Globalism - A FairyTale (or How Globalism Will Bring the American Way to the Rest of the World)How globalism was sold: "As these other countries' economies develop, they will eventually become democracies, liberalize their economies, aim for a lifestyle like ours, and before you know it their citizens will all have two cars and live in MacMansions just like we do."How globalism has worked out for the U.S.: "With open economic borders, the life of the average U.S. worker is getting more like that in the third world every day: less and less health care, fewer other benefits, a falling real income, crushed by debt."The force behind globalism is that of corporations, whose very existence is based on a drive for profits. It should be no surprise that opening economic borders results in pulling the U.S. standard of living down, far more than generously raising that in the third world.As a doc, I see a wide spectrum of society in my everyday life. I can tell you that this economic patient of ours is very sick indeed.
The odds are that most of those jobs would not come back. Some? Maybe, but only until they can be relocated to some other country. But, (don’t call it) NAFTA 2 has already met with Trump’s approval and only requires confirmation in Congress to take NAFTA (I’s) place. The question is moot.Manufacturing moves for many reasons, “the cost of labor” being only one of them. There’s the cost of infrastructure, electricity, water, and so on, the cost of building the plant and the land it sits on, the cost of shipping the finished product to its ultimate consumers, and so on. “Cheap labor” is a “cheap shot” as labor is usually only one part of a complex equation.In the final analysis, the cost of any product is the sum of its manufacturing and infrastructure costs, plus the cost of shipping it to the consumer. That’s why BMW, et. al. build autos and crossovers in the US and not Germany, or their country of origin. Nobody in the US thinks “cheap labor” is the reason those plants are located here, only when they locate somewhere else. Think about it. Is “cheap labor” the reason BMW, Honda, etc. build in the US?
Three big ones (note that #1 and #2 are related):Resistance to “pink-collar” service jobs: low-educated men who have spent careers in manufacturing, etc. often reluctant to take service-sector jobs traditionally held by women. See NYTimes story “Why Men Don’t Want the Jobs Done Mostly By Women: “Much of men’s resistance to pink-collar jobs is tied up in the culture of masculinity, say people who study the issue. Women are assumed to be empathetic and caring; men are supposed to be strong, tough and able to support a family. Telling working-class men to take feminine jobs plays to their anxieties and comes off as condescending…”Retrospective wait unemployment/“identity mismatch” for unemployed men. From the same article: “Many unemployed men who did manual labor say they can’t take the time and make the effort to train for a new career because they have bills to pay. And they say they chose their original careers because they wanted to build things, not take care of people. Lawrence Katz, an economist at Harvard, has a term for this: “retrospective wait unemployment,” or “looking for the job you used to have.” “It’s not a skill mismatch, but an identity mismatch,” he said. “It���s not that they couldn’t become a health worker, it’s that people have backward views of what their identity is.”Unemployed people are often reluctant to relocate to new geographies where the jobs are. Mobility is way down; unemployed people are much less willing to move than they used to. A lot of this has to do with high housing costs in markets that have lots of jobs. But there are other considerations as well. Good articles:Alex Tabarrok's answer to Why isn't there more labor mobility in the US? Why don't more people move from low to high-growth cities?http://www.nytimes.com/2012/03/11/opinion/sunday/the-go-nowhere-generation.htmlGeneration Stuck: Why Don't Young People Move, Anymore
Stable, healthy national economies are built on manufacturing and wages. What has happened to U.S.?
Globalization, which is code for cheap shipping costs and cheap foreign labor, mean mfr sector is never coming back. There are several stages in a growth of a national economy: 1. Agriculture 2. Industrial 3. Highly Specialized Industries/Research/Finance (ie, Internet/Computers in the first case) We've left Industrial/Manufacturing and moved on to the next phase. It's just a lot bumpier than everyone said it would be.
How little would American manufacturers have to pay their employees to remain competitive?
I honestly think we can stay competitive allowing a $7-10 dollar range for manufacturing jobs and the bit more skilled $15-18 in the higher end manufacturing range such as cars. Be turn out higher durability products generally. Also would need to cap ceo and exec pay execs maybe 100-200k a year and CEO maybe $250-500k a year and bonus's not exceeding in the millions. Then you look at some of these pay packages a CEO and their top 10 execs make put together often your talking 30-50 million a year.... how many employees is that making even $25 an hour? Over 900 employee's wages in a handful of pockets. You could essentially cut the top pay down significantly and have the benefits of laying off 800 employee's without the manpower loss. Then also the US needs to force copyright and patent protection overseas by putting very stiff fines on any country as a whole that doesn't significantly fight to curb those thefts. Those fines can be made by stiff import tariffs on any goods and services from that country until it agrees to work for copyright and patent protections. Our biggest asset in the US is our innovation and creativity and that adds to peanuts when some of the major countries we'd profit from our side instead promote stealing our creative and innovative things.
How responsible are American workers for outsourcing?
To a certain degree, yes. I don't agree with the Worker's Comp. statement, as you have to go through heck and high water to it approved and by the time you do, you are back to work. There are too many people on "disability" leaves when there is nothing wrong with them or if it is, was their own doing there own doing (like setting fire to themselves while free basing cocaine), people who are always saying "that is not my job" to the point you wonder exactly what there job is because it doesn't seem to be anything. The corrupt Unions (which are now on the decline, thanks to their own greediness) that made employers tolerate worthless, abusive employees who could phyiscally harm other employees and their supervisors and not go to jail over it, and to get back in after being fired, but paid back pay. We as consumers are also guilty; we like buying all those bargains at Wal-Mart and other places with deep discount pricing but the reason they are so cheap because they have been imported from other countries where they pay workers per week the same amount they may pay an American for an hour. Any company with shareholder has to make tough decisions and do what is most profitable for the company and they are outsourcing more and more to other countries every year. The only way to turn it around, besides tax and monentary incentives set by our government to encourage businesses to stay here is for the American people to go back to taking pride in what they do, put in an honest day's work, and do the best they can to make the company they work for a success.
America's moving of it's manufacturing base outside of the US has basically created a upward funneling of money to the richest Americans. Large corporations and investors have been the main beneficiaries of this transference of work to nations like China. As large companies like Walmart found newer and newer ways to squeeze costs to deliver cheaper items to consumers they 1. closed American factories 2. closed local small businesses that couldn't compete 3. created a new political marriage of ultra capitalist super rich and poor less educated whites in non-urban areas in the Republican party that is only beginning to show fraying. If America had some form of protectionist controls or had kept manufacturing jobs in the US, the American economy would likely be more balanced and less top (banking) heavy. While America would be unable to compete globally with China in terms of cost of labor(price), it could compete in areas which it kills China usually: design, quality, efficiency, technological innovation, marketing etc. My guess is that some industries China would win outright, where the focus is on large scale lesser quality goods like steel. However, in many other areas, if America had invested in training it's workforce and giving tax breaks in strategic industries (say green tech) China would not be the king of manufacturing it is now.You're right in that China has gained a lot in terms of wealth at the huge cost of pollution. China's economy is imbalanced towards focusing on exports mainly, but they are quickly trying to focus on a western style consumption model. The ultimate irony is that China continuously lends the US huge sums of money to keep this game going on. They keep American consumer interest rates low by buying our debt, and devaluing their own currency. Ultimately this game will end, when the US cannot pay its interest. That day is coming. Soon. And then my guess is that everyone in the world, rich and poor nations, will be losers.