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The "Exporting
Jobs" Scam
by
Harry Browne
The burning issue of the day is the "exporting of jobs" to
foreign countries by corporations.
As the prevailing wisdom would have it, greedy corporations
are taking advantage of lower wages in foreign countries -
taking jobs away from Americans and giving those jobs to
foreigners who will work for much less money.
In other words, American companies make their products
overseas and then bring them to America to sell to
Americans who were denied jobs producing those wares.
The politicians who are upset about this practice rarely
suggest any specific solution; they just promise to put a
stop to it. The TV commentators who are exercised about it
also are short on solutions; they just seem to enjoy
viewing with alarm.
The only concrete solution that's been offered (that I've
come across) is the introduction of state laws to require
any companies doing business with the state government to
produce their products within the U.S.
Economic Illiteracy
Politicians are notoriously economically illiterate. And
even when they know what would be the right thing, we don't
really expect them to do it.
But we do expect financial and economic reporters and
"experts" who appear on television to have some grasp of
whatever they're discussing. Thus, when these "experts"
join in the chorus of outrage over greedy corporations
exporting jobs, it's easy to believe there must be
something to the complaint.
But just once I would like to see someone on television ask
one of these politicians, reporters, or "experts" the
following question:
Since American wages have always been much higher than
wages in Thailand, India, Indonesia, and other Asian
countries, why weren't American companies exporting jobs to
those countries 30 or 40 years ago?
Or:
Since wages in African countries are even lower than those
in Asian countries, why aren't American companies exporting
jobs to Africa?
Or:
Since wages in America are lower than those in Japan, why
don't Japanese companies export jobs to America? Yes, they
have factories here that employ Americans, but those plants
make products that are sold here. They don't ship the
products to Japan to be sold. American companies build
factories in foreign countries but don't sell the products
there; they bring the products here for sale.
If you think about these questions, you can't help coming
to the conclusion that jobs aren't being "exported" because
of wage differentials, but rather for some other reason.
Chasing Companies Away
What is the reason?
Most likely, companies are heading overseas because U.S.
regulators just won't quit heaping more and more demands on
American corporations...
* About the only sure way a company can avoid
discrimination suits by government regulators or
individuals is to hire by quotas, which certainly isn't
the most efficient way to build a workforce.
* EPA officials can make a company's life miserable by
demanding changes in the way a product is produced -
changes that conform to government rules but don't make
the environment any safer.
* At any time a company might have to make major changes in
its facilities to accommodate new rules for dealing with
disabled employees or customers.
* In addition to the wages paid to employees, companies
must collect and contribute to payroll taxes that grow
bigger and bigger over the years.
These are just a few examples of the many regulatory
problems companies face. Every little regulation, every
demand, every new policy imposed by the government costs
money. And at some point, it simply becomes too expensive
to continue operating within the United States.
It's interesting that some of the politicians and reformers
who have demanded the above impositions on business are the
same folks who are condemning the companies that move some
of their production facilities offshore.
The Solution
And what solution do they propose to stop the "exporting of
jobs"? More government, of course - which will chase more
companies overseas.
If they really want to bring those jobs back, there's a
simple way to do it: repeal all the regulatory legislation
that's driven companies to export the jobs.
How soon do you think that will happen?
If your answer is "never," you're probably right. So the
"exporting jobs" problem will be with us for a long time.
--------
Also see:
"Seeing through Economic Fallacies: Is America in Trouble
for Lack of Manufacturing?"
http://tinyurl.com/2kfod
Harry Browne is the Director of Public Policy for the
American Liberty Foundation. He was the 1996 and 2000
Libertarian nominee for President. He is the author of 11
books that have sold more than two million copies. Some of
his books are becoming available online for download. Learn
more at his website
www.HarryBrowne.org
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