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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Mike M2 who wrote (60375)	5/22/1999 8:32:00 PM
From: Don Lloyd	Read Replies (1) \| Respond to of 132070

Mike - (...while it is true that imports from American subsidiaries are better than foreign owned from a national income perspective and I am aware that US citizen's own foreign shares as well. The salient point is the loss in wages and taxes is huge so i would agree with MB that it is nonsense. consumption of imports helps to undermine the buying power of the middle class...) Somewhere in the last couple of days I read an article that indicated that the low U.S. unemployment rates are primarily due to a severe slowdown in the rate of workforce growth, from 2% to 1%, if memory serves. The past history of high immigration and increased rate of female workface participation is just that, past. The sliding edge of the baby boomer demographic distribution is now starting to subtract from the workforce, rather than add to it. In a practical, overall sense, the imports are not causing a loss of wages and taxes, since the remaining statistically unemployed would have negative economic returns to their potential employers. Between taxes, regulations and the cost of living, the potential next marginal worker can neither supply value equal to his cost, nor can he receive a large enough wage to live on. Imports would be a problem if they were to persist at a high level during a period of high U.S. unemployment, but this is not currently the case. It may very well become the case in the future, but it will then be exacerbated by a structural inability to allow wages to easily adjust. Restriction of imports will simply depress overall living standards while trying to maintain non-competitive jobs for a relative few. The consumption of imports, in particular lower cost alternatives, adds to the overall buying power of the middle class, and does not subtract from it. Every import contributes to the wages and taxes earned and paid by the service workers who distribute, sell and service it. Even if there were U.S. workers available to manufacture the imported products, their increased final costs would drive their volume down and all other products would be fighting over a smaller pool of possible consumption outlays. Wages must always be less than the marginal productivity of the worker, after all costs, as applied to consumers' subjective valuation of the final products. To correct a mismatch, capital must be applied to increase the productivity for some existing workers, while releasing others to hopefully work in other growing or new enterprises. Regards, Don