WSJ Shocker on Globalization
“Globalization will put as many as 40 million American jobs at risk of being shipped out of the country in the next decade or two.” This comes from a very unusual source: the Wall Street Journal — one of the strongest and most consistent advocates of unchecked globalization. Yet a recent article entitled “Pain From Free Trade Spurs Second Thoughts” chronicles the mounting economic repercussions for US workers seems to represent a major crack in their globalization armor.
It concludes not by calling for any trade restrictions, but rather for more help for American workers. To their credit, they call for more than just token retraining programs, which is positive. The star of the article, an economist, is a respected Democratic consultant and apparently the presidential candidates are listening.
WSJ: For decades, Alan S. Blinder — Princeton University economist, former Federal Reserve Board vice chairman perennial adviser to Democratic presidential candidates — argued, along with most economists, that free trade enriches the U.S. and its trading partners, despite the harm it does to some workers…Yet today Mr. Blinder has changed his message — helping lead a growing band of economists and policy makers who say the downsides of trade in today’s economy are deeper than they once realized.
Mr. Blinder…remains an implacable opponent of tariffs and trade barriers. But now he is saying loudly that a new industrial revolution — communication technology that allows services to be delivered electronically from afar — will put as many as 40 million American jobs at risk of being shipped out of the country in the next decade or two. That’s more than double the total of workers employed in manufacturing today. The job insecurity those workers face today is “only the tip of a very big iceberg,” Mr. Blinder says.
Some critics are going public with reservations they’ve long harbored quietly. Nobel laureate Paul Samuelson, whose textbook taught generations, damns “economists’ over-simple complacencies about globalization” and says rich-country workers aren’t always winners from trade. He made that point in a 2004 essay that stunned colleagues. Lawrence Summers, a cheerleader for trade expansion as Clinton Treasury secretary, says people who argue globalization is inevitable and retraining is enough to help displaced workers offer “pretty thin gruel” to the anxious global middle class.Others are finding the debate moving closer to positions they’ve had for years. Ralph Gomory, International Business Machines Corp.’s former chief scientist who now heads the Alfred P. Sloan Foundation, says that changing technology and the rise of China and India could make the U.S. an also-ran if it loses many of its important industries. Harvard economist Dani Rodrik says global trade negotiations should focus on erecting new barriers against globalization, not lowering them, to help poor nations build domestic industries and give rich nations more time to retrain workers.
Mr. Blinder’s job-loss estimates in particular are electrifying Democratic candidates searching for ways to address angst about trade. “Alan, because of his stature, provided a degree of legitimacy to what many of us had come to feel anecdotally — that the anxiety over outsourcing and offshoring was a far larger phenomenon than traditional economic analysis was showing,” says Gene Sperling, an adviser to President Clinton and, now, to Hillary Clinton. Her rival, Barack Obama, spent an hour with Mr. Blinder earlier in this year.
Mr. Blinder’s answer is not protectionism, a word he utters with the contempt that Cold Warriors reserved for communism. Rather, Mr. Blinder still believes the principle British economist David Ricardo introduced 200 years ago: Nations prosper by focusing on things they do best — their “comparative advantage” — and trading with other nations with different strengths. He accepts the economic logic that U.S. trade with large low-wage countries like India and China will make all of them richer — eventually. He acknowledges that trade can create jobs in the U.S. and bolster productivity growth.
But he says the harm done when some lose jobs and others get them will be far more painful and disruptive than trade advocates acknowledge. He wants government to do far more for displaced workers than the few months of retraining it offers today. He thinks the U.S. education system must be revamped so it prepares workers for jobs that can’t easily go overseas, and is contemplating changes to the tax code that would reward companies that produce jobs that stay in the U.S.
June 6th, 2007 at 6:31 pm
If we can’t compete, we will lose a lot of jobs in many sectors. What would you do to compete? They have lower healthcare costs, lower tax on corporate profits, lower labor costs, stress education for high tech employees, graduate 700,000 engineers (many in our colleges either as a part of that or in addition, not sure) in China and India, lower litigation costs, “economic zones” with special breaks, a growing consumer base, and new infrastructure being built in many areas.
