America will continue to bleed jobs

[FightingForFreedom]

Wages will not equalize between U.S. and foreign countries for a very long time, if ever. The problem is supply differences. The 100 million or so American workers are vastly outnumbered by the potential number of Chinese, Indian, and other developing nation's manufacturing and knowledge workers. The standard of living differential is also too great. The balancing act for U.S. and multi-national businesses that are outsourcing our jobs is to make sure they don't kill the golden goose (the American consumer) before they've generated an even bigger goose to take to slaughter in China, India, and other targeted markets. Remember, producing cheaply means nothing if there's nobody to buy the products. And no one has been as well-trained as the American consumer to buy, buy, buy, no matter how much in debt one becomes! As a software engineer, I've seen this problem coming for at least 5 years now, but it was well masked by the artificial high-tech bubble through March 2000. I'm not sure that there is an answer at this point -- the genie is out of the bag, so to speak. Once one company in an industry has convinced the govt to open a market in one undesirable country or other, all other companies with which it competes are forced to do the same. Bottling up the genie is notoriously difficult.

[alrea]

i didn't see the marxist slant either.

but it was well masked by the artificial high-tech bubble through March 2000

this is a fact, and it was also masked by an administration that made the choice to deal in corruption at every turn whether it was with the chinese, in the boardrooms, or in dealings with other countries. the last administration encouraged sleazy business deals and their bureaucrats pushed hard and looked away when necessary.

it's been said here enough, clinton had great timing in the 90's but we'd be in some very very deep doodoo today if they were still calling the shots.

massive tax cuts, technology, a lower dollar and low interest rates will pull the economy back out eventually. but we've got to get rid of the COSTLY progressive socialist bias in industry, law, government and in the media. we can't afford any more ROBERT RUBINS, ENRONS or HILLARY CLINTONS.

[EVO X]

By the way, what exactly do you hyper free-traders think Americans ought to do for a living? We can't all run companies profiting by importing goods and services produced by $6,000-per-year slave labor in Asia. Somebody has to buy those goods and services. What should the rest of us do? We can't all be lawyers, insurance salesmen, and accountants. Fast food? Yeah, you're going to have to really hold down those programming costs to make your stuff affordable to people trying to support a family on McDonalds wages.

People still do support a family on McDonalds wages. They may have to work a second job and have the spouse work as well, but they do survive to work another day. When I go to a fast food joint, I don't get the impression that the employees don't want to be there or have major attitude problems.

[Jorge]

If we insisted on doing all those low value added jobs ourselves, our real standard of living would decline. It is the law of comparative economic advantage.

Exactly.
And if it wasn't for many of these low cost imports, Americans would have less disposable income, which means less money going into other areas of our economy and a lower standard of living for all.
As you said, there are certain economic advantages to importing some products rather than producing them here.

[EVO X]

That can't work. Something's gotta give. In the absence of protectionism, what gives is that the jobs go overseas. Our standard of living drops as a penalty for our bad business climate; the standard of living in third-world countries rises.

What is wrong with rising income in third world nations? They are not taking anything away from Americans. They are contributing to global output and harmony.

[1tin_soldier]

Just what do the protectionists have in mind?

Political power for whatever group they affiliate themselves with. It sure isn't prosperity, anyway.

[eno_]

You got it. Even when you ask the direct question: "How is protectionism going to be better?" you get no response - because it won't be better. Protectionism will relegate us to the same also-ran status of Argentina and every other second-rate hole. There is no alternative except to improve out business climate to the point where we are the best place on Earth to make the most profitable stuff on Earth. Ask Mexican farmers if we can't compete in low-priced commodity items.

[eno_]

...third-world countries where there are no environmental or workplace regulations...

Let's say you are right. Now, how is protectionism going to fix that? If we lack the political will to reform our tax and regulatory structures to where they are competitive, we lose. No way around that.

Some regulations add value, and middle class Chinese are already demanding breathable air and non-toxic water. Some regulations are stupid and put a drag on our economy. There is no way we can protect ourselves from our own bad decisions.

The Chinese are just like you are. They want the same things you want. If they have the stronger will to get what they want, they will be richer than you.

[1tin_soldier]

So then you would say that fairness doesn't come about from to traders each acting of their of free will and in their own self interest? You believe fairness is something that must be imposed. Lenin believes the same thing.

[wku man]

"They are not taking anything away from Americans."

Where have you been? Ask anyone working in IT or networking where the jobs are going. First it was just berry-picking and hotel room cleaning, then it was construction and blue-collar labor. Now the foreigners don't even have to break into our country to take our jobs away.

