11-13-2015, 06:00 PM
(11-13-2015, 02:12 PM)Benton Wrote: It's not like a company spending $5 million in US worker salaries is shutting down domestic production and outsourcing it with a Chinese company to spend $5 million in Chinese worker salaries. They're spending a smaller percentage of what they're spending here and then using the rest as profit.
That's a gross oversimplification. It ignores capital investment, it ignores that the price of those goods might be lower there. It's not paying the people and companies to ship the good overseas - it's taking with it jobs at suppliers. Those workers aren't paying taxes into our coffers. Those workers aren't buying food and clothes at our restaurants and stores.
Those companies might be saving several million and wages, but the total loss to our economy is many multiples of that. That's what I mean when I say the savings to the company is only a fraction of the wealth transfer.
Now the theory goes that as those developing economies become wealthier, they start buying more of our goods and the pie gets bigger for everyone. And while that may ultimately be the case the problem is it's clearly a slow and painful transition or adjustment, and the developing economies haven't figured out how to manage it. And that's on top of a slow down caused by an aging population and slower population growth.