What would you do if you were President and had a Congress that listened to you?
June 6th, 2007 at 6:47 pm
SMART TRADE!
We need to have real free trade with countries that have human rights, honor IP laws and give workers rights ie England, Canada…….
On Countries like China, Oman…. we put fines on their products taking away the incentive to steal ,exploit workers and violate of trade deals.
June 6th, 2007 at 7:51 pm
Jan Paul I would Compete by bringing in 20 million unskilled and uneducated workers from a country where they have no health care and give them the bare minimum. They would and will work for less wages then the people of the country whose jobs they are taking and be grateful because where they came from they were living on whatever they could scrounge out of the dump.Does that sound familiar?
June 6th, 2007 at 7:53 pm
Mike
Good point!
June 6th, 2007 at 8:16 pm
John to me the biggest travesty of the immigration bill is that it does not address the problem of Mexico.
June 6th, 2007 at 8:16 pm
LeftHook,
You’re shocked by an article more than two months old?
“It concludes not by calling for any trade restrictions, but rather for more help for American workers.”
—Sounds reasonable to me.
We have a study here in HK that was recently released that show the various value-additions to a Made-in-China laptop.
Out of a US$700 wholesale prices calculated for the purposes of US imports, about $350 is the screen (made in Taiwan), $100 for Microsoft software, $100 for the Intel chip and $150 for the China added-value.
Taiwan: 50.0%
USA: 28.6%
China: 21.4%
But, it counts as $700 worth of imports from China.
= = = = = = = = = = = = = = = = = = = =
Jan Paul,
“They have lower healthcare costs, lower tax on corporate profits, lower labor costs, stress education for high tech employees, graduate 700,000 engineers (many in our colleges either as a part of that or in addition, not sure) in China and India, lower litigation costs, “economic zones” with special breaks, a growing consumer base, and new infrastructure being built in many areas.
What would you do if you were President and had a Congress that listened to you?”
How about . . . ?
1. lower healthcare costs;
2. lower tax on corporate profits;
3. lower labor costs;
4. stress education for high tech employees;
5. let immigration produce 700,000 engineers;
6. lower litigation costs;
7. create “economic zones” with special breaks;
8. let immigration produce a growing consumer base; and
9. build new infrastructure
How’s that for a start on how America can compete?
Too difficult?
Too bad.
June 6th, 2007 at 8:32 pm
Mike
You are right you cannot fix immigration without trade!
June 6th, 2007 at 8:34 pm
David
The empty factories are all over the place!
June 6th, 2007 at 10:46 pm
David, can you post a copy of that study?
June 6th, 2007 at 11:13 pm
David said:
How about . . . ?
1. lower healthcare costs;
2. lower tax on corporate profits;
3. lower labor costs;
4. stress education for high tech employees;
5. let immigration produce 700,000 engineers;
6. lower litigation costs;
7. create “economic zones” with special breaks;
8. let immigration produce a growing consumer base; and
9. build new infrastructure
How’s that for a start on how America can compete?
Too difficult?
Too bad.
———————–
Hmmm? Kind of tough for a socialist nation like the U.S. to do. Yup! Too difficult! It would take citizens willing to vote for the reforms needed to do those things and it would mean that citizens would have to pay more taxes themselves. Yup. Too difficult for this nation of voters who want a nanny government.
June 7th, 2007 at 4:55 am
LeftHook,
Sorry, not my copyright.
= = = = = = = = = = = = = = = = = = = =
Mr Konop,
Did you miss the point?
Even if US factories are empty (and trust me, you don’t know what empty factories are until you’ve been to Hong Kong!), why in the world would that justify ruining China’s economy?
What did they ever do to you?
June 7th, 2007 at 5:43 am
David
Your logic is we should let China exploit people to hurt working class Americans to help Communist China?
June 7th, 2007 at 9:27 am
China is totalitarian, like Dubai but, is it communist?
David, haven’ they been moving to private ownership, own their own homes, own their own businesses, pay into a personal social security account (with bus. and gov. contribution too old age) have personal health savings accounts, etc.
