Charles M. Kelly Special for The Republic Mar.
28, 2004 12:00 AM
Doron Levin of Bloomberg
News noted in the Feb. 22 Republic that "savvy voters
know there is nothing the president can, or should, do to
impede the shutdown of inefficient manufacturing
Those who are profiting from globalization
defend it under the banner of economic efficiency. Actually,
unless you count cutting wages of U.S. workers an "economic
efficiency," it's a horribly inefficient process.
economic efficiencies are gained when a manufacturing facility
In the center of the
Near the raw
Where the best technology
Where the most qualified workers are.
Where the best management
Obviously, locating a manufacturing plant in
Mexico, China or any of the Third World countries to make
products for the United States violates all of the above
criteria. Again, unless you consider human beings as raw
material or machines, cutting the cost of their labor is not
an economic efficiency. It's the one-sided and brutal use of
In most cases, the only reason products can be
made outside our country and sold more cheaply here is the
huge disparity in wages, which more than makes up for all the
trouble corporations and investors go through in order to cut
American workers out of the income stream.
the bottom line.
Investors and corporations know they
get a triple-barreled benefit from outsourcing work to other
countries. First, the workers who lose their jobs are replaced
by workers making one-tenth to one-third as much.
Second, workers who lose their jobs enter the labor
market and have a depressing effect on workers who still have
jobs that can't be exported from this country: construction
workers, truck drivers, salesclerks, waiters and so on.
That's why the outsourcing of jobs has hurt not only
manufacturing workers, but virtually all who are in the same
income class. It's not just the 5 percent of workers who are
hurt by globalization, it's 100 percent.
workers who still have manufacturing jobs know that when a
corporation threatens to shut down a plant if employees don't
behave, like wanting a bigger share of the corporation's
profits, the threat is real. Even unionized employees have
learned that they have effectively lost all their bargaining
Those who believe that eventually all workers
will benefit from this perversion of international trade -
which is based on true economic efficiencies - should read a
recent article in the Wall Street Journal (Nov. 13,
2003), under the headline and subheadline: "Behind China's
Export Boom, Heated Battle Among Factories; As Wal-Mart,
Others Demand Lowest Prices, Managers Scramble to Slash
It describes how some Chinese workers are
making $32 a month, even though the minimum wage is supposedly
$56 a month - and they work up to 18-hour days.
competition is brutal. As the Journal noted: "Buyers
are moving aggressively to play one factory against another.
'As things get more competitive, the pressure that comes along
with that, yeah, we try to take advantage of it,' says Gary
Meyers, a vice president in global procurement at
What's even more worrisome is the
outsourcing of high-tech jobs, from computer programmers, to
Ph.D. chemists, to engineers, to architects. Incomes of
virtually everyone who actually works for a living are
vulnerable to similar increases in the labor supply, as
investors and corporations tap the world market of poorly paid
professionals to pit them against American professionals.
How can this race to the bottom for wages and working
conditions for increasing numbers of the world's citizens ever
create an economy in which workers can become consumers of the