Thirty Issues: Globalization

Wednesday, October 08, 2008

First, call in with your tales from the global economy: Did your job cross the border without you? Are your biggest customers overseas? Are you now supervising workers in Bangalore? Call in and comment below.

Philip Levy, resident scholar at the American Enterprise Institute and trade policy coordinator for the McCain campaign, and John Nichols, Washington correspondent for The Nation, debate the issue and what the candidates say (and are likely to do do) on this issue.

Bud Konheim, president and chief executive officer of Nicole Miller, explains the effects of globalization on New York's garment industry.


Bud Konheim, Philip Levy and John Nichols

Comments [42]

diane from NYC

I was really shocked today when you interviewed someone from the Garment Center on 30 issues in 30 days: Globalization. This is an old story that goes back to the late 80's early 90's and it seems like it is a story that no one is interested in anymore.

you covered it well and your guest described it succinctly but in the end his company is an anomaly.

Oct. 08 2008 09:13 PM
Boris from NJ

3. According to Mr. Konheim, China had built an infrastructure supporting the fashion industry. He only reported on the outside shell of that mechanism – he did not mention working conditions, environment standards, etc. Some of the reports coming from China paint a very bleak picture indeed. On the other had, like that earlier caller said about his Mexican relatives – they are happy to work 12 hour per day for what many here would consider a substandard wage. I am sure it is a step up for Chinese as well, but somebody has to pay for it. Guess who?

Oct. 08 2008 03:47 PM
Boris from NJ

2. Mr. Konheim kept repeating that he knows the industry, and understands how to make a garment. This knowledge seems to be disappearing in this country and it is very likely that, sooner or later, China will have a monopoly on the garment industry. Of course this means that they will control the prices. Some may not care about fashion industry, but the same situation exists in much more vital industries – like defense, electronics, science, etc. Once the country loses know-how it is very difficult to get it back.

Oct. 08 2008 03:46 PM
Boris from NJ

Mr. Konheim’s story is worth some analysis.

1. He said that labor cost is only a component of the product cost. In fashion industry the physical cost of material, shipping, etc. has to be added. Many industries don’t have this physical component, so it is all a question of a ratio - labor/product cost. If tailors were paid higher wages, their jobs would be worth outsourcing too. The silver lining here – with all the pun intended - when people with college degrees start making as little as tailors, their jobs will be safe (maybe).

Oct. 08 2008 03:45 PM

final comment: 3 words explain us firms outsourcing to 3rd world ones (no joke!):

free corporate massages

Oct. 08 2008 12:10 PM

ps this was the most interesting topic of 1990-2000.

interesting the nyc press is getting around to it now...

Oct. 08 2008 12:00 PM
Bernie from NJ

What jobs are going to remain in the US?

I think that only jobs that require the workers' physical presence will remain, as the internet is allowing "knowledge worker" jobs to be exported, just as the containter ship has allowed manufacturing jobs to be exported.

For the "physical presence required" jobs that remain in the US, the relatively free flow of foreigners into the United States labor force will bring the wage for those jobs down to the global average.

The only potential winners in the US will be those that have capital to invest, worsening the income inequality in the country. With the currently sinking markets, even that investing class may not fare well.

Oct. 08 2008 11:58 AM
Kathy from Long Island, NY

Why on earth wouldn't Nicole Miller put a videoconferencing system into the Chinese offices and into the decision-maker's home so that issues such as Mr Konheim is describing can be addressed in a timely fashion?

Technlogy can solve a lot of these issues.

Oct. 08 2008 11:57 AM

that xenophobic argument is great for outsourcing brokers. in reality ask anyone running a call center outside the us that is focused on the us market whether they make money. NO.

as far as china's success in making clothes, chinese factories were only step 2. step one: get americans to replace clothing with "body coverings."

the positive outcome of the second point is a huge boon to HIGH QUALITY garments (and food, furniture, etc). Seeing horrible clothes, etc first hand set in motion a revolution for clean, well made, long lasting things.

The "One good pair is better than 4 bad pairs" crowd has exploded -- thanks to chinese factories.

Oct. 08 2008 11:56 AM
Chuck from Brooklyn

During last night’s debate, John McCain said we need “a cool hand at the tiller”.


Oct. 08 2008 11:55 AM
merv from manh.

The AEI guy is either misinformed or deliberately misleading. The textile and apparel industry has lost over 450,000 jobs, 43% of its workforce, since the demise of the Multi Fiber Agreements that were conditional to China's access to the WTO. Factories in the Carolinas are not being replaced by factories "down the road" in the USA which is what was laughably said. The lack of protection to this industry is staggering.

Oct. 08 2008 11:55 AM
RC from queens


How about that most of the financiers for the garment industry are still in NYC? Are most of the Factors and Asset Based Lenders still in NYC?

Is this why most of your front offices are in NYC?

