An honest discussion about jobs in the United States.

[All_That_Chaz]

So I learned something today that made me think about the global economy. I approached a good friend who's very knowledgeable about finances and talked briefly about the current problems we have in the US in relation to jobs. I told him about an idea I've had for a while that I thought would greatly assuage the issue. It's incredibly socialistic, so it's very telling about where I fall politically when it comes to industry. I thought that a good idea for any country hurting for jobs locally would be to tax a portion of the profits made by private companies who send their jobs oversees. This would be done on an aggregate basis. The company would need to report the profit made by all plant located outside the country and how much it would cost to produce the same goods or services in the states. Then, a portion of that savings would be taxed as a way to counteract the effect of removing those jobs from the country. Now this is a case of double-taxation, but that line is misleading. We are double-taxed all the time. You pay payroll taxes on your job, and then later you pay income taxes on the same money. If you use that money to buy food at a grocery store, guess what, it's taxed again. Money is taxed over and over again and that line given by the GOP is just a way to get people riled up (I don't want this to become a political discussion, but that point was bound to come up).

My friend came back to me with this bit of knowledge that startled me. If a company opens a plant oversees, sometimes the country charges fees. Why wouldn't they? They know the company is going to save a massive amount of money by opening a plant here. Those fees certainly aren't going to stop anybody. Under current law, the government issues a credit to those companies equal to those fees. In effect, the government is paying private industry to move jobs out of the country. This is ludicrous to me. Wouldn't a country like ours that needs to hold onto jobs want to provide every incentive for companies to stay here? Why would the government give incentive to move out? It also brings up the point of where we draw the line when it comes to labor relations oversees. Right now we can pay programmers, a skilled position, in India a third of what workers in America would make. These people are still very poor, but their making tons more than others in the country. What if we found a country that had slaves. We could easily make a deal with that country to get incredibly cheap labor there. Should we take jobs over there? They'll work for nothing. Should we pay American companies to support slavery in other countries? Where do we draw the line in wages of what is even a living wage in foreign countries? If we don't care, then by all means, let's enslave a nation. I'm sure some company would have use for them. Personally, I don't support slavery.

My general point is that I think the government should be on the side of the American worker. American tax dollars should not be going to private industry rewarding them for finding a way to fire more American workers. Instead, that money they're saving should go back to the American people. I'm sure those dollars would help pay for medicare or welfare or even just put it towards the debt.

What do you guys think?

[Kilroy_x]

We export jobs because it's a better use of resources
Money saved is used to pay for jobs americans are good at
Other countries export back to us because hiring americans for certain things is a better use of their resources

tl;dr you don't understand economics. GG mercantilism

Better idea. Welfare and higher education assistance for people laid off due to outsourcing. That way they can retrain in something productive without having to absorb the burden personally.

Also the "slavery" you mention is the alternative to prostitution, starvation, or subsistence farming in most of those places so maybe don't be so chauvinistic with your western value system.

[devonin]

So instead of jobs going to foreign employees at cut-rate wages, they'll go to illegal immigrants under the table for cut-rate wages! The perfect solution!

[Kilroy_x]

Originally Posted by devonin

So instead of jobs going to foreign employees at cut-rate wages, they'll go to illegal immigrants under the table for cut-rate wages! The perfect solution!

BAM! Austrian economics'd

[All_That_Chaz]

Originally Posted by Kilroy_x

We export jobs because it's a better use of resources
Money saved is used to pay for jobs americans are good at
Other countries export back to us because hiring americans for certain things is a better use of their resources

The point is we have people who want to work and can't because there are incentives in place in the global economy to move jobs overseas. Yes, some people will make less money. That's part of the problem. Income inequality is at an all-time high.

tl;dr you don't understand economics. GG mercantilism

BA Economics, Northwestern University, class of 2007. I understand economics. This is your warning. Keep it civil in CT.

Better idea. Welfare and higher education assistance for people laid off due to outsourcing. That way they can retrain in something productive without having to absorb the burden personally.

This is exactly what I proposed the taxed money goes towards.

Also the "slavery" you mention is the alternative to prostitution, starvation, or subsistence farming in most of those places so maybe don't be so chauvinistic with your western value system.

I was being quite literal when I was talking about slavery. If you're saying we draw the line where the wage provides just enough to avoid starvation, then that's your line. I'm arguing that the line should be higher to help bridge income disparity.

Originally Posted by devonin

So instead of jobs going to foreign employees at cut-rate wages, they'll go to illegal immigrants under the table for cut-rate wages! The perfect solution!

Well the government doesn't support illegal immigration. I know you're just being coy, but I was hoping for a serious response.

[devonin]

I basically summed up a lengthy serious response in a flip answer that communicated the exact same information my lengthy response would have contained.

