How much does America benefit from the growth of emerging nations?

by on January 18, 2014 at 4:01 pm in Books, Economics, Education, Travel, Uncategorized | Permalink

Charles Kenny writes:

And growth in the developing world, even if it means that some populous economies may eventually grow larger than the United States, also means that there are more places for Americans to travel in security and comfort, and more places to learn, work or while away our retirement years. Americans can get health care at Bumrungrad International Hospital in Bangkok — accredited by the Joint Commission International, which certifies health-care organizations worldwide — for a fraction of the cost they can in Bethesda. Or their kids can attend college at the University of Cape Town, rated higher than Georgetown University in international rankings but one-fifth as expensive. Or perhaps they can get jobs at one of the new breed of world-class multinational firms based in the developing world, such as Tata or Huawei.

I sometimes think of this issue in terms of the gravity equation and the inward-looking propensities of large countries.  Relative say to Swedes, Americans are relatively unwilling to travel abroad, educate themselves abroad, or work abroad.  Some of this may be misguided arrogance, and some of it is a rational response from those living in a large, prosperous country and (often) knowing only the global language, namely English.  In other words, Americans benefit less (per capita) from the new opportunities abroad than do Swedes.  We do benefit to the extent foreign countries generate innovations which make their way to the United States, but so far not so many of those have come from emerging economies.  I expect that to change, although when is a very important and underexplored question.

I believe that for many educated but not super-elite Americans the best opportunities already are abroad, but most of that group is reluctant to exploit them, if only for reasons related to personal lifestyles and family connections and a general unfamiliarity with living abroad.  We can expect to see more anecdotally-based feature stories on this theme, however.  And there is some longer-run elasticity where the underlying American social norms change.

In the meantime, homebody Americans pay more for gasoline, due to the demands from emerging economies, and pay less at Walmart, and otherwise wonder what the fuss is about.

For more on related points, read Charles’s new and excellent book The Upside of Down, not to be confused with Megan McArdle’s new and excellent The New Up Side of Down, a single space can make all the difference in the world.

Peter January 18, 2014 at 4:15 pm

Thomas Homer-Dixon also has a book called “The Upside of Down” from 2006, which still tops the google search for that name where I am. Don’t people google a book title before using it to see if it’s already taken? Maybe I should just go ahead and call my new band “Radiohead”

Max Factor January 18, 2014 at 5:44 pm

LOL

Careless January 18, 2014 at 7:58 pm

As I understand it, band names are trademarked and book titles cannot be.

Peter January 19, 2014 at 12:31 am

Fine then, I’ll write a book about my life and call it “The Qu’ran.” Shouldn’t have any issues.

prior_approval January 19, 2014 at 4:09 am

Not with copyright – you are free to entitle your biography ‘Mein Kampf.’ Still might have some issues, though.

Bluto January 19, 2014 at 1:28 pm

The Upside of Down is to business book reading nerds what vampire movies are to 19-year-old girls. Expect decades more of this shit.

Anonymous January 18, 2014 at 4:20 pm

I’m amazed by how few Americans go to college abroad. Websites like Reddit are full of people complaining about high tuitions and student debt and yet almost no-one wants to go to Europe and get a college degree for free, or, at worst, at much lower prize than in the US.

mucgoo January 18, 2014 at 5:44 pm

They won’t get it for cheap or free without EU citizenship. In the UK you’d be looking at £14-20k for a scientific degree, subtract ~£4k for essay subjects.

So Much For Subtlety January 18, 2014 at 6:57 pm

Well if the prices in the UK are a little high, you can go to one of the off-shore campuses. They will be a lot cheaper.

For instance the University of Wastminster, if we can be generous with the word university, has a campus in Uzbekistan. They offer a Business course for about $5,000 a year. Taught in English. With a degree that looks absolutely identical to the British one at the end.

Personally I would always preferentially hire someone who stuck it out in Tashkent for three years over someone who did an equivalent degree at home. They might have learnt something useful and interesting.