Oct. 08 2008 11:55 AM

I'm so glad this guy is talking about the overall costs of globalization.
Just on communication, not even counting the shipping costs/carbon costs.
Globalization is truly rotten for the environment. We need to think about it.
And we need to make some things here. Where we can regulate the production, so the products are safe, and the production doesn't create excess pollution.

Oct. 08 2008 11:55 AM
colombuenazo from New York, NY

Free-trade agreements have NOT worked for either the US or the developing world. The only beneficiaries are the big multinational corporations (MNCs), but the Rich/Poor income gap keeps growing in most regions around the world and the US.

What we need is FAIR-TRADE policies with the world, and the END of obscene agricultural subsidies in the US, EU and Japan.

Furthermore, the FTA with COLOMBIA must continue to be OPPOSED on the grounds of the President Uribe's links with the creation and operation of drug-traficking-financed, dangerously-armed, RIGHT-WING militias who continue massacring peasants, union-leaders, NGO directives and left-wing simpathizers in all corner of that country.

Oct. 08 2008 11:53 AM
Dan Welsh from South Salem, NY

So-called free trade has not benefited average Americans. We built our economy behind protective tariffs. The American worker has thrived during periods of higher tariffs, and has regressed when tariffs have been low. This is just history (read Ravi Bahtra). Tariffs at reasonable rates are a sensible part of economic policy. Free trade as an ideology has made us unable to be objective about this subject.

Oct. 08 2008 11:50 AM
Chuck from Brooklyn

During last night’s debate, John McCain said we need “a cool hand at the tiller”.


Oct. 08 2008 11:50 AM
MichaelB from UWS Manhattan

Peter [11], et al, I am not blaming the foreign workers. Nor am I xenophobic. Overwhelmingly, these folks have been great and I think Indians are a wonderful people.

But companies are flagrantly breaking the law with impunity. Americans have AT LEAST as much right to work in America as foreigners do.

What about the caller who talked about his friend who was "forced" to train his replacement (or get shown the door immediately)? This indignity has happened to thousands of people. How can you blithely ignore or defend this? This is REALITY for so many people.

Oct. 08 2008 11:49 AM
susy from manhattan for new jobs is great.

But *what* jobs is he talking about?

Oct. 08 2008 11:45 AM

how does tax policy fit relate to this issue?

Oct. 08 2008 11:45 AM
Gary Comorau from New York City

We are not the largest word exporter!
The top three are:

I believe this changed by 2005. Germany has managed to build more high tech items.

Oct. 08 2008 11:39 AM
AWM from UWS

Xenophobia and scapegoating are a corporation's best friend. While they make decisions for the sake of profit, American workers focus on the people who are taking their jobs rather than the overall economic and societal core of why outsourcing is preferred. It worked in the past when strike breakers of different ethnicities were used, it works now.

If "globalization" was focused on actual reciprocity, a relationship that benefits both sides and whose core goal is mutual prosperity we wouldn’t have such a large pool of workers willing to work for nothing around the world. It is possible to use this approach and profit at the same time; now that the balance and dynamics of global business are changing it would be most productive to become more positively and constructively engaged. Within this downturn exists opportunities.

Oct. 08 2008 11:38 AM
Boris from NJ

There is another dimension to replacing American forkworce with foreigners - fraud. It is much easier to manipulate Indians, especially if they in Bangalor, to fudge company's numbers, than an American workers who know - presumably - their rights under the US law.

Oct. 08 2008 11:38 AM
Jim Fischer from Manhattan

Globalization Spreads All Agricultural Pests

Global trade inherently forces all trading nations to accept an increased level of invasive pests, diseases, and pathogens. The use of "self certification" by shippers tends to assure this, as the shipper has the choice of being honest, or shipping product.

Many countries inspect imports, but this is called a "non-tariff barrier to trade" by many trading firms, and the US lacks the resolve to stand up to pressure on this point.

One of the more glaring examples of this is the entire "Colony Collapse Disorder" problem,
about which you asked me to appear on your show, but I suggested a USDA staff member appear instead.

CCD is clearly caused by a mix of pathogens, and each and every one of these pathogens made it to the USA over the oceans along with all this new-fangled world trade.

As a result, US agriculture as a whole suffers, and beekeeping becomes, at best, marginally profitable in only the best years.

Other pests, pathogens, and diseases that prey upon other segments of agriculture have made life difficult for growers. Their only rational reaction is to use more pesticides,
which tends to result in more "bee kills" when pesticides are applied improperly by migrant workers who are not provided instructions in their native languages.

Oct. 08 2008 11:36 AM

(the issue being the corporate strategy of replacing educated analysts w perhaps smart and motivated but totally unqualified subs working at a hundreth the price!)

Oct. 08 2008 11:32 AM

yes i've worked w indians including ex farmers hence my comment. this is not about indians it's about the specific issue being discussed.

Oct. 08 2008 11:31 AM
Boris from NJ

Globalization was/is pushed by conservatives who support greedy executives trying to maximize corporate profits. Globalization was/is also supported by liberals who feel that it would lift working poor in the third world countries. It is the American middle class who is in the middle and pays for it - directly throught the loss of jobs or lower pay, higher taxes, etc.

