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Originally Posted by Stamen
You assume that we aren't exporting anything else.
What happens now is that your average Indian citizen can't afford to buy something made in the USA, but you increase their wealth and style of living and suddenly they want to buy that USA-made item.
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Can you identify a US-made item that is in hot demand in India? I can think of cars, but that's about it.
If you're talking about pumping money out of the middle class on this side of the water across the pond to build one over there, then yes, eventually you'll reach a steady state. Assuming that those companies in india will stay in india and not simply open yet another new branch in, say, kazakhstan or mozambique or uruguay when the average indian salary gets "too high".
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Not only that, but businesses in India may suddenly find that it's cheaper to make something in the USA because we are more efficient at making that product, and so they decide to hire an American company who suddenly grows and needs to hire more people.
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The two main things involved in producing any goods are labour and materials. Labour in india has a LONG way to go before it'll be cheaper to hire americans, and I daresay there's very little that can be purchased in the US that isn't cheaper to source elsewhere on the open market.
The people who are rah-rahing this move are explicit in saying that they want the US to move heavily to a 'service economy'. The FT article posted earlier claims that 'big gains are being made in the mortgage brokering sector', with the implication that where all the new jobs are going to be made is for people to become actuarials and pencil pushers, hollowing out manufacturing even more to countries with cheap-ne-slave labour.
Anyone who has read Gulliver's Travels will recognize Morlocks and Eloi by any other name. I hold no great expectation that these new 'sevice sector' jobs wouldn't also immediately be outsourced in turn as well... there's nothing unique, or even special, about a north american resident's educational or societal upbringing that makes them a more efficient mortgage broker.
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Thats just 2 cases where a USA company is suddenly in need of more American workers to meet demand from a new market that didn't exist previously.
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Well, two POTENTIAL cases. It's a pretty long stretch from the potential to the reality... and aside from the odd snarky comment, I've yet to hear of a single job outsourced from china or india to the western hemisphere (although apparently Japan has done a number of them to Brazil).
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As for the "Wal-Martization", you are right, in the short term a few more people will be shopping at Wal-Mart. But the expansion companies (mostly small businesses) will make due to the extra capital will create more jobs that outsourcing can't fill.
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And working. Don't forget working. The working part is far more important than the shopping part, really... as wal*mart has become the lowest common denominator for employment. You can't get worse than wal*mart, because if you were in a job that's worse (hard to imagine, but I suspect it exists), you could always quit and go to wal*mart. That, of itself, wouldn't necessarily be a bad thing if an individual could survive on a wal*mart income, but I double-dog-dare someone try to survive alone, let alone raise a family, on the 34hr/wk at $5.25hr they pay in anywhere but the most meagre of low-rent subsistance levels.
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Don't blow the problem out of proportion either, not every job is going overseas, and the only people that will really be affected by this are people working in certain industries who are unwilling to re-tool and get another job.
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That's where you're wrong. The people that are well and truly fucked are the people who are 'unwilling' (or perhaps unable, what with being put into the poorhouse due to half a decade of crap economy and now unemployment due to outsourcing). But EVERYONE gets affected by this, because with each passing day, a new way to outsource a new job to a lower-cost labour market comes online, pushing down on salaries at the same time costs are going up. The entire labour market gets squeezed by this. Some can, of course, absorb that shock better than others... but there's a vast, vast community of people who are just getting by that are being pushed right into indentured servitude at this very moment. Due to more factors than just outsourcing, of course, but it sure as hell doesn't help.
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I liken it to when Microsoft networking overtook Novell networking, all the Novell certified people suddenly found themselves without a job. Thats a market change, and that shit happens, now did those people suffer greatly because of it? Of course, but you don't hear from the ones who saddled up and re-tooled, got themselves an MSCE certification and got their job back (or never lost it in the first place). You hear from the ones who were so set in their ways that all they thought to do was piss and moan about how evil Microsoft is.
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Which is all well and fine for fat, well-paid former novell networking people who could retool at minimal expense into other jobs in the same industry. It's considerably more difficult for someone who's learned to use a metal press and arc welder all their working life to suddenly "retool" and become actuarials and mortgage brokers. Not only do you have the enormous barriers in education costs and available funds (and seats in schools!) but you also have the "working for a living" blue-collar vs. "3 martini swilling lunchbreak" white-collar cultural issues. Expecting these people to just magically retool and overcome is ludicrous. Of course, it's these unfortunates that every pundit tacticly admits to when they say "there'll be some pain involved."
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That said, I think there should be a Government program in place to financially help and retrain workers displaced by outsourcing, remember economics doesn't treat people "fairly", people do.
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Never happen. Commie.
