http://www.salon.com/tech/feature/2003/11/06/unionize/index.html

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A massive unionization of information workers would put them in a position to collectively bargain with companies about hours, wage increases and benefits. Workers would no longer be ordered to work mandatory unpaid overtime; if there was a call for their services on weekends, holidays and overnights, they would be able to sacrifice their time knowing it will be duly compensated. Limits on layoffs can also be negotiated into a collective bargaining agreement, assuring workers that their jobs won't suddenly be shipped where labor is less expensive (at least until the CBA comes up for renewal). Through collective bargaining, I.T. workers will receive time flexibility, something they have not had in quite a while.

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Marcus Courtney, president of Washington Alliance of Technology Workers talks about his fight to keep IT jobs in the United States.

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You are right that the expressed concerns about "foreigners stealing American jobs" always leaves me feeling a little uncomfortable. But along with the nativist and protectionist strands of thought here is also a deeper underlying critique of a global economic system that exclusively serves the need of corporations to increase their profit margins, while totally disregarding the stakes of workers in any of the countries affected. It's particularly interesting when the people profitting the most aren't the outsourcers themselves, as you mention, but the consultants and middle-men who are also the leading lobbyists for the idea.

I wonder, now that this economic reality is starting to bite into the white collar professions, rather than just continuing to decimate blue collar work, if it might actually motivate the American people as a whole to challenge the neoliberal free trade consensus.

[ 18 November 2003: Message edited by: robbie_dee ]

Book Review: Lou Dobbs is angry and he's not going to take it anymore
In his new book about outsourcing, the television journalist tells us he is shocked, SHOCKED, that corporations are treating American workers like crap.
(reviewed by Andrew Leonard, 09/09/04)

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Lou Dobbs is pissed off. It seems that American CEOs are busy selling out the American worker. Their rush to outsource and offshore every job that can possibly be moved overseas is threatening the "American way of life." Their belief that the free market will, in the long run, solve all problems has become an almost "ecclesiastical" act of faith.

To some people, the revelation that American business executives are out to screw workers is not, shall we say, breaking news. But for Lou Dobbs, a financial journalist who anchors his own hour-long television show every weeknight, we are suddenly living in perilous times. In "Exporting America," a slim but forceful tirade that is a print extension of his TV show's main hobby horse, Dobbs takes on the legions of free-market apologists who argue that outsourcing is just an example of efficiently working capitalism. He stresses repeatedly that those who are losing their white-collar, high-paying jobs are not getting good new jobs. Instead, while CEOs rake in ever more obscene amounts of cash and corporations get away without paying taxes and politicians of both parties smile benignly, American working men and women who once had decent livelihoods are now waiting in line for part-time jobs at Wal-Mart.

Dobbs' opponents, aggrieved at the unexpected and unseemly sight of a major cable news show anchorman spouting left-wing, pro-worker propaganda every night between 6 and 7 o'clock, have trashed him in the pages of the Wall Street Journal and elsewhere, calling him a "communist" and a "protectionist." This annoys Dobbs no end. So what if his rhetoric sounds as if it was lifted from the poster of an anti-globalization activist about to go wilding in the streets of Seattle or Miami? Dobbs takes pains to note that he is no "fire-breathing liberal." He is, instead, a lifelong Republican, a fervent believer in free-market enterprise and a staunch advocate of capitalism.

This presents a conundrum. There is much to appreciate and take notice of in "Exporting America." There is no doubt that the American worker is under threat, and the coddling of corporate America by state and federal politicians is unquestionably outrageous. As Dobbs recommends, tax laws need to be rewritten, and the exporting of American jobs to countries with lax environmental regulations, abysmal humans rights records, and an awful treatment of workers is in many ways unconscionable. And, although Dobbs is careful to include Democratic politicians in his comprehensive pillorying, he also makes clear his disgust at a Bush administration that will do nothing to help the American worker. He isn't optimistic about Kerry, but hey, a slim hope is better than none.

