United States Leaving First World

Townhall.com ^ | 1-22-03 | Paul Craig Roberts

[Norm640]

United States leaving first world by Paul Craig Roberts

America has turned its back on Americans. Even illegal aliens count higher with the American government than native-born, taxpaying, loyal U.S. citizens, who are regarded by their government as nothing but resources to be exploited.

American taxpayers now are expected to shoulder the burden of paying for university educations for illegal aliens. When Rep. Tom Tancredo, R-Colo., said recently that illegal aliens should be deported, not given in-state tuition, Karl Rove, the Power Behind the Bush, told Tancredo never again to darken the steps of the White House.

The U.S. government is replete with hatred of everyone who sticks up for the rights of citizenship. The government steadfastly refuses to defend our borders. It is more important, says the government, to have cheap household help for elites, and an abundance of fast food workers to keep down the minimum wage, than it is to defend our country's borders.

The INS refuses to deport alien criminals and issues visas to terrorists who wish to blow us up. Columnist and author Michele Malkin and the website vdare.com have documented the complete failure of government to protect the meaning of citizenship.

Politicians, including President Bush, pander to illegals even more shamelessly than they pander to monied special interest groups. Campaign finance reform is a joke when illegal aliens vote and money from abroad affects election outcomes.

The government's lack of loyalty to citizens has been noticed not only by illegal immigrants who pour over our borders with rising expectations and demands, but also by U.S. employers.

If it is permissible for illegal aliens to take fast-food jobs away from U.S. teen-agers and construction jobs away from U.S. construction workers, it is all right for H-1B visas to be issued to foreigners to take jobs away from American professionals.

Do you remember the "shortage" of computer software engineers, cooked up by corporations who wanted to replace American engineers by importing Indian and Chinese engineers at a fraction of the salary? This practice has been good for the bonuses of corporate CEOs, but today the young American software engineers who followed Warren Buffet's advice to "invest in yourselves" are unemployed.

Now comes the "shortage" of nurses. Hospitals are under financial pressure from the requirement to provide medical care to immigrants and need to cut costs. Bringing in foreign nurses, who will accept low wages in exchange for U.S. residency, is one way to cut costs.

One can sympathize with the hospitals, which are forced to pay the cost of government's failure to protect our borders. But let's make sure we understand what those declaring a nursing "shortage" mean. They mean that there is a shortage of American-trained nurses willing to work at a "world wage," which is an average of U.S. and Third World wages.

This is a clever way of creating a shortage. There definitely was a shortage of American software engineers at below American wage levels. That's why the supply of computer engineers was expanded to include India and China.

Will your occupation be destroyed next? If software engineers can be imported, so can electrical, chemical, mechanical and civil engineers. If nurses can be imported, so can doctors.

The list of occupations that can be destroyed by "internationalizing" the U.S. job market is long. Let's focus instead on the occupations that will be most difficult for the government to destroy. Only two come readily to mind: school teachers and lawyers.

School teachers are protected because their union, the NEA, is the backbone of the Democratic Party. The teachers will not stand for their wages to be driven down with the argument that there is a teacher shortage that needs to be filled by importing teachers from abroad.

Lawyers are protected because of the obstacles of state bar exams. Moreover, the abundance of lawyers is such that no one would believe in a shortage.

Between the importation of foreign labor and the export of U.S. jobs, the future is not bright for young Americans. U.S. manufacturers, both labor-intensive and high-tech, are rapidly relocating offshore. The offshore flight takes with it design, engineering, and research and development jobs. Back-office and clerical jobs are also being moved offshore.

If Wal-Mart has its way, nothing will be produced in America. The retailing giant wraps itself in the American flag, but it gives its suppliers price targets. Suppliers find that in order to meet the targets, they must move production offshore.

Wall Street and lenders, such as GE Commercial Finance, pressure U.S. companies to outsource production to China in order to improve their margins.

Outsourcing to lower wage countries can be a solution for individual companies. But when all U.S. companies outsource, the implication is a population working for Wal-Mart selling foreign-made goods.

Will America be a Third World country in 20 years?

©2003 Creators Syndicate, Inc.

[valkyrieanne]

Twenty years is optimistic.

[Norm640]

Becoming a service economy is not a new frontier. Unless you think making $7.00 an hour at wal-mart is a step up. The profit motive, which is great, by the way, goes too far when US companies take the means of production overseas. They do this less for tax purposes and more for the incredibly cheap labor. This idea of "free trade" being fair is a myth: workers should earn a good living wage, and they do, but those that can get away without paying a good living wage to their workers do so with aid from the US (NAFTA, for example). A job that would pay a US citizen $25.00 an hour pays a Brazilian $4.00 an hour, which is a whole lot for the Brazilian.

