Tag: Labor

Cheap labor vs. jobs

Imagine you have a servant who does all the stuff you don’t particularly want to do for, say, 5 cents an hour. He vacuums your house, he builds your furniture, etc. Or even imagine that you have a person you can buy a new car from for $100. Now imagine that, instead of the subjects being you and your servant, they are your country versus another country that gives your country goods and services for really cheap prices. How could this possibly be a disadvantage?

The problem—or at least the widely-perceived problem—is, of course, that when people get goods and services for cheap from overseas, they no longer pay the people in their own country to do the work, so people lose jobs. This is why we have protectionistic measures in effect such as tariffs, quotas, etc. But the same very basic principle that makes it a benefit to an individual person to receive the benefits of labor for little cost should logically also apply to an individual group of people or country, therefore the concern that receiving the benefits of cheap labor overseas somehow harms us is fundamentally irrational.

The only difference in the case of the whole country from that of the individual is that in this case, some members will gain the benefits from this type of transaction while others won’t, i.e. those who don’t can’t buy anything because they’re unemployed. Therefore, if only the benefits of this kind of transaction are absorbed by the receiving nation wisely, or in other words, if the received goods and services are distributed evenly (or evenly enough) among the country’s populace, it should be an overall boon to the country and everyone should benefit.

The reason this isn’t the case is that, under our current capitalistic ideology, we’re way too afraid of the idea of giving anyone economic benefit who didn’t earn it through labor. If we simply accept that we can be wealthy enough as a nation for some people to live well without having to work, then the availability of cheap labor overseas should never be a problem..

The same principle above applies to the threat looming on the horizon—and to some degree happening now—of robot labor replacing our jobs.

Of course, the details of how to wisely redistribute the wealth resulting from cheap labor would probably be complex, especially due to the issue that if nobody has any incentive to work, due to being able to receive economic benefit for free, then the country as a whole won’t have anything to offer foreign countries in exchange for goods and services; but I believe the problem is solvable and should be solved.

The details of how to wisely redistribute goods are outside of my intentions for this article, but one thing I will mention is that if people are guaranteed a sufficient, but minimal, living (such as shelter, food, water, clothing and possibly basic medical care) without the need to work, then the desire to have a much better living might still act as a sufficient incentive for a sufficient number of people to join the workforce.

I suppose a legitimate concern might be “what if there aren’t even enough jobs available for those who want to work to support the whole nation because they’re all replaced by overseas jobs?” And given that jobs could be done for lower wages to create more openings, I think this is equivalent to (or isomorphic to) the concern that our own labor may become too cheap due to its naturally shrinking until it matches the price of overseas labor.

To this concern I would say that there must be something already advantageous about the natural resources, infrastructure, government, culture, education, intelligence, place within the international community, or something of the country receiving the benefits of cheap labor that affords it its superior economy, or in other words that gives its people the luxury of working for higher wages or gives the country a stronger currency; and this has to be some advantage other than simply a practice of paying people more money to work, because doing that would end up simply causing prices of all goods and services to go up and hence raising inflation and weakening the country’s currency. And therefore, whatever advantage that country has already would remain even if they adjusted distribution and the workforce so properly reap the benefits of cheap labor overseas.