However, one has to wonder where Dobbs has been for the past half century.

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His nativist protectionist bullshit is the tragedy of the North American labour movement.

Np-p, Moneyline is ALWAYS about "foreigners' stealing jobs from "Americans".

[ 09 September 2004: Message edited by: BLAKE 3:16 ]

I don't like Dobbs much, either. I posted the article because I thought Andrew Leonard did a good job of making fun of him.

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Grr. It's not job loss, it's job transfer. Employment in the Indian IT sector is increasing - why doesn't that matter?

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Oliver, we've been over this before. Coupled with the altruistic goal of increasing more skilled employment in the 3rd World, a sacrifice we in the West should all be too willing to make (especially the ordinary working stiffs who've got it way too good) there are supposed to be some compensatory measures in place in the developed economies to smooth the transition that outsourcing will inevitably cause. So, how is that transition being facilitated? You rarely address that.

What we do know is that the corporations are making out like bandits with all this cheap labour. Hooray.

[ 10 September 2004: Message edited by: Hinterland ]

Countries and borders are just funny lines
To keep "them" out and all of us "in"

But if Apu gets my high-paying tech job
There's no way I can possibly win.

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Originally posted by virgey:
Who cares what happens in India

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I do. It has a population of just over a billion people, and it is one of the poorest countries in the world.

Hinterland: Sorry, but every time this comes up, I'm going to make the same damn point: the stakes involved are just too big. I have said that we should be working to have retraining programmes for displaced workers, but I honestly don't think that American IT workers need much in the way of retraining. It's a little-known fact^TM that the US labour market has an enormous amount of turnover; something like 10% of all jobs are destroyed in a given year - and are replaced by an even larger number of new jobs. The outsourcing phenomenon is an imperceptible drop in the bucket.

[ 10 September 2004: Message edited by: Oliver Cromwell ]

Edited to add:

Note1 - The linked article about Samuelson is in the New York Times, profiling a major journal article he has coming out at the end of the month. To login to the NYT website without registering, use username: babblers8 and password: audrarules.

Note2 - I first heard about this article from Nathan Newman's new Labor Blog. Here's a link to Newman's take on the issue.

[ 10 September 2004: Message edited by: robbie_dee ]

So what do I think?

Firstly, let's all remember what Samuelson is quick to point out: this is not an argument for protectionism.

The article doesn't say anything about the welfare effects for poor countries. I'm guessing that what the model says is that poor countries are able to capture more of the gains from trade than are rich countries. If free trade makes poor countries even more better off than what the standard model predicts, I can live with that.

But frankly, the bigger issue has always been that societies can organise themselves the way they choose. I don't think we have enough say in Globalisation, since it's many proponents, the WTF and the IMF, as well as NAFTA, are all beyond democratic control. If societies choose, protectionism, socialism, communism, or Randian objectivism, so be it. I realise that opens up the whole "beggar thy neighbour/beggar thyself" debate, but I submit that Globalisation is being co-opted by power abusers who are beggaring everyone but themselves. So, where are the real advantages?

And we telecom workers have noted which countries these imported workers are coming from. Not Mexico or Haiti or El Salvador or S Africa or Thailand or very many other coalition-of-idiots nations where human rights take a back seat to cash crops and abject poverty among the people. They are coming from nations where university tuitions are free and national debts a mere fraction of what they are in Canada and the States. India's and China's economic revolutions have been fueled by spending on infrastructure and cheap but highly skilled labour. Such wanton spending is just not part of the plan for IMF/WB structural adjustment programs for the colonies/third world nations struggling with indebtedness to rich nations.

India now produces about three times the number of engineering graduates that we do in the far west. China and socialist Singapore's economies are on fire right now. India is catching up while anemic economic grpwth rates continue to plague is in the most hawkish nations where infant mortality and child poverty are the highest among first world nations.