They have a Facebook fan page:

http://www.facebook.com/pages/Tashkent-Uzbekistan/Westminster-International-University-in-Tashkent/282951396980

Thor January 18, 2014 at 9:35 pm

If they spell it “Wastminster” I’m not enrolling.

prior_approval January 18, 2014 at 11:54 pm

Seems like links are out –

German universities have essentially low/free tuition for everyone, and if a professor (of Finance, actually) at the local one can be trusted, something like a quarter of all places of an incoming class is reserved for non-Germans. It is true that in this Bundesland, those who are not citizens pay 1000 euros a year in tuition, though for German citizens, since 2012, tuition is again free.

‘General information

Generally, tuition fees in Germany are rather low compared to other countries. They range from ca. 100 to 2000 Euros per year and additionally, German universities do not distinguish between students within or outside of the EU/EEA. Independent from the origin, local and international students pay the same (low) tuition fee!

The tuition fee (if there is any) usually consists of two parts. The Studiengebühren are the actual tuition fee and range from 0-500 Euros per semester. Additional to this tuition fee, a Semesterbeitrag is charged which includes administration fees as well as fees for the General Students Committee (AStA), the Studentenwerk (responsible for student residences and cafeterias) and often a (mostly obligatory) semester ticket for public transport in the city (and sometimes the region) around the university. The Semesterbeitrag is individually set by each university and besides the costs you should also consider the benefits (such a semester ticket) when comparing the tuition fees between universities. Below you can find an overview for the 16 federal states of Germany. Please be aware that the stated amounts and conditions are subject to change.’

Unfortunate that crediting sources of information is no longer possible – the spam wars are vicious, and collateral damage everywhere.

Max Factor January 18, 2014 at 5:47 pm

When resumes hit your desk are you really going to take the time to research the University of Cape Town to see how it compares to U-Mich or UVA? You’re paying for a credential – if the credential is from a foreign school it will carry less weight.

Brett January 18, 2014 at 7:11 pm

That’s what I was worried about, too. If you’re working for some type of high-powered multinational company, then there might not be any problems. But if not, then there’s a good chance that your employer won’t recognize that the University of Cape Town is awesome.

Besides, migration is usually driven by how relatively great the opportunities are – and the costs of staying at home. That’s why there’s a ton of Chinese people in Africa doing all kinds of stuff, but not as many Americans who randomly go over there to try and strike it rich. If your choices are potentially money and risk abroad, or crappy poverty and nothing at home . . .

Ray Lopez January 18, 2014 at 9:19 pm

+1 @ Brett – this is true. Americans being the most insured nation on earth, most Americans would take a guaranteed 5% by doing the safe thing and staying in the USA vs striking abroad and maybe striking it lucky with a University of Cape Town, but risking maybe losing your life in a car-jacking. Very few Americans are pioneers like me, who travel outside the USA (and the expat group in SE Asia countries is very small btw, mostly military guys on leave or a very small group of rich expats or criminals; seems to me to be a couple of thousand people and after a while you more or less meet all of them, lol). But in fairness to me, I also played it safe, stayed in the USA until I made my fortune there, before venturing abroad. As for Thailand hospitals, I agree they are good but to be honest for anything really esoteric (exotic cancer surgery, brain surgery, etc) the USA is still #1. But for routine stuff like a hernia operation, routine angioplasty, coloscopy, cosmetic surgery (maybe? if Botox), routine dental work, I think SE Asia is indeed on par with the USA and much cheaper).

Thor January 18, 2014 at 9:37 pm

It depends. If you go to the foreign equiv. of the Ivy League, as I did*, then you’ll be okay.

* I went to the UK, an elite school, but I’m not wealthy, so I saved my money, got a loan, got a fellowship, and worked while I was writing my dissertation.

Rahul January 19, 2014 at 1:36 am

@Max

I see the choice as more of, (1) Skip college since you cannot afford a US university or (2) Get a degree from Cape Town that you can afford.

Of course, some people should just skip college either way. But I can envision a cohort for which college makes sense as a career decision but not at the US university price tag. I’m assuming we restrict comparisons to useful degrees both places. If you major in Philosophy Cape Town’s unlikely to boost your wages much.

