Post by unlawflcombatnt on May 17, 2007 17:09:34 GMT -6
The latest trade sell-out by Democrats is anticipated to have its first effects on free trade agreements with Peru and Panama. Any deals with Peru and Panama, as well as the effects of those deals, have been described as "small."
The "smallness" of these trade deals is usually defined as the size of their export markets and ability to purchase American goods. The size of these markets is strongly related to their exchange rate GDP. In this case, the combined GDP of Peru & Panama is $92 billion ($0.092 trillion), or 0.7% of the US's $13 trillion GDP.
What's ignored, however, is the "size" of the new labor market available to American Corporate outsourcers. In the case of Peru & Panama, the combined labor force size is 10.6 million. The U.S. Labor Force size is roughly 150 million. The addition of Peruvian & Panamanian workers increases the size of the labor force available to American multinationals by 7%, or 10 times as much as it increases the consumer market size (of only 0.7%)
(Population & GDP information on Peru & Panama can be found at the following CIA World Fact links:
Peru
Panama
This may be a "small" deal when it comes to potential US exports. But it's not a "small" deal when it comes to American workers, by increasing American worker competition for jobs by 7%. For American workers, it is 10 times as big a deal.
For American workers, this is a losing proposition. Increasing the effective labor force size available to American business will decrease both American employment AND wages.
Of course, it's a great deal for Corporate America over the short-term, because it will further suppress wages and reduce labor costs (and increase profit margins). In the long-run, however, it will reduce the consumer income necessary to purchase production. In the long-run it's a bad deal for all. It's just one more step in the Globalization-induced race to the bottom.
Why any politician would support this, Republican or Democrat, is just beyond comprehension.
The "smallness" of these trade deals is usually defined as the size of their export markets and ability to purchase American goods. The size of these markets is strongly related to their exchange rate GDP. In this case, the combined GDP of Peru & Panama is $92 billion ($0.092 trillion), or 0.7% of the US's $13 trillion GDP.
What's ignored, however, is the "size" of the new labor market available to American Corporate outsourcers. In the case of Peru & Panama, the combined labor force size is 10.6 million. The U.S. Labor Force size is roughly 150 million. The addition of Peruvian & Panamanian workers increases the size of the labor force available to American multinationals by 7%, or 10 times as much as it increases the consumer market size (of only 0.7%)
(Population & GDP information on Peru & Panama can be found at the following CIA World Fact links:
Peru
Panama
This may be a "small" deal when it comes to potential US exports. But it's not a "small" deal when it comes to American workers, by increasing American worker competition for jobs by 7%. For American workers, it is 10 times as big a deal.
For American workers, this is a losing proposition. Increasing the effective labor force size available to American business will decrease both American employment AND wages.
Of course, it's a great deal for Corporate America over the short-term, because it will further suppress wages and reduce labor costs (and increase profit margins). In the long-run, however, it will reduce the consumer income necessary to purchase production. In the long-run it's a bad deal for all. It's just one more step in the Globalization-induced race to the bottom.
Why any politician would support this, Republican or Democrat, is just beyond comprehension.