Black gold rush

Topic: Labor Economics China

Many of you will know that the Chinese communities in the western United States came about because they were brought there to work on the Transcontinental Railroad.

Now, due to another labor shortage, there's been a proposal to bring Chinese workers into the US to work in the oilfield. Combined with the proposed purchase of Unocal, it's making some people nervous about China getting some control over the US's energy supply.

This can also be seen as an attempt to further internationalize the labor market. The prospect probably has the business community all excited, as it seems likely that lower labor costs would result. But for most people, "lower labor costs" = "lower income". The pie should get bigger, yes. But the extra, and more besides, will go to those who need it least. The net effect of this will most likely be an increase in income disparity, and in the long run, that's not good for anyone.