>----- Original Message -----
>From: "Doug Henwood" <dhenwood at panix.com>
>
>
>Nathan Newman wrote:
>Many business and professional services are related to
>>manufacturing jobs-- that is who is being serviced in many cases. If you
>>lose big manufacturing firms or have to scale back, you also cut back on
>>janitors, accountants, design services, and all the other folks who make
>>firms work.
>
>-So why is retail shrinking, with all those Chinese goods to sell?
>
>Overbuilding in the previous period is one answer,
Aha! Gotcha!! The major problem with U.S. employment is hangover from the bubble. Outsourcing/offshoring is only a minor part of the problem.
> and retail is going
>through a structural shakeout, partly due to Wal-Mart,
Wal-Mart opens stores like crazy and employs vast numbers of people.
> partly due to the
>Internet, that is only partially related to the recession. No one is
>arguing that trade is the only issue that effects jobs, just that trade is a
>significant factor in both manufacturing and services related to
>manufacturing.
>
>>Design, accountancy, and other services are necessary even if the
>>dirty work is done halfway around the world.
>
>But it's often easier to locate those services closer to the worksite--
>especially the lower-level services, from janitorial to food delivery jobs,
>that are completely integrated into the core manufacturing jobs. Send
>manufacturing jobs to a location and many of the services will follow.
Why should a trend that's at least 20 years old suddenly manifest itself in the last 2-3 years? We heard this argument in the 1980s and early 1990s from EPI and others, and service employment expanded nontheless.
> >And you're not
>>responding to the point that Chinese imports have largely replaced
>>imports from elsewhere in Asia, so there should be no difference in
>>the secondary effects.
>
>Since those jobs are moving because China often pays even lower wages with
>worse labor conditions, then the effects on US workers will still be worse,
>both in accellerated jobs losses and greater threats by management to move
>jobs unless wages and benefits are slashed.
But weren't you arguing earlier that China explained weak job growth?
> The effects on workers from
>low labor standards in China are not just from actual job losses but from
>the downward wage pressure and the concessions US employers can extract
>based on the threat of exit. So the lower the wages and higher the relative
>productivity to those wages are in China, the more downward wage pressure
>for US workers.
Real wages are flat, not down, and labor market slack could explain most of it. The effect of China is >0%, but you sound as if it's close to 100%.
As the BW article points out, most of the kinds of manufacturing done in China has no competition in the U.S. - it's mostly low-end stuff that left the U.S. years ago.
> >The import share of GDP is lower today than it was in 2000 - 14.1% in
>>the last quarter of 2003, vs. 14.6% in the first quarter of 2000.
>>Service imports (which would include "offshored" services) are up 0.1
>>point, from 2.3% to 2.4%, while goods are off 0.5 point, fom 12.2% to
>>11.7%. You'd have a hard time making the case that an import surge is
>>at the root of our employment problem in light of these numbers.
>
>The whole point of my original post is that I don't think these percentage
>of GDP measures are enough, given the low dollar amounts paid to Chinese
>workers.
Your first back-of-the-envelope calculation had 90% of the Chinese manufacturing workforce working for the U.S. market. If Chinese exports were displacing U.S. manufacturing as much as you say, it would show up as in increase in imports regardless of how cheap the products are. But there's no evidence of such an import surge.
> >What is it with the recurrent urge to blame Asians for our economic
>>problems? In the 1980s, it was Japan; now it's China and India. Why
>>the aversion to looking at our own structural problems?
>
>"Blame Asians"? Calling for the end of slave labor and imprisonment of union
>activists in China is not "blaming asians"; it's blaming US capitalists who
>collaborate with dictators in China to oppress the Chinese people and hurt
>US workers.
>
>What I don't get is the kneejerk defense of one of the most reprehensible
>regimes in global history, one that is mixing the worst policies of
>capitalist economic oppression with Stalinist political repression.
Could you stop being a propagandist for a moment? Why is trying to locate the cause of a problem - weak U.S. job growth - the same as a "kneejerk defense" of China? And why not focus on our crappy treatment of the unemployed and displaced instead of finding the root of our problem in China? When I interviewed Jagdish Bhagwati this morning, he spent a lot of time criticizing the Dems for not pushing for retraining, income support, and wage insurance. Why shouldn't we do the same?
>I am all for Chinese workers being better off economically. I am for
>greater trade in areas where the US is unfairly shutting out exports,
>especially in the agricultural area, where rural workers globally would
>benefit most. But I think it takes massive intellectual gyrations by left
>intellectuals to pretend that the massive forced poverty of hundreds of
>millions of Chinese workers by the hands of a dictatorship is not a
>signficant factor in the global economy and the downward pressure are wages
>in the US and, significantly, in many nations like Indonesia and Mexico that
>had been struggling to improve both their labor conditions and standards of
>living, but now face immisseration due to job shifts globally.
It's not a zero-sum game. Demand from China has boosted Japanese growth and pushed up steel prices around the world. If China keeps growing like this, wages and incomes will rise (and they already have risen). China's not some black hole that's going to suck us all down into its gravitational field. If we had a civilized welfare state and a more sensible fiscal policy, our labor market wouldn't be so weak and workers wouldn't be taking so many hits.
I don't get what your policy prescription is - tariffs on Chinese goods? Sanctions?
Doug