Illegal immigration compounds the problem. If we're going to throw our weight around in the world, we should push for other countries to reform their economies like the US--to at least set minimum wages comparable to US standards. If not, there will be no manufacturing or industry, or even high technology in the US. No matter the industry or tech., the cheaper the labor, the higher the profits. The United States is fast becoming irrelevant in the world economy.

Our trade deficit is so high because of ridiculously cheap imports. Imports are cheap because workers' wages are nothing overseas. Great for the consumer, but we have to work in able to be able to consume. Standards of living diminish when these good jobs leave.

No doubt, we have to protect the US economy--if we're serious about free trade, etc., then other countries should be as well, and play fair.

[Norm640]

the GOP has abandoned its principles economically. So too, have the DEMS. One should ask why Bill Clinton signed NAFTA, why Bill Clinton and Bush favored MFN status for CHina, and why no one is bringing this up in congress.

Democrats are always anti-growth, for they believe government should own the means of production. The problem with the GOP is that they believe too much in theories as opposed to the realities of policies implemented over the years. Sometimes protectionism is good (as Bush's steel tariffs have shown). Balance has to be achieved.

I hope I don't sound too left, but clearly, any ideology taken to the extreme is worthless.

[Norm640]

Nothing wrong with increasing profits, unless it is done unethically. I believe the allowance of countries to sell out its base, ditch US workers,and run overseas is criminal. Other countries don't allow this sort of emigration, they just benefit from our companies hitting their beaches. What the US is supporting here clearly benefits the richest because such overseas moves benefits nobody in the US except the person that owns the company.

Wal-Mart is only allowed to get away with what it can get away with it because it has the money and power to control price. If you shop around, though, you find that Wal-Mart's prices aren't so great, and what they sell is of questionable quality.

Nothing wrong with the profit motive, but nothing wrong with trying to look out for the US economy either.

[Fledermaus]

While there are good arguments in Mr. Roberts piece, I'm not so pessimistic.

But your comment that we should use GATT, etc. to "not make others labor cheap" is ridiculous. Your solution is to raise the price of labor everywhere so the U.S. doesn't have to compete? Talk about anti-capitalism.

First, you can't do it. Second, those third world countries can't be compared to our economy when to them $20 a week is a fortune. If some American company went to some backwater in Indonesia and started paying $25,000 a year for workers, there would be riots in the streets against those new "rich people".

Having work in Mexico would keep the majority of illegals out. Thinking you can create jobs in Mexico by paying everyone like Americans would never work.

I'm no globalist and I want the U.S. to remain strong and I want the borders protected. But thinking that only a manufacturing job base will do that is short-sighted. Using the slight "Service industry" also is a cheap shot and discounts our financial, computing, legal, management, and teaching industries. And yes, they can be called industries.

By having politicians pick and choose industries is disasterous. If they had their way, Texas Instruments would be forced to still manufacture slide rules so as to provide some stupid assembly line job to someone at $25 an hour.

But I guess having some unionized Democrat voting person making $35 an hour plus overtime for anything over each four hour period (and after 35 years of work hasn't got a dollar to their name), 60 days off a year and full medical benefits and guaranteed 50 cent a can Coke in the machines, free lunches and education grants to their snotty kids, working in a steel mill that hasn't spent one dime on modernization since 1955 mostly due to government regulations, is the way to go.

So it's better we all pay $500-1000 more per car so 60,000 dinosaurs in Pennsylvania, rich with electoral votes, don't have to learn to save and retire or find another job?

That's sad. I've had many different jobs over my lifetime and I would never allow those constraints to stop me. I guess growing up poor Arkansas trash made me a little more resilient!

[Fledermaus]

First, US and such
Second was Russia, etc.
Third was China, Africa and such

But now it's argued that there is a fourth world for the truely despot.

Russia dropped to third world status while Europe can be conceived as Second world. Many of the states in the U.S. have larger economies than most of Europe.

There is no single measure of this, it's based on many criteria. Economics being only one.

[Fledermaus]

You are correct. As we moved from an agri based economy to industrial, did we lose the agri business? No, we are the largest overall food producer in the world.

People use the term "service industry" to denegrate and that's ridiculous. I worked in the hotel industry as a Controller for 15 years and I saw plenty of capital being spent and many jobs created.

It's not my fault the mostly unionzed workers in the Mideast have never bothered to learn any new skills or save money when being well paid or think about moving if jobs dry up. Where is it written you have to live in one place all of your life? I went from California to Ark to Texas to N. Carolina to Tenn from 1960-1990. I went where the work was and the taxes were low.

