Letters to the Editor
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Disappointed
I am so disappointed in 'How The World Works'.
I expected a series exploring globalization in all of its dimensions, including how outsourcing impacts American workers.
For some, globalization is fun and exciting, and this is just dandy. Yay for You. But American workers face some real issues. Silicon Valley has been slammed. Mr. Leonard, are you in the Bay Area? If so, you are really out of it. Technology employment is below what it was in 2000 and still falling. I read somewhere that the percent of jobs lost around here equalled the Great Depression. And you don't even go into the issues of job lost? Of outsourcing migrating up the skills chain?
I feel like I'm reading a neo-con columnist on Salon, of all places.
I'm not saying you should cover only the bad news for American workers, but avoiding dealing with that topic is wrong headed and unhelpful.
Here are some links that your readers might be interested in, even if you're not. (Hardly radical reading - this is Roach of Morgan Stanley).
"OECD data put the wage share at 49.5% of business sector GDP in 2004 for the world’s 30 leading developed nations -- down sharply from the 53.2% reading of the mid-1980s. Reductions have been widespread -- including Europe, Japan, and the United States. This is hardly a coincidence. My vote for the explanation continues to go for the “global labor arbitrage” -- a critical outgrowth of globalization and the concomitant integration of cross-border labor markets (see my 5 October 2003 essay, “The Global Labor Arbitrage”)."
See
"The End of Labor" http://www.morganstanley.com/GEFdata/digests/20060109-mon.html
And
"The Big Squeeze"
http://www.morganstanley.com/GEFdata/digests/20050404-mon.html#anchor0
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More reality check to Andrew Leonard
This is from the Financial Times, 1-11-06, Christopher Swann:
Some economists believe that the threat of moving production overseas has made it easier for companies to keep a lid on wage growth. “Companies have been able to tap not just cheap labour but also smart labour from abroad,” said Ian Morris, US economist at HSBC. “This may help explain why wage growth has remained weak and profits at S&P 500 companies have been surprisingly strong.”
Rah rah corporate capitalism!
Slash benefits! Send jobs overseas! Screw workers! Whohoo!
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Two Cities: Bay Area and Suzhou
Hi Andrew,
I find your articles interesting. I have a personal question for you: Why you are interested in China anyway? My interest is personal…I studied Chinese at UCSC, came to China in 1991 (to study at Beijing U.), and have lived in China for the last two years. But I started studying not because I was interested in China, but because I needed to learn a language for school requirements, and was tired of memorizing all those Spanish verb tenses. Years later, after MBA school, I worked in the Bay Area as a marketing manager in several of high-tech companies. And starting in 2000, I was laid-off from many high-tech companies. In-between jobs, while my wife heroically worked as a low-paid marketing assistant, I worked as a waiter in a Japanese restaurant and taught night-school classes in order to pay our Bay Area housing mortgage. That was before two years ago, when we sold our house (for a decent profit), and moved to China. Our move was a “marketing re-positioning” for my family.
My current line of work somewhat relates to your last article. I do management and leadership consulting. In the Bay Area, saying you are a consultant means that you are really unemployed. Here, it means I’m trying to slowly help Chinese managers overcome their Confucian and State-Owned-Enterprise (SOE) cultural “blind-spots”. And I agree, it will take generations to overcome the damage that SOE culture has created.
I live in Suzhou, China. It’s a nice city. And if I have a craving to feel like I live in the Bay Area, I can always get on a bus to Shanghai (1 hour away), get stuck in traffic, and eventually get to a great Mediterranean breakfast restaurant that serves good falafel at a decent price.
I have heard that Suzhou was the #1 place for foreign investment in China last year. Which, on the surface, would be bad news for US tech workers because Suzhou is high-end (unlike, say, DongGuan in Guangdong, AKA Canton province). Siemens and Bosch have big presence here (well…Siemens has essentially become a SOE in China and so has big presence everywhere). AMD, Intel, Nat Semi, Fairchild, GSK, Samsung, Alcatel, Nokia, L’Oreal, Solectron, Delphi, Toshiba, BenQ (Acer), Philips, Maxtor, Seagate, Black&Decker, etc…all have big presence here. But there is actually very little design work done here and most production is still low-end by US standards. And China has a long way to go before it can be competitive with India, or even in Software.
I respectfully disagree with what camilleRoy said in his comments. For starters, there are a lot of places you can discuss the negative downsides of globalization and its many facets (i.e. outsourcing). Mr. Leonard’s articles are distinctly non-ideological about this debate, and I appreciate that. Also, what I never see from the anti-globalization crowd is a well-though out alternative. Its always corporate greed yadda yadda yadda. What can we really do about the outsourcing trend? Furthermore, the tech-downturn in 2000 had *nothing* to do with outsourcing. It had everything to do with market expectations and financial situations. You could argue that George Bush in the White House also focused big investors away from volatile high-tech, and into oil and military stocks. As stocks -or the promise of getting riches from going public- was the financial and spiritual fuel behind Silicon Valley and its hard-driving workforce, this shift in investment priorities still is (in my mind anyway) the biggest continuing obstacle behind the Silicon Valley depression. And let’s not forget the trouble Bush’s friends at Enron did to California and Silicon Valley in particular. A 10 minute black-out will shut down a high-tech company for a almost a day. (BTW, Suzhou SIP region boasts no black-outs in the last 5 years…sort of a record in China). Then there are the culture problems of the US as well. If we want to compete as a society, we need to invest in education. Duh!
I feel that the argument about blaming China and outsourcing for America’s job woes is an engineered distraction, and very similar to what Chinese people do in regards to Japan. Blame the foreigner, but don’t look at the real problems that are right in front of us.