Don't expect any relief from neither McCain nor Obama on this issue.

Oct. 08 2008 11:31 AM
Frank from Park Slope

It's going to hurt those of us who have been enjoying a tremendous standard of living for the last 50-100 years, but equalizing economic opportunity to all people on Earth is a Good Thing.

Frankly, I believe the American spirit and tradition of entrepreneuring will enable us to compete well in the world economy despite opening the leveling of global labor markets.

Oct. 08 2008 11:29 AM

ps i agree 100 percent w peter/11. as those target nations have learned brain and physical infrastructure is the keystone.

Oct. 08 2008 11:28 AM
chuck m from central NJ

I am a self employed personal trainer. My clint base shrinks as jobs disappear, largely because our manufacturing infrastructure disentegrates.

Oct. 08 2008 11:27 AM
peter from manhatten

smidely, have you worked with any indians? i have and found them to be very competent, even if they may have been 'ex farmers'. now, it seems, is when all the xenophobes come out of the closet.

Oct. 08 2008 11:27 AM

incidentally, some of the hedge funds, private equity firms and other top tier investment companies that are shifting work from nyc to india for an under the radar reason: indian businesspeople now own both the nyc or greenwich firm AND the cube factory in bangalore.

Oct. 08 2008 11:27 AM
Catherine from rockville centre

Brian- I hope you'll address the relationship between so-called "free trade" and immigration policy.

Oct. 08 2008 11:26 AM
peter from manhatten

don't blame workers in foreign workers who can do the same job for less - they have as much right as americans do to make a good living. our politicians, if they cared about american workers, could make it a priority to create incentives for american companies to keep jobs in the country, but they don't. just another side effect of the social-darwinist experiment in which we live.

Oct. 08 2008 11:25 AM
MichaelB from UWS Manhattan

I do IT (computer) work. Over the past several years, the teams I work with are overwhelmingly foreigners (with legal work statuses). Mostly Indian, but some Koreans, etc.
I believe the law says requires foreign workers can only be hired if the skills cannot be found with domestic workers. The high percentage of foreign workers in IT gives the lie to this criteria. Domestic workers CAN be found, but not at the lower wages that companies can get away with paying the foreign workers.

Oct. 08 2008 11:23 AM
Nathan from Saint Petersburg

With regards to the caller who had the friend who lost his job to the worker from India who made 25$ a day and was proud of it.

We need to be aware of purchasing power of dollars rather than absolute numbers. 1000 rupees a day is a solid middle class living in many parts of India. Of course he is proud of it. He worked very hard to get into that position.

Its just another side of the situation that needs to considered.

Oct. 08 2008 11:20 AM

Lots of the financial analysis business has gone from the US to Bangalore. 75K - 125K jobs are now 15K jobs done by ex-farmers.


Oct. 08 2008 11:19 AM

My mother lost her job when I graduated from high school when her seamstress job was moved to Mexico. It hurt our family however it would be hypocritical to ask our government to close the borders and also not to provide economic opportunity in other countries. However American workers would be more competitive if foreign companies were forced to follow the same environmental and labor laws we have here.

Oct. 08 2008 11:15 AM
Nathan from Saint Petersburg

I have been positively effected by globalization because I work for a European company that is actually outsourcing its work to the US. While this is in the extreme minority of situations currently, I expect this to be a growing trend. This is why it is essential that we improve our infrastructure and help educate our children so that US citizens can be competitive in the inevitable global markets of the future.

Oct. 08 2008 11:13 AM
hjs from 11211

poor mexicans do jobs that i don't want.

hey guys why don't we rebuild our economy on tech services, green tech. let's invest in education healthcare and modern infrastructure.
then we can sell services instead of goods to the world.

Oct. 08 2008 11:12 AM
Lauren from Woodbury, NY

The publishing industry has been demolished by jobs going overseas to India.
I'm lucky to have the job I do, but it's a very poor market compared to what it was in the late '90s.
...and yes, I feel it!

Oct. 08 2008 11:10 AM
john from upper west side

both candidates desplay an arrogance reguarding the ecconomy ... that they would suggest they have the answers to a major global imballance brought on through years of indulgance.

Just once I would like to hear I don't have an answer but I will put every hunman resource regardless of politics to work for a solution. That there are wiser more experienced minds than mine. That I have confidence in the ecconomic engine out nation is and its people. But we must all except the reality that we must tighten our belts and begin to live within our means. The political dueling for position of pundits and comminttors do not help direct the debate.

Oct. 08 2008 10:40 AM
Lennie from Manhattan

My wife and I noticed that, after the debate last night, Sen. McCain briefly shook a few hands and then disappeared. By contrast, Sen. Obama and Michelle stayed for a long time, posing for pictures with the audience, speaking with them etc.
Are we the only people who noticed this? I have heard no commentary. Are we correct and what do you think about it?

Oct. 08 2008 10:29 AM

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