These are discouraging times, but once in a blue moon a bit of hope appears. I am pleased to report on the bit of hope delivered in March of 2011 by Michael Spence, a Nobel prize-winning economist, assisted by Sandile Hlatshwayo, a researcher at New York University. The two economists have taken a careful empirical look at jobs offshoring and concluded that it has ruined the income and employment prospects for most Americans.
To add to the amazement, their research report, “The Evolving Structure of the American Economy and the Employment Challenge,” was published by the very establishment Council on Foreign Relations ( http://www.cfr.org/ industrial-policy/evolving-structure-american-economy-employment-challenge/p24366 ).
For a decade I have warned that U.S. corporations, pressed by Wall Street and large retailers such as Wal-Mart, to move offshore their production for U.S. consumer markets, were simultaneously moving offshore U.S. GDP, U.S. tax base, U.S. consumer income, and irreplaceable career opportunities for American citizens.
Among the serious consequences of offshoring are the dismantling of the ladders of upward mobility that made the United States an “opportunity society,” an extraordinary worsening of the income distribution, and large trade and federal budget deficits that cannot be closed by normal means. These deficits now threaten the U.S. dollar’s role as world reserve currency.
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