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.

[Bill Davis FR]

ITS TOO LATE...THE HORSE IS OUT OF THE BARN...WTO AND NAFTA RULE THE WAVES...

[FITZ]

$50,000 would be considered very good pay in this area where only 1 out of 3 people makes over $10 an hour ----but it's not too much over the level you can start collecting some of the freebies like Medicaid and Food Stamps.

"Budget writers agreed to keep CHIP income eligibility as it is now: families who earn twice the poverty level, or $36,800 annually for a family of four."

http://www.borderlandnews.com/stories/borderland/20030525-117411.shtml

[FITZ]

$20,000 a year gets you counted as employed but with that you and your entire family will qualify for the "earned income" welfare, food stamps, free lunch and breakfast at school, Medicaid and many others. You might just as well be on welfare for all that.

[lelio]

...and be counted as employed
Not to mention that if you go from being a Boeing machnist / engineer to working at WalMart as a greeter your influence on the unemployment number is the same.
In fact, it probably will increase the working hours / week figure as you'll have to work two jobs now.

[lelio]

There is no such thing as a level playing field.
That doesn't mean the US has to play the game and take the hits from competitors that are playing unfairly.
Moderate tariffs are one one of preventing a US company from selling out its employees so that the CEO can get a fat payoff. I don't think it is un-American or anti-"free trade" to hope that all Americans can benefit from a rising tide.

[hedgetrimmer]

Considering that Fidel Castro is in Argentina, as we speak, to celebrate the inaugration of the new president, I would say that most of Latin America is about to veer extremely and violently left.

[YankeeReb]

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. There are lies, bigger lies and statistics.

Thank God someone else understands this, whenever I mention it to anyone I'm met with blank stares. The former EE who's forced to take a job at radio shack for $10.00/hr is not counted as unemployed, nor is the person who's unemployment ran out. You can't grow an economy with large segments of the work force doing temp jobs with no security and no benifits.

[Beck_isright]

"Considering that Fidel Castro is in Argentina, as we speak, to celebrate the inaugration of the new president, I would say that most of Latin America is about to veer extremely and violently left."

Check out Brazil's desire to develop a "Latino" nuke and you'll see just how far left it already has veered.

[SSN558]

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

Actually I have been studying this for the last three years, and that is my take on it. The text book rules of economics are altered in practice and outcome, by the political and business coruption that you describe.

[AmericanVictory]

"Corporate leaders" do not create jobs,they ship them overseas. Job creation accompanies wealth creation, which overwhelmingly comes from new businesses surrounding breakthrough technology or innovations which are not the product of "corporate leaders" or the servile types who work for them. Corporate leaders and those climbing the ladder to be like them are more likely to block job creation than to originate it.

[FITZ]

Actually if I had stock in Walmart, I'd take it out and put it in Family Dollar or General Dollar stores now. Same if I needed a job ---I think Walmart is going to start seeing some serious competition because it's prices are too high. You can find better parking and cheaper prices at the new places going up all over. Why pay $15 for jeans when you can get them for $10? And if you try a Goodwill you can find them for $5. With wages dropping and unemployment rising, people need better bargains than Walmart can offer.

[FITZ]

Considering that Fidel Castro is in Argentina, as we speak, to celebrate the inaugration of the new president, I would say that most of Latin America is about to veer extremely and violently left.

And with the quickly worsening Mexican economy thanks to NAFTA and free trade ---can we be certain some of this extreme and violent left veering won't be right outside our borders?

[Beck_isright]

As sick as I am of our economy being shipped overseas, one job at a time, it's not the fault of corporate leaders. Just look to the US and state governments and you would see the real reason our corporations are fleeing. Don't blame the capitalists, they would rather stay here. But if the people will not reign in the rampant over-regulation and over taxation in our state and federal governments, then the corporations will go where the most favorable business climate happens to be at that moment.

[hedgetrimmer]

And with the quickly worsening Mexican economy thanks to NAFTA and free trade ---can we be certain some of this extreme and violent left veering won't be right outside our borders?

I am not sure that Fox could pull off a Chavez(as in Venezulela), but the next election could be very telling for Mexico.

[arete]

What are your solutions? High tariffs? Force people to buy expensive items that is only made in America?

We can start by getting big government (and their clueless lackeys at the FED) out of the economy all together. Ironically, those who post here all agree that central planning (as in socialism) doesn't work yet at the same time we expect a handful of morally corrupted and Wall Street sponsored politicians to provide us with an articficial fix. The ONLY solution is to suffer through the pain of the hangover from the 90's party and then rebuild on a solid economic base. Let the system clear itself and then move on. Central planning didn't work for the communists and socialists and it isn't going to work for us either.

Richard W.

[ex-snook]

thanks for ping.

The Bush-Clinton-Bush promises that 'free trade' will increase jobs is obviously a snow job. This is 'government to government' deals with lobbyist input that our reps can't change or see.

The truth is that these deals have swapped our jobs and factories for cheaper consumer goods. But the savings in product cost have been offset by the increase in government costs for crime and social disintegration. It's pay me now or pay me later, one way or the other.

I expect the same snow job in now in progress about dividend tax cuts producing jobs. Money is portable and the jobs will be created elsewhere.

[FITZ]

It looks like Fox's wife is going to try to pull a Hillary and become the next PAN president of Mexico. She's very politically ambitious ---maybe it's her calling the shots now. There's a new book out about her "La Jefa" (The Boss).

[FITZ]

I also don't think Fox could pull off a Chavez but I think there could be some anarchy in Mexico. The violence is escalating fast ---right now it isn't too political but you've got a lot of people over there with nothing to lose anymore. The protests could become very bloody if something doesn't turn around soon. Right now we're providing a very nice safety valve by allowing them to flood over the borders ---but if immigration was ever to slow down, things will heat up quickly in Mexico.

[A. Pole]

Not to mention that if you go from being a Boeing machnist / engineer to working at WalMart as a greeter your influence on the unemployment number is the same. In fact, it probably will increase the working hours / week figure as you'll have to work two jobs now.

Does it count as increased number of jobs?

[Prodigal Son]

The ONLY solution is to suffer through the pain of the hangover from the 90's party and then rebuild on a solid economic base.

No politician that advocates pain and suffering (even if it is the most rational choice) will get elected. That's the rub. The solution may be the correct one but this is where democracy interferes with the rational process. The party that promises to solve the problem with no pain- or indeed, gain- will get elected. Whether they deliver on that or not is a side issue. The fact that they get injected into the problem changes the nature of the problem (and therefore the solution).