Pure capitalism has a fundamental failure-end, as does pure communism. With no government-induced trade regulation or tariffs, production obviously HAS to go to the cheapest labor force.......that is competition. How can American workers compete with .50/hour wages unless they accept .45/hour wages?
My buddy from childhood had this crazy notion in high school back in the '70s. He was an electronics geek and back then he had this crazy notion that one day, practically every home would have a computer......crazy, right? So he did what most everyone would agree was the right thing to do and gambled that notion and directed his education to an Electrical Engineering degree with a strong Computer Science backround. He ended up designing computer chips with a firm in Oregon. His company was all inclusive, that is, ground floor employees where the assemblers, next floor up were the software and chip programmers, above them were the designers and R&D (where my friend worked), the floor above them were the sales and finally the top floor execs. My friend pulled in about 90 grand a year to start.....the American Dream.....see a future economy, educate yourself to participate in that economy, and land a good job.
One year, all the assemblers on the first floor had their jobs shipped to Mexico, and my friend, ever confident, told me he wasn't worried.....this is capitalism, and those people didn't educate themselves like he had so those job were always at risk. A few years later, the software programers lost THEIR jobs to India, and my friend, now a little concerned, said he thought he was still safe, since programmers usually only have Associate degees and weren't as valuable as he and his Design Engineer co-workers were. In two years HIS job was sent to India, where a team of Electric Engineers, who were educated here in the states with funds provided by the Indian government (provided the graduates would return home to India to use their skills there) were ready to go to work for 20 grand a year, which is a lot in that country.
By the way, remember the lowly assemblers who lost their jobs to Mexicans? Well, my friend tells me that last year, those Mexican workers lost THEIR jobs to Guatemalans, since the Mexicans wages had risen to about $1.75/hr, and the going rate in Guatemala is .65/hr., and thanks to CAFTA there are no issues with trade now.
"Global Economy" truly is a race to the bottom.
