Our current economic downturn is the direct result of an imbalance in the global economy precipitated through labor arbitrage. Prior to our current condition labor markets were relatively confined within nation state boundaries. Within these boundaries nation states enacted laws in varying degrees to ensure (at least in most developed countries) that labor was provided basic protections against an often times capricious employer. In addition, to laws governing basic worker rights, labor was afforded the right to organize into unions, guaranteed a wage above the level of subsistence, and afforded job security enforced through business custom.

Most important was the assurance that today’s job would not become the lost job of tomorrow. But once the global economy surged past the nation state breakers the obliteration of labor security commenced unabated. With the outflow of corporate capital in search of cheap labor abroad and unregulated inflow of foreign labor via “Temporary Worker Visa” programs (L-1, H1-B, and others) no job was any longer secure regardless of profession. There was talk of retraining workers displaced by these free (or was it lopsided) trade effects but as more and more workers became displaced across a multitude of professions the talk subsided and the realization set in that all meaningful employment had vanished from the United States. The result was a liquidation of competence, purchasing power (consumption), and a once throbbing heart of global economic dominance.

At this point businesses around the globe finally realized that a vibrant global middle class capable of purchasing had died a slow and agonizing death. Slow in that little by little year by year their numbers declined has jobs were lost to lower cost labor markets. But this new army of low cost labor wasn’t able to sustain the insatiable consumption of the global economic engine – its meager wages could barely sustain the basic necessities of existence. The race to the bottom was complete – the economic engine back fired one loud and last gasp for consumption – then expired.

The above will be our shared future both capital and labor if we don’t fully realize that one without the other does not make for an economy. Greed can only be a short term benefit for the long term result is an extreme maldistribution between capital and labor that eliminates any possibility that labor will easily regain a lost middle class propensity to consume. Granted capital will enjoy their excess wealth but this is a hollow transitory victory.

We must come to the realization that our current economic condition is a structural defect that can be remedied only if we work together.

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