Just Above Sunset Archives

January 18, 2004: Unemployment and outsourcing of American job overseas.


On Friday, 9 January 2004 in the daily weblog I posted this The Brave New World: "While workers are necessary, and so have to be kept alive, they have no hope of any better treatment since they are infinitely available, replaceable, and generally interchangeable."  Really.  That's a fact, Jack! - and reprinted it in the Just Above Sunset magazine here.

This week readers responded.

The issue?  Unemployment and outsourcing of American job overseas.

This was a discussion of the eighteenth century economist David Ricardo and his "Iron Law of Wages."  The iron law of wages is simple and logical.  It says that wages will tend to stabilize at or about subsistence level.  That seemed inevitable to Ricardo, since while workers are necessary, and so have to be kept alive, they have no hope of any better treatment since they are infinitely available, replaceable, and generally interchangeable.

And that is the problem.  Previously the pool of available labor was limited - a matter of geography.  Now, for the first time in history, thanks to modern computer networking and telephony, we really do have "infinitely available" labor, worldwide, twenty-four hours a day.  This IS new.

Yes, Ricardo's wage theory had seemed untrue.  The supply of competent workers in a given place was not unlimited; neither workers nor industry were perfectly mobile, and labor demonstrated in the last two centuries that it could mobilize and defend itself.  This "iron law of wages" would function only if the supply of labor is infinite and totally mobile.

And now we pretty much have that.  Globalization.

In reaction Phillip Raines sent this:


Just a quick note to express my appreciation of the op-ed on the worker and with globalization there is no end to replaceable labor.  The worker is an issue near and dear to my heart.  I heard a consumer advocate poo-pooing the efforts of furniture builders lobbying to impose tariffs on Chinese furniture.  Asian manufacturing is taking over and unless the craftsmen get their real estate licenses they have little hope of surviving.  Real estate and journalism are the only professions that wont get out sourced.  Pitiful.


Well my reaction was this:


The thing is that this is a problem without an obvious solution.  Tariffs just drive prices higher for no reason - one pays more for the same crap.  Now that we actually have a real global labor market, things will shake out to those who can "do it best for the lowest cost" getting the work.  Time and distance don't matter any longer.  And that had to happen.  This is part of the "global village" business Marshall McLuhan failed to consider.  Small world, uncomfortable world.

Of course it's not quite as simple as that - it's more like the work goes to those "who can do it good enough at a lower cost."

Most stuff sold is "good enough" stuff.  In theory there should still be a market for fine, specialized, unique work.  Real craftsmanship, not ordinary things.  For common, useful "good enough" items - jeans, shirts, shoes, pressed-wood dining room chairs, and answers to questions about how to set up your DVD deck or get your mail-in rebate - well, that can be done most anywhere by anyone.  We ain't special.

So if you want a cotton shirt that's "good enough" Wal-Mart will fix you up.  And it'll come from Bangladesh.  If you want something really fine, well, it won't.

Most folks look at the choices, look in the wallet, and, each item at a time, do the trade-off.  Whats "good enough" is usually what they buy.

Damn, I sound like William Morris and the Craft Movement assholes of the late nineteenth century!  But no, some things are best mass-produced.  Canned anchovies - and socks and light bulbs and all the rest.  Fine stuff.  Useful.  I'm not a Luddite.  I'm not going to handcraft my own writing paper.  So my pipe cleaners come from Senegal.  So what?  Global mass production is fine for the bits and bobs of life - and political pressure will sooner or later take care of the sweatshops and exploitation of the downtrodden.  Really.  As world communication also becomes more globally open you can't hide that crap.

But I'm still out of work.


Well, this provoked a reaction from Rick Brown, the "news guy" as I call him:


Not sure if real estate can be outsourced, although there may be some of that whenever the economy is such that the Japanese and Saudis buy up all those buildings in New York City.

But journalism has been quietly outsourced for years.  We just don't hear much about it because journalists usually think of reporting on news business issues as a form of, pardon my French, professional masturbation.

