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Pastimes : Let's Talk About Our Feelings!!! -- Ignore unavailable to you. Want to Upgrade?

To: Bill who wrote (96789)	3/1/2005 7:13:13 PM
From: cosmicforce	Respond to of 108807

This is not an elasticity of demand curve! It's a tilted table and is anomalous like the curve for perfume: the lower the price of perfume, the less you sell and you make less profit. The lower the price of labor (including exported labor), the lower your taxes, in the case under discussion. The reason for the non-elastic behavior is that there are hidden variables: companies can treat workers like crap in places like Afghanistan so the table is titled - it's not really the same laboror. Wal-mart said we want cheaper rugs - adjust the price. A factory in Afghanistan which hired young girls to tie knots worked them from 8am to 2 am with 6 hours off. I guess they could work a little more and go blind a little sooner. Are American workers to compete in this type of environment? The answer is a resounding YES. Apply the same economics to any skill level and YES, the American worker is prohibitively expensive to hire. The U.S., in effect, allows companies to treat slave, substandard or even professional labor in developing countries as peers to the American worker. Not only that, there is a protection from taxation because foreign labor is a direct cost and can be expensed 100% against profits, unlike domestic labor, which includes payroll taxes and other societal benefits. So, we are actually subsidizing the export of jobs. An otherwise identical labor market external to the U.S. would be cheaper to operate in. When my company tried to import INTO China our equipment and other infrastructure (to support the jobs lost FROM America), they had protectionist levies that made refrigeration equipment and environmental chambers (made in the U.S.A.) too expensive to import so we bought NEW in CHINA. This wasn't calculated correctly by our management so the company didn't benefit as much as management hoped. I can see which side the bread is buttered on, to use Mulholland's expression: that of the technology transfer corporations and Chinese. Yeah, it helps stocks short term based upon INTERNATIONAL equity and profitability. If I wasn't compassionate, I could say I got mine and screw everyone else. Cynical people can take advantage of the worker's ignorance and leave them out of the loop. There wasn't and never will be a referendum on matters that benefit people in power.