Max Factor January 19, 2014 at 5:47 pm

I’m getting a Masters at a city college for about $15k. There are plenty of good, affordable domestic options.

Rahul January 20, 2014 at 1:23 am

It’s a question of whether said foreign university is better than a City College. I don’t know. What’s your major BTW? My impression was that most city colleges rarely offer some majors like chemical engineering which are otherwise quite highly paying, especially abroad. I could be wrong.

It’s also a question of relative living cost abroad versus moving to a major American city with presumably high living costs.

Michael January 19, 2014 at 9:05 am

And they’re right not to go to Europe, since American companies won’t hire Americans with degrees from abroad, except for Oxbridge and maybe LSE. Source: I’m an American with a degree from a very good European university.

leftistconservative January 18, 2014 at 4:32 pm

any benefits growth of other nations go disproportionately to the elite. Of course academia seems to avoid that question.

Alexei Sadeski January 18, 2014 at 4:35 pm

Some elites benefit, some suffer.

Probably many more benefit than suffer from this, but still some do and will suffer.

Age of Doubt January 18, 2014 at 6:53 pm

Yeah, there’s a barrier to entry there. In order to “travel in security and comfort, and … while away our retirement years”, you need to have a large disposable income to blow on air travel and hotels. In other words, outside of the developing countries, this benefits only a small number of wealthy people… and that pretty much sums up globalization.

Alexei Sadeski January 18, 2014 at 7:47 pm

No, the wealthy can travel *anywhere* in comfort and safety.

Middle class Americans can and do travel outside of the US.

Careless January 18, 2014 at 8:00 pm

Comfort, sure. Safety?

Alexeisadeski January 18, 2014 at 8:05 pm

Four Seasons has excellent security.

Private security firms can be decent as well.

Helicopters are popular in Sao Paolo for more than their convenience.

Careless January 21, 2014 at 4:19 pm

Sorry,, Alexei, just doesn’t comport with my experience or knowledge. Rich hostages are taken.

Engineer January 18, 2014 at 4:54 pm

most of that group is reluctant to exploit them, if only for reasons related to personal lifestyles and family connections and a general unfamiliarity with living abroad. We can expect to see more anecdotally-based feature stories on this theme, however. And there is some longer-run elasticity where the underlying American social norms change

So you mean to say that a lot of people aren’t just rootless cosmopolitans roaming globe in pursuit of utility maximalization. And that that’s a bad thing.

Michael January 19, 2014 at 9:08 am

You hit the nail on the head. This post demonstrates that the underlying values of the economist will always influence their analysis of a phenomenon. Sure, the growth of emerging nations helps upper middle class people who want to travel the world. It does not help lower middle class factory workers in the midwest. Guess who is more numerous?

abc January 18, 2014 at 4:57 pm

Relative say to Swedes, Americans are relatively unwilling to travel abroad, educate themselves abroad, or work abroad.

Sweden is 50% larger (land area) than Colorado. It’s population is smaller than that of the greater LA area. Thus, there will be a wide variety of specialized needs that will not be optimally served within Sweden.

There are about eight other nations within 400 miles of Stockholm.

Thus, there are many reasons for Swedes to travel outside Sweden and doing so is easier than for most Americans. Of course, there are situations like Detroit/Windsor and El Paso/Juarez, where traveling outside the US is easier than traveling from Stockholm to Finland. But, generally speaking the costs of and the incentives for foreign travel differ markedly between the two nations.

Commentor

Squarely Rooted January 18, 2014 at 5:58 pm

Thank you. I was just about to make this point when I saw that you had.

Surprising that an economist would not see the obvious economic reasons that Americans may be more disinclined than Europeans to live, work, or travel abroad.

Every year, there about 2 trips taken abroad per 10 Americans, half of which are to Canada and Mexico which we can discount most of for these purposes, so probably something closer to 5-8% of Americans travel abroad in any given year. Given that you can’t get to the nearest non-Mexico-or-Canada country without dropping like $500, or 1% of median household pre-tax income, it’s not surprising most Americans choose not to leave the country in most years.

