Naked Capitalism has the article “How to Run a Cheap Foreign Labor Economic Model”.

The editor, Yves Smith, gives the following introduction to the article:

Yves here. In a bit of “cart before the horse,” I’m featuring this post on an approach to labor arbitrage that despite having a certain internal logic, serves to illustrate how far out of whack the debate over unregulated international trade has become.

With that proviso in mind, here is a teaser from the article itself. It follows the description of how to do it “right”.

This can be contrasted with what we’re actually doing, which is importing cheap foreign labor into our formerly high wages services economy.

When you do that what happens is wages get systemically undermined. Profits for those businesses that are exposed to the rising volume of demand and the falling wages enjoy a margin boost. These will include property developers, banks and some retailers (though certainly not all). That’s because the wider economy gets bogged down as wages growth stalls and falls.

This is the type of thing we need to understand if we are ever to get a handle on the falling living standards of most people in this country. We also need to understand the oligarch’s trick of making workers around the world compete for the ever lower wages of the jobs that are available. This competitive spiral downward is what needs to be broken by giving workers more rights around the world. We can do it by legislation in this country and by diplomatic negotiations with other countries to encourage them to do the same.