How will the American labor market survive in the global economy?

[0rganism]

Poll question: How will the American labor market survive in the global economy?

Because we are competing directly in a global marketplace with workers from India, China, Mexico, et al, and there are existing inequities in standards of living, collective bargaining rights, and environmental standards, we are faced with a fluid situation. Something will have to change to reach a state of equilibrium. Which, in your opinion, best describes the eventual result of labor and wealth inequities?

[Warpy]

1. Abandoning US workers in favor of cheaper workers

overseas while trying to keep the US as the primary market is not going to be sustainable. How long it takes the behemoth known as the mean ole gummint to do something about it is anybody's guess.

Businessmen will continue to seek cheaper labor and pocket the savings, not passing any of it along. Consumers will continue to be expected to pay first world prices for third world goods and services. The businessmen expect those "other" workers to stay employed and continue to be their market. The problem is that all the companies are looking into doing the same thing to their workers.

My guess is that the marketplace will have to dry up a whole lot more than it is right now for the gummint to act, and that means most of us are going to see a massive decline in living standards. Eventually, some really punitive tariffs against offshored jobs that rely on a US market will have to be enacted. The rich will yowl like scalded cats.

[0rganism]

2. Indeed! "The rich will yowl like scalded cats."

I tend to agree with your assessment; we will not see significant policy adjustments until the parasite class feels the shrinking market pinching it in the ass. Then, the remaining plutocrats will accept the necessary changes as an alternative to revolution.

[vote independent]

3. Global economy = positive thing

I don't understand why you all are so opposed to a global economy that makes things more affordable for everyone.

Trade barriers keep billions in poverty around the world. If wages drop for everyone, that's alright as long as the cost of goods drops as well (which is what it happening with free trade).

Embrace a better world!

[0rganism]

7. The inequities are not in wages alone

There's also the question of what those wages can buy, and what kind of living conditions one has to enjoy the fruits of those wages. If wages drop for everyone, what guarantee do we have that life will improve for anyone? If a labor consumer can always count on exploiting inequities in an unregulated labor market, then the cheapest labor source sets the standard all labor will approach in the process of attaining competitive equilibrium. If those standards are sweatshops and barrios, then that's where we're headed.

Is that the "better world" you plan to embrace?

[IrateCitizen]

19. Because it doesn't make everything more affordable

I'm so sick to death of this kind of simplistic drivel regarding trade issues. It sounds as if you just copied and pasted this from a Thomas Friedman op-ed in the NYT.

Full globalism, as you propose, is utterly unworkable for several reasons. However, it is advantageous for specific areas to band together in common interest to form regional trade blocs. The EU is an excellent example of this. Their approach has helped to minimize the pain of this transition, by ensuring that the living standards of poorer members are raised UP, rather than just pushing DOWN the living standards of workers receiving greater compensation.

To expect the countries of Africa and Latin America to compete on the same field as the US and EU is pure folly. Of course, there are steps that the US and EU can take to help them along, namely by eliminating agricultural subsidies and opening their agricultural markets to foreign goods. But many of these countries need to pursue the very process of modernization, and must be free to pursue it in their own way. Imposing one-size-fits-all trade rules on them will only hamper this process while pushing living standards down for already modernized nations.

Furthermore, if you look at the path of development of successful economies, all of them adopted PROTECTIONIST measures until their economies were ready to compete on a bigger scale. The developing nations of the world must be afforded the same opportunities as the likes of Europe, the US, Japan and South Korea in order to truly achieve modernization and industrialization. Your utopian vision of "free trade" just ain't gonna do it.

[mhr]

24. Yes! You Hit The Nail ON The Head, But The Compromise will Never Happen

We are heading for a new social civil war as ever more people like myself have nothing left to lose after being economically estranged from the American Dream.

Unemployed four years now. So with two college degrees and no prospects, the American Dream is DEAD for me.

I no longer believe!

It won't take much to motivate similarly effected people to extract a pound of flesh.

One would suspect that flesh might look, smell, and taste like ultra-wealthy republicans.

[TO Kid]

4. It's old news

In the 70s the bogeyman was Japan, in the 80's it was Korea, in the 90s it was Mexico, now it's China and India.

[0rganism]

8. And what if those "bogeymen" are real?

Maybe you don't remember? In the '70s, Japan developed a formidable technology base and took a huge bite out of American automotive and consumer goods production. Now I don't recall the "bogeying" of (South) Korea, although their economy has certainly blossomed over the last 20 years, but southeast Asia in general has become a fantastic labor sink for manufacturing jobs. Mexico provided an additional cheap labor base after NAFTA, increasing salary inequities between labor and owners over the decade. China and India are huge labor resource pools. If you don't think our current job situation owes anything to their availability, you haven't been paying attention.

