Bush endorses jobs export!

[Chris A]

Are these people on another planet, or are they just so firmly painted into a corner that any spin goes, no matter how ridiculous?--CA

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February 10, 2004

Bush Endorses U.S. Jobs Moving Overseas

On Labor Day, President Bush said, "I want people to understand that when somebody wants to work and can't find a job, it says we've got a problem in America that we're going to deal with. We want everybody in this country working."1 But yesterday, President Bush directly contradicted himself, releasing a report which "supports the shift of U.S. jobs overseas."2 When asked about the report and how it contradicts the president's supposed concern about job losses, the president's top economic adviser said, "Outsourcing is just a new way of doing international trade."3

With more than two million jobs lost since President Bush took office, newspaper headlines across the country told readers of the White House's new support for the practice of wealthy corporations eliminating U.S. jobs and shipping them to lower-wage countries. The Seattle Times headline read, "Bush report: Sending jobs overseas helps U.S."4 The Pittsburgh Post-Gazette said, "Bush Economic Report Praises 'Outsourcing' Jobs"5 and the Arizona Republic said, "Bush Report Lauds 'Outsourcing' Jobs."6

And while this may be troubling to the millions in the United States who are out of work and suffering from stagnating wages, it was celebrated in India, where thousands of good paying, white-collar U.S. jobs have moved.7 The headlines in India read, "Bush Aides: Outsourcing win-win for India." The story said the Administration believes exporting jobs to India and other lower-wage countries "is a win-win for both exporter and importer"8 - failing to explain how this is a win for American workers who the president just months ago purported to care about.

Sources:

President's Remarks on Labor Day, 09/01/2003.

"Bush Supports Shift of Jobs Overseas", Los Angeles Times, 02/10/2004.

"President Calls Economy 'Strong and Getting Stronger'", New York Times, 02/10/2004.

"Bush report: Sending jobs overseas helps U.S.", Seattle Times, 02/10/2004.

"Bush economic report praises 'outsourcing' jobs", Pittsburgh Post-Gazette, 02/10/2004.

"Bush report lauds 'outsourcing' jobs", Arizona Republic, 02/10/2004.

"More job searchers just quit looking", USA Today, 02/09/2004.

"Outsourcing win-win for India, US: Bush aides", Indian Express, 02/09/2004.

[marvin g]

Let's work to get him a job over there!!!;)

[Chris A]

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February 11, 2004
OP-ED COLUMNIST

Watching the Jobs Go By
By NICHOLAS D. KRISTOF

To be permitted to read the rest of this column, you must first click here (http://graphics7.nytimes.com/images/2004/02/10/opinion/11KRIS.gif) and answer the question correctly:

Go on, try it. After all, 83 percent of Japanese high school seniors got it right (though only 30 percent of American seniors). The correct answer is (c). If you answered incorrectly, though, keep reading — think of it as a social promotion.

The topic today is the growing furor over the outsourcing of jobs to India — and, more broadly, educational lapses here. One reason for the jobless recovery in the U.S. is that it doesn't make much sense to have an American radiologist, say, examine your X-ray when it can be done so much more cheaply in New Delhi.

Indeed, why should computer software be written, taxes prepared, pathology specimens examined, financial analysis done or homework graded in the U.S., when all of that can be done more cheaply in Bangalore? I.B.M. is moving thousands of jobs to India and China, and Reuters says it will have Indian reporters cover some U.S. companies from there.

All this is unsettling. But to me the alarm seems overwrought — and dangerous, for it is likely to fuel calls for protectionism. A dozen years ago, there was a similar panic about high-tech jobs going abroad, and people said that Asia would be making computer chips while Americans produced potato chips.

Instead, free trade worked. Some autoworkers lost their jobs, but America emerged stronger than ever. Studies by Catherine Mann of the Institute for International Economics suggest that it is the same this time. Outsourcing raises American productivity, gives our economy a boost, increases foreign demand for U.S. products and leaves us better off.

Yet, as an Indian friend, Sunil Subbakrishna, pointed out to me, there is one step we should take in response to this wave of outsourcing: bolster our second-rate education system.

