If it were so simple, there would have been a giant sucking sound as jobs moved south after the passage of NAFTA. There was not one, for the simple reason that it was not worth the major costs of relocation to deal with a foreign workforce unless the differential in labor costs were profound. However, the greater the skills required, the fewer available workers in low wage countries, and the greater the tendency for wages to converge.
Even in industries like textiles, the high end merchandise tends to be American or from other developed country. It is the cheap stuff that helps the working poor maintain a decent budget that comes from China. But it is true enough, relatively speaking, that manufacturing is moving off shore, and becoming a smaller percentage of GDP. That is because we are entering a post- industrial economy, not made up primarily of service jobs, but of technology, communications, and information related businesses, where skilled labor is becoming increasingly salient.
This trend has been going on for sometime, and yet we had an abnormally low unemployment rate (by historical standards) during the '90s, and even now have an unemployment rate that would not have looked bad until the more recent comparisons. The sky is not falling......... |