I've worked for companies that had me training Malaysian and Indian tech workers, and watched production in American fabs drop while new ones developed overseas. I've seen real people losing their middle-income jobs, and go hunting for work in the "service sector". And you want to shrug it off as an imaginary phenomenon? There's a reason the minimum wage hasn't kept up with inflation.

It's all about competitive equilibrium. You've been selling doodads for a long time at price X, and now an overseas doodad source is going to sell comparable doodads to doodad users for price 0.01*X. What's going to happen to the doodad market?

[TO Kid]

12. Still lots of manufacturing here

The fact remains that even through all the scares, domestic manufacturing output has been increasing steadily, employment numbers fairly consistent, and the increase in high-end (professional, managerial, technical) employment has outstripped the manufacturing job loss

[area51]

14. "Still lots of manufacturing here"...

... of burgers. This republinazi administration is counting fast-food jobs as manufacturing.

[IrateCitizen]

18. Then how do you explain the fact that...

... the purchasing power of people in the bottom three income quintiles has actually gone DOWN over the past 30 years, while the purchasing power of those in the top 2% has gone up well over 100%?

Our manufacturing here is a joke compared to what it once was. Of course, this was inevitable, considering that we were responsible for over half of the world's production following WWII. The problem is that no politicians or economists in positions of power have been willing to address the realities of this situation, namely a decline in US economic influence throughout the world, especially vis a vis Europe and Japan -- and instead have adopted policies geared toward squeezing every last drop of productivity out of fewer and fewer workers, hogging global investment capital, and maintaining absurdly high consumer spending patters in hopes of maintaining the illusion of a no longer existent global hegemony.

the increase in high-end (professional, managerial, technical) employment has outstripped the manufacturing job loss

Considering that those losing their jobs in manufacturing require training for the jobs you just listed, please explain how this has resulted in anything close to a balance. Also, please address the impact of increasing flight of technical jobs overseas on such an assertion.

[porkrind]

23. Strongly disagree!

Could you please post some links or give further explaination? What you describe bears no resemblance to the America I live in. I wish it were that way.

[phantom power]

5. equilibrium

On average, Americans have a far higher standard of living than the rest of the world. The difference is less between us and other 1st-world countries, but even there, we consume more resources than our European or Asian counterparts.

Globalization represents a flow towards equilibrium. I'm pretty sure this means America is headed towards a lower standard of living. In the long run, it may not need to be a zero-sum game, but over the next few decades there will be competition.

It's already starting. China is competing for steel and concrete, and the prices are rising sharply. And their standard of living is still far less than ours.

I don't think it needs to be an utter catastrophe, but I do think we're headed for a recession, as our economy continues to equalize with the rest of the world.

[mastein]

6. More than one

This is a very complex issue, and will like all macroeconomic issues be based on both politics and individual micro economic decisions. Some businesses will continue to go off shore looking for cheaper labor etc. Some like service industries cannot do that.

In terms of what you call "subsidies" that has already happened in the form of tax cuts which are balloning the Federal deficit and the National Debt.

This sort of large scale question can and should be debated in a more precise manner, and often as things change here and abroad.

[0rganism]

9. subsidies...

Subsidies for labor definitely haven't been the role of the recent tax cuts, which are primarily geared towards the owning/investing classes. Indeed, we could have eliminated FIT entirely for everyone below median income, and seen only a minor difference in total revenue uptake -- something I've long thought would be a good idea.

A real subsidy for labor would look like socialized health care, or free public higher education, or fixed-income housing -- a real tangible benefit for the low-wage worker.

What the tax cuts have given us instead is a subsidy for the wealthy. Now that the "trickle-down" effect can be distributed elsewhere in the world, any argument that American labor will benefit from these cuts is rendered moot. Any re-investment in the manufacturing sector is more likely to occur in a cheaper labor market.

[mastein]

11. Points well taken

I agree that the current tax code is regressive and that the tax cuts went to the wrong group. I am curious to hear more about your idea of completely eliminating fed. inc. tax below mdn income as I believe the strength of a consumption based economy is the consumption of 3rd and 4th quartiles.

I further agree that capital is now more mobile than ever before and will continue to be exported if there are no consequences for doing so.

There were a couple of bones tossed to the lower end of the scale (and that's about all it was) in the last tax code revsions.

Like I said there are lots of topics within in this one, that are worthy of much more time than I currently have to sit here and type, but this is a good start.

[oscar111]

22. service jobs CAN go to India. All of them. Not one US job left.