Mr. Subbakrishna, a management consultant specializing in technology, notes that in his native Bangalore, children learn algebra in elementary school. All in all, he says, the average upper-middle-class child in Bangalore finishes elementary school with a better grounding in math and science than the average kid in the U.S.

I saw the same thing when I lived in China and interviewed college applicants there. The SAT wasn't offered in China, so Chinese high school students took the Graduate Record Examinations — intended for would-be graduate students — and many still scored in the 99th percentile in math.

The latest international survey, called Trends in International Mathematics and Science Study, found that the best-performing eighth graders were, in order, from Singapore, South Korea, Taiwan, Hong Kong, Japan, Belgium and the Netherlands. The U.S. ranked 19th, just after Latvia. (India and China weren't surveyed.)

"For too many graduates, the American high school diploma signifies only a broken promise," declares a major new study released yesterday by three education policy organizations. Called the American Diploma Project, it found that 60 percent of employers rated graduates' skills as only "fair" or "poor."

The broader problem is not just in schools but society as a whole: There's a tendency in U.S. intellectual circles to value the humanities but not the sciences. Anyone who doesn't nod sagely at the mention of Plato's cave is dismissed as barely civilized, while it's no blemish to be ignorant of statistics, probability and genetics. If we're going to revere Plato, as we should, we should also remember that his academy supposedly had a sign at the entrance: "Let no one ignorant of geometry enter here."

In 1957, the Soviet launching of Sputnik frightened America into substantially improving math and science education. I'm hoping that the loss of jobs in medicine and computers to India and elsewhere will again jolt us into bolstering our own teaching of math and science._

[catesta]

Manufacturing confusion
Thomas Sowell
January 15, 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.

[catesta]

Third world sweatshops
Thomas Sowell
January 27, 2004

"Low-Wage Costa Ricans Make Baseballs for Millionaires."


That was the headline on one of those New York Times "news" stories that continued its recent tradition of disguised editorials. The headline said it all but the story ran on and on anyway, with details and quotes that added nothing to the familiar story that Third World workers don't earn nearly as much money as most Americans, even when they work for rich American companies.

Perhaps the best refutation of the implied message of this "news" story also appeared in the New York Times, in a frankly labeled op-ed piece by the paper's own Nicholas D. Kristof. Writing from Cambodia, Kristof reported: "Here in Cambodia factory jobs are in such demand that workers usually have to bribe a factory insider with a month's salary just to get hired."

The workers in Cambodia receive even lower wages than those in Costa Rica. But the difference is that the report from Cambodia spelled out what the local workers' alternatives were and how anxious they are to get the jobs denounced by intellectuals and politicians in affluent countries.

"Nhep Chanda averages 75 cents a day for her efforts. For her, the idea of being exploited in a garment factory -- working only six days a week, inside instead of in the broiling sun, for up to $2 a day -- is a dream."

By and large, multinational companies pay about double the local wages in Third World countries. As for "exploitation," the vast majority of American investment overseas goes to high-wage countries, not low-wage countries.

Why are these international capitalists passing up supposedly golden opportunities for exploitation? Because they understand economics better than most intellectuals and politicians, who are content to score cheap points, without worrying about the logic or the consequences.

If outsiders succeed in pressuring or forcing multinational companies to pay higher wages, that will make it more economical for those companies to relocate many of their operations to more affluent countries, where the higher productivity of the workers there will cover the higher wage rates.

Net result: Third World workers will be worse off for having lost better jobs than most of them can find locally. Meanwhile, Western intellectuals and politicians will be congratulating themselves for having ended exploitation.

At the heart of all this is a confusion between the vagaries of fate and the sins of man. All of us wish that workers in Costa Rica and Cambodia, not to mention other poor countries, were able to earn higher pay and live better lives. But wishing will not make it so and causing them to lose their jobs will not help.

It is tragic that people in some societies simply have not had the same opportunities to develop more valuable skills and that those societies have not had economic and political systems that promote economic progress comparable to that in most Western countries.

Low pay is one symptom of that fact -- and changing the symptom will not change the underlying problem, which is that the people in such countries got a raw deal from fate, history, geography or culture. But the left attempts to blame Western employers who are providing these workers with better options than they had before.