And if you notice, you see plenty of Detroiters and Vermonters and Seattlites and Californians and Texans fairly routinely visiting the nearby foreign country, so this is very obviously a function of that.

Of course America is also just a much larger country than any in the world outside southeast and central Asia, so there are also just many more destinations for travel and study in the United States than in most other countries.

jk January 19, 2014 at 4:54 am

Tyler did qualify the next statement with “some of it is a rational response from those living in a large, prosperous country and (often) knowing only the global language, namely English. In other words, Americans benefit less (per capita) from the new opportunities abroad than do Swede.”

I think his bigger point is that EMs are catching up and no presently rich countries has a monopoly – be it from N. America or Europe – on job opportunities and success (primarily for single, “unencumbered” middle class people) – if that is one seeking. On Tyler’s other point: There is undeniably a subset of Americans that are either overly nationalistic or xenophobic or just oblivious to the outside world (as with every other country).

Michael January 19, 2014 at 9:09 am

Actually, it’s much easier to travel from Stockholm to Finland than it is to travel from Detroit to Windsor. There’s a ferry that costs less than $100 (sometimes much less), and you don’t even need a passport if you’re Swedish or Finnish.

iolanthe January 19, 2014 at 11:37 pm

A better comparison than Sweden (which as people say is pretty small and surrounded by places that are trivial to get to) is Australia. We are about as large as the lower 48 and even more isolated (“the tyranny of distance”), it’s even more expensive to get away than from the US, we only speak English and yet depsite (because) of this there are very few places you won’t find Australians but many where there is not an American to be seen, despite the fact that there are ten times as many of you.

My personal vote is the miserable amounts of leave you get. We all get at least 4 and many 6 weeks and it is seen as not the done thing for an employer not to allow a continuous 4 week break which is probably the minimum to make it cost effective to get to Europe. Another factor may be ability to work in these places. Lots of Australians (although probably just as many Americans) have access to EU nationality through descent and Australians without UK nationality can still get 2 years on the basis of being Commonwealth citizens.

BBlase January 21, 2014 at 9:27 pm

I’d agree with your comparison with US and Australia but add that we often hold substantial student debt making it difficult to travel after university. After travelling around the world I’ve come to realize young Americans should take the next flight to Oz once done with school via the work holiday visa arrangement that nearly every young American seems clueless about. Although it does come with substantial barriers: $400 visa fee, $5000 AUS in the bank, $1,500 one way ticket.

Engineer January 18, 2014 at 5:02 pm

Or perhaps they can get jobs at one of the new breed of world-class multinational firms based in the developing world, such as Tata or Huawei.

I wouldn’t call Tata world-class – certainly they are not world-leading.

Huawei on the other hand has a strategy to become world-leading by luring engineers from away Huawei’s leading global competitors like Ericsson and Cisco. Sometimes they hire them at high salaries and then fire them after year or two after they have dumped their brains to their counterparts in Shenzhen. Huawei’s competitors don’t like this and have been refusing to hire these engineers afterward. The absolute top-tier engineers are kept on and create patents for Huawei and lead its efforts in international telecom organizations.

Rahul January 19, 2014 at 1:31 am

Another problem (at least at Tata) is that except for some very high positions their salaries are way lower than what you’d get for similar qualifications in the west.

So unless you are absolutely unemployed working for the Tatas won’t make sense.

Gabriel Puliatti January 18, 2014 at 5:35 pm

For every unskilled manufacturing job lost in the US to robots and abroad, I can assure you there’s a better job for his wife as an ELT teacher abroad.

Nick Bradley January 18, 2014 at 7:07 pm

unskilled?

Ian January 18, 2014 at 5:43 pm

Relative say to Swedes, Americans are relatively unwilling to travel abroad, educate themselves abroad, or work abroad.

That’s because “traveling abroad” for a Swede can just mean crossing the border into another country that’s right there, moron.