The world's labour force needs organizing, not just in certain places which allows capital to take advantage of quirks in currency variations.
Essentially, capitalists have profited from chaotic conditions around the world for far too long. We need a world trade authority to decide fair trade, wages and much more. Probably a UN based organization. The idea has appealed to contingents from almost all political parties in North America.

Of course, the recurring theme of fascism from Hitler to Franco to Carlos Menem to Pinochet to Maggie to the Republican's has been anti-unionism and anti-workers rights all along. The Yanks have the lowest rate of unionized work force at about 15% or so, Canada around 35%. "Flexible" labour forces were supposed to be the answer to high unemployment rates. But we socialists know and realize that this hasn't materialized in America or Canada where being counted as unemployed is becoming more and more difficult under right wing governments, especially so since Chretien and Paul Martin. The real U rate in the US is more like 10% as they continue to hemorhage white collar jobs to India, China, Russia, Ireland, Singapore etc.

Winston Churchill once said that 10% unemployment is necessary for capitalism to function. The Yanks have got that now, and Paul Martin has done a fair job of making access to UI-EI-O more difficult to impossible for millions of Canadian workers.

[ 10 September 2004: Message edited by: Fidel ]

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Originally posted by Hinterland:

And Oliver, it's too early to tell whether India and China will be the smashing successes you think they'll be any minute now. They've got a lot of obstacles to surmount that go far beyond the simple transfer of call centre jobs to Delhi.

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Oh, call centre jobs are what they tell us are being exported to India. IBM, INTEL and many more are doing research and development in India and China as we speak. It's not just blue collar jobs being exported to communist China and India and Singapore and Russia where skilled and educated work forces are common place. China is on the other side of the globe while right to work States and Madamoros, Mexico go begging for jobs. And Nortel sucks.

[ 10 September 2004: Message edited by: Oliver Cromwell ]

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Originally posted by Oliver Cromwell:
I just realised that I missed your point. What trade does is re-allocate resources where they are more productive. In this case, capital is more productive in poor countries, so it shifts there. There are limits to this process, of course; it's hard to uproot the GM plant in Oshawa and send it to China. But what's special about the IT outsourcing story is that the capital required isn't very costly at all to transfer: install a few cables and work stations, and you're done.

[ 10 September 2004: Message edited by: Oliver Cromwell ]

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Yes, companies like Alcatel are in China with contracts to develop high speed ATM networks over fibre as more and varied corporations locate there. GM is over there now trying to corner the market on new vehicle production. I forget how many new cars and SUV's are meeting the road in China every month, but they will outnumber cars in the US before long. China is booming to say the least and now has a working middle class the size of the U.S. population.

And what's entirely ironic about it all is the fact that these corporations are having to cede 51% controlling interest to the Chinese state. I though heavily interventionist economies weren't supposed to work ?.

Sorry, China's economy is booming. No one's dropped the big one on them yet. ha ha

[ 10 September 2004: Message edited by: Fidel ]

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Originally posted by Mandos:
Why can't another job exist?

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Good question eh, OC ?.

American and other corporations have been "shifting" jobs around the re-locating to just other cities within their own countries for many years and do it because of lower tax incentives in city X or for an offer of free or cheap utilities or free land or whatever the case happened to be. They didn't actually create any new jobs by doing that. It was all about cutting costs and increasing profit margins. And in many cases, wages dropped for the new workers over the wages lost to another city. And this has all happened over a number of years that corporate taxation has generally dropped off since the 1960's and years of rapid economic expansion in N.America.

The economic gurus like OC here may point out to us that the net export of N. American jobs(who's counting, btw?) is good for the global economy overall. It's supposed to create more prosperous trading partners and perpetuate the exchange of goods and services between countries in order to realize the giant, feel-good theory of globalism.

