In an excellent short article today in the NYT, Daniel Gross makes the point that higher corporate profits for the first time have not resulted in higher wages.This has been true not just for the United States,but also for Germany,France and Japan.This is one effect of globalization.Because it is now possible for corporations to invest their profits in many countries around the globe, the US looks to be the loser overall.And it is also apparent that corporations no longer see themselves as attached to any single country.
While corporations have realized the New Economic Order for what it is,many ordinary citizens are still under the illusion that being born an American or German or a Japanese automatically entitles you to a higher standard of living.The steady erosion of living standards and the emigration of capital to countries with low wage rates will continue.
The battles being waged at GM and Delphi are part of the same war against people in the high wage countries.It is obvious that the days of labor’s bargaining power are ending.When GM and/or Delphi fold, we can usher in the dawn of twenty first century
Global Capitalism.Those who thought that they can expect high standards of living by being born in America are going to be in for a rude shock.
We’re in a race to the bottom and Americans have the farthest distance to fall. Welcome to the new world order.
I remember a statement made by Carly Fiorina during her go-go years as the high priestess of Hewlett Packard in which she said that Americans are no more entitled to jobs than Indians or Chinese.That captures the essence of how irrelevant nation states have become to corporations.In a world awash with mobile capital and educated workforces have become commodities highly prized by corporations, India and China have become magnets.
The only hope for American workers remains with Japanese and Asian corporations.
The problem is that we’re competing with countries where $5000 a year is a fortune. I used to make $5000 a year – back in 1965 teaching history & art in high school. My last job was as a designer where I made almost that much in a month (pre-tax), but there was someone in China who was willing to do the same work for $5000 a year. Bye-bye job, hello involuntary retirement as I was deemed over qualified for the office jobs that were available in this area.
You certainly have a point.But, the fact that you can live quite comfortably in places like India at $5,000 per year, has opened up an entirely different set of problems.I read somewhere that many Indian people who have lived and worked in the US for twenty years or more are now returning to India to start new companies that are competing in the world markets in areas as diverse as pharmaceutical research, biotechnology,computers and others.The article also had a comment from one such emigrant who said that the cost of a startup company in India is very small compared to the US and the availability of capital is quite good in India for such startups.A Professor from Stanford, one of the godfathers of Silicon Valley has now set up shop in India to take advantage of this cost differential.
challenge of competing on a global scale, they may able to get jobs with foreign corporations.
And part of that challenge will involve some lifestyle changes, but if it is presented in the right way, some may be surprised at how readily those changes are accepted.
The idea of the free market and unchecked capitalism is a very deeply ingrained cultural value for Americans, not just an economic system. Americans like to pay their own way, they don’t want handouts or anything that might be considered socialism.
The value to commercial interests of these values has long been appreciated by the high-profit medical treatment industry, and when you consider that the idea that a day’s labor should be worth, at a minimum, the value of a day’s survival, is now considered by mainstream Americans to be a radical leftist concept, some even actually believe it to be a principle of socialism! – while it might seem strange to imagine upper middle class Americans lining up to work for a couple of dollars a day, a bunk, and a bowl of soup, in many ways, they have been trained to accept that as vigorously as they have been taught that sense of “entitlement.”