David Cay Johnston writes in “Free Lunch”:
“From the perspective of a company, people who do factory and most office work are so many oranges and tankers of gasoline; their labor is just another commodity purchased in the market. Minimally skilled labor is far more common in China than it is in the United States. This means that until the vast supply of Chinese labor is fully employed, the forces of supply and demand, combined with our government’s current rules, will relentlessly force more and more jobs to move to China, depressing wages in the United States. The process will continue in other countries with vast labor pools and enough stability to attract capital. By the time the global equilibrium is reached and the downward pressure on American wages eases we will all be dead – and so may our great grand children’s great grandchildren….
“In the next decade or two, as many as 40 million American jobs will be at risk of moving overseas, according to an analysis by a leading supporter of free trade. That means that more than one in four jobs in America may evaporate. To put this in perspective, in 20078 there were about 147 million civilian jobs in America, fewer than 7 million we unemployed, and another 4 million or so wanted work but been without a job for so long that they were no longer counted in the labor force. The loss of 40 million jobs would be an economic catastrophe worse the Great Depression.”
From this we can deduce that our current unemployment and poor prospective to returning to even 2007 levels is due to two considerations: An economy in a deep recession which, under normal circumstances, tends to correct itself over several years; and an inexorable long term trend of loss of jobs and reduction of wages as a result of competition from rising economies throughout Asia and other parts of the world.