I'm just not sure how you think taxing the difference in costs between operating overseas and operating in America as a means to encourage jobs being kept in America doesn't result in a similar increase in the costs of goods, making those wages worth less and basically keeping people at the same level of poverty just now with also spending hours a week labouring to stay just as poor.

The actual socialist solution is to tax people a larger percentage of their earnings the more they make, and roll that additional tax revenue into social programs, not try and indirectly force corporations to employ americans under dramatically stricter labour and wage laws.

[devonin]

Whoa...Kilroy was banned for that? Seems a little much. And this is -ME- saying this.

And Chaz, if you're going to edit someone's post, change the font colour or something. I just had to field a request about Kilroy being upset and offended that I called her a 'he' when it was -you- who edited that into my post.

I said "Chaz edit" yeesh.

[All_That_Chaz]

Originally Posted by devonin

I basically summed up a lengthy serious response in a flip answer that communicated the exact same information my lengthy response would have contained.

I'm just not sure how you think taxing the difference in costs between operating overseas and operating in America as a means to encourage jobs being kept in America doesn't result in a similar increase in the costs of goods, making those wages worth less and basically keeping people at the same level of poverty just now with also spending hours a week labouring to stay just as poor.

The actual socialist solution is to tax people a larger percentage of their earnings the more they make, and roll that additional tax revenue into social programs, not try and indirectly force corporations to employ americans under dramatically stricter labour and wage laws.

On a microeconomic level, companies will produce less because the marginal cost of production is higher. This will both drive down profit margins and drive up prices. Prices are going to be higher because they're artificially low due to the exploitation of foreign labor. If we're trading higher prices for jobs, I'll take it. That's the decision we're talking about.

Yes, the Phillips Curve dictates that with higher employment, we will have increased inflation. I'm not saying that won't happen. I'm saying jobs are worth more. I don't see how you can say people would be just as poor if they're working instead of not working.

And of course I'm for a more progressive tax. That's not what I'm focusing on. I'm talking about providing incentives to keep jobs here.

[Cavernio]

lol this thread, not the topic, just...the banning, the 'you don't know what you're talking about, but I didn't read what you're talking about', the (mis)quoting...

"On a microeconomic level, companies will produce less because the marginal cost of production is higher. This will both drive down profit margins and drive up prices. Prices are going to be higher because they're artificially low due to the exploitation of foreign labor. If we're trading higher prices for jobs, I'll take it. That's the decision we're talking about."

I might be wrong here, but if anything the US did would actually do this, your plan or another one, then would it not merely end up incentivizing using labour from poorer countries even more because the US as a whole, in comparison, will have become even richer?

[Emithith]

Want slavery? Look into how chocolate is made.

FfT.

[devonin]

Originally Posted by Cavernio

I might be wrong here, but if anything the US did would actually do this, your plan or another one, then would it not merely end up incentivizing using labour from poorer countries even more because the US as a whole, in comparison, will have become even richer?

If the government started issuing penalties on moving labour overseas, one of two things would happen:

1/ The penalties would still make it cheaper to operate overseas, companies just pay the penalties, and pass the extra cost onto the consumer in the form of higher prices. Things become more expensive, but nobody is making any more money, people in general become poorer, the economy goes deeper into the shitter

2/ The penalties make it cheaper to operate locally, companies move their facilities into the US, offer jobs at the lowest possible salary, try to employ illegals under the table if possible, unemployment drops, but the higher cost of production causes prices to go up anyway. Inflation occurs. People have more money but their money is worth less buying power. At best, in general people stay exactly as poor as they were before, but if the inflation causes a larger price jump than the difference in income of people on Unemployment or Welfare, they become generally poorer, the economy goes deeper into the shitter

The only ways the government has to make it more appealing to a corporation to operate in the US pretty much all have the effect of being harder on the currently working poor in exchange for being nicer to the unemployed.

If they subsidize wages, they're spending tax revenue they have to make up somewhere else, resulting in the cutting of programs (This would work beautifully if the thing they cut was Defense, but how likely is that to happen?) and reduction of services. If they make up the revenue by taxing the corporations themselves more heavily, they're basically robbing Peter to pay Paul, and taking money away from them to have money to give them doesn't actually fix/change anything.

[Cavernio]

Umm, I wasn't specifically asking about Chaz's plan per se, but his take on the outcome of his plan, which is obviously very different from what you see would happen.
I reported my statement as a question because I was questioning what defines a richer country in comparison to a poorer one: If minimum wage were to rise in the states, (regardless of the cause), then that simply creates more of a disparity between US workers wages and poor country overseas wages, thereby giving even more incentive for a company to use overseas workers.

[devonin]

I think Chaz's idea is that these new American jobs are going to the unemployed for probably minimum wage, not going to the currently employed at a higher rate of pay, so no, they won't become wealthier.

Intrinsic in his plan I hope, is the idea that the penalties for overseas labour are high enough that it is -cheaper- to pay an American minimum wage.