In short, aren’t they moving more to an personal “ownership society” whereas communism is collective ownership? aren’t education and improved skills being rewarded with higher wages instead of a more “collective wage” system.
You are there David. What do you see? Even a totalitarian government can be capitalist.
Dubai, also, totalitarian but rising wages, education, private ownership, etc. Remember Pinochet had totalitarian rule to end socialism and move to capitalism because socialists were destroying Chile.
That doesn’t mean I support illegal trade activities or unfair ones but, we have to remember to use correct descriptions.
We exploited our workers when we were a growing nation. We had children working in factories for a nickel an hour and for more than 10 hours a day. We had to reform many things we did that exploited workers and led to the power of unions supported by government because voters elected those who supported unions.
That is why having organizations like WTO undermines the U.S. from doing just one-on-one negotiations.
You can’t just act but, have to go through a WTO process that takes quite a while and even then the WTO may rule against you in cases where special exemptions have been given a nation like China.
Our problem with China has more to do with our own past policies that put us in a bad trading position than with what China as a developing economy is doing illegally. We literally agreed to trade in a manner that invited this but surrendering our trade rights to an international body.
Also, if China is so bad, why are we allowing them to be our banker? Don’t we as a sovereign nation have a right to restrict who buys the debt Americans end up being obligated to? Our need for China to keep loaning us money along with Russia and OPEC is losing us more and more ability to “call the shots” every day.
China was doing all the things we don’t like before we entered them in the the WTO agreement and yet, we went ahead and did it. We are our own worst enemy.
June 7th, 2007 at 9:40 am
Jan
Good Point!
June 7th, 2007 at 8:55 pm
Mr Konop,
You still don’t get it, do you?
I’ll try to type more slowly, so you can follow along:
Almost 30 years ago, we told China to stop being communist.
They did.
They stopped.
They aren’t communist anymore.
If they were, they wouldn’t be able to sell America $700 laptops.
.
Imports from China don’t hurt American workers.
Taiwan: 50.0% - - USA: 28.6% - - China: 21.4%
.
Imports from China help American workers.
Taiwan: 50.0% - - USA: 28.6% - - China: 21.4%
.
Bashing China doesn’t help American workers.
Bashing China hurts American workers.
.
Got it?
= = = = = = = = = = = = = = = = = = = =
Jan Paul,
Whew. Now I can type at a normal speed.
Yes, there was a revolution in post-Mao China that succeeded in sweeping away the last vestiges of communism, in stages. The first step was the October 1976 coup ‘d etat, followed by peaceful purges (nobody shot in the back of the neck) in 1977-80. By February 1980 it was over, so they invaded Vietnam.
The leaders labeled “capitalist roaders” during the Cultural Revolution were back in power.
In the 1980s, there was a second round, between the comprehensive reformers and the socialists. By 1988, the comprehensive reformers had won. The Tiananmen Square massacre was a set-back for the reformers, but in 1992 Deng Xiaoping made his famous “southern tour” and said “to get rich is glorious.”
After that, the smart thing to do if you were a socialist was to get out of the way. Those that didn’t got run over by the Progress Train. Straight line, non-stop progress from the 3rd century to the 21st.
.
Never in all of human history have so many people had their standards of living improved to such a great extent in such a short amount of time. Never.
.
Personal ownership? Yes.
Pay for performance? Yep.
Private education? Yeah.
Corruption? Natch.
Freedom to travel? OK.
Wide-spread wealth? Of course.
Powerful, independent trade unions? No.
Tolerance for dissent? Are you kidding?
= = = = = = = = = = = = = = = = = = = =
“That is why having organizations like WTO undermines the U.S. from doing just one-on-one negotiations.”
—We have the market, and other countries want in. If America were not a part of the WTO, we would be the dictator, the totalitarian ruler of trade agreements. No one could possibly stand up to us, and no one would. We would act as Mr Konop seems to think China does, just dictating terms with no negotiation whatsoever. Take it or leave it, buster.
That isn’t in keeping with what I believe to be American values.
.
