ugnet_: Politics Y2K4

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Politics Y2K4
Disappearing US Jobs

As David Ricardo theorized, a drop in wages leads to an increase in
profits, hence the hot performance of US stock markets. While Ricardo made
valuable contributions to our understanding of the distribution of wealth,
changing economic conditions raise questions about the validity of his
free trade assumptions.

In a New York Times op-ed (Second Thoughts on Free Trade, January 6, 2004)
and a C-Span program covering the same topic, US Senator Charles Schumer
(D-NY) and several economists discussed outsourcing-- the loss of highly
paid skilled US jobs to equally skilled but lower paid overseas workers--
its impact on the US economy and the "free trade" implications.

Ricardo's classical free trade model assumed the unique factors of
production, land, labor and capital, of a given country which, in turn,
gave it an absolute advantage in the production of certain commodities,
could not be moved across international borders. With today's technology,
multinational corporations can easily relocate operations to countries with
cheaper skilled labor. US workers are rapidly being eliminated from the
desirable labor pool mix. As highly skilled well paid jobs move overseas,
US workers will be forced to take low wage jobs, which will reduce their
standard of living.

As Schumer and other suggest, this is not a "jobless recovery."Â Jobs are
being created outside the US. Schumer has called for a national dialogue
about the direction of the US; it is an overdue conversation.






QUOTES for today
  "Man's dearest possession is life, and since it is given to him to live
but once, he must so live as not to be seared by the shame of a cowardly
and trivial past; so live as to have no torturing regrets for years without
purpose; so live that dying he can say â all my life and all my strength
were given to the finest cause in the world â the liberation of mankind."
-- Fyodor Dostoevsky