Max Factor January 18, 2014 at 5:55 pm

Re: “I believe that for many educated but not super-elite Americans the best opportunities already are abroad, but most of that group is reluctant to exploit them, if only for reasons related to personal lifestyles and family connections and a general unfamiliarity with living abroad.”

What are some of these opportunities? The EU has high unemployment, South Africa is a war zone, the wealthy and educated Chinese are coming to the USA in droves and Japan still discriminates against foreign workers. France, Greece, Spain and Italy are falling apart. Any country with a weak currency will make it harder for Americans to come back to the USA because they won’t be able to save money while working abroad – I know people teaching in China and while the pay is good for China it’s not good for the USA. So the longer they stay in China, the harder it is for them to build retirement savings.

America is still the nicest house on the block, even if Average is Over. Of course Ray Lopez will argue against that but at least my girlfriends always had nice teeth and the ability to purchase their own smart phones.

Doug January 18, 2014 at 6:44 pm

Canada, Australia, New Zealand, Singapore, Hong Kong, UAE, Germany, Holland. All have tight labor markets (at least tighter than the US), strong currencies, actively favor Westerners, and are as safe or safer than most major US metros.

Max Factor January 18, 2014 at 6:49 pm

But what are these “opportunities?” Why would these advanced nations take our “educated but not super-elite?” Are we to believe “Average is Over” hasn’t hit Canada and Singapore?

Brett January 18, 2014 at 7:15 pm

I’m pretty surprised that Canada doesn’t draw more Americans northward, particularly with the oil boom in Alberta. Maybe it’s the winters.

JWatts January 19, 2014 at 10:24 pm

It’s not easy for an unskilled American to get a job in Australia. And a high skilled American has better opportunities in America.

RPLong January 18, 2014 at 11:14 pm

+1

I’d be interested in even one example of what sort of opportunities we’re talking about.

prior_approval January 18, 2014 at 11:52 pm

Working for some of the world’s leading engineering and manufacturing companies, when talking about Germany?

But then, it isn’t as if today America is able to create a surplus of engineers – that is another one of those long running trade deficits Americans seem to think is just the ways things are.

RPLong January 19, 2014 at 10:16 am

Is that really an opportunity that’s open to the “educated, but not super-elite?” I moved from the USA to Canada, and then back to the USA from Canada, and finding employment was the #1 challenge. It’s safe to say I’m educated and that I’m not super-elite. Perhaps it would be easier for me to find a job in Germany; but I don’t see how it could be, especially since I don’t speak German.

Maybe TC means people who are highly educated, but not super-elite, i.e. all those MBA expats in Singapore and Saudi Arabia. But from the vantage point of the average holder of a B.A./B.S., those folks are still pretty elite. MBAs are expensive.

prior_approval January 19, 2014 at 10:41 am

In terms of language, the sort of German company I’m talking about is likely to use English. In the case of a German company like SAP, English is (from what I have heard from SAP employees in the past) the company’s language.

An engineer may – or may not – be considered ‘highly educated.’ Nonetheless, there is a constant need for German companies to find such people. Culture may be a problem – and language plays its role in that, of course – but an export oriented economy tends to speak the language of its customers, and in much of the world, that language tends towards English at this point, at least in international contexts.

Ray Lopez January 19, 2014 at 3:33 am

@ Max Factor – lol, good one! I see you’ve traveled outside the USA, or at least read up on the literature. “Of course Ray Lopez will argue against that but at least my girlfriends always had nice teeth and the ability to purchase their own smart phones.” – but were your girlfriends half your age or less, and also models and beauty contestants like mine? While it’s true I look (since I take care of myself, and do some minor Botox cosmetic surgery and teeth whitening) like a man of around 35 yrs old, in the USA there’s no way I could date the girls I’m dating now, and just might marry one of them. “It’s more fun in the Philippines” as this year’s tourist board slogan says. ;-)

Michael January 19, 2014 at 9:12 am

Ray, some of us would prefer dating women who want more than just our money.

