Stop trading U.S. jobs away

New York Daily News ^ | May 25, 2003 | Lou Dobbs

[sarcasm]

We're in a modest economic recovery, one that is still fragile. And this recovery is not creating jobs. I'm far more concerned about the jobless nature of this recovery than the level of interest rates or market levels.

Government and corporate policies are sending more jobs, capital and American know-how overseas to produce goods and services more cheaply. The proof is in the numbers: The U.S. account deficit, the broadest measure of transactions with other nations, swelled to $503 billion in 2002.

That's not the way it was supposed to work. Increased global trade was supposed to lead to better jobs and higher standards of living by opening markets around the world for U.S. goods. Now some people, myself included, are rethinking the belief that free trade benefits all nations.

According to the Economic Policy Institute, rising trade deficits cost 3 million jobs in the U.S. between 1994 and 2000. And a report by Forrester Research predicts that nearly 500,000 tech jobs will be moved overseas by 2015.

We're also exporting capital. Companies like Motorola have invested billions in China - the country with the largest U.S. trade imbalance with the U.S.

Another problem resulting from America's trade imbalance: Intellectual capital is being shipped overseas - in some cases, raising national security concerns.

So what's gone wrong? Alan Tonelson, author of "Race to the Bottom," says unequivocally that corporate America is largely to blame. "They sold America a bill of goods during the 1990s, because they said that all of these new trade agreements ... were going to boost exports from their American factories. And what they've done is they've used these trade agreements to send production abroad."

Controlling costs

Of course, American business needs to look for ways to control their costs. And consumers are often driven in their purchases by prices.

But it's not just corporate America that needs to adjust to the new global marketplace. Federal and local policymakers need to recalibrate as well.

David Huether, chief economist at the National Association of Manufacturers, says policymakers need to ensure that the regulatory environment is conducive to maintaining our competitive edge.

"To make domestic manufacturers more competitive," he says, "we have to make sure that there aren't future increases in regulation that would push up costs here."

He adds that the federal government should promote trade adjustment assistance to help displaced workers find new employment.

We also need legislation that encourages companies to keep jobs here.

"The only way we can get in on this game is to ... make penalties for those who manufacture overseas and benefits for those who manufacture in the United States," Sen. Fritz Hollings (D-S.C.) told me. "I have a bill to keep the jobs in this country. It's going to be an uphill fight because we've got to really change the culture."

Changing the culture won't be easy: The middle class has little representation in Washington, the multinationals have little incentive to produce here at home, and working men and women in this country are watching their paychecks shrink in response to the competition of lower-paid foreign workers.

Trade barriers

Huether says that policymakers also need to lower barriers to trade overseas.

"Our tariff rates on industrial goods average less than 2%," he says. "The rest of the world, particularly developing Asia, is a lot higher - in the area of around 10%."

On the corporate side, Huether says businesses need to invest in their employees.

"The way that manufacturers compete is through their very high productivity, and one of the ways to do that is ... by maintaining a very able and trained work force," says Huether.

There's no easy corporate or government policy solution to America's export problem. It's time for corporate leaders and policymakers to heighten their efforts to keep American jobs from going overseas.

[dennisw]

Idiot. Trade equals economic growth, period..............

LAUGHABLE!!! Hardly a universal law. One size fits all, cookie cutter economics.Just a wet dream of free market worshiping libertarian loons.

[dennisw]

The top three destroyers of American jobs are:

government regulations
labor unions and
trial lawyers

 

ABSURD! TUNNEL VISION! You make no mention of low wages overseas. In Mexico for that matter. Of Chinese making crap for Wal-Mart in prison like factories. Of very low wage Chinese, Filipinos, Central Americans competing with Americans. Of software jobs exported to India.

I suppose it won't matter to you if we outsource vital defense manufacturing to China.

