Andrew Hagen

In a comment to reporters, the chairman of the White House Council of Economic Advisors, N Gregory Mankiw said:

Outsourcing is a growing phenomenon, but it’s something that we should realize is probably a plus for the economy in the long run.

(*) They said that the mechanization of agriculture was good because it would lead to new industrial jobs. When the deindustrialization of America became a reality, they said it was good because it would lead to new information technology (IT) jobs. Now that the information technology jobs are being outsourced to India and other countries where replacement workers will earn a small fraction of the wages and salaries earned by Americans for doing the same job, they say it’s good. Yet, they have no plan. What jobs will replace the lost IT jobs?

If a new wave of job growth does take hold, Americans who get those jobs will find themselves replaceable by any person in the world willing to take a lower wage or salary under George W Bush’s immigration plan. Any poor person from anywhere in the world could get a US visa and green card if he agreed to take a job in America even if the rate of pay is below the market rate. There would be no limit to the number of job-replacing immigrants. Say you earned $20 an hour. If your employer posted an ad on a web site and someone from the far side of the world responded, he could get on a plane, come to America, and take your job for $10 an hour or less. Your choice would be unemployment or accepting a pay cut to a fraction of what you used to make. That is Bushonomics in a nutshell.

Who cares how fast the economy grows if the rich live off the fatted calf while the bottom 90% are reduced to penury?

The wreckage of the Bush economy has only begun.

Update: 15 February 2004. In terms of economics, the massive wave of white collar outsourcing is wreaking havoc in the labor market. Max Sawicky gives his informed take. (†)

This entry was posted on Thursday, February 12th, 2004 at 15:19 and is filed under Economic policy. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.