Ray Lopez January 19, 2014 at 11:55 am

@Michael–well that’s a very Western, specifically western European medieval concept (marrying for ‘pure love’ with no strings attached, at least in French romantic literature). In most places of the world and in the real world (including my parents, who celebrated their silver anniversary) people marry for reasons such as: money, beauty, status, power, as well as puppy adolescent love I guess.

Michael January 19, 2014 at 3:51 pm

You’re creating a false dichotomy of marrying for just love or just money. There are many alternatives between marrying for “pure love”, as you say, and marrying for money.

Jon Teets January 19, 2014 at 9:26 am

One opportunity has closed over the last 5 years in 1st tier cities in China. Five to 10 years ago you could transfer as a senior engineer or engineering manager to a multi-national and get a good bump up in salary and a nice expat package. If you did a good job, you’d get promoted to near jr. executive pay and the expat package would get bigger. If you’d invested in real estate in a decent location very early in your tenure, between the appreciation in the property, the rise in the RMB and increase in pay, you’d have done pretty well. If you’d skimped and put some prior savings into an apartment in a highly desirable area where prices were going up at a much faster rate, you’d have made a killing. I know people in both categories.

There aren’t a lot of jobs left at those levels as there’s a lot more local talent competing for them who will work at a substantially lower rate and without an expat package. (This is even true at executive levels, now.) The price of real estate is too high now to get in a location that is both a reasonable commute to the office and close to places servicing expats. What’s more property taxes are looming. (Note that an foreigner can’t buy more than one property, is required to live in that property, and cannot resell it for a period of 5 years.)

So Much For Subtlety January 18, 2014 at 6:38 pm

Bumrungrad International Hospital in Bangkok

Oh come on. He made that up. There is no such place!

Although it is not a bad name for Bangkok as a whole. Bumrunandnastyrashgrad perhaps.

Dismalist January 18, 2014 at 6:47 pm

What, is the author from out-of-state? :-)

Nick Bradley January 18, 2014 at 7:05 pm

no mention of the loss of middle class wages. none.

When a manufacturing worker gets laid off and transitions into an exciting new services position at Wal-Mart, we all benefit because freedom.

Nick Bradley January 18, 2014 at 7:10 pm

Because Sweden has low income inequality, goods and services must necessarily be expensive (same in Australia).

In Sweden’s case, that drives up the cost of living domestically and makes foreign travel really attractive.

per capita GDP (PPP) is $40k in Australia, but $55k nominally.

Dixon Duval January 18, 2014 at 7:18 pm

Europe is nice and travel is an adventure. However, if you decide to look at your “hole card” the inside of a person is as important or more so than where they are. No matter what the credentials the interview reveals much about the individual.

Ilverin Curunethir January 18, 2014 at 9:30 pm

Noone’s mentioned global warming, and that’s a negative externality if there ever was one.

I’m not sure if the proper way to measure it is warming per citizen of each country or by warming per square kilometer. Probably some combination of those.

Richard Besserer January 18, 2014 at 9:36 pm

Yes, yes—and I myself am one of these, having moved outside the US for a job opportunity—but surely mass emigration of the middle class from any country is a sign, and cause, of trouble? I doubt it’s something any US government should encourage.

Not to mention that it’s not a permanent solution for underemployment in the States. As developing economies get richer, they’ll get choosier about which expats they’ll seriously consider for jobs. I doubt my own employer would seriously consider someone with my qualifications ten years ago for my position today.

prior_approval January 18, 2014 at 11:58 pm

‘but surely mass emigration of the middle class from any country is a sign, and cause, of trouble’

Yes – but a narrative might be in the offing here. We have blamed the poor for their miserable state for decades.

Now, the American middle class may have lost enough power that it too can be blamed for its condition. In this case, for being ‘average’ in a world where average is over. By not travelling away to another country – just like a legal migrant worker, actually.

