10/08/2004

U.S. payrolls grew modestly in Sept.

During this electoral year, there isn’t much that democrats or republicans can agree on. One exception is that both parties agree economic growth is inevitable for the next 12 months. Today October 8, 2004 a Job Growth report was published. The report found growth to be not as substantial as was anticipated for the month of September. The democrats are blaming the lack of growth on the republicans, and the republicans are blaming the bad weather in Florida. Regardless, new jobs fell short of expectations. In the vice-presidential debate on Tuesday, Edwards suggested many jobs were lost do to outsourcing of American jobs to a global labor force. This statement drew a bit of a question. In a perfectly competitive marketplace isn’t the greatest optimal market the one in which has the lowest cost perpetuating the highest return? Wouldn’t the outsourcing of jobs be considered a strictly profit seeking motive which would in turn yield a benefit to all Americans?

source: http//www.msnbc.msn.com/id/6205119

6 comments:

peter_parker said...

Economic laws can seem ruthless at times if we turn our focus from the overall benefit to America to the middle-income factory worker who is trying to help a child save for college and just lost their job. That is one of the strategies of politicians. They play on the emotions of people in order to be elected so they can have their wonkian policy put in place, whether or not it will actually benefit anyone. They don't explain the benefits and how the laws work and what can result from certain moves such as outsourcing. They go against the idea because they hope for the vote of those middle-income workers in manual labor. Good politics is not necessarilly good economics and good economics are hardly ever good politics.

pramahaphil said...

Outsourcing is beneficial to all America as a whole, but the Democrats are trying to strike a sympathetic cord for the poor assembly line worker that lost his over paid unionized job to a better educated lower paid Asian worker.

The blame for outsourcing really should lie with the labor unions.

Bryce Larkin said...

In all the economic classes that I have had, outsourcing of a product to a country with a higher comparative advantage is healthy for everyone. It makes me think, what kind of Vice President Edwards will be if he doesn’t understand the simple concept of comparative advantage?

John West said...

Comparative advantage is a term that most Americans are not familiar with. This election year is showing those of us that have taken an econ. class, that the Democrats are trying taking advantage of this fact. They call the American people to look at the job losses to overseas companies and by doing so make the Bush/Cheney ticket backpeddle while trying to find something to blame it on rather than just coming out once and for all and telling the public that job outsourcing is okay because other countries are doing the same thing here. Doing so would be political suicide for any politician, icumbent or otherwise.

Maudi said...

Outsourcing is definatly the cause of jobs lost over the last little while. It is important that we remember that in perfect competition the bid has to go to the lowest bidder in order to compete. Therefore Americans need to change the way they thing and take advantage of the situation.

Dr. Tufte said...

It's odd, but essentially correct, that the candidates think the economy will be alright over the next 12 months. This is odd because the index of leading indicators suggests a recession is coming next spring. This isn't a very good predictor, but it is about the best we have.

As to outsourcing, yes it should benefit the country as a whole. But Edwards isn't appealing to the country as a whole - he's appealing to its individual members.

I would not blame labor unions for outsourcing Pramahaphil. Unions are just not very pervasive in this country - and they are more common in the public sector (which doesn't tend to outsource).

BTW: is "wonkian" a word Peter_Parker? I doubt it - but I like it anyway!