Whereas newspapers and networks used to always send Americans overseas to report back, in recent decades, they've relied more on lower-wage locals to do the job.  In the case of TV, theyve also turned more to buying video wallpaper from the cheaper subscription-based "agencies" such as Visnews (now Reuters TV) and UPITN (I forget what they're called now).  AP and UPI used to dominate the American wire service scene, but UPI pretty much folded, giving way to AFP and Reuters.  And AP has always leaned heavily on its foreign members.

My gripe with journalists being outsourced is not that we need to save those jobs for Americans (what difference would it make anyway, since they'd be living overseas and spending their money there?), it's that we Americans are not getting as much foreign news as we used to, and certainly not as much as we need.  When spending becomes an issue, it's apparently just not as important to have a reporter on the scene, much less one who knows how to explain stories in ways Americans can understand.

But I must admit, I've never fully understood what I see as the paradoxical attitude of so many liberals, who one might think would have a humanitarian concern for all the world's peoples, arguing "America First" positions when it comes to labor.

On principle, I personally find it hard to screw the rest of the world in the name of maintaining Fortress America's sumptuously high lifestyle.  I don't understand why some Chinese guy in Shanghai should lose his job making Huffy bikes and watch his family starve, just because some American guy in Ohio wants to keep that job for himself just so he can afford to buy a Hummer.

(Disclosure: Yes, my wife is a highly-paid executive in an American company, and I might not be so quick to believe the aforementioned if she gets downsized.  But I can tell you this now, that if it does happen and I do change my thinking because of it, I'll be wrong.  Why?  Because I shouldn't allow myself to become a self-involved conservative whose ability to see the big picture is limited by what he sees going on in his own pocketbook.)

Concerning the issue of quality: That's not a real issue.  Examples follow.

Example #1: Why is it that air travelers cram themselves into sardine cans and sit there for four hours on a flight to the coast, with nothing to eat but a bag of peanuts and a Diet Pepsi?  I find this especially relevant whenever I open any books about the early airline industry that show magazine advertisements with photos of hypothetical air passengers in the future, sitting around tables, playing cards and ordering gourmet meals.
The answer?  Most travelers look at price, not quality. Airlines give customers only what most customers are willing to pay for, and an airplane roomy enough for card tables costs more per passenger-mile than most people want to pay just to go from here to there.

Example #2: In fact, when it comes to quality, there are many higher quality products made more cheaply overseas that sell for less than vaguely similar products made here.  Example: My wife's Honda Civic Hybrid.  At this point, you can't even buy an American-made hybrid car.

Yes, sweatshops are a problem that we, the world, need to do something about.  Someone does need to put pressure on those factories, but to make them change their ways, not to close them down.  After all, we need to remember that the real problem with sweatshops is the inhumane conditions the worker is forced to endure, not that someone over here has dibs on that foreign guy's job.  (But I also agree with Alan when he says globalization of media means that bit-by-bit, sweatshops will probably become less sweaty.)

If you don't agree with my position, and feel that we Americans have a birthright to protect American jobs, then I advise two concurrent courses of action:

1.) Join a "Buy American" campaign that fights for high tariffs and boycotts foreign goods, and
2.) ... okay, I was going to say "Vote Republican," but obviously that won't help.  Since big business, which is an important part of the GOP core, loves cheap labor and is therefore in favor of open markets, even though that sort of thinking runs counter to the famously conservative "fuck the foreigners, let's look out for ourselves" attitude, I guess there is no major political party that panders to precisely what you might be looking for in this area.  But in the meantime, you may want to keep an eye peeled for Pat Buchanan and Ralph Nader.

I swear that what I say here is the truth, the whole truth, et cetera, but I'd guess the reason you don't hear much about it elsewhere is because there's no party that stands for what I believe, either.  In other words, my opinion has the disadvantage of sounding anti-labor and anti-American at the same time, which leads us to that question Mort Sahl used to end his act with: "So, is there anyone here I haven't offended?"

And this is why, my fellow Americans, that I am announcing to you today my solemn intention to NOT become a candidate for the office of the President of the United States!  God Bless this Great Country of Ours ... and especially, the child who's got his own!


And your reaction?  Send one by email to editor@justabovesunset.com of course.  Let me know if you mind my publishing what you say.