The WTO, World Bank, IMF – the Bretton Woods institutions – were created in the 1940s to help pull the war-shattered Europeans out of poverty and to avoid giving the USSR any easy pickings. It was extended to other parts of the world in the 1950s and later. Keep it in the context of the times: we gave up a lot of power to help our neighbors, friends and strategic allies resist communism.
Guess what?
It worked.
We won.
Yippee!
Nobody bitches about the price paid to win World War II, but everyone seems to think that World War III should be cost-free. It wasn’t, it isn’t and that won’t change.
I happen to think it is important to continue to fight the blind, ignorant protectionism, isolationism and racist xenophobia that destroys lives. If you think we should surrender, lay it out in so many words.
= = = = = = = = = = = = = = = = = = = =
China as banker: when the US spends far, far too much money on pork-barrel projects and tax cuts for the rich, the Treasury issues bonds to pay for the banquet.
Those bonds are available on the open market and are the most stable, liquid financial instruments in the world.
We have no say over who buys them or at what price.
If China decided to buy US T-bills, they can get them from us or from London or Hong Kong.
There is no consideration of “allowing them to be our banker.”
.
June 7th, 2007 at 9:50 pm
Mr Konop,
You still don’t get it, do you?
I’ll try to type more slowly, so you can follow along:
Almost 30 years ago, we told China to stop being communist.
They did.
They stopped.
They aren’t communist anymore.
If they were, they wouldn’t be able to sell America $700 laptops.
.
Imports from China don’t hurt American workers.
Taiwan: 50.0% - - USA: 28.6% - - China: 21.4%
.
Imports from China help American workers.
Taiwan: 50.0% - - USA: 28.6% - - China: 21.4%
.
Bashing China doesn’t help American workers.
Bashing China hurts American workers.
.
Got it?
= = = = = = = = = = = = = = = = = = = =
Jan Paul,
Whew. Now I can type at a normal speed.
Yes, there was a revolution in China, post-Mao that succeeded in sweeping away the last vestiges of communism in stages. The first step was the October 1976 coup ‘d etat, followed by leadership house cleaning in 1977-80. By February 1980 it was mostly over.
The ones labeled “capitalist roaders” during the Cultural Revolution were back in power.
In the 1980s, there was a second round, between the comprehensive reformers and the socialists. By 1988, the comprehensive reformers had won. The Tiananmen Square massacre was a set-back for the reformers, but in 1992 Deng Xiaoping made his famous “southern tour” and said “to get rich is glorious.”
After that, the smart thing to do if you were a socialist was to get out of the way. Those that didn’t got run over the Progress Train. Straight line, non-stop movement from the 3rd century to the 21st.
Personal ownership? Yes.
Pay for performance? Yep.
Private education? Yeah.
Corruption? Natch.
Freedom to travel? Right.
Wide-spread wealth? Of course.
Powerful, independent trade unions? No.
Tolerance for dissent? Are you kidding?
= = = = = = = = = = = = = = = = = = = =
“That is why having organizations like WTO undermines the U.S. from doing just one-on-one negotiations.”
—We have the market, and other countries want in. If America were not a part of the WTO, we would be the dictator, the totalitarian ruler of trade agreements. No one could possibly stand up to us, and no one would. We would act as Mr Konop seems to think China does, just dictating terms with no negotiation whatsoever. Take it or leave it, buster.
That isn’t in keeping with what I believe to be American values.
The WTO, World Bank, IMF – the Bretton Woods institutions – were created in the 1940s to help pull the war-shattered Europeans out of poverty and to avoid giving the USSR easy pickings. It was extended to other parts of the world in the 1950s and later. Keep it in the context of the times: we gave up a lot of power, to help our neighbors, friends and strategic allies.
Guess what? It worked.
We won.
Yippee!
Nobody bitches about the price paid to win World War II, but everyone seems to think that World War III should be cost-free. It wasn’t, it isn’t and that won’t change.
I happen to think it is important to continue to fight the blind, ignorant protectionism, isolationism and racist xenophobia that destroys lives. If you think we should surrender, lay it out in so many words.
= = = = = = = = = = = = = = = = = = = =
China as banker: when the US spends far, far too much money on pork-barrel projects, the Treasury issues bonds to pay for the banquet. Those bonds are available on the open market and are the most stable, liquid financial instruments in the world.