[Beck_isright]

Since I used to deal with Levi Strauss on a frontline basis for several commercial enterprises, I think I would be much more capable of commenting on their situation than you would. The situation in Mexico is far worse than you'll ever know. But I'm sure since you are a man of the world and go down there every 30-45 days like I used to and keep abrest of all the developments down there you know far more about the trade situation than I do. When you go down to the industrial parks surrounding Mexico City and see what is and has happened, get back to us with a report. So far NAFTA has not lived up to the promises except to allow our industry to relocate to Mexico for lower labor costs. In return we have lost the electronics industry, we are in the process of losing the textile industry and now we are locked in a life and death struggle to maintain American agriculture. But you can live in your little fantasy world as long as you'd like. I'm sure the guys at the country club and other RINO's will look out for your well being.

[Beck_isright]

" The top three destroyers of American jobs are:

government regulations
labor unions and
trial lawyers"

The first two I agree with. The third one is bunk. The trial lawyers only succeed because of the absurd regulations. The largest problem is the tax structure as it exists today. 100 years ago, most of the funding for the government was extracted via tariffs. Now, it's easier to eliminate choice from industry and the individual by lowering tariffs and taxing the hell out of the domestic producers (citizens and corporations). I'm sorry but if we could get a 30% reduction in real income tax rates at the cost of a 7% increase in tariffs, I would say, let's do it tommorrow. But instead, because some day the demorats will get re-elected, we will get the increase in income tax rates and tariffs. That will be the final nail in our coffin as an economic superpower.

[maui_hawaii]

Since I have been a professional financial analyst and international trader, particularly with China, I would beg to differ with your limited assesment.

[Beck_isright]

Congratulations. I'm sure that will do the shrinking middle class a lot of good. But that still does not answer the question as to why we have elected to finance the operation of our government on the backs of domestic corporations and the individual citizen versus a reasonable increase in tariffs. But I will not debate a rabid free trader. It's not worth the time.

[maui_hawaii]

Not all trade is bad at all, some trade relations though are unfair and not very good though. Its a case by case situation.

Rabid free trader. Oh please. Rabid fair trader maybe, but definately not a rabid "free trader".

"Free Trade" depends on how you define those words.

If free trade means we open our markets to goods from all over the place, but those other places don't open to us, that is not free trade. I am definately not for that. Some people use that mantra to justify their importing and where they import from.

"Free Trade" all depends on how you define things.

[maui_hawaii]

I'm sure that will do the shrinking middle class a lot of good.

If your employer Levi Strauss had the good of everyone in mind they wouldn't leave Mexico.

I know where they are coming from for sure. They are caught in the middle of things and just go wherever.

We export 7 times (plus) more to Mexico than we do to China. We actually export over $100 billion to Mexico. Which trade relation is better for the middle class?

[redangus]

One way trade doesn't. You are assuming that we are equal trading partners with these other countries which we are not. We buy billions of dollars worth of goods from many countries that have no market for us to sell to. There maybe millions of Chinese, Malaysians, Mexicans etc., but they don't buy large quantities of American made goods because they don't have the money to do so. We are not playing on a level field here. Go to any Wal-Mart, Lowes or Home Depot and see how many things are made in America. I can tell you very few. I would bet if you went to stores in the above mentioned countries you would find the same thing to be true. Very few American made items on the shelves.

[maui_hawaii]

There maybe millions of Chinese, Malaysians, Mexicans etc., but they don't buy large quantities of American made goods because they don't have the money to do so.

You are right on on your assessment that we are not equal. Another thing on the side though, not all those countries you mentioned are even in the same category. While we are not equal, they are not all equal amongst themselves either.

For every $100 billion we import from China we have on average about a $15 billion dollar (or so) export opportunity.

With Mexico for every $100 billion we import we sell $75 billion dollars (plus) of good old, made in the USA stuff.

