Do you guys realize that the Foreign countries outsource more jobs to the US than we outsource to them? We have many more high paying jobs from around the world now in the US because of freer trade.
People who criticize free trade fall into the same fallacies of mercantilism that existed centuries ago. Understanding the often forgotten balance of payments should make someone pro-free trade. There is the capital account and the current account. If you have a deficit in one account, you have a surplus in the other of equal value. The US currently has a current account deficit (also called a trade deficit) and a capital account (meaning investment) surplus of equal value.
One form of investment is called "foreign direct investment." A type of foreign direct investment is outsourcing. Outsourcing is simply a type of investment in another country. Because of our trade deficit, we have an investment surplus. Countries therefore invest more in the US than we invest in them. It just so happens outsourcing jobs to the US is a common means of doing so.
We buy goods from foreign countries because they are of better value than US made goods. Those countries then either buy goods back from us, or invest in us. If they buy back from us, it is obvious that there is no net loss. But it should be just as obvious that if they choose to invest in us there is also no net loss. Because we buy foreign goods, we are allowing for foreign countries to invest more money in us, thus creating more jobs at home. But why do they invest dollars in America? Because dollars cannot pay the foreign workers that produce what is exported to Americans. They have to invest the dollars in America or buy goods sold in dollars from Americans. They could hoard the dollars, but this would not be beneficial, especially seeing how the value of the dollar continues to fall. And the very act of saving dollars rather than investing or spending them is because it is expected the dollars will be invested or spent in the future. Ultimately, the dollars spent overseas come back to us.
In short, free trade does not hurt our employment. What it does do is expand production, increase efficiency, provide cheaper products for everyone, raise real wages, and especially allow the poor to afford certain items that they could not afford before.
Free trade is simply voluntary exchange across political borders. The idea that we we all be worse off if people are allowed to trade in ways that will improve the condition of both traders is a dangerously incorrect. We do not want to return to the failed mercantilist policies of the past.
Even tho we probably share political genetics.. There's a couple problems with your attempt to make me happier with American complacency towards the RIGHT jobs..
1) Yes -- there are foreign auto-makers in the US. Largely because Autos are heavy and bulky and hard to ship. But there are NO -- NONE foreign consumer electronics manufacturers, foreign clothing manufacturers, foreign toy manufacturers that are being "shared" in the JOBS sense. There may be foreign investment in some American companies, but this does not shine up the jobs trade.
I don't think you understand. There are more jobs created by foreign companies in the US than than US companies create in foreign countries. This is not some theoretical explanation. I am referencing what is actually happening. We are complaining about outsourcing jobs to foreign companies, but they literally outsource more jobs to us.
"Foreign-owned companies in the United States have a work force of more than 5.3 million, or some 3.5 percent of all workers, and are spread across the 50 states in sectors from manufacturing to retail and publishing. If these jobs did not exist, the nation’s unemployment rate would be above 13 percent. "
It is not just auto, there are many different jobs. This is much, much bigger than foreign auto makers.
"[aside from auto] there are also tens of thousands of Americans working for companies like the Tata Group of India, which recently reopened the Pierre Hotel in Manhattan and makes Eight O’Clock Coffee; Haier, the Chinese appliance maker, with a refrigerator plant in South Carolina and an impressive headquarters in a landmark building in Manhattan; and Nestlé, the Swiss food company, which employs hundreds to make Nesquik and Coffee-Mate in Indiana."
"When foreign companies open a factory or buy a business in a region they also stimulate local commerce and create a demand for more homes, shops, schools and restaurants. They contribute money to schools, parks and towns, and lure consultants and technicians who then provide more jobs. This ripple effect explains why governors, mayors and economic development officials are so eager for foreign investors.
Without foreign investment, says Mitch Daniels, the Republican governor of Indiana, “we’d be a Dust Bowl.”"
So yes, foreign companies are literally hiring workers in the United States and providing them with jobs that would otherwise not exist.
http://www.nytimes.com/2009/10/18/business/18excerpt.html?pagewanted=all
We got 5.3 million jobs because of outsourcing in 2009.