Scouts Out! Cavalry Ho!

[1tin_soldier]

You are right about one thing; I am not an expert on economics! But I do know what I have read and witnessed.

And yet remain blissfully ignorant as to it's cause.

[1tin_soldier]

Well you'd be stupid to do such a thing, now wouldn't you?

Provided I were given the choice, yes I would, which is exactly what I'm saying. I'm better off buying goods I actually want at lower prices as opposed to higher ones. The whole country is better off when I am forced to constantly reevaluate the value of my work to the public. Only a free market can do that, not tariffs, quotas, gov't job programs, tax-credits, or well intentioned and naive politicians.

[1tin_soldier]

But they also had more time for each other so it's a trade-off.

Yes. In fact just last century it wasn't uncommon for a man and his sons to spend 14 hours a day working the fields. Oh, how I yearn for the good ol' days.

[Willie Green]

The screed is close to incoherent, and has almost no nexus to anything to do with economic reality or theory. It has echoes of a dead German philosopher who wrote books in England of massive malignant influence that have since been totally discredited.

There is one rule for the industrialist and that is: Make the best quality of goods possible at the lowest cost possible, paying the highest wages possible.

-- Henry Ford

"I believe in the dignity of labor, whether with head or hand; that the world owes no man a living but that it owes every man an opportunity to make a living."

-- John D. Rockefeller

"The high wage begins down in the shop. If it is not created there it cannot get into pay envelopes. There will never be a system invented which will do away with the necessity for work."

-- Henry Ford

[Afronaut]

"People still do support a family on McDonalds wages. They may have to work a second job and have the spouse work as well, but they do survive to work another day."

Touching Future....

[Afronaut]

"And yet remain blissfully ignorant as to it's cause"

Hey Big Mouth! What do you do for a living...BTW?

These are real people with real families and with hopes a dreams. I can wait to see how you put bread on the table.

[Torie]

"Real dollars" means inflation is factored in, and as I said, the CPI overstates inflation, particularly prior to the index being revised sometime in the late 1990's, so in real terms the rise in median incomes has been greater than that depicted in the chart. They have probably risen close to 50% in real terms since 1967.

[applemac_g4]

Your analysis regarding the 40k wage earner ignores this fact: That when a 3k foreign worker is paid that 3k, national wealth is diminished by 3k. The economic health of the united states is not determined by how cheaply a given individual can purchase goods and services. Rather, it's determined by GDP - and as a result, by the amount of wealth that remains within our borders to fuel GDP growth.

Regarding the slow crawl upward of median household income; all you have to do is compare the cost of automobiles, housing, utilities, and food to what it was in the 60s to realize that standard of living has actually taken a rather serious nosedive (and I'm deliberately excluding the effects of space-program derived technologies when I say this to paint a picture that is strictly fiscal).

The history of foreign trade in the modern era has been pretty repetitive: American companies try and sell goods to foreign nations. Foreign nations use subsidies, cheap labor, and governmental regulation compete to counterattack. US companies lose market share. US Companies move production overseas to compete more effectively. American citizens lose jobs. This is not the blueprint for a healthy economy, and it's time that the United States dropped it's delusions of world hegemony and did much, much more than it does now for its own citizens.

You won't see this happen though. Why? High taxes, foreign aid, and big bureaucracies are a keystone of neoconservative policy (think big-government Republicans, of which GW Bush is one). For this strategy to work, people must be able to sacrifice larger percentages of their incomes to government and for that to happen, the other things you buy must be available for relatively less money, or through credit over ever increasing periods of time.

Cheap Chinese imports, and the increasing use of consumer debt testify to these truths.

[applemac_g4]

A successful protected market: America for the first 150 years or so of it's history. The EU today. China today. All of you who are pointing out how quickly China is modernizing and how wealthy they are becoming as a nation - keep in mind that their attitude towards free trade is strictly a one way street that involves importing US dollars in exchange for slave-labor exports.

The same thing held true for Japan during its two decades of success.

[Torie]

If you live in a town with good infrastructure, relatively cheap housing, and available skilled and disciplined workers, new companies will move in because your town now has a competitive advantage. I notice that you live in Idaho, which is in general a sought after place to live. Your town near Pocatello will snap back soon.

[Torie]

You had better hope that China and India are getting more productive rapidly, or Gen Xer's and the younger Boomers are going to have to defer retirement. Someone is going to have to produce the goods when about a third of Americans and particularly Europeans, are retirement age. Jeremy Siegel just wrote an article on it. If you are interested, I will post a link.