Romney has come out talking big about trade with China, attacking the President over made-up issues and lies about Obama’s record on dealing with a growing trade conflict with the worlds second largest economy. For example, he put out this attack ad just a few weeks ago:
While this hypocrisy was pounced upon by the New York Times, a deeper issue is at stake; one which undermines the very model by which Romney himself operates. Mr Romney is an established liar. He is also an established business person who uses his money to ship jobs to China. What he is failing to look at, both on the campaign trail and the board room, are the long-term implications of his actions.
Let us use one example. According to CNN Money, the average Chinese worker brought home about $300 per year in disposable income in 1990. By 2000, that same worker was making closer to $700. In 2010, now they are pulling in about $3000. The Wall Street Journal reports that the average salary for 2011 came to just shy of $4,000 per year. At the current ~20% compound annual growth, the average Chinese worker will match U.S. salary within a decade, and in many areas such as around Shanghai and Beijing, they already are close to matching the cost of U.S. Labor in the most depressed areas of our nation.
The reason? Industrialization: the very act of moving these jobs to China in the first place. Workers with the needed skills become more in-demand as more companies enter into the market seeking those workers, which results in the inevitable wage increases. Corporations which seek to skimp out on wages inevitably create the very situation they were attempting to avoid in the first place. That is the pitfall of the corporatist mindset. U.S. workers are not expensive; they are the market price. You enter into a new jobs market, and that market rises to the same cost as the U.S. worker market. That is how things work in a market economy. That is the underlying nature of Capitalism, supply and demand.
Someone should tell Mitt: short-sighted visions of quick profits make for lousy business plans. They also make for bad government.