The fact that China's economy is booming stands as a testament to the benefits of lower wages and offshoring middle class prosperity here so that China can become a model for middle class capitalism. So why didn't these corporations pick Thailand or Russia or any of the African nations now following the Washington and IMF/WB plan for liberal democracy as their new trading partners ?. Why China and India when they're all the way on the other side of the planet?. Why not Maquiladora, Mexico ?. What happened to the right-to-work States where unions are a non-factor ?.
Surely, wages in Haiti or Kenya or Thailand would be as low as they are in China or India ?.

Low wage ecomomies have been tried before, however. It gave us Dickenesian London and colonialist Britain where children worked as mud larks dredging coal from the Thames to sell. Life expectancy of their parents was quite low as London was filled with tens of thousands of street children. And today in low union-low wage zone America, married couples in the there are working three and four jobs between them and are still living below OECD and national guidelines for poverty. Infant mortality and child poverty are highest in the most politically conservative of first world nations.

I think part of the problem has been that capitalists and speculators of money have relied on chaotic conditions around the world from which to profiteer on. When one world economy is pessimistic, money migrates to one where optimism thrives. But everyone can't be optimistic at the same time or bubbles happen. And, of course, the super-rich can weather any duration of pessimism while millions wait for the economic long run. Russia, and Africa and Latin America have waited for this economic long run to kick in for over 15 years now. Liberal democracy is almost like a religion. Except that religion at least has the after-life to promise the faithful. Liberal democracy only has the long run to offer its followers though.

[ 10 September 2004: Message edited by: Fidel ]

Social democracy is what the people in Palestine and throughout the the Muslim world are yearning for. They don't necessarily want Ferrari's and million dollar incomes as American propaganda machine has proposed as irresponsibly as they have. The majority of the world desires basic economic security: access to clean water, health care, a roof over their heads and for their children to go to school. The Contras and the CIA made sure that schools and hospitals were bombed to smithereens in Latin America during the 1970's and 80's threat of the spread of communism. And guess what ?. The people still want those things, not to be banana republics or to be oppressed by hand-picked despots of Uncle Sam with weak and ineffective governments in Canada a part of the conspiracy of silence.

I think Canadian's have to ask themselves, do we want great wealth instilled in the hands of a few as is the case next door, or do we desire to be a true social democracy ?. Because we can't have both.

[ 10 September 2004: Message edited by: Fidel ]

I think that round-trip IMF loans to corrupt despots is not the answer. These third world countries need basic infrastructure, but first and foremost, they need for the cold war idiocy to cease on the part of the American's.

China allows money in but not out. Why are they doing better than those with newly liberalised capital markets ?.

I honestly think that the Washington consensus and WB's approach to liberal democracy has been similar to the trickle-down economic theorists since Milton Friedman and the CHI schooler's. They've thought it was a mere question of creating a nouveau billionaire class in all these countries enjoying newfound freedom from communism or the threat of the red menace. They knew the loans were bad, but surely these hand picked capitalists would learn to become venture capitalists and allow trickle down to work its magic. Well guess what, it isn't working for there either. Money tends to remain an inert force in the hands of a few while hundreds of millions have already paid back prinicple on IMF loans several times over. Where are the results ?.

In fact, I don't think it's part of the grand plan to help countries become at all prosperous. The fertile and mineral rich poor nations of the world are considered nothing more than repositories of cheap labour and cheap resources for capitalists and industrialists who still subscribe to old world colonialist ideas. Afterall, N.American's spent trillions on a cold war and preventing Latin America and Africa from attaining schools, hospitals, roads and basic infrastructure that the Soviets had proimised and were in the process of delivering inbetween stints of economic and military warfare with the west. Why would our filthy rich want a spread of general prosperity and economic security only to see it imported hear as inflation, the scourge of those with money and assets ?.

[ 10 September 2004: Message edited by: Fidel ]

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Originally posted by Mandos:
That still doesn't really explain why people have to lose jobs here for people to gain jobs there. Did Canada cause unemployment in the US and Britain?.