As to "protection", as I wrote in this thread already, who's to say? Were we supposed to protect all those lost jobs when calculators and computers replaced slide rules? Do kids in school today even bother to learn geometry with protractors and graph paper anymore? I guess we should worry that the Palm Pilot might eventually replace spiral notebooks. Can't have all those spiral notebook workers in Backwater, Ohio out of work!

Do any of the "have to protect our base" people ever consider all the jobs created in the new industries?

I know all the arguements about things like steel (can't rely on foreign sources, we'd be doomed) or oil and I can relate to them somewhat. But keeping old industries that can't or won't adapt like textiles in South Carolina alive only to protect the job of some voter is stupid.

And then there are the arguements about how us trading with China, etc. are helping spread our ideals and systems to the relics of the past that beleived in Communism and socialism. All that fits in and should be discussed.

But those are other threads.

[Dajjal]

BTTT

[sneakypete]

Will America be a Third World country in 20 years?

Yes.

[sneakypete]

Russia dropped to third world status while Europe can be conceived as Second world.

Not true. The primary difference between third world countries and second world countries is second world countries have a educated skilled workforce available,even if they don't have the jobs. Third world countries have illiterate populations with no job skills.

[sarcasm]

Third world countries have illiterate populations with no job skills.

Like many areas in the United States.

[bankwalker]

does anyone know the official definition of first, second, third world,etc.

Seems like there is no real official definition on this so far.

[SauronOfMordor]

Seems like there is no real official definition on this so far.

Correct. Like many terms "Third World" has no precise, commonly accepted definition. In popular usage, it means a country with high poverty and low literacy. Considering what the NEA is doing to the real literacy level in the US, it is not unreasonable to say that significant sections of the US are headed in the direction of "third world" status.

The tipping point will be when the US middle-class no longer generates enough tax revenue to support the expanding welfare state.

[Proud_texan]

I'm still trying to get a handle on this as I'm confused; I've lived 6 places (always coming back to Texas!) in the past 15 years, sometimes there just wasn't a market for my skills in Texas and I was in Seattle during the WTO riots and some of the arguments I see here are, almost word for word, identical to the quotes from the WTO protest looneys in Seattle.

And while it's only one story I met a union member while I was there. She dropped by one day and I asked her why she wasn't at work; she didn't feel like it and wanted to take a week off. I asked her what her supervisor said about that. She hadn't called. Apparently she had n days (I can't recall the number but I think it was 3-5 days) before she had to call in and report being sick. Of course she got full pay.

Later on she decided she had a booze problem. She got company paid for rehab and six months off. Of course she got full pay.

Right before I left there was a lot of talk of layoffs. She hurt her shoulder. I asked was what wrong; nothing, but if she's on disability (she figured it might take six months for her shoulder to get better) they couldn't lay her off. Of course she got full pay.

In two years I figure she showed up at work for a total of about 3 months. She collected 24 months of pay.

I might add that not only was she dishonest, but she hardly had the skills to command a $35 an hour job, plus half that again in benefits.

I'm just an independent contractor but if I was a company I'd be hard pressed not to move my operation to a country with a bit more, well, sanity.

[Norm640]

I grew up dirt poor, I am dirt poor; last year I made 9,000 dollars. And, I live in appalachia.

That doesn't prove a whole lot, but since you decided to play some class war, I'll just throw that in.

Look, I'm not arguing for trying to get everyone paying at the same rate as American workers. I will argue, forever, in fact, that workers get paid sh-- even in their own countries by these American companies, and countries like China, where most new investment is going, don't care a wit about fairness to the worker.

Anyway, we are losing our base and we are becoming a service economy, like it or not. Manufacturers rely on cheap labor, and the cheaper the better. By your logic, the only beneficiaries of this great "competition" which, you seem to think, is very fair, are the folks that own the companies. For those that work for, not own, companies, they get screwed. Factor in offseas wage competition, and you have what we're happening now. "Competition" has zero to do with it, unless you happen to own the means of production.

I'm sorry, but that's a terribly elitist position to take. And, countries have sued the US in the trade courts for far more ridiculous things than wages. I'm not asking for equal wages, I'm merely asking for standards similar to what workers here have in the US. Sorry to hurt your precious "competition" but that competition doesn't mean a hill of beans to someone without a job in Appalachia.

Or Arkansas.

We can deny the reality of the situation by blustering about saying "the US is the most powerful country in the world," etc., this "rah-rah" crap. The facts don't play out that way. Sure, CEOs benefit, but Americans get shafted. Paul Roberts was pretty clear about that.

And he's right.

