| You state, "Free trade benefits all," but that is the bone of contention. Classical economics had little concern for unused resources when cheaper, better ones were available. If the resource was labor and supply exceeded demand in some locality, nature would rectify the balance through starvation, disease, infant mortality, etc. That should be unacceptable in our society, but the impact of free trade on US labor has been effectively ignored. Platitiudes about retraining and an economy which creates better jobs than those that are lost are losing their credibility. It is becoming evident that what benefits corporations need not benefit workers or potential workers. There are societal costs that are not included in the computation of macro economic benefits and costs. Allan Greenspan sounded a clarion call. Tax breaks mostly benefitting the rich and the costs of a war create a federal balance sheet that can't maintain the promise of Social Security. As the job market shrinks because of shipping jobs overseas, the labor force to support Social Secuiry decreases. As you point out, US wage levels make all jobs candidates for outsourcing and foreign labor forces have been enabled to step in with much lower wage requirements. I think it is just a matter of time until enough US citizens realize that the real issue is the pocketbook and not the twin bogeymen, terrorists and same sex marriage. There is great potential for new policies to create more harm than good. Social engineering is tool with a very bad track record, but so is laissez faire capitalism. I am leaning toward the idea that a level competitive playing field needs to be regional. Products would cost more here than in India because higher labor costs would reflect local labor wage rates and work would be done locally. Higher consumer prices and lower corporate profits would support higher local wages. India would need to develop a demand among its 1 billion people for its local call center expertise. Productivity would not mean finding cheap foreign labor but improving domestic per worker output. An alternative would be continuing free trade with much stronger laws for wealth redistribution, including higher sales, personal income, and corporate taxes. Some combination is what will probably be attempted. |