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Yes we have on a small scale. It's less expensive to do business and set up certain manufacturing here in Canada than in the States. Big sugar companies in the States are ensuring that Canadian sugar is a lot cheaper for candy companies to relocate here. Hollywood likes making films up here, too. The drop in our looney in about 1989? or so from 8- some cents to below 70 against the American buck. has also made it much cheaper for American multi-nationals to cart off our natural resources and ship them back to us as finished products. But according to the conservatives in Canada, we can thank Mulroney's signing of NAFTA and FTA for our increased exports to the States. Ya rrrright.

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Originally posted by Mandos:
If so, how did Britain accumulate capital? Is there a point at which this relationship was not at the price of pitting workers in one area against another? That is the issue we are discussing here.

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Originally posted by Mandos:
That still doesn't really explain why people have to lose jobs here for people to gain jobs there. Did Canada cause unemployment in the US and Britain?

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Sort of. British farmers would have been hard-pressed to compete with Canadian produce, But since they had a comparative advantage in manufactured goods, employment there increased. So yes, British farm workers were hard hit by Canadian competition, but trade with Canada generated new employment opportunities that didn't exist before.

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[H]ow did Britain accumulate capital?

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Is there a point at which this relationship was not at the price of pitting workers in one area against another? That is the issue we are discussing here.

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So yes, British farm workers were hard hit by Canadian competition, but trade with Canada

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If resources are finite, then the question of how they should be allocated will always have to be addressed. In this case, the scarce resource is capital. In a world with decreasing returns, capital will be most productive where capital/labour ratios are low, so there are efficiency gains to be made in transferring capital from rich countries to poor countries. If rich country workers manage to prevent this transfer, it will be at the expense of poor-country workers' welfare.

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Wealth is relative. The goal of those of us who recoil at your story is not merely the amelioration of the situation of workers in poor countries (though this is not unimportant), but also the elimination of the conditions of inequality that cause poverty---by the reduction of the effect of class, in other words.

This means not only the difference between workers in disparate regions, but also within countries, by reducing the distance between the national rich and the national nonrich, and eventually globally, but reducing the economic control of the economic controller class.

What we are afraid of is that your story simply creates a cyclical "see-saw" effect, where we see the relative amelioration of workers in some countries coupled by the impoverishment of others. As the price of labour rises in one area, surely capital will flee again, returning perhaps to the shores were it once before fled.

Perhaps in absolute terms, capital may leave behind a legacy of investments that implies a net improvement in the quality of life of those now left behind and under threat of sinking into poverty once more. But the average North American worker, for example, is still often only one or two paycheques away from ruination. The automation around him/her and the speed of service will not help him/her when s/he has no job. Because wealth is relative, s/he is still akin in the most important senses to the poor worker against whom you would pit him/her.

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Originally posted by Oliver Cromwell:

If resources are finite, then the question of how they should be allocated will always have to be addressed. In this case, the scarce resource is capital. In a world with decreasing returns, capital will be most productive where capital/labour ratios are low, so there are efficiency gains to be made in transferring capital from rich countries to poor countries. If rich country workers manage to prevent this transfer, it will be at the expense of poor-country workers' welfare.

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Originally posted by Mandos:
But what you are missing in this explanation are the agents and controllers of this property transfer and the manner in which they benefit from it.

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It's not that complicated. Rich-country owners of capital send it to poor countries, and they repatriate the profits it generates; they're better off. Poor-country owners of capital face increased competition for labour and for export markets, and they are worse off.

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Wealth is relative.

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The goal of those of us who recoil at your story is not merely the amelioration of the situation of workers in poor countries (though this is not unimportant), but also the elimination of the conditions of inequality that cause poverty

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What we are afraid of is that your story simply creates a cyclical "see-saw" effect, where we see the relative amelioration of workers in some countries coupled by the impoverishment of others. As the price of labour rises in one area, surely capital will flee again, returning perhaps to the shores were it once before fled.

