which means Williams is using nearly 7-year old statistics, when things have changed dramatically even in the last two years. So he's starting with a mark against him.

And, as much as Williams claims its about government, in the end companies are shifting jobs overseas for one simple reason - because they can. Technology now allows calls to be made from the United States to a call center in Asia without prohibitive long-distance charges and allows the near-instantaneous distribution of information to anywhere in the world with a T-1.

So much of this is a response to technology - but, does the government have to maintain programs, such as H1-B and L1, that accelerate the process? Because there is a certain competitive advantage for a worker in this country, addressing market concerns here, over someone overseas. And those programs negate those advantages.

[dennisw]

Does anyone REALLY believe that call centers are moving to India because of TORT LAWYERS? EPA regs? Get real - it is all about cheap labor and bumping short term profits.......


You are unfairly beating Walt about the head with common sense!

[dfwgator]

Much of it can be summed up in a phrase: less predatory government and the absence of tort-lawyer extortion.

Also, they don't have to deal with NIMBYs.

[dennisw]

I think an Indian author could have written just as good of an article for a much lower price......

Outsource Walt's job to India at 1/5 the price and get much better.

[Destructor]

" 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."

What moron came up with this analogy? Jobs are "exported" when companies relocate their operations overseas! This article is flawed on so many levels it's almost complete non-sense.

[warchild9]

Big corporate suits made their money improving the profit line from quarter-to-quarter. If the company dies, they move on to the next, and repeat the process. They are scum, and traitors. Unlike most people on this forum, I have worked higher mid-management, and have the experience to back this assertion up.
The suits announce that they're eliminating millions of American jobs (in the aggregate), announce where they're going, and these jobs then reappear in the Third World where they were honestly predicted to go.
Tens of millions of dollars appear in the suit's pockets, along with more tens of millions in the coffers of politicians in the form of bribes, er, campaign contributions.
The Chinese prepare to take over Asia. India finally profits from the lessons of Western Civilization.
America dies. Parts of it become Mexico; other areas totter on, filled with idiots whose principle concern is sports.
The South continues its resurgence.
And so, history has repeated itself with another big nation.

[fortaydoos]

the silliest thing is about a month ago I was a firmly committed "free trader" - until I started looking at the facts and reading posts like yours, harpseal's, and other clear thinkers.

[scottlang]

The more jobs leave, the more people who will vote democrat. Bush will stand or fall on jobs.

[warchild9]

If that is true, W has lost North Carolina. At least, in our house.

[scottlang]

For the first time in my life, the republicans can not count on my vote next year. I want them ti earn it. They have so far failed to do so.

[dennisw]

Pat Buchannan also used to be for so called free trade. I've known for 15 years it's all a lie.

[Tokhtamish]

What is truly disgusting and shameful about this essay is being a corporate whore ahead of being a black conservative.

When deindustrialization hit America in the early '70s, blacks were all set to follow the Irish and Italians out of the ghetto along the same path they did. But with the destruction of the industrial economy and the end of any substantial need for low and semi-skilled labor that rung of the ladder was destroyed.

An economy without low and semi-skilled stable jobs is an economy in which it is not possible to work your way out of the ghetto. An economy in it is not possible for someone who messed up, who got into trouble, to straighten himself out and get a second chance. An economy in which it is not possible for someone without a college degree to buy a house, be a good husband/father and be able to tell his children that they can have a good future if they follow the rules, work hard, and stay out of trouble.

[lelio]

A job is not a good or service; it can't be imported or exported.

Tell that to the former Pillowtex workers (just to bring up a recent example) now looking for a retail position.

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.

I agree in that we have to clean up our house, look at harpseal's point on how to do so. It isn't all about raising tariffs on imports, but rather increasing incentives to do the work here. I don't care if you cut taxes to -30%, a worker that's 1/20th the cost of one here will continue to look more attractive.

And plus I sort of like looking at our rivers knowing that we aren't smashing up old computers and dumping the waste into it like they do in poor Asian countries.

[MonroeDNA]

"It's a heap of dumbass non-reasoning."

Speaking of which...

[dennisw]

The more jobs leave, the more people who will vote democrat. Bush will stand or fall on jobs.

AKA the common man turning to government socialism (voting DemocRAT) in times of economic peril. In times when he feels betrayed by the mega-corporations. Not that the RATS have real and good solutions. Just that people will vote for the almighty gubbermint to bail them out

[lelio]

An economy without low and semi-skilled stable jobs is an economy in which it is not possible to work your way out of the ghetto.

Nail. Head. Hit. Bingo, I've been trying to say that myself and you so eloquently did it: we've had movement upwards in our society as we HAVE these jobs here.

If all those jobs move overseas, what is the young man in the hood supposed to do besides turn to selling drugs?

In fact, the poor have a harder chance of moving up today due to illegal immigratation. Driving down the wages of low skilled workers (and not everyone is the hyper-genius as us on FR so don't frown on the jobs) is bad for the US.