Jane the Actuary January 18, 2014 at 10:08 pm

Sorry, but I’m going to have to join the general griping that there’s a rather valid reason why Americans are “unwilling to travel abroad” — it’s called cost. A prior commenter identified $500 as the cost for a trip to a foreign country, excluding Canada or Mexico — but I don’t think a trip to the Carribean is what people have in mind when they castigate Americans for not being sufficiently well-travelled. A trip to Europe is in the neighborhood of $1500 at the moment for the flight alone; for a family, as opposed to a carefree middle-class single person, this is almost always cost-prohibitive. A trip from Germany to Italy — well, that’s a perfectly ordinary vacation for a German family. Even my husband’s very working-class German family vacationed at Lake Garda every year.

Turkey Vulture January 19, 2014 at 12:20 am

I currently work about 1,300 miles from where I was born, and 400 miles from where I grew up. All of these places are in the U.S.

As noted by many above, that probably has something to do with this observation about our relative tendency to flee abroad, relative to the Swedes.

Nominull January 19, 2014 at 1:37 am

Plenty of innovations have come out of S. Korea and Japan, and those were once “emerging” nations. The good thing about emerging nations in theory is that they eventually emerge. Then we can start seeing the benefits.

Matt January 19, 2014 at 4:20 am

“Or their kids can attend college at the University of Cape Town, rated higher than Georgetown University in international rankings but one-fifth as expensive.”

Wow. Who needs “brain drain” when Americans (or whoever) can just buy their way into all the best international schools (and perhaps be publicly subsidized at other citizens expense)?

yo January 19, 2014 at 6:15 am

I laugh at this blog post. Immigrants to the US suffer labor market persecution and then some American professor telling young Americans to go abroad? If I were Brazil or the Philippines or some third world nation, I’d enact reciprocity in response. First have all US Citizens coming in fill out pointless forms. Then once you see them working, imprison them in squalid camps only to deport them back a year later in handcuffs.

8 January 19, 2014 at 6:17 am

Stop lying to people. Globalization means the average is global. Americans of average ability lived high on the hog because they benefited from a relatively closed system that meant Americans benefited most from U.S. institutions. Now high rates of immigration have diluted that value and the immigrants themselves are changing the institutions towards global standards, which means things like the U.S. continually dropping on the list of economic freedom. You are heading towards mediocrity America.

Don’t worry soon to be poor (from your perspective, from a global perspective you’ll still be rich, so there’s that!) Americans. Before your standard of living finishes plunging to Third World levels, you will be able to move abroad and join the middle class of…….well someplace that let’s Americans emigrate to without having high skills. So Singapore is out, and China doesn’t want you. You won’t be able to open a bank account overseas because the banks don’t want to deal with Americans, so you’ll need a work around. Maybe Bitcoin? You’ll also need to keep filing/paying U.S. taxes, unlike those lucky Swedes.

The best opportunity for Americans would be after an emerging market crash that devalues the currencies.

prior_approval January 19, 2014 at 7:07 am

‘You won’t be able to open a bank account overseas because the banks don’t want to deal with Americans, so you’ll need a work around.’

Actually, this is only semi-true. Local banks without a connection to the U.S. don’t care – which is certainly the case in this part of Germany. Admittedly, in this specific example, they can also only handle your local (read more or less EU wide) banking needs.

It is only international banking corporations that also have to deal with the U.S. that refuse to handle American customers, as such American business provides the mean for American regulations to apply to a company’s broader dealings with American citizens, even outside of the U.S.

Marie January 19, 2014 at 10:36 am

I haven’t checked in years, you still need a passport to hit Canada or Mexico, right?

Used to be when I traveled or lived close I could cross over, bit of a hassle but no more than that. Friends with kids brought them back and forth, also, and while in school it was easy to think of doing a semester in Mexico because it wasn’t that big of a deal.

Now if I want to pass over for the day to Mexico with my family I need $600 worth of passports.

Zach January 19, 2014 at 7:09 pm

After spending four years in Germany, I can see your point, but there are also countervailing factors

Reputation wise, the US is #1, at least at present. A European who moves to the US for a few years and wants to move back will have few troubles — many Germans believe this is the only way to get ahead in the German system, and I only met one German professor who *hadn’t* spent a few years in the US. In contrast, an American who spends a few years in Europe and wants to move back is bringing a credential to a country that doesn’t know how to value it. That factor grows exponentially for any country outside of Germany, France, or England.

carlospln January 19, 2014 at 8:36 pm

Megan McCardle’s excellent ‘The Upside of Down’?

this is the ‘pundit’ that The Atlantic fired, who washed up on the shores of The Daily Beast for 15″, and now has a perch on Bloomberg’s Opinion?

