I don't think its so much that China's GDP has grown to the point it is "threatening" any coundtries. Its more that for all practical purposes, China has an infinite amout of people. And as there economy grows, and their standard of living increases, they will start to demand more products. This will make them a large player in terms of importing products, instead of just exporting them, such as right now.
I am assuming that our conversation is all in good fun.
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Jeez, if we could only get Americans to buy American, but that's another topic.
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Statements like this make my head hurt. There is no reason to buy American simply because you live in America. This kind of thinking ties in directly with people thinking outsourcing is inherently bad as well. It is difficult to teach several semesters of Economics in one relatively short post, and I am sure to get flamed for this, but here goes anyway.
I want you (this would be anybody that reads this post, and wants to take the time and effort to play along) to stop for a moment and think about the shirt you are wearing. Why did you buy that shirt? Do you like it? Does it fit your style? Is it comfortable? Did it fit you budget? In short; when you went shirt shopping, did you look for the ugliest shirt you could find that was also the most expensive, or did you look for the shirt that you liked the best for the least amount of money? I would be willing to bet that for most people (lets call them rational consumers); the second option was their choice. Does buying this handsome shirt at the lowest cost possible to you make you a greedy capitalist pig, or does it make you a smart, informed buyer? Again, I think that most people would say a smart, informed buyer. Why then, when companies do this EXACT process, does everybody think they are horrible? Companies out source to lower costs, which in turn lower prices, which in turn benefits us, the consumers. Now wait, before anyone goes off saying if nobody has a job we can't buy products anyway, let me tackle one subject at a time. I am aware that many people think that if a company saves money buy lowering costs, they will not lower prices. Instead, they will continue to charge a high price, reaping massive profits. This is not the case in most situations. They simply cannot do it. If there is a particular industry that finds a way to lower costs, and they do not lower prices, they will be making large profits. Well, what attracts new firms into an industry in the first place? Profit. So if there is an industry that is making large profits, outside firms will be induced to enter, and begin making this product. New firms mean a larger supply. A shift in supply means prices must go down. They MUST go down. If they do not go down, producers will be left with a surplus of goods, and will then lose money. This process of firms entering the market will continue until firms in this industry are no longer making a huge profit, and instead are making a "normal" profit. So we now know that if a firm finds a way to lower its costs, this is passed on to consumers through a higher quantity of goods at a lower price.
Outsourcing. Just saying the word makes people’s hearts beat faster and foam start to fleck around their mouths. A purple hue can even be seen crawling up some people throats to slowly consume their faces as the blood vessels in their eyes strain. But wait: are companies out sourcing the problem, or is it the American workforce? The head of the Economics department at MIT, one of the top Econ schools in the country, once said, "If you have third world skills, you will work for third world wages". This is what outsourcing is all about. America is just not competitive when it comes to producing certain goods, and you know what? That is just fine. The concept that is being lost is that of specialization. Instead of each country trying to produce ALL the good and services that the countries consumers want, it is much more efficient for them to only produce those goods for which they have a comparative advantage, then trade. There are people in Asia that will work all day for a tiny fraction of what American workers will work for. Let them. In fact, give them every job that they have the skills to do, and let them produce those products at a low price. Now, let us concentrate on what it is we can do better. Think about the educations systems in Asia, and here. No comparison. In fact, our colleges are some of the best in the world. So use them. Get educated. Learn to do something that nobody in a third world country can do. The problem is not that American companies are trying to lower costs by outsourcing. The problem is that the American workforce can not, or is not willing to become educated. For the year 2004 the Bureau of Education reported that only about 1/3 of people who enter high school will ever receive a college degree. 1/3. We are a country that has some of the top schools in the world, yet less then 1/3 of us will ever receive a degree. And that’s just an undergraduate degree; the numbers are even smaller for Masters or PhD’s. Get your skills above those of a third world worker, and your job will not be outsourced. Yes, some tech jobs are being outsourced as well. Again, this does not mean that the company is bad. It means that American workers are not competitive in that field. Tech support gets brought up quite often. When you call Dell or somebody you often get a person in India. Well let’s look at this. Tech support workers in America often have very little or no educational training. Maybe a certificate program or something, but rarely a college degree. For a quarter of the price you can get a person in India who has a PHD or Master degree in computer science or engineering. I am sorry, but it is a no brainier. The companies can purchase WAY more for WAY less. Now instead of getting offended by this, we all need to work harder to make ourselves more competitive in the work force. Get rid of the entitlement complex: I’m an American, therefore I deserve a high paying job, many creature comforts ect. No you don’t. The people that work their asses off to become the best at something are the ones who will make it. If you have third world skills, you will work for third world wages.