How many did we lose to outsourcing in that same year? 2 million. On net balance, because of outsourcing, we have +3.3 million jobs.
Number of Jobs Outsourced in the US in 2009 | Number Of | How Many
These jobs are also higher paying than American jobs, due to the high demand for high skilled labor coming from foreign countries. I had book marked an article on the exact percent higher, but I lost it.
So I will provide this one instead:
http://www.channelingreality.com/Competitiveness/Ohio/ITAAO_article_Insourcing_Jobs.pdf
Jobs insourced to the US have been growing at 5.5% per year, whereas job loss to outsourcing is only growing at 1.5% The fact of the matter is that because of outsourcing, the US has millions of jobs it would not have had before, they are higher paying, and because free trade allows competition the goods produced are cheaper and more efficiently produced.
2) When countries "invest in America" you make it sound like they are creating jobs to balance the deficit of job trade. Most often -- they take those bucks and buy US treasuries with them. Now I KNOW you're not gonna argue that balances the jobs sheet..
Well yes, that is exactly what is happening. But you are absolutely correct that a significant portion of investment comes in the form of US bonds. I am not sure if you can say "most" comes in that form, I don't have the hard numbers. Foreign nations also finance our government, preventing it from collapsing. We could not fund medicare, social security, and all these wars without foreign nations buying bonds. I don't think we should have a government doing all of these things, but free trade does not cause our government to do these things.
3) It is not their job to assure that the RIGHT KIND of jobs get created here. That's OUR job. It would be imperialistic for them to even care. Ultimately the condition of our workforce is up to US.
Not sure what you mean by right kind of job. I never said anything like that. In my opinion, there is no such thing as a "right" kind of job. The purpose of employment is production, and the purpose of production is consumption of what is produced. In a free market, people are allowed to consume freely, so what is produced will depend on consumer preference, as will employment. So I guess you could say the "right" kind of job is one that successfully produces goods and services in line with supply and demand and consumer preference. But all individuals decide what they want depending on what they buy. So I am not sure who you think is assuring this "right" job is created.
4) The other type of "foreign job presence" in the US is not in manufactured goods, but in R&D. Probably the majority of this type of foreign job placement is in hi-tech areas because of ease of employment. We are in danger of losing the attractiveness for this kind of investment because our sons/daughters are not filling those slots. It's not a libertarian thing to let stuff slide just because the govt can't or won't fix it. Again -- it's US attitudes that have to change here. More MBAs and less scientists/engineers is a prescription for the end of a empire.
Not sure what you are talking about. The fact of the matter is that currently Americans do not save much at all. Because of this, they highly demand consumer goods, and so employment will tend towards the production of consumer goods. MBAs and scientists can be used to improve upon these products and discover new products to meet future demand, so I am not sure why you are assuming these people will disappear. In fact, according to the BLS, the job growth rate for engineers is supposed to grow just as fast as every other job in the next 10 years--11%.
Engineers
So your notion these jobs are disappearing is simply not accurate. And I don't want the US to be an empire, I wont it to be a constitutional republic as prescribed in our Constitution.
Leadership is critical at this stage. With Immelt moving GE medical to China we get a glimpse of the fucku attitude that could be justified -- given the mutual abuse between company's like that and the govt. If we don't get the message out -- that it's OUR RESPONSIBILITY to look forward and direct capital to the right places -- you're gonna see years go by without any new attractive IPOs on the stock market that mean more than a twitter..
Don't you see? We are directly capital to where we want it to go. That is what a free market does. Free trade is merely the international extension of the free market. I'm not sure what you mean with that statement, to be honest, and what leadership is supposed to do. I would say make trade even freer.
The biggest complaint about free trade is the outsourcing of jobs. But we
get more new jobs from outsourcing than we actually outsource ourselves. In fact, we insource over twice as many. Americans getting these jobs spend their salaries on goods and services in America. So the notion free trade is taking away jobs from Americans is simply not true.
