Comment Ah the march of globalization/progress/whatever (Score 1) 1319
This free flow of jobs, or capital, out of the US and other western democracies, is increasing the divide between the wealthy and poor at a documented and alarming rate. Many of the jobs that are being lost, manufacturing, service jobs, encompass the visceral substance that is the middle class in a developed country, leaving a vacuum in its place. As in where do we work now???
And now even high technology jobs are spreading around the world. This shouldn't be surprising given how much easier it is for a developing country to educate elements of its workforce and provide a sexy price tag to a foreign corporation, than for a developed country to compete on price given the considerable costs it must cover.
As these jobs drip away - what do we have in their place? Certainly high end management jobs, lawyers, doctors, 7 Eleven attendants, and Walmart cashiers will not employ a country, nor do they make up a middle class. There is nothing substantive in its place - no immense new industry (can you say Railroads?) that can hire the teeming masses that we are and will be losing as manufacturing, and other industries, flee.
Warren Buffett, and other influentials, has spoken on occasion as to how America can confront this coming crisis and how the developed nations must innovate to survive. They speak of how since America, and to a similar extent the West, cannot compete on the cost of production, it must find other ways to compete. Certainly the Internet provides vast opportunities for job creation - but how vast? On the level of the hundreds of thousands of jobs around the country that the mainstays of agriculture and industry have? Likely not.
Not that we've lost all of our manufacturing or service or technical base - but the process is, indeed, quickening - ever expanding into other "traditional" industries. For that matter the US is littered with the skeletons of once living, breathing cities supported by the very manufacturing jobs that have dripped away over the last handful of decades.
Clearly the loss of these jobs raises concerns - the trade offs of globalization certainly benefit the cheap production of goods, and the ever-tantamount corporate profit. But the cost to the very nations, the very people, who have built the infrastructure and innovation for a global economy raises serious concerns. All of these concerns can be summarized in one question:
What are we going to do about it?
Much can be said about the very stability that free trade and globalization have brought the world. Were we to step on the fire hose, halting the spray of jobs moving from the developed to the developing world much of this stability could be jeopardized. Were we to consider enacting barriers to the free flow of capital and the transfer of jobs to the developed world - what affect would that have on this supposed stability?
Indeed, it raises many questions, one oft-raised criticism of globalization is that it creates a disincentive for the developing world to develop. Rather, free trade and the free flow of capital incents keeping the costs of producing goods as low as possible - benefits thought sacrosanct in the developed world are shied away from in the developing as they are a deterrent to capital. God forbid a company choose to do business in another state or nation because your state has enacted a minimum wage or the right of workers to organize.
But the most pressing question in my mind, the question which inspired this very letter, is what will happen in the developed world when the job base is truly global and the jobs have fled. Will innovation save us? What kind of innovation could do it?
We need a new kind of industry - perhaps information is that industry - but as of yet I don't see it. For now information and information technology is driving up productivity, but this productivity is allowing for the elimination of jobs, more so than the creation of them. Communication technologies (from the telephone to the internet) are allowing, even, small companies to decentralize to offices in multiple countries - having software engineers in India and management and Sales in the US, for instance. Companies are automating formerly un-automated disciplines - ERP systems, e-Business, EDI, and more - all to allow the efficient processing of business transactions. But these are not so much new industries as niche, sub industries. They will not fill the void left by the mass employers of the 20th century.
The problem is, indeed, complex and involves incenting the developing world to continue to develop, while avoiding a zero sum loss of development (translated to JOBS) by the developed world. It will require new innovative approaches to job creation at all levels and that cannot translate to a swath of minimum wage, benefit-less, jobs. Perhaps it will require regulation by governments to combat the loss, or maybe it's too late, but the dialogue needs to happen and we need ideas - dammit.
