Replies

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."

Who is "buying" those "exported" jobs and for what price?

A like Williams. He's sharp. And he has an excellent point about the sloppiness of language and thought.

He is also correct about the hostility to business in this country.

He is also correct that increasing the total tax burden is almost certainly counterproductive.

However, his capital-flow argument is very weak, and nowhere does he address non-economic effects of current policy.

It could be said that we, the consumer are "buying" the jobs everytime we purchase something at a reasonable cost or even the stockholder who wants to make higher dividends.

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.

I would like to know the source for Walter William's claim that the most workers hired by U.S. corporations in 1996 were in high-wage countries such as England, Germany, and the Netherlands. In any event, this no longer appears to be the case. Following is an excerpt from an article titled "Pink Slips Continue Unabated Over U.S. Technology Drain" that can be found at http://news.tradingcharts.com/futures/1/8/39313681.html:

“India for now is, by far, the biggest but not the only beneficiary of this trend. Russia, China, and others, with an educated and cheaper workforce, are getting involved as well. Every year hundreds of thousands of college grads, in those countries, with degrees in computer science, are replacing U.S. programmers, and unfortunately this trend has just begun.

This points to a major flaw in William's arguments. He makes much of the fact that countries that simply have very low wages (such as Thailand, Colombia, Philippines, the Democratic Republic of the Congo, Rwanda and Ethiopia) are not major targets for outsourcing. In fact, the countries that are major targets are those with low wages AND educated workforces. These include India, China, and Russia, none of which are mentioned by Williams. As far as the number of jobs being outsourced, the article goes on to say:

“A grassroots movement to stop offshore is emerging. On June 23, the AFL-CIO gave testimony before a U.S House of Representatives Committee on Small Business and quoted a study, by Forester Research, that estimates 3.3 million jobs and 136 billion in wages to shift overseas in the next decade. A survey by DeLoitte Research forecasts a shift of 2 million jobs and 356 billion by 2008, and this is just within top 100 financial services firms. Both studies paint a bleak picture for white-collar technology jobs."

The DeLoitte Research survey can be found at http://www.deloitte.com/dtt/cda/doc/content/dtt_research_fsi_offshorefinance_063003.pdf. Concerning the number jobs expected to be outsourced in the financial-services area, it states:

We estimate that 13 million people are employed in financial-services jobs in mature industrial economies. Taking the same 15 per cent cost savings, this translates into the potential movement of up to two million jobs.

Regarding where the jobs are expected to go, it states:

In the future, we anticipate that offshore activity will be spread around the Indian Ocean Rim — from South Africa, through the Indian sub-continent, to China, Malaysia and down to Australia. The hub market will be India, potentially accounting for as many as one million new positions from offshored financial services.

In summary, Williams needs to provide the source for numbers that support his contentions. His contention that the outsourced jobs are going chiefly to high-wage countries is either wrong or seriously out-of-date.