The jobs transfer market

The USA economy lost 500,000 jobs in one just one month (December 2008) and the present unemployment level nationally is set at 10%, with far higher levels in some areas. At the same time, 750 million new jobs are expected to be created in South Asia over the coming decade. More will be generated in China and other parts of Asia and even Africa. This is likely to continue the drain of jobs from the USA and northern Europe where labour and other costs are high. This suggests that the USA and Europe are likely to experience structural unemployment at a high level during coming decades.

Ironically, it can be argued that Americans (and increasingly Europeans)are jobless because of the triumph of US born market capitalism. This has ensured that investment follows the same path as water – downhill, where there is least resistance and easiest returns. That means that US investors, and particularly consumers, have helped create jobs in countries where workers' pay and living conditions are far lower than those demanded in the USA and where profits (for a small elite in the US and elsewhere) can be maximised.

If this proves correct, and social and economic inequality in the West continues at its present extremely high level (bankers bonuses, sink estates, etc) it raises a very interesting question. What actions will be needed to prevent massive social unrest in the US and Europe? Surely some form of redistributive tax system is a real possibility given that the number of voters needing help will far outweigh those with assets to protect. Could Marx's prophecy of the triumph of socialism prove to be correct after all?

Just a thought!