This is a must read article...
Today, somewhere between 70 percent and 80 percent of all products sold in U.S. Wal-Mart stores are from China. Following such deals to their eventual end reveals an even more grim future for the American middle class if trade borders continue to dissolve.
If the U.S. and China, for example, were to enter into a single labor and goods market, wages would then converge. Whereas a factory worker in China was making, say, $3 an hour and a comparable worker in the U.S. made $30 an hour; the Chinese worker shoots up to about $15 an hour, and the American worker’s wages collapse to the same. In China, everyone is happy and rich. In the U.S., the government would be overthrown.
“We have free trade within the 50 states,” Stumo says. “By impoverishing our middle class with this offshoring driven by free trade policy, you’re killing the U.S. consumer market, which drives growth, because they have no money. Five or ten percent cheaper prices is overwhelmed in this stage by lack of production and stagnant wages,” he says. “The U.S. middle class cannot afford to fund the rise of other countries anymore.
There are a lot of mining ghost towns in the west too. The world changes. Before the days of government assistance, when your town’s economy dried up, you moved away.
Now, people hang around, sealing the fate of their children.
I moved from Seattle to rural KY. I’ve been to a lot of these towns. I’d love to live near some of them, but I’m at retirement age. I would never, EVER consider raising a family in one unless someone chained me to the concrete and my wife was already pregnant.
Danville, VA today reminds me of what Asheville, NC looked like 40 years ago which was a run down mountain town with 1/3 of the downtown boarded up after a majority of the local manufacturing had either shut down or laid off a good portion of its workforce.
That said if industry ever returns to Danville it has all the components necessary to become a revival city with lots of character.
Danville is a charming old town, grand history, grand old buildings and mansions downtown. It is dying but not quite so badly as the writer depicts. There’s a very nice road course and racing country club just east of town, VIR, Virginia International Raceway. Several recreational lakes nearby. It’s not without appeal, Southside VA is very conservative, real estate is cheap there as well as in Caswell County NC just south of town. And, while you might be able to see the Blue Ridge in some parts of Danville it’s certainly not in them. I have no idea what “the bellybutton” of the Blue Ridge is and have never heard that term before.
The textile industry didn't grow up in places like Danville, Virginia in the 1880s. In this country, it actually had its roots in the 1790s in New England. The displacement of industry has been almost a constantly recurring theme for generations in this country. And interestingly, the pace seems to accelerate as companies and entire industries make very rapid decisions and have no qualms about walking away from capital investments that cost millions of dollars to build.
Globalization finally got around to hollowing out communities in the South, who suddenly realized that the folks in Flint and Youngstown had a point all this time.
That formed the basis of the Trump Coalition.
Some places never really recover from economic decline.
Somebody told me to read a book, which was about what happens to factory toens when the factory shuts down.
The summary I was given, was that some towns have worked more than others to attract new business.
I also heard that Pikeville Kentucky, is a success story as they have greatly expanded a college campus, which helps offset the decline of coal.mining in eastern Kentucky.
But the economic dislocation is very hard to overcome. If any employer which employs thousands shuts down, there’s no way that a new business will hire all those old workers , to do the same job b they are skilled in, at the same pay, in a new business.
bkm
Bump.
Wasn’t Danville the last capital of the Confederacy?
Isn’t Danville that City that’s at the end of a 3-mile grade?
There aren’t many products that have remained the same, the price of which can be compared over a forty or fifty year periods. But I can think of one.
During the early 1970s, I bought Levi’s 501 jeans in my size (32x34 mostly) for $7.00 a pair and they were most all made in the USA. I can recall paying up to $17.00 in the mid-80s, but haven’t purchased that particular jean much since, and some production was still in the USA, but much had been moved overseas.
Now, with all the production having been moved to cheap labor nations, the price of Levi’s 501 jeans is around $40.00 per pair, some prices a little less and some more.
I believe the idea that consumer prices are significantly lower after all the offshoring of US manufacturing is largely a a myth, or an outright lie. Most cheaper foreign made products are just that, cheaper, but inferior products. But I don’t think anyone could prove much consumer price savings on products that have actually remained the same over the past 40 or more years.
There are empty factories all over, the problem Danville has is it’s in a state that is not especially good to do business in. Reshoring is benefiting those with lower taxes, fewer regulations, and right-to-work.
Went to college in Danville, 1959-61. Yes, last Confederate Capital. Yes, Wreck of old ‘97 was going to Danville. Tobacco markets were booming then and the smell of tobacco filled the whole city in the Fall. Dan River Cotton Mills was the big business. All gone now. In front of City Hall was a stature of a cousin of mine, Harry Wooding, who was long time mayor of Danville. As initiation into college frat, I had to jump up, put my arm around him and give a speech. I recited lines from “Hamlet.” “Speak the speech, I pray you. Etc.”
I’m surprised at many of the comments on this thread. Many sound like they come from Barrack Obama supporters, that the job losses were just natural events and the jobs are gone and they’re not coming back.
Actually, the jobs and industry losses were due to US government polices and were totally predictable, and many will come back if the voters continue to support, and grow in support, of President Trump and his polices.
Areas tend to recover that have a plentiful supply of high quality housing.
It’s not a surefire guarantee though, New Orleans, is an example.
It also takes an educational establishment (think UofTexas Austin, Stanford) and an entrepreneurial mindset (Seattle, Silicon Valley).
High-quality housing normally attracts high-quality businesspeople (think Greenwich, CT).
Looks like a lot of Upstate NY and for the same reasons.
Wish Trump would hold a rally here to talk about this.
He’s got a lot of support Upstate, Pubbies AND Dems. And we surely could use the influx of cash.
From the article:
“sold 33 percent of production to Wal-Mart stores–the highest number federal law allows a retailer to buy from a single manufacturer”
Anybody know what this is about? There’s a federal law about how much a retailer can buy from a manufacturer?
“My life, like everyone else’s, took a big dip,” says Voss. “The murder rate has tripled, gang activity is everywhere, suicides are up. My cousin committed suicide in 2010. He was laid off from Dan River and unable to find work and got into drugs. My nephew was murdered that same year, it had to do with drugs. He was 28. You couldn’t imagine any of this happening in the 90s. The middle class has moved to the lower class. What used to be a middle class neighborhood is now ‘the hood,’” he says.
I used to love that little town. It’s a crime what happened.