Key to job growth, equality is boosting tradable sector of economy

Discussion in 'Economics' started by Covertibility, Jun 8, 2011.

  1. Good summary of a paper done by Michael Spence and others : Key to job growth, equality is boosting tradable sector of economy (only 2 pages - comments are worth a read).

    I've always wondered how Germany (and the rest of those super duper "evil" socialists) were able to keep their manufacturing plants from disappearing off into the globalized world - "co-determination" or Mitbestimmung.


    Another read: China: Effects of Intellectual Property Infringement and Indigenous Innovation Policies on the U.S. Economy

    Based on survey information, the USITC estimates that U.S. IP-intensive firms' losses from IPR infringement in China were approximately $48 billion in 2009. (IPR = Intellectual Property Rights)

    U.S. firms in the IP-intensive economy reported that an improvement in China's IPR protection and enforcement to levels comparable to the United States' would likely increase employment in their U.S. operations by approximately 923,000 jobs.

    To complement the survey results, the USITC used a statistical and simulation analysis to estimate the U.S. economic effects of an improvement in China's IPR protection to levels comparable to the United States'. This analysis found the following effects: (1) a $21.4 billion increase in U.S. exports of goods and services, (2) a $87.8 billion increase in sales to U.S. majority-owned affiliates in China, (3) a potential 2.1 million increase in net U.S. employment under conditions of prolonged and high unemployment, and (4) some reallocations within the U.S. workforce towards more IP-intensive services sector jobs.


    Ya, that whole let's do business in China thing has some real major drawbacks.

    Of course the politicians won't bother with any of this, they're bought and paid for by the special interests who advocate that free markets and free trade Rule!! So who's still a blind free trade supporter out there?
  2. Gee..Wow..What a shocking surprise.

    Ross Perot and this guy pretty much warned that this was going to happen back in the early 1990's.

    " MM: Who will be the winners and losers under a system of global free trade?

    Goldsmith: The losers will, of course, be those who become unemployed as a result of production being moved offshore. They would also be those who lose their jobs because their companies do not move offshore and are not able to compete with cheap imported products. Finally, they will be all those affected by the reduction in their earning capacity following the shift in the sharing of value- added.

    The winners will be those who can benefit from an almost inexhaustible supply of very cheap labor. They will be the companies who move their production offshore to low-cost areas; the companies who will benefit from paying lower salaries at home; and those who have capital to invest offshore, and who will receive larger dividends as a result of the very low-cost labor. But they would be like the winners of a poker game on the Titanic. The wounds inflicted on their societies would be too deep to be acceptable without brutal consequences.

    It should also be remembered that one of the characteristics of developing countries is that a small handful of people control the overwhelming majority of their nation's resources. It is these people who own the major part of their nation's industrial, commercial and financial enterprises and who assemble the cheap labor which is used to manufacture products for the developed world. Thus, it is the poor in the rich countries who will subsidize the rich in the poor countries. This will have a deep impact on the social cohesion of nations. "