The Offshored Economy

[Donnachaidh]

http://ow.ly/1oPiq


March 19, 2010 " -- In the 20th century, Detroit, Mich., symbolized American industrial might. Today it symbolizes the offshored economy.

Detroit’s population has declined by half. A quarter of the city—35 square miles—is desolate with only a few houses still standing on largely abandoned streets. If the local government can get the money from Washington, urban planners are going to shrink the city and establish rural areas or green zones where neighborhoods used to be.

President Obama and economists provide platitudes about recovery. But how does an economy recover when its economic leaders have spent more than a decade moving high productivity, high value-added middle class jobs offshore along with the Gross Domestic Product associated with them?

Some very discouraging reports have been issued this month from the Bureau of Labor Statistics. There have been record declines in both jobs and hours worked. At the end of last year, the U.S. economy had fewer jobs than at the end of 1997, twelve years ago. Hours worked at the end of last year were less than at the end of 1995, fourteen years ago.

The average workweek is falling and currently stands at 33.1 hours for non-supervisory workers.

In a major problem for economic theory, labor productivity or output per man hour and labor compensation have diverged markedly over the last decade. Wages are not rising with productivity. Perhaps the explanation lies in the productivity data. Susan Houseman found that U.S. labor productivity statistics might actually be reflecting the low wages paid to offshored labor. An American company with production in the U.S. and China, for example, produces aggregate results in labor output and labor compensation. The productivity statistics thus measure the labor productivity of global corporations, not that of U.S. labor.

More at the link above --

[nebenaube]

1. Yep... kiss Social Security goodbye

because those outsourced jobs are not paying into the pool.

[OhioChick]

2. K&R n/t

[moondust]

3. Many places may never recover.

As long as corporations can stalk the globe in search of the cheapest labor on the planet and then re-import products and services without a significant deterrent, the offshoring will continue. Eventually they may find some people somewhere who will work for nothing more than room and board because it's more than they currently have. This is the road to slavery.

As far as I can tell, government is the only entity with the power to create a significant permanent deterrent.

Don't hold your breath.