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.

[BushCountry]

Just the opposite is shown. The funny thing is that the overall percentage of adult working greatly increased from 47% to 67%. That is why you are comparing apples to oranges, we have millions upon millions more adults working now (as a percentage of the adult population of the United States) as opposed to the glory years.

[the gillman@blacklagoon.com]

Numbers that have been cooked by every administration for decades are worthless.

[meenie]

The Drug cartels are doing pretty well. With relaxed trade barriers and less customs inspection, smuggling is easier. The politician has a cash cow in the form of contributions from management of multinational corporations who want to keep the game going as long as possible.

Other than these two examples, the beneficiaries are few. The consumer has the benefit of cheaper goods which are purchased with fewer wage dollars so he is involved in the race to the bottom. The real losers are the people and sovereignty of our nation being delivered to the altar of world government and tyranny.

[raybbr]

Can you add me to your list, please?

The super-capitalists in this group are going to be selling all the old arguements. How free trade is the end-all and be-all of marketing. I have one question they can't answer. After 10 years of NAFTA and GATT what are these nations buying from us that represents true free trade? And, do these other nations impose no tarrifs on goods from America?

[sarcasm]

The percentage of the population in the workforce is an indication of stagnant or declining real wages for a substantial portion of the population. Many women were forced into the workforce to make ends meet.It does not diminish the fact that the average unemployment rate has been increasing.

[BushCountry]

Unemployment rate does not measure the real joblessness. Many people are not counted, others are counted as employed if they do part time temporary odd jobs, while trying to get the real job back. Our percentage of adults working in this far greater than most countries.

[BushCountry]

I get your point loud and clear, women shouldn't be working! Barefoot and pregnant in the kitchen! The world changed, not necessarily for the better (not because women work), I realize this. My point is that if we had a robust ecomony (5% GDP), we would not be talking about unemployment. Trade barriers will not create this ecomony. It is just my humble opinion.

[Ed_in_NJ]

Thanks - explains why noone I know thinks these pacts are providing any benefit to the US working class.

Good for the shysters, not for the producers.

[A. Pole]

That is why you are comparing apples to oranges, we have millions upon millions more adults working now (as a percentage of the adult population of the United States) as opposed to the glory years.

You mean the years when one wage could support one family?

[sarcasm]

You are distorting my position by posting such a comment. I am merely presenting facts which you wish to ignore. Again, a 5% unemployment rate is not indicative of a robust economy.

[listenhillary]

How to tune our economic engine and make it roar.

Growth of Fed & State governments need to be frozen, scaled back. Paying leeches health care & generous pensions when they produce nothing and only act to impede the free market is stupid.

Drop the nanny state government. Medicare, Medicaid, social security were all bad ideas and we're getting close to the bottom of the hill. Social programs are consuming over 1/3 of government spending. 70% of social program spending goes to administering programs, not to people that need the money. How stupid is that?

There are few things that the private sector can't do better than the government. Privatize government programs.

Reasonable taxation with either a flat sales tax, or flat tax on spending.

Extent of small business regulation should be to register the business with the state.
Private trade groups need to be the ones to grant licenses to prove one is competent in their field. (U/L Laboratory seal of approval?) Do we really need a department to license dog groomers?

Enact loser pays legal reforms. Our businesses are being henpecked to death by lawyers, government regulators and accountants.

Privatize all of our schools including colleges. Government control has not worked. Bring back apprenticeships for trades. (Our local state college just had a 20% increase in tuition. So much for affordable education, Wasn't that the point?)

Teach small business management starting about 6th grade. Instead of the demonizing businesses, we need to be come a nation of entrepreneurs.

[MonroeDNA]

"And can anyone tell me exactly WHO is benefitting HOW from NAFTA, etc.? "

Sure. I am. I pay less for socks and shoes (and many, many other imported goods), so I have more money left over. I am a small business owner. With the money I have saved from cheaper goods, I just hired another guy to help out. So he is benefitting, too.

Now the people who used to make socks and shoes here in the US are unemployed. I feel bad for them, but they need to re-educate themselves (like I did), and find a new trade.

And you benefit, too. Cheaper socks and shoes for you, too. Or would you rather pay more, and let the local socks and shoes workers keep their jobs?

IMHO, the people here who think I should pay more for socks and shoes by barring imports, so that I subsidize the local workers making socks and shoes, are closet socialists.

Let the market decide.

[m&maz]

Your article said: :... 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 federal government (and their environmental extremest friends) are the reason for the jobs leaving this country to start with.. Every time one turns around we see more government regulation making it harder for business to survive.. The environmentalists do everything they can to halt mining, logging, and drilling efforts in this country.. By doing so, not only are jobs lost, but the US is forced to depend on foreign interests to provide the raw materials that could be produced right here in America.

[MonroeDNA]

"The Japs bought into the economics of globalism, and are suffering the same fate as Americans."

The Japanese economy has been in the tank not because of global free trade, but because their banks were in bed with their manufacturers, and their real-estate tycoons. They severely overestimated (on paper) the value of their real estate holdings, to prevent their friends from being embarrassed. When the eal estate market collapsed, so did a large part of their banks paper holdings. That led to the collapse of their economy.

You need to re-read your history a bit more before you go off on such an ill-informed rant.

[Beck_isright]

"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%."

And before the days of so called "free trade", which is a myth perpetuated by our own investing community and government, we funded almost all of our government functions with tariffs. But now it's much more convenient to stifle economic growth by levying an income tax and penalizing the producers and entrepreneurs in our country, instead of the subsidized goods coming from other nations. Either way, this policy of over-taxing US citizens and under-taxing imports will eventually cause that spiral of deflation that everyone seems to fear.

[A. Pole]

Our percentage of adults working in this far greater than most countries.

BTW, I would not be surprising if percentage of teenagers working were higher and rising. When parents lost well paying jobs, kids might try to help to balance the budget.

Also number of hours worked can be higher. Some interesting stats at Annual hours worked per person . A sample:
Belgium 1990 - Men 1713.1, Women 1512.0
    1994 -Men 1728.5, Women 1512.0

USA 1980 - both sexes 1883.4
    1990 - both sexes 1942.6
    2000 - both sexes 1978.7

[Beck_isright]

"And can anyone tell me exactly WHO is benefitting HOW from NAFTA, etc.?"

Al-Queda and any other terrorist group. They can smuggle whatever they want into our country now because it's impossible to inspect every trailer or rail car entering into the US from Canada and Mexico.

[Feldkurat_Katz]

I get your point loud and clear, women shouldn't be working! Barefoot and pregnant in the kitchen!

There is nothing wrong with women working, however, it is wrong that having two workers per household is a necessity.

[Beck_isright]

"To be honest, I am surprised at how robust our nation is and proud of Americans for making a comeback (albiet right now a weak one, but we survived a lot). What I am trying to say is that I don't think trade barriers will help our ecomony and that if we get to 5% GDP, unemployment would not be a problem. A robust ecomony means full employment."

I love the idea of challenging my fellow capitalists on this one. If you could have an across the board tax cut of 20 plus percent with an increase in tariffs of 3% to offset the cut (in demospeak that is) OR maintain the status quo, which would you prefer? If you cut the taxes dramatically, I gurantee an economic explosion which would not be injured by the increase in tariffs because the spending power would mulitiply faster than the inflation rate ever could.

[KevinDavis]

You sir hit the nail on the head! Don't forget the lawsuits by overzealous lawyers and also more demands by the unions that company provides employees health care and baby care. It is getting to expensive to do business in this nation.