Surgery has been done from Aust. to US by robotic gloves, internet, cameras, and robotic hands with the scapel.

Same could send burger flipping to India. Robots dont get paid for house rent, or healthcare, or food. Coming in say six years?

BTW, India's workers take our jobs, then robots in India take the last human job away.

World is 100 billionaires, and millions of robots. 6 billion starve in a month. Like that?

[mhr]

10. Unemployed 4 Years - Ex-Telecom Worker

2 College Degrees:

BSEE
MBA

Honorably Discharged Naval Officer

Commercial Pilot

Have over 2000 resumes out the door.

Have not had a significant inquiry in years.

Plan to be homeless soon, the savings are finally running out.

Don't tell me that outsourcing has not had an impact on the job market.

If you do, I'll spit in your face!

[andyjackson1828]

20. 4 years?

Is it possible that a previous employer is blackballing you?

[mhr]

25. It's Possible, I Have Yet To Get To That Stage In The Hiring Process

We are talking no inquiries at all here!

[Yavin4]

13. If I Hear "The Japanese Bogeyman" Argument One More Time...

I'm going to scream. What we saw in the 80s with the Japanese was indeed FREE TRADE. We saw a nation develop ITS OWN industries and compete globally with superior products and win. That's the kind of trade that benefitted EVERYONE!!

What we're seeing today with outsourcing and globalization IS NOT FREE TRADE!!!! It's massive devaluation of labor wages, and it will lead to the impoverishment of the entire world.

[IrateCitizen]

17. Actually, that's not entirely true...

Chalmers Johnson proposes in his book Blowback that the US actually initiated favorable trade terms toward Japan and Korea in the wake of their post-WWII reconstruction in order to placate the ongoing US military presence in those countries. We never thought that they would actually surpass us in terms of economic and industrial clout at the time. When they actually did catch up and begin to surpass us, we were caught flat-footed.

Also notice how, in the aftermath of the Japanese surge in the 1980's, along with the continued economic expansion of the entire Pacific Rim in the 1980's and 1990's, you had the Asian financial crisis of 1997. This was an event almost wholly instigated by the actions of the International Monetary Fund, a virtual international arm of the US Treasury. As Asian businesses collapsed, US investors moved in to buy them up. And the Asians noticed this happening, and you can be certain they will NOT allow a similar scenario to repeat in the future. It's also interesting to note that the one country largely unaffected by this -- Malaysia -- basically told the IMF to stick it when they tried to force their "reforms" in the face of the crisis.

[0rganism]

15. So far NO ONE thinks offshoring improves 3rd-world labor conditions?

Come on, this one is the Big Banana for proponents of global "free" trade! It's gonna really do wonders for all those people making $.10/hour in a maquiladora, right? Their standard of living is set to shoot through the roof, as their working conditions improve to those of the unionized American jobs they replaced.

RIGHT????

[IrateCitizen]

16. Difference between EU and US approaches to "globalization"

The United States could stand to learn a few lessons about how to properly conduct globalization by studying what the EU has done since its inception -- particularly the policies pursued with the proposed introduction of poorer Eastern European nations into the fold.

Rather than use the lower wages of Eastern European workers as a leverage against the better wages of their counterparts in Western Europe, the EU has decided to put policies in place to provide a base "floor" for wages and benefits in those Eastern European countries in order for integration to take place. While the "floor" is not exactly equal to the salary of workers in Western Europe, it is high enough to prevent a mass exodus of jobs from the Western European nations while still keeping Eastern Europe attractive to outside investment.

The transition is by no means painless, but it appears that the EU has taken steps to minimize the pain for all involved.

Contrast that kind of approach to the one pursued by the US in NAFTA and FTAA -- a kind of corporate oligarchy under which wages, environmental protections and the rights of communities are all pushed down in order to further the short-term bottom line. It appears that the EU realizes that a good wage and living standard for workers is in its best LONG-term interest, while the United States is completely unable to concentrate on anything but the SHORT-term.

BTW -- I voted "more than one of the above". I think that wages in the US will continue to be pushed down in pursuit of quarterly corporate profits, but FTAA will never pass as Brazil and Argentina refuse to come on board, South America will form its own trade organization not exactly welcoming to US involvement, the EU will continue to move toward an integrated and independent Europe with a similar path taken by the Pacific Rim led by Japan and an emerging China. The US will become increasingly isolated as the rest of the world realizes that it can get along without the US at the time that the US is realizing it cannot get along without the rest of the world.

[oscar111]

21. We cant compete;so, EU style cooperation?

India and China together have 8 workers to our one. Could we form some sort of economic cooperative to avoid competing? We will lose competing. EU is cooperation among nations. Why not a US India China cooperative?