Can someone explain how sending millions of jobs oversees helps the U.S. economy?

Question

Both long and short term? I'm trying to understand the neocon globalists like Bush who say protectionism hurts American economy. I'm a Paleocon.

Answer 1

It is not benificial to the domestic economy, since it removes jobs from the domestic market, thus reducing consumer purchasing power in that nation. But it serves to benefit the Company by one of the following:

* Increase profits for CEO's and Shareholders

*Tax Benefits for moving to a less taxed nation

*Avoid lawsuits and unions.

* Currencey Exchange benefits

Answer 2

There are several ways to go about it, but let's try assuming the opposite and see what conclusions we come to. Let's say we believe that it's always better to keep business internal if possible, that this is the best way to help the economy. Then ask, why does it only apply at the national level and not the state level? In other words, if you live in Kansas, is it always better to pay people in Kansas instead of a neighboring state? Is Kansas' economy always hurt when a product or service is purchased from a company outside of Kansas? If so, then go to the county level.. then the city level.. then district, finally the block you live on, and finally the house you live in. At some level you'll be growing all your own food, making all your own clothes, and so on, because to purchase anything externally would hurt your 'household' economy. But of course, this is ridiculous. You'll then have to explain why it makes sense at any of the levels above.

Of course in the short-term, those who are losing a job here to one overseas will not be happy about it, and that's understandable. But the economy as a whole does benefit, and long-term everyone is much better off with free trade than without it.

This might be helpful for you:
http://www.mises.org/multimedia/video/ss06/Murphy.wmv

A related question that might help as well: Does it hurt the economy to purchase a cheaper good overseas? If so, let's assume this scenario.. I bring over a tv from a foreign country (assume that I got it past customs somehow), and I give it to you for free. By doing that, did I help or hurt the economy? If you say that it helped, then it doesn't make sense to say that cheap foreign goods hurt.
If you say that it hurt, then logically, the best way for me to help the economy instead is to take a tv from you instead of give you one. (this would be a version of the 'broken window fallacy') Since that's ridiculous, too, you have to explain why both giving and taking a tv hurts the economy.

Answer 3

In real time, it hurts.To say that with low tech jobs migrating,people would go for high tech jobs(by enhancing their skills etc) is just a wishful thinking and has no data to prove it.It's the new entrants in the job market who shall try to be eligible for high tech jobs and make a difference in the economy but most of the the people rendered jobless have to suffer.Of late,a large number of such affected people have learn t a lesson and migrated to the countries where such jobs went and being quite experienced ,got the jobs on priority .The local wages or pay scales worked in their favor as the cost of living there matched their earnings and surprisingly,they were able to save more than what they could in their own country.Looks it's the beginning of a trans migration of labor to find jobs anywhere than other way round.With increasing remittances to their own country,is shall have a positive effect on the economies of their parent country.However,it shall take some time to get a more clear picture on this issue.

Answer 4

Actually it does help the United States, but not in the short run. The majority of lower paying US jobs expedited allows the lower educated positions, or good producing positions, to be sent to other countries. The problem is not in the lost jobs, it is re-educating the people who have lost their job, mainly those who are 40+. In order to appreciate this you must look at what is better for the world as opposed to our nation. If you notice, the largest economic growth has been in Latin America because they can produce more for less. But now it has recently switched to China. So, if you want to blame anyone stealing jobs, start with China. In the long run this helps the major corporations create more jobs--that is more service driven jobs--since the goods are being produced cheaper. So those who are older and aren't able to learn new technology would get the butt of the deal. BUT, technology / Service jobs usually pay more thus raising the average paycheck in the long run. The short run isn't as beautiful, but in the long run the US and the whole world profit from all of this, mainly globalization.

Answer 5

You can play around with text-book theories all you like, but the benefits of free trade, globalisation , market forces are one of the greatest myths of our time. It is quite possible to construct an economic model to maximise gross national product by devising an optimal level of trade and tariff protection for any national economy , including the US. This may not be a high level of protectionism, but the US already has hidden and not so hidden protection in place anyway for political reasons, especially in high-tech[defence] and agriculture.
But the proof of the pudding is in the eating. Look around you. Do you really think the US is reaping great economic benefits for everyone by these free trade and globalisation policies? Well, I suppose you can buy lots of cheap stuff from China if you have the money to spend.

Answer 6

Don't blame Bush. This was going on when Clinton was in office.

A lot of companies wouldn't feel the way they do towards their employees "IF" they themselves weren't over paying their CEO's. "No one" is worth 100 million plus a year, w/or w/o stock options or w/or w/o bonus checks, etc.

Answer 7

Simple: from the consumer's point of view, it makes goods we buy cheaper, which frees up your money to satisfy additional consumption needs. This explains why you are now able to buy iPods and HDTVs and PCs and Internet access and cell phone services, in addition to your food, shelter, and clothing.

From the producer's point of view, it frees up domestic labor to be redirected into more productive work. This explains why things like iPods, HDTVs, PCs, Internet access, and cell phones even exist -- which they didn't when your parents were young.

Answer 8

As long as we do not study economics as science that deals with nature, composition, laws, properties and classification of wealth we will have such questions. First understand that labor or an employee is a form of wealth. Wealth always moves, like matter and energy, from higher concentration to lower concentration. Wealth in the form of wages is concentrated in developed countries and wealth in the form of labor is concentrated in developed countries. Remember that concentration of one form of wealth is always reciprocal of the concentration of other form of wealth. When one form of wealth moves in forward direction, other form of wealth moves in reverse direction. Neither USA is a loser nor is the country like India.

Answer 9

no longer probably. all of us who's familiar with what "off-shoring" is already knows that protecting a employer alive as a substitute of ultimate and firing all of us is definitely a sturdy difficulty. for the reason which you for my section will by no skill vote for all and sundry who does not call for coverage designed to stress off-shoring, what's your pink meat, besides?

Answer 10

It doesnt help. It only puts money in the companies pocket.