Globalization and the destruction of domestic Labor / by kevin murray

America is a capitalistic society, of which, it is of paramount importance of most publicly held corporations to make it their policy to essentially earn as much money as possible on their products and assets.  This signifies that almost all corporations look closely at their sales in which their objective is to increase them, as well as looking closely at their expenses in which their objective is to decrease them and/or to get more value out of the labor utilized.  It goes without saying that western nations, because of their wealth, their cost of living, their infrastructure, their laws, and their social services,  that their overall cost of doing business domestically is meaningfully higher than the cost of doing business in developing nations.

 

It then follows, if there is no penalty for doing business in countries in which you can produce your product for a significantly lower price point, in which labor laws as well as health and safety laws are far more lax, in addition to the fact that this can all be essentially outsourced to foreign manufacturing concerns that then have the responsible of adhering to both local as well as adhering to corporation policy, that it would behoove these corporations to do so.  So too, as good as that already is, corporations through the tricks of the trade, of specifically staging domestic subsidiaries in foreign nations as well as bending or utilizing tax rules  or loopholes in a manner that specifically allows that corporation to "game" the system so as to reduce their overall tax footprint, you then have as reported by cnn.com, companies such as Apple, that "…In 2014, the corporate giant paid just $50 in tax for every million it made selling iPhones and iPads to most of the world outside America. That's a tax rate of just 0.005%."

 

Not only does the globalization of manufacturing profit corporations headquartered in America, by allowing these same multinational giants to draw first upon the wealth of America in their stock issuance, higher education, and financing, but they are also able to leveraged up that wealth by utilizing it in all of its myriad forms off-sourcing in places all across the world, increasing profit and taking market share from others not so richly endowed, in which  the end result is often a corresponding robust stock price performance, based on impressive profit margins and growth.

 

Of course, all of the above signifies that as in most situations, there are the winners, as well as the losers.  The winners are those that are the corporate insiders and valued members to such corporations, as well as their stockholders, and consumers of such products that are able typically to purchase the product at a lower price point.  The losers are the tax recipients, which means cheating the infrastructure and safety net that America has an obligation to provide for the disenfranchised, in addition to American companies that are unable to take advantage of cheaper foreign labor as well as substantially lower tax rates for outsourcing, and finally, quite obviously, those that labor in the manufacturing fields of America, who have been squeezed out of labor markets through no real fault of their own.

 

Finally, as reported by epi.org, "…in 2011, international trade depressed wages for non-college educated workers by 5.5 percent, costing the average worker $1,800."  The bottom line, quite obviously, is that American labor cannot compete against foreign labor specifically because the playing field is not level, for if foreign countries have imported to them, or have access to all of the material needs that create the equivalency of a manufacturing plant in America, along with softer labor/safety laws, and millions of their denizens that need jobs,  then they will take jobs from Americans, and domestic labor will be left instead with hard to outsource low-paying service related jobs, hyped up but disappointing gig jobs, and way too often, idle hands and a future of little meaningful opportunity.