Perhaps in absolute terms, capital may leave behind a legacy of investments that implies a net improvement in the quality of life of those now left behind and under threat of sinking into poverty once more.

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As capital accumulates, incomes rise, and the formerly-poor country can start to generate its own savings and investment; China has already started down this road.

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But the average North American worker, for example, is still often only one or two paycheques away from ruination. The automation around him/her and the speed of service will not help him/her when s/he has no job. Because wealth is relative, s/he is still akin in the most important senses to the poor worker against whom you would pit him/her.

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I'm not buying that. Are you really claiming that a Canadian earning $20k/yr is really no better off than an Indian living on the equivalent of $1/day?

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But so far as we have seen, the liberalization of trade leaves one group permanently and absolutely happier, and not subjected to any "see-sawing" at all: the large investor class.

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So I ask again: how will your development by trade story cause the important relative improvements that would indicate a reduction in class? Because while it seems to leave behind in the long run more gadgetry (that may become less affordable as capital flows out anyway), it doesn't seem to leave equality behind.[/QB]

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Originally posted by Oliver Cromwell:
I don't understand why you think this is the most important question here. Trade has provided hundreds of millions of Chinese with significant increases in their economic welfare. Are you really arguing that because not all Chinese have benefited - especially those who live in the more inaccessable parts of the country - this is bad news? That China would be better off if everyone were equally destitute? That India's problem isn't that there are hundreds of millions of Indians living on less than $1/day, but that all Indians are not living on less than $1/day?

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I think this is a misleading argument, and it's used by a lot of free traders as a subtle attempt to portray the anti-free traders as being heartless SOBs bent on impoverishing poorer nations.

As an aside, your argument is based on certain assumptions which are not necessarily 100% correct, such as the one that states that trade always increases economic welfare; on the surface that is true, but it asks nothing about the distribution of the increases between countries and within countries.

What us non- or anti- free traders have always stressed is the importance of domestic production to meet domestic markets and this domestic demand. This creates a well-balanced economy that is relatively insulated from the capricious effects of speculative activities in resources, which harms resource-dependent nations such as Botswana or even Canada (something like 20% of Canada's GDP is due to "production" - i.e. extraction of our natural resources, so commodity price fluctuations affect us more than the USA, where about 5% of their GDP is attributable to the primary sector).

There is nothing wrong with trade flows or capital flows in and of themselves, and the particular model I hold up as a viable template says nothing about curbing nonspeculative capital flows. By all means let there be foreign direct investment and technology transfer into countries like the Sudan, or the Congo! But produce for local markets first! Initiate and accelerate the process the industrial nations went through, by building up local economies, local markets, before devoting national resources and labor to international trade.

It is a rather poor farce of claiming goodness of gains from trade when (a) North American farms can sell at below local cost in faraway countries thanks to price supports which do not penalize exporting agricultural goods, and (b) when people in LDCs are producing manufactured goods that come back to North America or Europe, but which do not get sold in that country because there has been no effective build-up of a well-balanced domestic production sector.

If the arguments of the specialization-from-trade model had held sway as they do today, Canada and the USA would be the biggest agricultural nations in the world, because that is what these two nations did best when they were first colonized.

Relying on domestic demand as a source of economic development simply hasn't worked. The Indian economy was essentially closed until the 1990's, and during that time, it lost ground. In any case, the problem has been a lack of capital, not demand. A poor country that is almost entirely populated by people who are living on subsistence incomes or less simply can't generate very much savings and investment on its own. Later, once incomes have started to rise, the domestic market will indeed be an important source of growth on its own. And as incomes rise, savings will increase, and they'll have less need for foregn capital.

You're quite right about agricultural subsidies, of course. They're simply inexcusable.

I certainly wouldn't claim that China and India have gotten everything right. But they did get one big thing right, which is to open the door to rich-country capital. What concerns me is the possibility that rich countries might turn off the tap at the source.