Losing jobs overseas

[atlantabiolab]

"Save Manufacturing Jobs"
by Thomas Sowell (January 14, 2004)

"Manufacturing jobs" has become a battle cry of those who oppose free trade and are sounding an alarm about American jobs being exported to lower-wage countries overseas. However, manufacturing jobs are much less of a problem than manufacturing confusion.

Much of what is being said confuses what is true of one sector of the economy with what is true of the economy as a whole. Every modern economy is constantly changing in technology and organization. This means that resources -- human resources as well as natural resources and other inputs -- are constantly being sent off in new directions as things are being produced in new ways.

This happens whether there is or is not free international trade. At the beginning of the 20th century, 10 million American farmers and farm laborers produced the food to feed a population of 76 million people. By the end of the century, fewer than 2 million people on the farms were feeding a population of more than 250 million. In other words, more than 8 million agricultural jobs were "lost."

Between 1990 and 1995, more than 17 million American workers lost their jobs. But there were never 17 million workers unemployed during this period, any more than the 8 million agricultural workers were unemployed before.

People moved on to other jobs. Unemployment rates in fact hit new lows in the 1990s. None of this is rocket science. But when the very same things happen in the international economy, it is much easier to spread alarm and manufacture confusion.

There is no question that many computer programming jobs have moved from the United States to India. But this is just a half-truth, which can be worse than a lie. As management consultant Peter Drucker points out in the current issue of Fortune magazine, there are also foreign jobs moving to the United States.

In Drucker's words, "Nobody seems to realize that we import twice or three times as many jobs as we export. I'm talking about the jobs created by foreign companies coming into the U.S.," such as Japanese automobile plants making Toyotas and Hondas on American soil.

"Siemens alone has 60,000 employees in the United States," Drucker points out. "We are exporting low-skill, low-paying jobs but are importing high-skill, high-paying jobs."

None of this is much consolation if you are one of the people being displaced from a job that you thought would last indefinitely. But few jobs last indefinitely. You cannot advance the standard of living by continuing to do the same things in the same ways.

Progress means change, whether those changes originate domestically or internationally. Even when a given job carries the same title, often you cannot hold that job while continuing to do things the way they were done 20 years ago -- or, in the case of computers, 5 years ago.

The grand fallacy of those who oppose free trade is that low-wage countries take jobs away from high-wage countries. While that is true for some particular jobs in some particular cases, it is another half-truth that is more misleading than an outright lie.

While American companies can hire computer programmers in India to replace higher paid American programmers, that is because of India's outstanding education in computer engineering. By and large, however, the average productivity of Indian workers is about 15 percent of that of American workers.

In other words, if you hired Indian workers and paid them one-fifth of what you paid American workers, it would cost you more to get a given job done in India. That is the rule and computer programming is the exception.

Facts are blithely ignored by those who simply assume that low-wage countries have an advantage in international trade. But high-wage countries have been exporting to low-wage countries for centuries. The vast majority of foreign investments by American companies are in high-wage countries, despite great outcries about how multinational corporations are "exploiting" Third World workers.

Apparently facts do not matter to those who are manufacturing confusion about manufacturing jobs.

 

[Lao Tzu]

you didnt even include the first industrial revolution, which unemployed around 80% of factory workers.

Even though this is all true, it doesnt change the pain & fear people who lose their jobs go through. Unless you address that people will be strongly in favor of protectionism.

 

[Apöllo]

Look dudes, you have to remember the Number #1 Watched Sport in America is NASCAR. That says a lot about our population. People need those low paying jobs.

 

[Lao Tzu]

In other words, if you hired Indian workers and paid them one-fifth of what you paid American workers, it would cost you more to get a given job done in India. That is the rule and computer programming is the exception.

Not true. Engineering and financial jobs are being exported too. Supposedly science jobs like chemistry, biology, etc will start being exported too.

You also have to take into account that i think about 5 of the top 10 fastest growing jobs in america are generally low wage jobs with either no college or 1 year college (medical assistant, cashier, etc) while at the same time some of the highest paying skilled jobs (engineer, computer programmer, scientist, financial worker) and unskilled (manufacturing) are being exported. this creates a mindset of exploitation, even if the numbers dont support that claim. However i havent seen the numbers on the subject yet.

 

[Lao Tzu]

dont nobody want to reply

 

[MattTheSkywalker]

Re: Re: Losing jobs overseas

Not true. Engineering and financial jobs are being exported too. Supposedly science jobs like chemistry, biology, etc will start being exported too.