The left-wing spin is that the poor are poor because the rich are rich. That opens the door for a big power-grab by the left in the name of "fairness" or "social justice" or whatever other rhetoric resonates with the unwary and the ill-informed.

Unfortunately, this theory does not also resonate with the facts. Whether domestically or internationally, investors looking for the highest rates of return usually steer clear of poor areas and put their money where there are people with more advanced skills, living in more prosperous countries, even if they have to pay much higher salaries in such countries.

The United States, for example, has long invested more in Canada than in all of poverty-stricken sub-Saharan Africa, where wage rates are a fraction of Canadian wage rates. If the facts mattered -- and if the poor really mattered to their supposed saviors -- the implications of that would have been understood long ago.

[catesta]

Third world sweatshops: part II
Thomas Sowell
January 28, 2004

Those who vent their moral indignation over low pay for Third World workers employed by multinational companies ignore the plain fact that these workers' employers are usually supplying them with better opportunities than they had before, while those who are morally indignant on their behalf are providing them with nothing.


Some of the more rational among the indignant crusaders for "social justice" may concede that the employers are usually offering better pay than Third World workers would have had otherwise. But they see no reason why wealthy corporations should not pay wages more like the wages paid in affluent countries.

There are at least two reason why not -- one economic and one moral.

The economic reason is that output per man-hour in Third World countries is usually some fraction of what it is in Western industrial nations such as the United States. Pay rates raised without regard to productivity are a virtual guarantee of unemployment, whether it is done in the name of ending "exploitation" in the Third World or providing "a living wage" in the United States.

Most modern industrial nations have minimum wage laws but those with higher minimum wage rates or additional workers benefits tend to have higher unemployment rates.

Germany, for example, has perhaps the most employer-provided benefits mandated by government. These benefits include such huge severance pay that firing anyone is likely to be uneconomical. The costs of these benefits have been estimated as roughly double those of employer-provided benefits in the United States.

If you think that is great for the workers, remember that there is no free lunch, for workers or anybody else. The high cost of labor and the difficulties of firing anyone mean that employers are reluctant to hire, even when times are booming.

It is often cheaper to expand output by using more labor-saving machines, or to work the existing workforce overtime, rather than hire more employees. While Americans become alarmed when unemployment reaches 6 percent, double-digit unemployment has been common in Germany.

At one time, neither Switzerland nor Hong Kong had minimum wage laws. Last year, The Economist magazine reported: "Switzerland's unemployment rate neared a five-year high of 3.9 percent in February." For most countries that have minimum wage laws, 3.9 percent would be a five-year low, if not wholly unattainable.

Back when Hong Kong was a British colony and its wage rates were set by supply and demand, the Wall Street Journal reported that its unemployment rate was less than 2 percent. Then, after China took over Hong Kong and mandated various worker benefits -- which add to labor costs, the same as higher wage rates -- Hong Kong's unemployment rate went over 8 percent.

This was not high by European standards but it was unprecedented for Hong Kong. There is no free lunch in any part of the world.

Why cannot rich multinational corporations simply absorb the losses of paying Third World workers more than their productivity is worth? Why shouldn't they?

First of all, multi-billion-dollar corporations are seldom owned by multi-billionaires. They are usually owned by thousands, if not millions, of stockholders, most of whom are nowhere close to being billionaires. Some may be teachers, nurses, mechanics, clerks and others who own stock indirectly by paying into pension funds that buy these stocks.

Indeed, the average incomes of all the stockholders -- direct and indirect -- may be no greater than the average incomes of those intellectuals, politicians, and others who want them to absorb the costs of higher pay in the Third World.

But if teachers, nurses, mechanics, and clerks are supposed to accept less money to live on in their retirement years, why shouldn't similar donations to the Third World come from reporters for the New York Times or Ivy League professors, movie stars or others who are morally indignant?

Or is this just one of many things that the morally indignant think is worth having others pay for, but not worth enough to pay for themselves?

[Chris A]

I think they coined the word "jive" for Sowell. His apologies for the right tend stretch to an area I call ignorable.

[Fran]

Originally posted by marvin g
Let's work to get him a job over there!!!;)


WHAT ??!! And screw up our outsourcing too ?