Falling upwards for 41 years.

ps why DOES Cowen carry water for this hack?

Steve Sailer January 19, 2014 at 10:52 pm

Getting a job abroad doesn’t seem to have hurt Stanley Fischer’s career.

CBBB January 20, 2014 at 10:16 am

Haha +1

Steve Sailer January 19, 2014 at 10:54 pm

“Or their kids can attend college at the University of Cape Town”

Isn’t that where J.M. Coetzee’s Nobel prizewinning novel “Disgrace” starts out? Doesn’t sound terribly highbrow in Coetzee’s description …

Steve Sailer January 20, 2014 at 12:36 am

Shortly after winning the Nobel, Coetzee went into exile in first world Australia.

Michael January 20, 2014 at 6:32 pm

Or you could have gone to UT Austin and accidentally had him as a TA. If memory serves after listening to my discussion of my difficulty writing, and having seen my work, he told me ‘Just write.’

jerseycityjoan January 21, 2014 at 4:19 am

The rest of the world does not want to give our tens of millions of college graduates their jobs, for the most part. They sure don’t want to give jobs to our high school graduates and high school dropouts.

The rest of the world looks at us as a source of jobs for them, if they decide they want to try their luck overseas.

It is funny that all over the world, the elite of many countries and their various supporters are encouring their own people to leave while they are trying to bring in new foreign workers that they can easily exploit.

Should we start insisting that for each person of theirs we take, other countries must take one of ours?

Darko Svitek January 21, 2014 at 6:43 am

Tyler,

In addition to the factors you mentioned, which all play a role, there are several other important ones.

Sweden, though very open and generous, also has very rigid internal structures that make it difficult for people who want or need to follow an unconventional path. These people have no choice but to go to abroad to chase their goals.

Also, many of those Americans who might theoretically have their best opportunities outside the US are not white. Consider the difficulties a (white) Swede would encounter working in Germany, Italy, India, South Korea, Hong Kong, or Japan. Now consider the difficulties a Pakistani-American would encounter in those places. We don’t like to talk about these things, but I would say every single case, the American has the more difficult lot, simply by virtue of her ethnicity.

BBlase January 21, 2014 at 9:14 pm

I’m a young educated (graduate-level) American who speaks three languages and has traveled through over forty countries on five continents over the past 18 months. It is very difficult to find a job aside from teaching English abroad or volunteering both of which are not viable career options. Work visas are often a catch-22 particularly in UK/Europe. Latin America is growing but underpaid, Brazil may be an outlier but is expensive and is in bubble mode if you look at indicators such as real estate. Asia provides opportunities but with the vast cultural differences it can burn one out after a couple years. If I was fresh out of college with mediocre job prospects stateside I’d make my way to Australia where a work visa takes 6 days at $400 wherein jobs are typically $20-30/hour but expenses are substantial – same goes for New Zealand. It’s much easier to retire abroad than to work abroad as an American.

Zhivago January 23, 2014 at 9:41 am

“I believe that for many educated but not super-elite Americans the best opportunities already are abroad, but most of that group is reluctant to exploit them…”

One other factor not discussed here: the financial disincentive for educated Americans to seek work abroad. The United States taxes all income above $97,600 generated outside the United States. Professionals working abroad get double-taxed on all income over that level, once by the US and once by the local jurisdiction.

Also, as an employee of a large multinational I can tell you that many companies now have a strong bias towards hiring local market talent these days. It’s cheaper and, more importantly, local market employees understand the culture/customs and bring business networks. Of course there are still specialized roles that require US employee knowledge and management talent, but they have dwindled over time.

Source: educated but not “super-elite” American that has spent many years looking for an opportunity abroad.

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