[Fledermaus]

. I will argue, forever, in fact, that workers get paid sh-- even in their own countries by these American companies, and countries like China, where most new investment is going, don't care a wit about fairness to the worker.

You can argue it all you want but that doesn't make it fact. I suggest you use your computer to look up the "average" income in the third world and see what American companies are paying. When the average worker makes $20 a month, a job paying two dollars a day is rich by those standards. You can't compare wages earned to U.S. standards. What China pays it's workers in it's state owned businesses is none of my concern. Mexicans aren't coming to the U.S. to just to earn higher wages, they are coming just to get a job! The Mexican economy is so state-controlled and corrupt that they can't create enough work for their population even while they sit on as much oil as Canada and could make everyone rich if they worked for a freely run, competitive oil company. Instead, it's state run and it's weak profits are used to run the corrupt government and is failing dramatically.

Someone sitting on the ground eating worms in Ethiopia would love a job paying $1 a day!

And obvioulsy, even at a minimum wage level $9K a year, you obviously still have electricity and a computer internet provider. So what's your point?

And as to "we are losing our base", you need to go to the library and read the history of the U.S. and you'll find we lost "our base" in the last 19th century when we went from an agricultural base to a manufacturing base. Now we are shifting from manufacturing to service and information.

What do you want to do? Guarantee a $20/hour job to make trinkets for Happy Meals? Then I hope you are prepared to pay $5 for a Big Mac. Why should a U.S. manufacturer be forced to pay high wages and benefits to people for jobs that monkeys can be trained to do. I worked at Whirlpool for 2 summers and it doesn't take much intelligence to put a plug into a hole and a piece of insulation behind a grommet. Sure I was happy to get $7 an hour when minimum wage was $2.85. I would have been happy to get the $2.85 also.

You want standards in other countries similar to the U.S. because you want to raise their standard beyond their conditions only as a straight-line comparison to justify the wages you want here. So I guess the U.S. companies should be forced to buy denatl insurance for employees in Indonesia that probably has 3 dentists in the entire country.

And if you aren't making enough money in appalachia...MOVE! My parents moved us plenty of times. Since college, I moved to where ever I thought the jobs were better. And I'm in the "service" industry. My wife works for a large payroll processing company she helped start from scratch...that's a service and they now employee 250 very high paid workers with benefits.

Fine argument, just doesn't hold water.

[Fledermaus]

I hear ya. I've moved many times and took lesser paying jobs just to find a better cost of living or better company to work for.

Here in Nashville (I live in Franklin actually), Peterbilt finally had enough and locked out the union workers. These workers, making an average of $40 an hour plus all kinds of benefits, were calling into a local talk show to complain about losing "their job". The host pointed out, correctly, that it wasn't his job, it was Peterbilt's job to offer him. Peterbilt couldn't stay competitive when they were threatening to strike over, get this, longer bathroom breaks and cheaper Coke's in the machine! I kid you not.

The alternative was having no job when Peterbilt went bankrupt. Too many people in the U.S. think everything is an "entitlement" and there are poor people around the world that would give an arm to get even 1/100th of that kind of wage. That's not exploitation of the third world, it's reality.

Why would McDonald's want to pay $5 for a Happy Meal toy when an equally qualified individual in China or Mexico (remember when everything was made there or Japan?) is willing and grateful to do if for less? But what seems like less to our standards is like winning the lottery to them.

Thankfully, most Americans understand this and don't make apples vs. oranges comparisons like some around here do.

Nice Post!

[Proud_texan]

Hehe, I like that longer bathroom breaks and cheaper cokes.

I swear this is true:

I met another union worker while I was in Seattle and he told me one of the things they were trying to negotiate in their new contact was that they couldn't fired or punished for cursing at customers.

I don't know if it was one of those throw away things that they put in there so when they give it up they can say they compromised, but it kind of put a bow on the whole thing that they'd even ask.

[Norm640]

Fleder, let's assume something right from the bat--you don't know my circumstances so it would be best to dispense with the free advice.

As it is, I'm locked into where I'm at because I care for my parents--I don't have the money to move, much less the money to adequately care for them. Most of what I earn goes into their care. I'm not saying this to look pitiful, because I don't believe in that. I'm not even trying to get you to see my side--I don't care what you see. I don't care enough about your argument to write a reply concerning it, weak as your own argument is.

I don't engage in class warfare. My point when I mentioned my situation was merely to show that I know what I'm talking about--I live through it on a daily basis. You should at least respect the position instead of having the crass arrogance to suggest the next course of my life. I know what I should do in my life--that's not why I mentioned my economic status in the first place.

Keep yourself in check, and the rest will take care of itself. If you follow this advice, less people will probably think you're a jerk. Probably.