The people weren't offered a choice, "you can have inexpensive goods and go on unemployment, OR you an keep your jobs but with a 10% markup on electronics" (btw there was massive collusion by Samsung and Sony with subsequent settlement for price fixing in flat-panel TVs).
Moving jobs overseas is evading the "free market" by literally moving the labor market somewhere else. The corporation captures the benefit, the old workers are unemployed, the new workers do not benefit from the social benefits of the nation to which the corporation pays it taxes, and the shareholders get an extra $1.00EPS on their dividend sheet (that they pay very litle tax on because their rates are lower than wage tax). It's an all-around scam.
Jobs move overseas because employers don't want to pay us if they can find a pool of people that do not expect rights or market compensation for their labor.
It's like applauding McDonald's for replacing its minimum wage workers with indentured servants. They're ignoring basic human expectations about compensation so they can save money.
Now we don't have jobs, but the servants get to live in America! It should be celebrated.
If those people were to receive the same basic rights or fair market compensation for their labor, it would be a positive.
Your Cost of Living argument is lame; the term has a definition which you have overloaded to mean something completely different.
Yes, there are people who will lose jobs for all sorts of reasons, including competitive advantage of different regions (eg China and Mexico have labor that is far cheaper than Americans are willing to work for) or the euphemistic “creative destruction”.
I don’t feel sorry for horse buggy whip salespeople who had to search for a different purpose in life. They already won a lottery by being born in the USA in the most affluent time in history. The economy doesn’t owe anyone anything.
The only thing I wished we as a country had done during multinational trade pacts was not to put the onus on individual employees for proving jobs lost to offshoring; there was moral hazard and the evidence to prove causation was hidden from those who needed the evidence. Other than that, these trade pacts simply accelerated the changes that were going to happen anyway. It’s better not to live in a one-industry town where the winds of change can decimate the Un-diversified local economy.
Corporations are using free trade to introduce foreign-made goods at huge margins, while at the same time trying to prevent consumers from practicing price arbitrage.
If corporations were not artificially inflating the cost of living for the US consumer (through the cost of medicine, software, textbooks, food, clothing, etc), then there would be no issue with an open labor market.
But the corporations want to have their cake and eat it to. Free-trade means we get to sell you foreign-made goods at higher margins. Free-labor means we get to hire foreign workers are lower cost. Neither of things things are good for the US consumer, only the US corporation.
> Companies did move millions of office jobs to India, the Philippines and other places where they could pay workers less. But those job losses were more than balanced by growth elsewhere in the economy.
That's like saying there will be an apple shortage but ignoring it because we grew more oranges.
> But many companies discovered that labor savings were offset by other factors: time differences, language barriers, legal hurdles and the simple challenge of coordinating work half a world away. In some cases, companies decided they were better off moving jobs to less expensive parts of the United States rather than out of the country.
The thing is, rents and expenses continued to grow where these jobs used to be but wages stagnated. Offshoring is a contributor to wage stagnation, which would be acceptable if rents and expenses ebbed and flowed at the same pace. But wealth inequality and rent-seekers continue to squeeze the average person. The result is people who are underemployed or working multiple jobs.
> Ms. Lund said she saw parallels between offshoring and automation: Both trends threaten one set of jobs but should make the overall American economy more productive, creating new job opportunities, albeit ones requiring different skills. And she said the pace of change should allow workers, companies and governments to adapt.
Learning new skills isn't free. It will harm workers who have their jobs automated. Our employment system isn't worker-friendly in this instance. Those displaced workers will still need to pay rent and buy food ALONG with buying new skills. They will probably end up underemployed.
Consumers used to buy air conditioners made by Carrier in the US. Now the exact same air conditioner made in Mexico can be bought.
If the price went down the same amount as the labor savings, you'd have a case. But the fact that the move is being pushed by shareholders means a large amount of the savings will go into their pockets.
Of course, if the Mexican workers had to deal with all our EPA and work regulations, had the same cost of living and taxes, it could be considered free trade. But they don't. It's the same old story of free trade and currency arbitrage for capital, but not for labor.
