Shanadeus said:
Leave where?
To a more dangerous/unstable country?
Applies more to corporations who simply can't just pack up and relocate willy-nilly, and if they do it's usually a loss long-term for the company. Sure they just outsource to India and China, but the workers in those countries are already gaining more power than they had 5-10 years ago. And relatively soon it'll simply be too expensive to continue with that practice, and risky as well if you're going to play with the general unreliability of basic necessities such as electricity and security in such countries.
We even have Chinese companies building plants in america because of how unreliable conditions are in China.
Not true. There are plenty of countries in the emerging markets that are more than happy to receive foreign investment and companies do in fact leave if the opportunities are better elsewhere.
One of my foreign bank accounts for instance currently earns an 8% annual interest rate, which is down from 15% thanks to the economic downturn. What's the interest rate on anyone in Canada or the US?
Ships fly flags of convenience leading to most of them flying flags of Liberia and Monrovia. Over 50% of US public corporations are incorporated in Delaware due to favorable taxation laws.
Obama tried to make corporate inversions a bit more annoying last year but it still doesn't stop companies that I've invested in, like Weatherford International, originally from the US, in moving to Bermuda and then Switzerland.
International companies are international and they will be wherever is most favorable since they are supposed to have no nationalist ties.
The belief that countries that provide favorable climates for the wealthy are unstable or dangerous is patently false. SE Asia has seen the rise of many millionaires of late, and countries like Malaysia are seeing corporate investment rise hand over fist. Sunpower for instance is a US solar company it's building plants in Malaysia to compete with the Chinese.
Where do you get the idea that it will be too expensive to continue the process of outsourcing in a world of increasing global traffic and technological improvements?
We are not talking about slight differences here:
http://www.allbusiness.com/manufacturing/4004559-1.html
"Total compensation costs for 71 million Chinese production workers employed in rural manufacturing plants was an estimated $75 per month, according to Banister. Subtract out social insurance costs and their take-home pay is about $70 per month or around $837 per year. On a purchasing power parity basis, they would be making less than $2 an hour in the United States, or $3,890 a year. "
While increasing demands will certainly increase the wages of the Chinese laborer, the gap itself may likely never be overcome and there will always be yet another country or group of countries that are or want to be where China was. The Chinese themselves are aggressively increasing it's connections with Africa ans they produce and sell in African countries to the point that Chinese languages are now an important language of trade on the continent.
http://www.atimes.com/atimes/China/KG14Ad02.html
Ultimately, there is no way for the Western laborer to compete unless the workforce becomes specialized or the worker concedes to fewer benefits.