Taking a global view, it is very evident that the downward pressure on U.S. job and wage growth will not respond to continuing good news in corporate boardrooms and on wall street. More than 3 billion people (nearly half of the world’s population) live below U.S. $2.50 per day. Tragically, most of those people are doomed to short lives of poverty, disease, and violence. Corporations with a global presence or with global aspirations are well aware that the per person cost of developing a select few hundred or a select few thousand or a select few million of them into productive workers is enormously smaller than supporting education in the U.S. and Europe and paying U.S. and European wages.
Even the most well intentioned of U.S. investors and corporate leaders can’t ignore this potential because they face a largely unregulated global competitive environment — a competitive environment vastly unlike the competitive environment that prevailed in the U.S. in the mid 20th century when federal regulation of economic activities maintained the free flow of capital, commodities, and labor among states but strongly regulated those flows across U.S. borders.
One last note: according to one expert, “S.& P. 500 profits have recently been bolstered by fast-growing overseas sales. And tech companies derive a greater share of their sales from overseas than companies in other sectors.” (Paul J. Lim, Beyond the Surge in Corporate Profits, New York Times, April 23, 2011,) No matter how loudly and how often our policy makers proclaim that high tech jobs and highly educated workers will be our salvation, actual tech trends show that they are wrong.