We have no say over who buys them or at what price. If China decided to buy US T-bills, they can get them from us or from London or Hong Kong. There is no consideration of “allowing them to be our banker.”
June 7th, 2007 at 10:23 pm
This has been my point, we expect a Communist China to play by free market civilized principals. China has made it clear they will play under their rules and socialist system unless we stand up and play hard ball. Do you think the American economy can afford not to demand that China follow civilized rules of trade?
China: We Are Socialists!
Beijing (FORTUNE) – Senior U.S. officials, led by Treasury Secretary Hank Paulson, arrived inside the Stalinist-style Great Hall of the People Thursday morning, briefed and breakfasted and eager to offer guidance to Chinese leaders on how to become a “responsible stakeholder” in the global economy
According to the English translation of her remarks, she repeated six times that China was “sticking to” its “new path of industrialization,” and three times that China was “continuing to improve” on reforms already in place. Substantial free-market change wasn’t part of the equation. “By following a path of building socialism with Chinese characteristics in an independent and self-reliant manner,” she said, “we have scored glorious achievements that attracted worldwide attention.”
At debate is China not playing by the rules of the trade agreement.
CNN-But Paulson said earlier this week China could and should do more to reduce its massive trade surplus and revalue its currency. And a WTO report released Monday complained bitterly about continued rampant counterfeiting and piracy, policies limiting imports and regulatory barriers to U.S. service companies
“We see troubling indications that China’s momentum toward reform has begun to slow,” US Trade Representative Susan Schwab, a participant in this week’s meeting, wrote in the Financial Times.
June 7th, 2007 at 10:53 pm
The currency thing is a smoke screen. If they let their currency rise rapidly, our prices for seniors would explode. They would explode for all of us, but seniors only get a raise once a year and has to hope the Government reports inflation accurately.
It won’t help.
David, by allowing China, Russia and OPEC to become our bankers, I believe regardless of China’s improvements, we lose bargaining power. For that matter, all kinds of power as a debtor nation normally does to its lenders.
I think we gave up any chance of retaining our “empire” when we stopped being able to have our debt funded by our own citizens. Internal debt in a nation is one thing but external weakens a nation and I believe sovereign nations should strive to fund virtually all debt internally except in brief periods until paid back and then borrow from something like an IMF not another nation directly because you may have to trade with that nation and set terms.
When we continued to increase our debt well beyond our internal capability to fund it, we lost a lot of sovereignty and power. It isn’t China alone but any nation we have to trade with and set terms with.
The WTO was a bad deal from the beginning because it created an international ruling body that the U.S. has to bow to. The intentions are very noble, but often not in the nations best interest. The very same terms could have been made on a nation by nation basis with each trade agreement being approved by Congress as it was set down in our Constitution.
We do need to avoid protectionism but, you call trade “normal” if it requires you to lower your standards of living to compete.
Having said that, we could compete with high standards of living if we adopted policies like Ireland did where high tech education, low debt, low corporate tax, good social policies, etc. exist.
The U.S. can’t compete not because of unfair (illegal something else) trade as much as bad policies here and a nation that is dumbing down its workers.
Debt and bad tax and other policies are killing us. China isn’t the only nation that is beating us badly in the trade game but because it is so big and has become so popular, it stands out.
But, look at Australia, New Zealand, Ireland, Dubai, Singapore, etc. They are all reducing debt, growing their economies faster than the U.S. and raising their standards of living.
Here, we see our debt rising, infrastructure decaying, and buying power in decline. Each worker now owes $400,000 for the unfunded liability and still no reforms on the horizon.
June 7th, 2007 at 11:15 pm
Sorry for the double post; it took most of an hour to show up.
.
Mr Konop,
1. We defined the rules of trade, back about 60 years ago. Not China.
We had the power then, and we used it.
Now, they have some power and we have some power. Are you suggesting that we totally ignore their power, and just continue to act as if we were the only one with any power?
Not going to work.
