This is my feeling also. The problem is if you read any of the commentary by almost any economist, including the left leaning ones, I don't get the feeling they think this.

I read a series of articles in the Milwaukee Journal On-line that stated one of the Chinese objectives was to forcefully keep their wage levels down for at least the next 20 years, with over 1 billion people this won't be hard to do. I don't know what the answer is, but obviously, what we're doing now ain't working for America.

Hi Nathan. If the WaPost is to believed, you are grossly understating how "unfree" Chinese labor is. It is not merely a matter of not having collective bargaining rights - as disgraceful as that is in both the U.S. and China. Maybe this is a slander, but as I understand it, a large portion of thw workfoce is stuck in an industrial feudalism, where they are forbidden to quit their job without government permission, nor apply for another job. In short they not only lack collective bargaining rights, but individual bargaining rights.

Note: actual e-mail is garlpublic. the address after the AT sign is comcast. The part afte the dot is net. I don't mind revealing my e-mail, I'm just sick of it being picked up by autoharvesters.

OK - that WaPost article is actually one you linked to. I still think the summary was a bit too short.

Gar- What part of "slave-like conditions" makes Chinese workers sound other than unfree :)

This was a great piece, Nathan. I love clear economic analysis I can understand. Bravo!

I worry about the effect on America of billions of Chinese workers kept in horrible conditions by American businessmen. I hope that the Chinese worker doesn't blame the American public for something they can't control. This could lead to military problems. What is a country that can't feed most of its citizens doing lauching a astronaut? Kind of makes you wonder.

Nathan:

While I applaud your defense of both American and Chinese workers. The fundamental problem with the trade negotiations with China is not an issue of jobs. The fundamental problem is that the Chinese have stolen much of the intellectual property from the US for its development—this have been done in both concert with American business, but also as an unspoken policy of the Chinese government. This point is never discussed because the WTO and it affiliates, such as the IMF, wanted “free trade” with China. Further, you have not factored currency rates correctly. Chinese workers may make far less by US dollar amounts, but the issue of exploitation is NOT the Yuan. The issue of exploitation is, as you stated, is an issue of bargaining rights. Which is to say, yes the Yuan is being held artificially lower so that globalization can take place; but I would argue that the decline of the dollar is an equally important factor, which is why I have said all along that the decline of the dollar around the globe is terrible for the world’s poor.

Just a few comments. One, these back of the envelope calculations can't be right. To start with, according to one of your favorite sources, Business Week, the total number of manufacturing workers in China is about 100 million, of which only 35% are involved in export.
(http://www.businessweek.com/bwdaily/dnflash/oct2003/nf2003106_8722_db010.htm) And since those 35 million aren't simply exporting to the US, but to the whole world, the ones in direct competition with US workers in your model would be a fraction of 35 million.

On the other side of the equation, the Americans they would be competing with to supply goods to the American people are not the entire American workforce, but the fraction of the 14.5 million employed in manufacturing who supply the domestic market. The 108 million in services, the 4 million in farming, these are not in competition.

Furthermore, since it is perfectly possible to lose jobs in manufacturing and gain them in services (it's been going on in the US for half a century), it is perfectly possible at least theoretically that this can also happen internationally. It is not given that there has to be net loss. It is something that would have to be determined by closer analysis.

Lastly, while I completely agree that Chinese wages are kept down by repression, that was true before too. If we compare before and after the great manufacturing boom, things have gotten better for Chinese workers. It hasn't removed repression. But it has substantially improved their standard of living. If you want to make a bi-national balance sheet like this and keep it honest, you have to find a way to weigh our loss in standard of living (if net loss there is, considering all workers) against their gain.

I'm not trying to dismiss the argument that jobs are being displaced. I think it's an argument that deserves serious consideration. We might even be on the cusp of something unprecedented. But once you start looking at it seriously, the econometrics are complex.

This is a good treatment of what's wrong with the post-modern slave trade embodied in Sino-American economic relations.