Why your job is moving to Bangalore
Published February 18, 2004
Bhagwati has done better. Referring only to service jobs diminishes the magnitude of the issue. The use of personal anecdotes about a few hundred students and a secretary as surrogates for the world economy disappointed. As did his contention that few of his foreign students were good enough for a job with Intel. And his projection of a future filled with American workers fixing things built somewehere else was less than attractive (probably true as things are going, but is this really the way we want things to go?).
My biggest disappointment was that Bhagwati seems to be caught in the past, the world of at least twenty or thirty years ago and earlier. He still seems to think that the benefits of "free trade" will accrue to the U. S.
They won't, because we're not in an era of classical free trade - we're in a world economy (which he does mention, but goes sliding by). What we have is "Faux Free Trade" not "Free Trade."
The under-pinning of Free Trade is David Ricardo's theory of comparative advantage. The key assumption of that theory was "factor immobility": labor and capital stayed within the exporting countries. Under those conditions, it worked. Industries that countries were better at grew while industries they were worse at (internally, not compared to other countries) diminished. As this happened, craft spinners got jobs in mills. When that went away, mill workers got jobs on automobile assembly lines. And so on.
But the global economy means that we no longer live in that kind of world.
In the old world, trade caused dislocations within industries. In this new world, dislocations affect nations. We're seeing the beginnings of that now.
* In the last two years, we lost more jobs than have been created, and the new jobs pay an average of 21% less than the old jobs. [Jobs shift from higher-paying to lower-paying industries Economic Policy Institute 01/21/04]
* Long-term unemployment is increasing dramatically, and the better-educated you are, the worse the effect. [The highly educated are the latest victims Economic Policy Institute 01/15/2005]
Saying that "innovation and creativity" will fix it is just grasping for a magic wand.
In spite of Bhagwati's dismissal of his students' capabilities, foreigners are at least as smart as we are and are educating themselves in the best schools in the world, then working at home. A useful source for more details is the December 8, 2003 Business Week cover story "The Rise of India and What It Means For America" [subscription]:
- Why your job is moving to Bangalore
- Published: February 18, 2004
- Type:
- Section: Culture
- Writer: Hal Pawluk
- Hal Pawluk's BC Writer page
- Hal Pawluk's personal site
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The triple Whammy to OFFSHORING American
JOBS:
I have been aware of offshoring since the mid to late 70's, YES PRE-NAFTA, about the same time countless American corporations were bailing on the US. to Caribbean nations. American companies who were founded, built, and made successful by American workers, NOT THE OTHER WAY AROUND. Corporations like IBM, WalMart, HP, KPMG, Hal-
liburton and it's subsidiaries, Heinz and its subsidiaries, and the parent company of Bank of America (who insultingly is one of the 12 banks doing business under the corporate layering, and guise of being American), originally from from places like New York, Arkansas, California, and Massachusetts, are now Caribbean corporations, who no longer pay federal or state taxes. When these 100's of millions of dollar$ lost for the good of the U.S. infrastructure, public safety, education, highways, Medicare/Medicaid, and the cost to protect and maintain freedom by the our military, are considered, American politicians gladly and greedily accept these corproations money year after year, and as we all know, nothing is free, it even costs to breathe, and
therefore something is ALWAYS expected in return.
Do not confuse the loss of these federal and state taxes from Corporate or other taxes. They are NOT the same.
Do you wonder as to how budget deficits continue to mount all the way from the local to the federal level. The fight against terroism and regime changes has nothing to do with thse defi-
cits. It's the loss of the corproate state and federal tax dollars, and the dollars lost in earnings by Ameican workers.
A country where, our CONSTITUTION calls for for an accounting from time to time for deposits made into the account of the U.S. Department of the Treasury as required by the constition (and no other account, under any other name or guise), there are many Americans who would devote their time and effort to take part in this constitu-
tional requirement for the good of the whole... We The People of The United States of America.
And this audit could and would include the GAO.
Just consider the raiding of money from the Medicare system. If it were not done, and left as it was designed to be, Medicare would be SELF-SUFFICIENT, plain and simple!
And consider, since former IRS Director, Charles Rosotti's statement to Congress, in answer to the
question regarding an audit by the GAO, as to the whereabouts of missing $3 Million, that "it did not happen under his watch," is insufficient and irresponsible. How difficult would it be to follow the electronic and paper trail?
If over the last 12 months or so California has lost over 240,000, Michigan, over 210,000, Ohio over 220,000, not to mention New York, Florida, Texas, Illinois, Massachusetts, Washington, New Jersey, and all others, I would question the accuracy of the numbers and percentages being reported as to the present claimes total lost.
The spending, saving, and home-buying that took place before more jobs were sent off-shore, were not done because their are 300 million or more other workers in Pakistan, Ireland, India, and other places who are more current with current technology, because the only number MOST former-American corporations who are taking part in this, are interested in ONE thing and ONE thing ONLY.
MO' MONEY, MO CHEDDA, MO SCRILLA, ETC.
The dollars once spent by Americans who earned these lost dollars, are of course, not being spent back into our economy for goods and services, nor contributing toward state and federal budgets, which underlies an even deeper issue of suppression of the truth, about the same time as I became aware of once-American corproations BAILING-OUT on the U.S. It was never enough to have the system manipulated, to shift the tax burden on the American workers, and being given tax breaks. That shift will shortly have the Big 3 and other bail as well, if they already have'nt. Since I know this, rest assured, the last people you voted for, are very WELL-AWARE of it as well.
This is an American problem, not Republican, Democrat, or other party.
These corporations have their ass-et-s on U.S. soil and elsewhere protected by the U.S., by who else but, the U.S. military and others, and this should be paid for, not provided without a BILL, not solely paid for by WORKING Americans.