The United States is losing its comparative economic advantages. In today's global economy, the average American is slowly losing while the workers of developing nations are winning big. Globalization has become a dirty word, and given the circumstances for the American low-skilled worker, rightly it has. However, when used correctly, globalization has the potential to bring true prosperity back to average America, not just Wall Street. Here are three simple steps to make globalization work for us.
First, educate and reeducate the work force. It doesn't matter if third-world workers or immigrants take American low-skill jobs if the American work force then assumes higher-level work. The decadence of America's standard of living gives third-world countries an absolute advantage in most every industry with a comparably skilled workforce. However, it is an economic certainty that there are markets where the U.S. has or potentially has a comparative advantage. The key is capitalizing on them.
As America's comparative advantages are found, the state and federal governments must actively encourage current and future members of the work force to gain the skill sets needed to exploit them. College educations are a costly affair and grants given to students are often economically wasted on majors and degrees that are interesting to the students but not advantageous to the economy. The government should provide full scholarships to students under the condition that they major in a discipline advantageous to the economy (as determined by the projected needs of employers) and suited to their talents.
Of course, college is not for everyone and those who end their educations in high school are at an absolute disadvantage to workers in less developed countries. Therefore, a system of government trade schools needs to be established and funded to provide workers with the skills needed in the labor market. As America's trade advantages change, so must the education of the workforce and thus reeducation must be frequent and the curriculums adaptable.
This system would benefit the average worker by giving him employment and higher wages, the American economy by allowing its workforce to specialize and innovate, and the government through increased revenue derived from taxes on higher incomes.
Second, priority, but not protectionism, must be given to on-shore companies. As part of governmental affirmative action, minority- and female-owned companies are given priority with government contracts through a system of "targets" (as quotas were made illegal). While it is debatable whether these targets better the plight of minorities as a whole, it is obvious that the benefits given to such companies in the awarding of government contracts is sizable. Therefore I propose that another category be made giving top preference to "certified on-shore companies" that do 100 percent of their business within the United States. This system would encourage American enterprise the same way affirmative action encouraged minority enterprise and would severely discourage companies from outsourcing jobs to developing nations and headquartering in tax shelters such as the Cayman Islands.
Finally, the United States must take steps to ensure that its information advantage is not lost overseas. The biggest advantages of western countries in economics lay not in consumer goods but in its wealth of information. Students from other countries come to the United States to get a world-class education and then bring their acquired skills and knowledge back to their homelands in order to reap economic benefits. Such tendencies undermine the United States' information advantage and threaten to outsource even medical jobs overseas. Publicly funded universities therefore need to severely limit the admission of international students who do not plan on remaining in the United States. When the British harnessed the power of steam, they took extraordinary measures to protect their trade secrets and now, with education, so must we.
Of course this is solely an economic argument and social considerations must be taken into account as well. I am not advocating discrimination based on national origin, but rather protection of our greatest national resource.
It's time to use globalization to our advantage. The global economy has become a fact of life, and if we don't take certain measures to preserve our advantages, we will be destroyed by it.
