The 'Exporting Jobs' Scam by Harry Browne

HarryBrowne.org ^ | March 13, 2004 | Harry Browne

[JTG]

The burning issue of the day is the "exporting of jobs" to foreign countries by corporations.

As the prevailing wisdom would have it, greedy corporations are taking advantage of lower wages in foreign countries — taking jobs away from Americans and giving those jobs to foreigners who will work for much less money.

In other words, American companies make their products overseas and then bring them to America to sell to Americans who were denied jobs producing those wares.

The politicians who are upset about this practice rarely suggest any specific solution; they just promise to put a stop to it. The TV commentators who are exercised about it also are short on solutions; they just seem to enjoy viewing with alarm.

The only concrete solution that's been offered (that I've come across) is the introduction of state laws to require any companies doing business with the state government to produce their products within the U.S.

Economic Illiteracy

Politicians are notoriously economically illiterate. And even when they know what would be the right thing, we don't really expect them to do it.

But we do expect financial and economic reporters and "experts" who appear on television to have some grasp of whatever they're discussing. Thus, when these "experts" join in the chorus of outrage over greedy corporations exporting jobs, it's easy to believe there must be something to the complaint.

But just once I would like to see someone on television ask one of these politicians, reporters, or "experts" the following question:

Since American wages have always been much higher than wages in Thailand, India, Indonesia, and other Asian countries, why weren't American companies exporting jobs to those countries 30 or 40 years ago?

Or:

Since wages in African countries are even lower than those in Asian countries, why aren't American companies exporting jobs to Africa?

Or:

Since wages in America are lower than those in Japan, why don't Japanese companies export jobs to America? Yes, they have factories here that employ Americans, but those plants make products that are sold here. They don't ship the products to Japan to be sold. American companies build factories in foreign countries but don't sell the products there; they bring the products here for sale.

If you think about these questions, you can't help coming to the conclusion that jobs aren't being "exported" because of wage differentials, but rather for some other reason.

Chasing Companies Away

What is the reason?

Most likely, companies are heading overseas because U.S. regulators just won't quit heaping more and more demands on American corporations. . . .

• About the only sure way a company can avoid discrimination suits by government regulators or individuals is to hire by quotas, which certainly isn't the most efficient way to build a workforce.

• EPA officials can make a company's life miserable by demanding changes in the way a product is produced — changes that conform to government rules but don't make the environment any safer.

• At any time a company might have to make major changes in its facilities to accommodate new rules for dealing with disabled employees or customers.

• In addition to the wages paid to employees, companies must collect and contribute to payroll taxes that grow bigger and bigger over the years.

These are just a few examples of the many regulatory problems companies face. Every little regulation, every demand, every new policy imposed by the government costs money. And at some point, it simply becomes too expensive to continue operating within the United States.

It's interesting that some of the politicians and reformers who have demanded the above impositions on business are the same folks who are condemning the companies that move some of their production facilities offshore.

The Solution

And what solution do they propose to stop the "exporting of jobs"? More government, of course — which will chase more companies overseas.

If they really want to bring those jobs back, there's a simple way to do it: repeal all the regulatory legislation that's driven companies to export the jobs.

How soon do you think that will happen?

If your answer is "never," you're probably right. So the "exporting jobs" problem will be with us for a long time.

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Also see: "Seeing through Economic Fallacies: Is America in Trouble for Lack of Manufacturing?"

[JTG]

I think that some good points are made in this column, especially the point that it's interesting some of the politicians and reformers who have demanded the above impositions on business are the same folks that some of the people who are condemning the companies that move some of their production facilities offshore are the same people who put all of this unnecessary regulation on them.

[Arkinsaw]

Where libertarians make sense, like here, we ought to listen and work with them.

[JTG]

What areas can't you work with them on?

