Is it really such a bad thing when businesses export jobs to countries where they can get cheaper labor? Is it such a bad thing, for you to drive a little further just to buy the product you want at a lower cost? I think both are perfectly acceptable.When businesses “send jobs overseas” what they are really doing is saying “look, we have a limited resource (cash) to spend on expanding our business. If we keep jobs here, with higher labor costs, we won’t be able to expand. On the other hand, if we were to lay off a few people now, and invest the saved money into research and development of a new product, we’ll be able to hire those people back.” Now I know you might say, “well if they’re just going to hire those people back, why not just keep them there in the first place?” Just think about it this way. Before the company went overseas for their labor, they had a limited amount of cash to pay their employees. Now that they have gone overseas, they have saved money to invest into new products, which not only benefit the company through increased sales, but also society as a whole. Once they have gained the ability to produce these products they’ll need some people to do the actual production, and therefore will hire some of the old employees back. The reason for hiring these American workers back, instead of sending labor directly overseas is because they’ll probably want to observe how the product gets produced, so they can modify the process, and make it more efficient.
Now I’m not saying that the temporary, or even long-term layoffs are pleasant to those who get laid off, because they’re not. But think about the country as a business. The country has a limited resource (human labor) to produce as many new products as possible to benefit society. By sending some jobs overseas, we’re allowing for new domestic companies to emerge, who will utilize the human resource to produce their products.
If that example didn’t make sense, think about it this way. If we were back in the 18th century, and we decided to “preserve American jobs”, do you think that you would be driving to work everyday? Do you think that you would be able to sit at your desk in your nice office, to read this article on your computer? No, you wouldn’t, because we would have lacked the labor (skilled and unskilled) to produce those products. Also, if a company is unable to find cheaper means of production, their competition most likely will. That means eventually, people will buy the cheaper products over the more expensive ones, and not only will a few production workers get laid off, but the whole company will shut down. That means that the company’s executives, the production managers, the accountants, the janitors, the legal department, the marketing department, and the production workers will all have to find new jobs (and by the way there are far fewer job openings in this country, or in any country for CEOs than there are for production workers).
“But what about the foreign laborers who are forced to work for lower wage?” you’ll ask. Well how much do you think they were making before American companies set up shop in their country? Probably next to nothing, if anything at all. These people are lining up to be able to earn a decent wage for their work.
“Well they’re only making about 50 cents a day, how is that a decent wage?” you’ll continue to ask. If you consider the cost of living in those countries, it’s enough for them to be able to have clothes on their backs, and put food on their table to feed their families. They won’t get rich off of these jobs, but American workers won’t get rich off of their manufacturing jobs either. They just get paid more because the cost to live here is much higher. Eventually, if American companies remain overseas, the foreign laborers will gain some wealth (I’m not talking Trump money here, just enough to have a little comfort), because they’ll eventually start demanding higher wages. That’s just how it works in developing countries. Think about the U.S. during the industrial revolution. We had children putting in hours at factories, and no laborer made very much, but it was a living. They had enough to afford a place to live, food, and clothing. Look at us now. We’re one of the riches countries in the world. We didn’t get that way by jumping the gun and forcing businesses to pay higher wages right away though. It took years of low wages, then eventually some of the workers gained some wealth, and began using that wealth to improve their lives. Some even created new companies, which created new jobs. And if you want my bet, I’ll say that within the next 20-30 years, we’ll start seeing new Indian companies emerge, that won’t be quite as big as American companies, but they will definitely increase the country’s wealth as a whole. And shortly after that we’ll start seeing more recreational companies emerge from India, such as theme parks, and casinos.
So basically, yes in the short term exporting jobs does hurt some Americans. But in the long run, not only will they be able to find jobs, but the country as a whole will have far more products available to it to choose from and the foreign economies will improve, offering us even more people to buy products from, and even to sell them to, since their buying power will have increased.
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