ok so you got all these jobs going to india right?

well why cant we make india pay them the same amount of money we would have payed them.

10/20/2006 4:43:54 AM

Putting a tariff on job exports would be easier.

10/20/2006 7:26:31 AM

Because a) India is a sovereign nation and b) Why would we want to make goods more expensive?

10/20/2006 7:35:27 AM

^ Pretty much.

10/20/2006 9:58:51 AM

^^Pretty much.

10/20/2006 10:10:04 AM

^^^ Pretty much

[Edited on October 20, 2006 at 10:10 AM. Reason : .]

10/20/2006 10:10:35 AM

Well, we could always invade India next. To make them pay equal wages.

10/20/2006 10:44:31 AM

I think it would be possible to put some pressure on India to pay those folks similar wages. I don't know if that should be done but just by mentioning that, the president could cause a serious discussion that would put some pressure on India.

10/20/2006 11:00:56 AM

why would we want to? We'll just inflate the price of goods artificially.

Why doesn't the president just go ahead and slap an extra $100 on all software products and call it done.

10/20/2006 11:06:38 AM

Similar wages? Are you mad?

Do you know how rich you would be if you made an American wage in India. Don't forget that Indian cost of living != American Cost of Living

Damn, and I thought I already pwnt this with the 2nd reply.

10/20/2006 11:06:47 AM

yeah...im just saying...it could be done...

i sure as heck would not want that...low wages elsewhere are what keep prices down here...

10/20/2006 11:11:15 AM

Not to mention the pain and suffering it would inflict upon the Indian people.

10/20/2006 11:49:14 AM

i am of the opinion that the Indian Rupee is ridiculously undervalued - time and the free markets will fix that.

just an anecdote: a Indian-American guy I know who lives in Virginia started a software company and tried to hire talent in India. he said what he was looking for was too expensive in India, and is now has people working for him in the Ukraine. since he started the company, i think he's more Americans than he has people overseas. stuff gets developed there and needs feet on the street here.

10/20/2006 12:47:00 PM

making India pay more would defeat the purpose of outsourcing

10/20/2006 12:56:01 PM

^ Which would just perpetuate poverty.

10/20/2006 12:57:23 PM

I think that this is the case that people make about globalization: you need these cheaper wages to bring in investment and develop a nation's economy until the nation's standard of living rises enough so that American wages become competitive again. According to the pro-globalization types, you'll eventually reach some sort of equilibrium.

The only problem of course is maintaining enough domestic industrial and economic strength to be around when that happens.

10/20/2006 1:06:49 PM

We won't be making "India" pay their people more, we'd be making the American companies that employed the Indians pay them more.

10/20/2006 1:32:08 PM

^^ Not at all, that is why we have flexible exchange rates. Thanks to our currency markets there is nothing India could do or be that can harm the U.S. economy in the long term.

For example, whenever you hear the horror story of international trade "We buy everything from China and they refuse to buy anything from us" then the exchange rates will adjust to make them buy stuff from us or it will become prohibitively expensive to afford Chinese products. In other words, if Chinese goods are perpetually cheap then the system will adjust to make the Chinese yuan expensive compared to the dollar, offsetting the cheapness of the goods.

Oh, but LoneSnark, what happens if the Chinese interfere with the market and don't let their currency appreciate? Well, then the system will adjust some other way. China is keeping its currency from appreciating by flooding the international market with yuan by buying up dollars and investing in T-Bills. Well, this behavior will eventually flood the Chinese economy with yuan, sparking inflation. Therefore, the prices in China will inflate until price parity is reached and the trade deficit vanishes. This takes longer and is more damaging to the Chinese economy than if exchange rates were flexible, but it still happens.

I say the long term because this statement is obviously not true in the short term. India could dump its dollar reserves, bid down its own currency, invade its neighbors, steal technology, etc; all of which could be very damaging in the short term.

[Edited on October 20, 2006 at 1:39 PM. Reason : ^]

10/20/2006 1:39:05 PM

Quote :

"We won't be making "India" pay their people more, we'd be making the American companies that employed the Indians pay them more."

10/20/2006 1:41:19 PM

It wouldn't work because we can't force another nation to pay its workers more and forcing American companies to increase the amount they pay Indians would in the best case scenario make American goods more expensive.

Eventually Indian jobs won't be as attractive because the salaries in Indian will continue to rise.

10/20/2006 1:51:25 PM

Quote :

"Oh, but LoneSnark, what happens if the Chinese interfere with the market and don't let their currency appreciate? Well, then the system will adjust some other way. China is keeping its currency from appreciating by flooding the international market with yuan by buying up dollars and investing in T-Bills. Well, this behavior will eventually flood the Chinese economy with yuan, sparking inflation. Therefore, the prices in China will inflate until price parity is reached and the trade deficit vanishes. This takes longer and is more damaging to the Chinese economy than if exchange rates were flexible, but it still happens. "

Bravo. I absolutely love international finance because its so simple, yet so few people get it.

Loneshark, have you read either "The Choice" or "A Fable of Free Trade and Protectionism"

10/20/2006 2:51:51 PM

I have not, did you really enjoy it? I'm always on the look out for a good book or two.

10/20/2006 4:26:13 PM

The Choice takes about 25 minutes to read, but its well worth a rent from the library.

10/20/2006 5:55:26 PM