[MJY1288]

I must admit, I have little use or respect for Harry Browne, but as a business man myself, I have to completely agree with him on this one. It's not the wages, it's the strangle hold the Government has on American Business with their over regulation and their way of punishing all for the crimes of a few. Example: I own an Auto Body Shop, I use tons of paint, all of which is harmful to the environment if not disposed of properly, the FEDS here of some hideous act by some Body Shop Owner that dumped 500 Gallons of un-used paint into a River and the whole industry pays because of some jerk off in Congress who wants to get re-elected on his Pro-Environment stand. Yet the other 2 million Body Shop Owner's who have never dumped their Toxic waste like the one violator did, we all pay for by new regulations that have to be funded in order for them to be enforced. So the Govt. comes up with a "Registration Fee" or "Toxic Waste" surcharge in order to fund this new Bureaucracy.

For the first time since I have read anything Harry Browne has written, I agree with him.

[Arkinsaw]

What areas can't you work with them on?

Open borders for one.

[bcoffey]

Interestingly, a CNBC business program about an hour ago stated that there are more jobs being imported into the U.S. from overseas than are being exported from the U.S. to overseas.

If we were to tighten job flow, it would tighten in both directions, and we would be the net losers.

I've never heard this statement before and I think it should be spread far and wide.

[petercooper]

Stop the excessive govt regulation.
Stop taxing businesses and individuals to death.

This outsourcing "issue" is a non-issue.

[MJY1288]

That statement is exactly correct, the problem is not the big business, It's big Government. Punish the law breakers and leave the law abiding business people alone, PROBLEM SOLVED

[MJY1288]

The list is very long of why I dislike Harry Browne, but even a broken clock is right twice a day, and Harry Browne is 100% correct on this one, and despite my dislike for his politics, I have to give him an "Attaboy" on this one

[MJY1288]

BINGO

[JTG]

The problem with the immigration issue is the influx of people from Mexico seeking a handout. Those people are the "bad immigrants". The good immigrants are people who bring capital with them and want to start up businesses, or people who actually want to work and not be on the government dole.

Private property rights work by themselves to protect from influxes of immigrants anyway. Even if we had massive amounts of immigrants coming in, they would either have to buy private property or leave. They can't just crowd on people's lawns and stuff.

[rdb3]

I can't believe I'm agreeing with Browne. Simply can't believe it.

Show 'em my motto!

[rdb3]

Where libertarians make sense, like here, we ought to listen and work with them.

On things economic, libertarians make tons of sense. But that's about as far as I can go with them.

Show 'em my motto!

[freekitty]

As usual, it's the you know what government that is the problem. And the problem there is it way too big which makes it out of control.

So what do we do?

[Arkinsaw]

Private property rights work by themselves to protect from influxes of immigrants anyway. Even if we had massive amounts of immigrants coming in, they would either have to buy private property or leave. They can't just crowd on people's lawns and stuff.

Sorry, I agree with Browne on the above, but not this at all.

[JTG]

We elect Libertarians and TRUE Republicans, republicans who are economically conservative. Republicans who want to get rid of the government regulation and high taxes. That's what we do. And we elect more conservative/libertarian senators to the Senate, because the Senate is the stumbling block. The Senators are the people who reduced the 2001 and 2003 tax cuts. Just my 2 cents.

[Libloather]

The only concrete solution that's been offered (that I've come across) is the introduction of state laws to require any companies doing business with the state government to produce their products within the U.S.

Liberteens for MORE laws? Doesn't add up.

My solution - end the minimum wage.

[Enduring Freedom]

The quality of software is higher in India than it is in America.

Think that's a lie?

It isn't.

Better software. Cheaper.

Get it?

[JTG]

That's fine. It's not that big of an issue for most people, but certainly Harry Browne wouldn't care if states set up their own border control. He just doesn't want the federal government doing it, because it's not authorized in the Constitution.

I don't agree with Harry on everything, either. For example, I disagree with the typical libertarian position on drunk driving: they think that you can't arrest drunk drivers until they hit someone, and I think that's just stupid. There is nothing wrong with driving checkpoints for drunk drivers. Driving is a right, not a privilege. I do however disagree with safety belt laws. I think that once you are 18+, you should be able to drive without a seat belt. But I do believe that kids must be in child seats or in seat belts. If you want to screw up your own life, that's fine. But don't put your kids in danger. That's how I feel about those two issues.

[KEVLAR]

I would love to see some suggestions. We still have courts siding with environmental groups to manufacture regulations or bankrupt those in their sights. Just look at the uproar over the current administration injecting a little common sense into the EPA regs.