Arun, it's difficult to respond such vague terminology. What does "significant economic benefit mean"? Benefit to whom, lower-paid workers? States (and taxpayers) providing tax breaks and incentives, and getting lower revenues?
What if the corporation merely absorbs the cost reduction as profit? Is that an economic benefit? To whom? When everyone buys foreign cars, is that an economic benefit? When Boeing moves production to South Carolina, what is the economic benefit to Washington? Looks like a zero-sum game.
By "economic benefit" do you mean "cheaper labor" and "cheaper products"? This in a nation:
1. whose automobile industry is a shambles
2. whose manufacturing base has been in decline for decades
3. where “full” employment (~5%) likely will not return until sometime in the 2016-2020 period (see Figure 4 and the discussion below)
4. where non-wealth-creating consumption (PCE) makes up about 71% of GDP
5. whose total (public & private) debt-to-GDP ratio is north of 350% and is now rising faster than defaults, asset sales or payments can pare it down due to increased public debt
6. where real income actually declined over the last decade
7. where “over the past 10 years, the private sector has generated roughly 1.1 million additional jobs, or about 100K per year. The public sector created about 2.4 million jobs.”
8. where home prices, which were the principal source of household wealth in a bubble economy, have likely not yet hit bottom
9. where household wealth has fallen precipitously as a result
10. whose overbuilt residential investment sector (new housing) will stagnate for many years to come
11. where there are 23.1 square feet of shopping center space for every American
12. where rising health care, food and energy costs are eroding household disposable income
13. where over 45 million Americans lack any kind of health insurance
14. where the cost of an college education has increased far in excess of the inflation rate for decades
15. where wealth & income inequality is at its highest level since 1928
16. where 49 million Americans went hungry at some point in 2008
17. where 1 in 8 Americans and 1 in 4 children receive food stamps
18. where total bank credit of all commercial banks is contracting, not expanding
19. where several regional banks fail each week
20. where the government insurance system for depositors (FDIC) is insolvent
21. where “enormous budget deficits in nearly every State in the Union are ‘wreaking havoc’ on government employees, the services they provide, and the residents who need them most”
I suggest that workers and nations like the United States can't stand much more of these wonderful "economic benefits".
Jim |