You also have to take into account that i think about 5 of the top 10 fastest growing jobs in america are generally low wage jobs with either no college or 1 year college (medical assistant, cashier, etc) while at the same time some of the highest paying skilled jobs (engineer, computer programmer, scientist, financial worker) and unskilled (manufacturing) are being exported. this creates a mindset of exploitation, even if the numbers dont support that claim. However i havent seen the numbers on the subject yet.

Computer programming exportation is shown to have many flaws as benefits - many jobs come back with so many bugs and flaws, that skilled programmers are needed to de-bug, which brings the cost up.

Low wage jobs always grow faster - they're easy to grow. Someone figures outhow to break something down, and BAMMO, an explosion, usually short lived.

A "mindset" is created when one example of a guy who lost his job and his house and his wife and his kids is repeated 10000 times with warnings that "it could happen to you".

Those kinds of claims are best received by the same people that trample each other at wal-mart for the $29 DVD player while bitching about outsourcing. Bizarre.

Standard of living goes up up up.

 

[Lao Tzu]

If vocational education was easier to obtain, quicker and cheaper than it is now then cries against protectionism would go down alot. But they are not, and as long as people have few/no financial options other than a career which could be outsourced people will favor protectionism, even if it means they spend an extra $10 on a DVD player. Financial & vocational mobility would help increase the standard of living and keep the US competetive but we don't have them. What can you do if you lose your job? take 2 years off, work nights part time for $6/hr (if you can find a job) and go to community college while running up 20k a year in loans?

 

[MattTheSkywalker]

If vocational education was easier to obtain, quicker and cheaper than it is now then cries against protectionism would go down alot. But they are not, and as long as people have few/no financial options other than a career which could be outsourced people will favor protectionism, even if it means they spend an extra $10 on a DVD player. Financial & vocational mobility would help increase the standard of living and keep the US competetive but we don't have them. What can you do if you lose your job? take 2 years off, work nights part time for $6/hr (if you can find a job) and go to community college while running up 20k a year in loans?

I don;t exactly know what this is a response to.

Vocational education is far from unobtainable. Is there some 'exploitation' at those schools?' Yes, if you think being an MCSE is your key to financial independence, you aer getting lied to.

Cries against protectionism? People love protectioniosm - show a few dark faces or slanty eyes getting jobs we are losing and it whips Americans into a frenzy. The first immigration law was the "Chinese exlcusion act' passed around 1875 to keep the Chinese from taking too many railroad jobs. Protectionism didn;t arrive this election cycle - look at the Japanese auto industry in teh 1970s and 1980s, the way it was received here.

What's so funny is that protectionism HARMS the group at the expense of a few - sort of like fascism. Unions and the klike aer part of the reason American corporations can't WAIT to go overseas.

Protectionism hastens more Americans into $6 an hour jobs than anything else.

I can't respond much more because I am not exactly sure what you points are.

 

[Lao Tzu]

my point is if switching vocations was easier i think people would be less opposed to shipping jobs overseas. If a person has no options other than a job that will be switched overseas then they will be very opposed to international trade. However if they have an easier time obtaining quick educations that give them living wages then people won't oppose this as much. Going from a $19/hr manufacturing job to a $7/hr taco bell job is a major jump, so is going from a $40/hr IT job to a $11/hr IT job. People need flexible, quick, new educations to survive in the modern economy but thats not realistic as education is still designed for 18 year olds with 2-4 years to kill and nothing better to do than go to school.

 

[MattTheSkywalker]

my point is if switching vocations was easier i think people would be less opposed to shipping jobs overseas.

of course they would. And less protectionism would make it easier to switch vocations or careers.

If a person has no options other than a job that will be switched overseas then they will be very opposed to international trade..

Let them pay $1,100 for a DVD player then.

However if they have an easier time obtaining quick educations that give them living wages then people won't oppose this as much.

Is there more to this statement than "people want something for nothing"?

Going from a $19/hr manufacturing job to a $7/hr taco bell job is a major jump, so is going from a $40/hr IT job to a $11/hr IT job.

The IT job loss is a market correction.

The other loss - you've dramatized somewhat but I get your point - if it happens enough, themarket settles out where the cost of living drops enough to offset lost wages. That guy won't stay at $7 per hour very long.

People need flexible, quick, new educations to survive in the modern economy but thats not realistic as education is still designed for 18 year olds with 2-4 years to kill and nothing better to do than go to school.

Irnoically the state of education today is in place because of teacher union protectionism. I'd love to open that market.