For the past
several years, the U.S. has been spiraling through the “Great Recession”, and,
as such, a central issue in both the public and private sectors has been
putting American citizens to work. But
let’s consider for a moment just what exactly our economy allows for,
specifically regarding off-shoring and outsourcing.
Here we are, 2012,
a world that has become steadily interdependent and globalized economy. We enjoy everyday luxuries impossible to
consider a century ago. Standardized
clothing, mass manufactured and shipped from the Caribbean (Honduras,
specifically, for my shirt right now) and produce, far out of season in the
Midwest, fresh on the shelves from Jamaica and South America. Toys made in China. Steel, mined in Brazil, ships to the U.S.,
where it’s delivered to a tariff-free zone (an area not technically considered
the U.S.) where it’s manufactured into usable materials import-free (meaning
the good ol’ U.S. of A. makes zero public profit) and shipped to the
Netherlands where components are put together into a product. A U.S. company contracts an Asian company to
create computer processors, which, in turn, contracts Chinese mining companies
to provide raw materials and Indian firms to write and install software, and
the whole shebang is then shipped to a separate company (probably a U.S.
company taking advantage of less-expensive labor and more lax import/export
laws as it sets up shop in a foreign nation) to put it all together, when other
companies come in to market, pack, ship, stock, and sell the item. Then, if something happens and you need tech
support, the phone is answered by someone halfway around the world, working
third shift to accommodate the time difference, whose paycheck is still signed
by the American company. Obviously,
“bringing jobs back home” is a little simplistic.
Now let’s think
what would happen if all this work arrived on our shores: The labor that we in
America get all up in arms about when we hear numbers like “$3 a day”, decrying
how terrible it is to be paying workers such a paltry sum, suddenly shoots up
to American standards, somewhere in the minimum range of $7.50/hour. (Side note: what we often fail to consider is
the purchasing power parity, or PPP, which links changes in the exchange rate
between two currencies to changes in the countries price levels. This adjustment then allows for a more direct
comparison of living standards…for instance, in 2007 the GNI per capita in
China was $2,360, but the PPP per capita was $5,370, meaning the cost of living
was less in China and that the GNI per capita could purchase as much as $5,370
in the U.S. I’m not saying I’m for or
against $3/day, but just that single number alone doesn’t paint an accurate
picture).
Anyway, say we have
100 workers at $3 U.S./day, working for one day - $300 in labor. 100 workers at $7.50/hour, working an
eight-hour day for one day = $6000. Now
think about that over the course of a year.
Now, if output remains the same, but cost of labor increases, what
logically must happen to the cost of the product? You guessed it.
I would say our
next step is figure out what we can
do, and what we can do better than
anyone else. We can’t very well consider our economy in isolation from the rest
of the world; jobs don’t just appear. We
can spout all we want about job creation, but until we find something people
will pay for, we can’t very well work it.
We’re in the midst of a global system, what happens in one place inevitably
affects what happens elsewhere.
So what’s the
point? We live in an ever-shrinking,
ever-flattening world. No longer is a
single country autonomous and independent of the activities, the economies, the
products of another nation. Now, I’m not
saying that I necessarily agree or disagree with the current level of
out-sourcing and off-shoring, or even that there aren’t some gigs we could do
here, simply that “bringing jobs back home” isn’t as easy as that.
No comments:
Post a Comment