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Friday, July 20, 2012

Reich: The Problem Isn’t Outsourcing

On Twitter, Modeled Behavior says:

This should be default liberal position. Recommended RT @MarkThoma: The Problem Isn't Outsourcing... - Robert Reich

However, for my taste, Reich gives in too much to the idea that income flows over the last several decades have followed changes in productivity. But they haven't, increases in the productivity of labor have not translated into corresponding increases in real wages, the gains have gone to the top of the income distribution instead, and it's not clear to me how calling for more a more competitive, more productive workforce will change that. Of course we want labor to be more competitive and more productive, but we also want workers to be rewarded when this happens:

The Problem Isn’t Outsourcing. It’s that the Prosperity of Big Business Has Become Disconnected from the Well-Being of Most Americans, by Robert Reich: President Obama is slamming Mitt Romney for heading companies that were “pioneers in outsourcing U.S. jobs,” while Romney is accusing Obama of being “the real outsourcer-in-chief.”
These are the dog days of summer and the silly season of presidential campaigns. But can we get real, please? The American economy has moved way beyond outsourcing abroad or even “in-sourcing.” Most big companies headquartered in America don’t send jobs overseas and don’t bring jobs here from abroad. That’s because most are no longer really “American” companies. They’ve become global networks that design, make, buy, and sell things wherever around the world it’s most profitable for them to do so.
As an Apple executive told the New York Times, “we don’t have an obligation to solve America’s problems. Our only obligation is making the best product possible.” ...
What’s going on? Put simply, America isn’t educating enough of our people well enough to get American-based companies to do more of their high-value added work here. ... Transportation and communication systems abroad are also becoming better and more reliable. In case you hadn’t noticed, American roads are congested, our bridges are in disrepair, and our ports are becoming outmoded.
So forget the debate over outsourcing. The way we get good jobs back is with a national strategy to make Americans more competitive — retooling our schools, getting more of our young people through college or giving them a first-class technical education, remaking our infrastructure, and thereby guaranteeing a large share of Americans add significant value to the global economy.
But big American-based companies aren’t pushing this agenda, despite their huge clout in Washington. They don’t care about making Americans more competitive. They say they have no obligation to solve America’s problems. ...
The core problem isn’t outsourcing. It’s that the prosperity of America’s big businesses – which are really global networks that happen to be headquartered here – has become disconnected from the well-being of most Americans.
Mitt Romney’s Bain Capital is no different from any other global corporation — which is exactly why Romney’s so-called “business experience” is irrelevant to the real problems facing most Americans.
Without a government that’s focused on more and better jobs, we’re left with global corporations that don’t give a damn.

    Posted by on Friday, July 20, 2012 at 07:47 AM in Economics, Income Distribution, International Trade | Permalink  Comments (107)


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