To be very capitalistic about it, that is a choice that the seller makes. Why should the burden of relocation fall upon the purchaser of goods when it's the decision of the provider of goods? I shouldn't have to pay more for a product because they decided to move their manufacturing process, that's their call not mine. They can price it in to their new rates, but then it's up to me to agree or disagree if I'll pay them. But equally, if their manufacturing costs drop, I have no recourse to demand a rebate.
I definitely agree that it's strange that the same labour is worth different amounts depending on point of origin, when the goods sold is essentially information. I don't like it, either. But employers are not beholden to the relocations of their employees, it's the responsibility of the employees to negotiate the agreement.
So it is either that US company got better work done at cheaper price. Means win for US as it got a tiny bit competitive. That'd be pro-market argument.
Or another way that if US company has decided to not employ US born local at least those got employed overseas will not compete for housing, schools and other services for which they easily out compete locals if they are employed in US. Means another win. That would be pro-nativist argument. I know they are not much loved here but that's that.
American companies have actively moved their manufacturing to other countries to save on labor, nobody forced them.
This resulted in lower prices but was a net negative for the American job market.
America was totally free to engage in free trade by exporting their local products abroad, and by accepting foreign products to be sold in their own market without gutting their production capacity.
While you’re not wrong about people’s motivations, or the market’s sentiments, I do think this isn’t the right take on globalised industry. There’s no need to close US factories and move workers - it will happen naturally. For example, nobody closed US auto factories to move production to Japan - the Japanese out-competed the US on price and quality. The same is just starting to happen with electric cars now. Greed may have accelerated this transition, but it was inevitable.
Isn't this against the spirit of globalization and free/open markets? Or is that just meant for companies to benefit from cheap labor but not for consumers to be able to shop around?
(These are general questions, I don't necessarily mean that you are pro-globalization.)
it's downward pressure on US wages without the benefits of having an employer, but for third worlders
Right, this was the deal offered to Western factory workers: you, your family and your friends will be tossed on the scrapheap when the factory that employed most of the town goes offshore, but some people you’ve never met 10,000 miles away will be slightly better off, and some other people you’ve never met will enjoy slightly cheaper consumer products.
And people wonder why those people vote as they do.
Offshoring and automating contracts the economy because all the people who were employed were spending money on goods and services.
Now what has happened is that they don't have a job or the job left to employ someone in a foreign country.
Economy contracts.
Sure, the owners of company X have a few more dollars, and sure, the economy of the foreign land grew a bit because now there is someone purchasing goods and services, but the domestic economy contracted.
Then for a double whammy, because the people who ran the country were stupid and allow foreigners or foreign-controlled corporations to come in and buy up real-estate, this money then floods in and starts buying up residential properties creating a shortage of housing, which creates a double crunch because now these unemployed folks need to figure it out as supply and demand is causing purchase or rent of real estate to go up. Food is going up, everything is going up.
The outside economy it's no problem for them because through economies of scale, they can just keep the money flowing in to take over, but it only benefits a few people, not everyone. It's not as if there's any sort of organized structure here to be "oh, let's all just employ people to build ghost cities one after the other so foreigners can park their money in empty real estate".
People like the IBM CEO are part of the problem destroying society. I do not applaud him or his peers. They are parasites with vast multi-million dollar salaries.
"IBM CEO Arvind Krishna and ex-exec-chairwoman Ginny Rometty were collectively awarded more than $38m in compensation for their services in fiscal 2020, a year in which Big Blue's revenues shrank and operating profit more than halved."
Not bad eh? 2 people got more than $38 million in a single year. To do what? Golf and attend meetings.
People shop for the best deal. Companies look at countries and do the same. Give them a better deal by lower taxes and reducing regulation, and back they come. Raise taxes and regulation, and away they flee.
Moving jobs overseas is evading the "free market" by literally moving the labor market somewhere else. The corporation captures the benefit, the old workers are unemployed, the new workers do not benefit from the social benefits of the nation to which the corporation pays it taxes, and the shareholders get an extra $1.00EPS on their dividend sheet (that they pay very litle tax on because their rates are lower than wage tax). It's an all-around scam.
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