...is something I'll say after I address a couple points in your post

/disclaimer - I'm not an economist by trade, although I did minor in it, with a focus on environmental economics and fiscal policy in third world countries. That being said, it's been a number of years, so I may be grasping at slightly incorrect terms here and there.



While this is true, there's something to be said about this being a temporary situation which will eventually work itself out with a lower equilibrium than we're accustomed to in the West, but for the general benefit of all. This is just one of the problems with economics in general - the "optimal solutions" often ignore the realities we have to face in terms of national security (we don't want to outsource our military manufacturing, for example). At any rate, going into the cheaper manufacturing jobs - why are those jobs so much cheaper? Aside from being willing to work for the less expensive rates, there's also much fewer restrictions in terms of workplace safety, etc in those countries, as well as fewer liability concerns for the company if (when) something does go wrong. So, as we live in a modern society of greater fluidity of capital, companies will move to these locations for their manufacturing. Over time, pressure will build in those countries as they grow more opulent, and they will undergo a similar human rights progression that we saw in the early 1900s in our factories, unions will form, and China will cease to be the ideal location - this is already starting to happen and we're seeing some companies leave China for other areas of Southeast Asia. The other factor which will work to even things out is transport costs (fuel) - as it gets prohibitively expensive to ship things long-distance, we'll see a return to locality of manufacturing from that.



Just want to address one point - American tax code is all wonky, and so while we've got "one of the highest corporate tax rates" ON PAPER, we actually have the second lowest EFFECTIVE corporate tax rate of any Western nation, due to subsidies, tax breaks, loopholes, etc. (See graph link at bottom, I don't have admin powers to be able to post links anymore )


Anyway, from an economic standpoint, having jobs outsourced is a good thing, and I don't just mean for a company's bottom line. The West has had such an unduly disproportionate amount of wealth that something had to give and start flowing back toward an equilibrium - this is what's happening now. What's going to happen next is increased demand as affluence spreads, which will mean more jobs across the board (technically, with automation that aspect might be mitigated), but more importantly, specialization - this is what markets are supposed to do. Even if one place (China, in this case) were to have a manufacturing advantage for every good there is, it is STILL not optimal economically for China to manufacture everything, but rather for proportions to work out where different areas of the world will specialize in specific types of products because of their respective comparative advantage on those goods. Once more, we already see this, and in the real world it can cause some problems 5% of HDD manufacturing capacity is in Thailand, which was impacted significantly by the floods there last year), but it's the direction which economics will push things.


Which is, of course, all well and good for numbers on a page, but ignores the people who are "left behind" in the transitional period. As for the solution, this is how we see things - this is the first of two steps in the automation process (first to the third world, then to predominantly robotic, both for agriculture and manufacturing). We as a society need to take a look at ourselves and see how we want to treat people when the second one comes around (decades from now, mind you, but it's coming) - we read fiction here, so I'm sure we've all been exposed to some form of either potential future society. So anyway, first off: recognition that this is something which ISN'T going to change and because we contain a modicum of humanity, maintain and enhance the existing social safety net for the people who will inevitably have a harder time finding work.

Secondly, as we won't be able to stop the fluidity of capital and the pushing of jobs to the third world entirely, rather what we need to do is to use fiscal policy to encourage more rapid adoption of human rights and environmental policies in the third world (while we still have the leverage to do so) to reduce their comparative advantage relative to us, which would allow for a greater percent of our population to be employed during the transition. Unfortunately, I can't think of any surefire way to do this beyond a tax on goods manufactured in countries which don't meet certain standards (for example, a tax on any goods manufactured in a country which allows child labor would be something which could probably get past Congress).

However, I don't think political or economic realities will allow this either. Wages have been stagnant since the late 1970s, and the increase in the cost of goods due to either the taxes themselves or due to the companies in question having to raise the prices due to increased cost of manufacturing to adhere to the policies would eviscerate what is left of the middle class. On the flip-side, the longer we wait, the worse the impact would be.

So....yeah. At the end of the day, the unemployment problem becomes the same problem that pretty much every other problem facing humanity can be boiled down to - it's not that there's not enough jobs for the people who want them...it's that there's too many people for the number of jobs which are actually needed.