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I've been thinking about some new legislation that I feel Congress should pass. American businesses that operate abroad, should have to pay foreigners the American minimum wage. This is not a distortion of the free market, not unless you feel that al minimum wage laws are distortions of the free market. In which case, I doubt you'd agree to be paid $2.50 an hour.

The benefits of this theory are twofold: American businesses won't be as quick to send American jobs overseas and for the American companies that still decide to work in foreign nations, the forigners might be paid better.

The first prong of the twofold benefit will create more jobs in America. Why manage a company overseas when you have to pay the same amount to a foreigner that you would have to pay an American? It's unproductive, unless of course that company is just seeking to expand it's influence.

The second prong will create a better standard of living in the nations that do not pay their citizens as well as we pay ours. This can transform third world countries over night, putting money into their economy and government.

While this idea is basically designed to be a detterant for the shipping of American jobs overseas, it's a also beneficial to the foriegners that work for the companies that decide to do business overseas anyway. If this idea is adopted, a time limit would of course have to be created. If this were to become a bill and through that course become a law today, I would give an approximate 4-5 years that companies would have to start to ratify this law.

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"Government, even in its best state, is but a necessary evil; in its worst state, an intolerable one."
-Thomas Paine

"Any man under 30 who is not liberal has no heart, and any man over 30 who is not conservative, has no brains."
-Winston Churchill

"There are two wisdoms: a widsom of the heart, and a wisdom of the mind."
-Charles Dickens

No. Outsourcing is good for the economy and provided foreigners with opportunities they wouldn't otherwise have. An international minimum wage for western companies would be a step back.

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Baby's got a place in the sun, selling people shade

American companies should follow the foreign standards set by the largest Corporation in the USA, the United States Government!

Capital mobility is an important aspect of economic development, given knowledge diffusion and the creation of the infrastructure required for domestic firm creation. Any attempt to reduce that mobility will harm economic development. We already have to put up with US-inspired policy that maintains world poverty: from domestic protectionism to the imposition of irrational economic policies, via the Washington Consensus, on the developing world

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I was angry with my friend: I told my wrath, my wrath did end. I was angry with my foe: I told it not, my wrath did grow. And I watered it in fears, Night and morning with my tears; And I sunnèd it with smiles, And with soft deceitful wiles. And it grew both day and night, Till it bore an apple bright; And my foe beheld it shine, And he knew that it was mine, And into my garden stole, When the night had veiled the pole: In the morning glad I see; My foe outstretched beneath the tree.

Should US companies pay foreign workers what they pay US workers? Yes.

Should they be forced to? No.

However, if I had my way, any company (US or otherwise) that didn't follow comparable trade practices with those in the United States would be tariffed on all goods or services crossing into the US.

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sputterman: "Aiding the enemy? If the truth aids the enemy then we are in the wrong war."

Outsourcing is good for corporations, not the economy. You outsource enough (like now) and your country stops being net exporter and you also run into problems with unemployment.

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sputterman: "Aiding the enemy? If the truth aids the enemy then we are in the wrong war."

And who do you think employs the majority of people and provided us with the majority of our goods and services? Corporations. Profit maximalization is the ultimate goal with any feasible economic system.

Depends. Yes, if we outsource most manufacturing jobs, we would no longer be that large an exporter of goods, but this isn't necessarily bad. If we maximize profit by having our manufacturing job overseas, this just insures more money in other areas. Exporting isn't exclusive to manufacturing of goods anyway. We aen't about to outsource our actors and scientists, while films and microchips are all exported.

Reference your claims, sir. Where is the evidence for this? Unemployment only occurs when investment ceases, but if we maximize profit via outsourcing, we can insure more jobs.

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Baby's got a place in the sun, selling people shade

In terms of trade effects, there is no reason that "good for corporations" cannot be translated into "good for the economy". As with standard comparative advantage analysis, we'd just need redistribution such that the losers are compensated.

We can refer to some potential negative effects from outsourcing, as summarised in the "Advantages and disadvantages of outsourcing (Journal of Management Development, 2000, Vol. 19 Issue 8 ):

[Disadvantages] include becoming dependent on outside suppliers for services, failing to realise the purported hidden cost savings to outsourcing, losing control over critical functions, having to face the prospect of managing relationships that go wrong and lowering the morale of permanent employees. Moreover, outsourcing can generate new risks, such as the loss of critical skills or developing the wrong skills, the loss of cross-functional skills, and the loss of control over suppliers...Short term contracts, based on the principle of the lowest winning bid, are claimed to stifle incentives to innovate because rewards for innovation cannot be captured by the contractor. Furthermore, outsourcing has led to a loss of...corporate memory

However, the likelihood of these disadvantages being affected by a petty minimum wage is low

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I was angry with my friend: I told my wrath, my wrath did end. I was angry with my foe: I told it not, my wrath did grow. And I watered it in fears, Night and morning with my tears; And I sunnèd it with smiles, And with soft deceitful wiles. And it grew both day and night, Till it bore an apple bright; And my foe beheld it shine, And he knew that it was mine, And into my garden stole, When the night had veiled the pole: In the morning glad I see; My foe outstretched beneath the tree.

I worked in China for an American multinational. We couldn't have paid US wages and survived in that country. Don't forget you're competing with local companies in whatever country you operate in. If your wages are 10 - 20 times what the locals pay you're out of business. You'd also cause serious local inflation resulting in the cost of goods being out of reach of everyone except your employees.

One thing we did that I liked was that we insisted on western standards of business practice even where it wasn't required. For example we used OHSA as a guide where Chinese safety legislation was lacking.

I think western companies operating in foreign countries should abide by western standards to guide them in the treatment of employees even when lack of local standards or corruption would give them leave to do otherwise.

Well, in order for workers in other countries to be paid American minimum wage, they would have to be as efficient as Americans earning the minimum wage which is, only guessing here though, a very bold assumption. Workers as far as economics are working correctly are paid something near their marginal productivity rate, and workers in less developed countries simple aren't, as a rule of thumb, productive enough (yet) to merit the pay that a worker in the West does.

Otherwise I agree with revier on the impact of anything that limits capital mobility too much or is in any way protectionism.

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I believe that government is the servant of the people and not their master...that the world owes no man a living, but that it owes every man an opportunity to make a living.
- John D. Rockefeller