2. Who are you advocating using American trade power against? Did you forget that 60% of China’s exports are by foreign-invested companies? Are you intending to slam companies from America – which have a huge role in Sino-US trade – or is that just ‘collateral damage’ in your little trade war?
3. What would be the source of products that replaces what we don’t buy from China? At what premium over the price we pay for items made in China?
If you don’t know the answer to that one, you are proposing destroying the existing structure without any idea what comes next, which is very, very dangerous.
4. What makes you think the US plays by the rules? Have you looked into our anti-dumping regulations? Did you know that we CURRENTLY have anti-dumping penalties against products made in China that are NOT made in America? How can companies be dumping products in America when those products are not being made in America? Why do you ignore the fact that America is a major abuser of WTO rules?
As for China being “socialist,” . . . are you that thick? What else was she supposed to say, “We’re Republican’ts” ? You can focus on the propaganda if you wish, but the serious players look at the realities.
Jan Paul,
I can only repeat:
China as banker: when the US spends far, far too much money on pork-barrel projects, the Treasury issues bonds to pay for the banquet. Those bonds are available on the open market and are the most stable, liquid financial instruments in the world.
We have no say over who buys them or at what price. If China decided to buy US T-bills, they can get them from us or from London or Hong Kong. There is no consideration of “allowing them to be our banker.”
There is no such thing as “allowing” someone to become our banker. Just STUPID fiscal policies under the Republican’ts, that’s all.
June 8th, 2007 at 12:24 am
Sorry for the double post (posts?); it took most of an hour to show up.
.
Mr Konop,
1. We defined the rules of trade, back about 60 years ago. Not China.
We had the power then, and we used it.
Now, they have some power and we have some power. Are you suggesting that we totally ignore their power, and just continue to act as if we were the only one with any power?
Not going to work.
2. Who are you advocating using American trade power against? Did you forget that 60% of China’s exports are by foreign-invested companies? Are you intending to slam companies from America – which have a huge role in Sino-US trade – or is that just ‘collateral damage’ in your little trade war?
3. What would be the source of products that replaces what we don’t buy from China? At what premium over the price we pay for items made in China?
If you don’t know the answer to that one, you are proposing destroying the existing structure without any idea what comes next, which is very, very dangerous.
4. What makes you think the US plays by the rules? Have you looked into our anti-dumping regulations? Did you know that we CURRENTLY have anti-dumping penalties against products made in China that are NOT made in America? How can companies be dumping products in America when those products are not being made in America? Why do you ignore the fact that America is a major abuser of WTO rules?
As for China being “socialist,” . . . are you that thick? What else was she supposed to say, “We’re Republican’ts” ? You can focus on the propaganda if you wish, but the serious players look at the realities.
Jan Paul,
I can only repeat:
China as banker: when the US spends far, far too much money on pork-barrel projects, the Treasury issues bonds to pay for the banquet. Those bonds are available on the open market and are the most stable, liquid financial instruments in the world.
We have no say over who buys them or at what price. If China decided to buy US T-bills, they can get them from us or from London or Hong Kong. There is no consideration of “allowing them to be our banker.”
There is no such thing as “allowing” someone to become our banker. Just STUPID fiscal policies under the Republican’ts, that’s all.
June 8th, 2007 at 6:59 am
David
You are making my point. If a multi-national company is using Chinese exploitive labor and environmental standards they should have a penalty large enough to not reward the practice.
BTW durring the CIVIL WAR many said if we set slaves free we would kill the economy!
June 8th, 2007 at 9:48 am
David
There is no such thing as “allowing” someone to become our banker. Just STUPID fiscal policies under the Republican’ts, that’s all.
=====================
I agree. I am saying that decades ago when they turned to the open market for the funding primarily, they lost their ability. The government posts those bonds on the open market while they also have non-salable bonds (paper accounting only) for the various trust funds they borrow. Those are all borrowed from U.S. workers and while the majority of our debt is still internal, too much has gone public for the very reason you state - Spending beyond our means.
