Consumers Need a Bigger Slice of the Pie (int'l edition)

''The next downturn'' (Cover Story, Oct. 9) is right on target. And the reason seems as simple as one plus one yields two. Directly or indirectly, any company depends on the final consumer, the average guy standing on the corner, for its survival. Boeing Co. depends on lease companies that depend on airlines that depend on passengers. Microsoft Corp. either depends on computer makers that depend on corporate customers that ultimately depend on consumers or it depends on consumers straightaway.

The problem is that consumer wealth as a fraction of overall wealth is decreasing at an alarming rate. In the past 10 to 15 years, the world has witnessed a massive and unprecedented transfer of capital from the consumer to the corporate sector. CEOs now earn tens or even hundreds of million dollars a year, while 20 years ago hitting much above $1 million was rare.

But if consumers don't have the money to spend, prices will go flat or even fall. Lower prices mean less revenue. Less revenue will mean less profit. Less profit will probably mean less return on capital. This will send investors fleeing from stocks. This in turn may fuel a dramatic loss of assets, defaults, bankruptcies, the fall of the dollar, and the rise of unemployment--since the U.S. and, to a lesser extent, the whole world is highly leveraged on virtual money.

In Brazil, red-hot stocks of telephone companies are losing momentum because service-rate increases that sent them through the roof in the first place won't happen anymore. The market can't absorb them. And selling phone services to the rich won't be enough. They are too few. If you don't agree, there's always the saying that ''everything that goes up must come down.''

Antonio Camargo
Sao Paulo

With Employment High, Italy Doesn't Need Immigrant Labor (int'l edition)

Italy currently has 2.4 million official unemployed workers, 1.5 million in the South alone (''Is Europe having a change of heart on immigration?'' International Outlook, Oct. 23). Even if--and that is a big if--Italy creates 800,000 new jobs by 2002, it will still have 1.6 million of today's unemployed, plus all the youngsters who will get on the unemployed list. How on earth the unions say that, in the same period, we need 200,000 foreigners to fill those jobs is beyond me.

There are two more likely explanations to this ''creative'' math:

1. Since they don't have the will or the power to stop illegal immigration, center-left politicians and unions pretend to need foreigners already here;

2. Since the foreigners are already here, politicians promise nonexistent jobs to pull those foreigners under their political wing--one day they will become voters.

Immigrants may well be needed by certain European countries, but they should be let in only through the proper legal channels and on the basis of accurate statistics.

Pietro Fioravanti
Prato, Italy