4.13.2004

Exposing the Conservative Straw Man - "Productivity" OpEdNews.com

"But offshoring isn't the problem for American workers!" conservatives shout. "It's the increase in productivity. American businesses need fewer workers because automation and hard work have made our workers more productive."

This is a tragic lie, and it's been bought hook, line, and sinker by most American politicians and even many economists.

Productivity is, very simply, the measurement of how many products or services can be produced for how many dollars of labor expended. But offshoring distorts productivity figures in two ways.

First, foreign labor is cheaper, but produces nearly identical amounts of product or service. The result is "increased productivity."

Second, many corporations don't put offshore labor onto their balance sheets as a labor expense. Because they hire offshore companies as subcontractors to do work previously done by their own employees, they get to reduce the number and cost of their employees while having an only slightly increased line-item on their P&L for the subcontractor. The result is that it looks like their remaining employees are getting more done, because the offshore employees are no longer counted in the productivity figures.

But the Indians and Chinese know something you won't hear on conservative "business" programs. While China and India eagerly let multinational corporations move work from America to their nations, they fiercely protect their own domestic industries primarily through the use of tariffs - taxes on imported goods - and the strict regulation of imported labor.

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