[RJS1950]

B freakin S. It means economic growth IF the goods are manufactured here and workers who make the goods get paid here thereby spending the money here for other goods and services produced here for which other workers get paid...etc. If the goods/jobs are overseas, then it is little different from the goods produced by foreign industries, only the CEOs and stockholders gain, and in the long run you create a society where the former, now unemployed/underemployed workers cannot afford to buy the goods and services produced, and certainly not at the level they might if the goods were produced here and the money all flowed through the american economy. Where the hell did you learn economics? From the DNC? Goods, services and the money from the wages of the producers are what fuel an economy, otherwise, you had better find enough buyers in europe, asia and elsewhere to buy large quantities of your goods because you are killing off the buying power of the average worker in this country.

[SSN558]

"So don't beat me over the head with your economic nostalgia and tell me how you're going to bring back all those wonderful smokestack industries, where square-jawed laborers carried their lunch-pails to the factory and punched the time clock and voted like the union bosses told 'em to vote. That whole Archie Bunker America is gone, and it ain't coming back for the simple reason that American workers don't want it back."

Ah Yes. I do occassionally encounter a venonmous response from those hate the manufacturing economy. Many of them suscribe to the old hippie philosophy, that someone else will provide all the things that make civilized society possible. My experience tells me otherwise.

I live in the manufacturing belt and life is good, and it is good for all that are willing to get up and produce something of value from raw materials. I've lived and seen what happens to an economy that dismantles manufacturing for a central planned high tech and global trade economy. CA for example. You get a two tiered society infested with gangs, drugs, and crime. Every person is not cut out for life in a cubicle, and these get left out.

The economists that advocated this condemed 25% of the population to a life of poverty and crime. Imagine living in a place with no fences, no gate guards, no helicopters orbiting over your roof top at all hours. I still do but I had to leave your globalization utopia to make it happen.

[waterstraat]

For every $1 worth of goods we buy from Mexico (either through outsourcing etc) we actually sell just over 75 cents to Mexico. That means 75 cents to the dollar of real exports.

You call this "good"? For every $1 we buy, the mexicans only buy .75, that means we LOSE 25% on our trading with mexico. We would be better off if we canceled all trade with Mexico.

[maui_hawaii]

Compared to China its WAY better. No one ever said anything about "perfect"...

[waterstraat]

Who said anything about perfect" I just want some fair trade. Just how many countries do we have a "surplus" with anyways? Which countries are they? Free trade means free trade. It means that unless we are totally undeveloped, we should be running surpluses with most of our trading partners. That makes us strong economically. (exclude "foreign investment", just talk about real trade of goods and services)

[maui_hawaii]

I am all for fair trade. The current trend and economic model is not for that.

I was on another thread where I looked at the trade numers it shows a clear trend. Outsourcing.

That trend won't work, especially in creating fair trade or economic growth.

[maui_hawaii]

Based on what I can see, NAFTA was not built around the current trend of this breed of globalization. The model behind the current trend sucks and is weak.

If we don't change the economic model, forcibly, then we are in for a long term bit of trouble.

Here is my solution: First sign several more FTAs with some allies. Negotiate fair terms.

Then, for those not holding a FTA, levy a 150% tax on all imports from those countries that could be done 'in network'. This means taxing China.

On one hand it will completely eliminate taxation 'within the network' but on the other it will tax off those unprofitable relations. It will be development focused trade relations.

[Madstrider]

those hate the manufacturing economy

I merely hate nostalgia as an economic policy.

I live in the manufacturing belt and life is good

If by "manufacturing belt" you mean you live in the Upper Midwest, then you live in a state which sanctions the union shop, a state that is losing both population and political clout to the right-to-work Sun Belt, a state where retirees outnumber schoolchildren. Michigan, Wisconsin and Illinois are America Past. Texas, North Carolina and Arizona are America Future.

a two tiered society infested with gangs, drugs, and crime

Like ... New Jersey? Detroit? Chicago?

Every person is not cut out for life in a cubicle, and these get left out. And not everyone is cut out for life on the shop floor, either. What's your point, O Knight of Labor?

[Madstrider]

Where the hell did you learn economics? From the DNC?

Adam Smith. Ludwig von Mises. Friedrich Hayek. Ever hear of 'em?