John, why do you say they are “exploiting” the Chinese labor. They are exploiting low taxes and low costs but wages are rising, standard of living is rising, they have higher home ownership than we do in many cities, they are saving much more of a percentage of their wage than we are, they have personal accounts for social security that the employer contributes to as well as the gov. and employee, the middle class is rising 50 million a year, while ours either rises or fall but is shrinking, have personal health saving accounts, are getting new roads, new cities to replace decaying infrastructure ( our infrastructure is all rated “C” or worse,” have double digit growth in car purchases, expect to have 90% out of poverty by 2025, had 400,000 new brokerage accounts opened in one day, have a housing boom, etc.
Are their a billion people to go? Yes, but they are doing something to bring them up and out of poverty.
Take Kodak
quote:
Since the mid-1990s, Kodak says, sales in China have climbed from nowhere to first place; revenue grew 40% during the first half of this year. The company says it is now ahead of plan to recoup its investment, with China’s profit margins on par with those worldwide.
It’s no coincidence that Chinese are bringing home more memories from trips. The World Tourism Organization says 20 million traveled abroad in 2003 and that this number should quintuple by 2020. And digital camera sales have room to grow at a similar pace: The industry as a whole sold 1.4 million in China last year, versus 16.4 million in the U.S.
http://members.forbes.com/global/2004/1129/054.html
=========================
Yes, they have a long way to go but at the rate they are going, their standard of living will have gone from 3rd world to past us, in just a few more decades.
When you are a business and have a chance to give workers a chance in a nation that is helping those workers and the businesses rise and rise and rise, why not go there? You help the workers and the government gives you 350,000 engineers and even more skilled workers every year to draw from.
Low skill jobs are going to other nations because wages are rising and the cost of labor for low skill jobs can be reduced in Vietnam, but even there, they are making advances. China has lost 100’s of thousands of jobs to lower wage nations but replaced them with higher paying, higher skill jobs.
The government there, IS looking out for the workers at a measured pace that won’t destroy the boom. Yet, the boom is growing so fast that low wage workers are investing too much in stocks in a frothy market which has the government trying to discourage them from too much risk.
That our low wage workers would be investing and saving like they are. Yes, I am only talking about the 300 million that have risen so far and 1 billion have to rise yet, but they are.
They are building new factories, pipelines, rail lines, roads, etc to more rural areas so people making 29 cents an hour won’t have to move to the already bigger overcrowded economic zones where wages are higher. We, instead, close factories down because we can’t compete under our tax and regulation policies.
Yes, they steal patents and do underhanded things in their push to rise out of poverty. They do have corruption but, when the government cracks down on those they find corrupt, the penalty is often death, I believe (David is that true? I apologize, if it isn’t).
It is our decades of bad policies that are coming back to haunt us now that other nations (not just China, but dozens) are exploiting OUR weak internal policies that are based on socialism.
We are rapidly becoming if not already more socialist than they are. They are reducing welfare and we now have 52% of the people getting some type of government funding from either the state for feds.
We have got to start focusing more on what we are doing wrong than what China is because what they are doing wrong is at least rising people out of poverty and while wrong, they, like us, have “good intentions” but our good intentions are killing us.
David, answer me this.
I heard that during reduction of State owned businesses from 96% to around 30% they told workers being laid off to either get new skills for the private sector or face losing state benefits. Is that true? Do they have “welfare reform” that requires people work?
June 9th, 2007 at 10:27 pm
David, answer me this.
I heard that during reduction of State owned businesses from 96% to around 30% they told workers being laid off to either get new skills for the private sector or face losing state benefits. Is that true? Do they have “welfare reform” that requires people work?
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There is on one-way answer. Each province, many cities, some SOEs and the national government all have various plans, programs and instructions on what to do with laid off workers.
China isn’t a uniform monolithe. In some cases, the lay-off terms are quite harsh; in others, very generous. I’m sure what you described has happened, but I do not believe it is happening in the majority of cases.
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MNCs ‘exploiting’ Chinese workers –
Why would anyone want to work for a foreign company in China (or anywhere, for that matter)?
Foreign companies are different, they are more complicated and they are full of foreigners. Not attractive.
How, then, do foreign companies manage to hire workers? They offer better working conditions.
They have to, or they couldn’t manage to hire anyone.
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June 13th, 2007 at 9:14 am
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