What is the future of work? Which party will prevail in not only lowering our unhealthy unemployment rate but ensuring that job growth will continue based on genuine prosperity and not the "bubble economics" such as the housing and Internet bubble enabled by Bill Clinton? Let's call it "Bubba economics."
As I said in a previous post, the major driver of our economic doldrums is the rise of China and India during the past decade. What's more, while economists can claim that the issue is China's undervalued currency, it's the slave wages that make outsourcing to China appealing. Let's face it, American businesses didn't relocate to southern states because they have a different currency but because they are "right to work" states.
President Obama's announcement on Monday that the administration would take action against China for illegal subsidies of auto parts sheds a light on the enormous role China is playing in our economic doldrums.
But I'd contend that it's cheap labor, not subsidies, that's the problem. The reason why the last decade was the first since the Great Depression in which there was no net job creation in the U.S. is that the 500 million people in advanced economy labor pools, whose average daily wage is $135, can't compete with the 1.1 billion people who make $12 a day in developing economies such as China, and the 1.3 billion people in rural economies where the daily wage is only $1 to $2 a day.
We didn't used to outsource, at least not to this degree. In 1955 GM was the largest company, with more than 475,000 employees and only around 75,000 employed by overseas contractors. Today Apple is the biggest company, employing fewer than 50,000 employees here and more than 700,000 abroad.
The standard Republican response to economic doldrums -- claiming that tax cuts will incentivize companies to "re-shore" jobs--is absurd. As even the conservative Wall Street Journal admitted, most major U.S. companies pay zero taxes.
While Huffington Post's "What is Working" campaign has provided vital input on how we've got to train more Americans for highly skilled jobs -- especially at community colleges -- unfortunately the fastest growing jobs don't require a college degree.
As economist Jeff Faux of the Economic Policy Institute has observed, "the Bureau of Labor Statistics projects that by 2014 the number of occupations filled by people with college degrees will rise by merely one percentage point -- from 28 percent to 29 percent."
What's more, the BLS says that of the ten occupational groups that will add the most jobs between 2010 and 2020, five don't even require a high-school diploma.
Those who think we can jump-start the economy by encouraging high tech start-ups need a reality check, given that too many of these start-ups wind up outsourcing much of their work. Wonder why California, our most entrepreneurial state, has one of the highest unemployment rates in the country -- 11.5 percent as of March of this year compared to the U.S. rate of 8.3 percent?
In fact, four of the five Congressional districts in the U.S. with the highest proportional decline in jobs are in the tech-heavy San Francisco Bay area -- oh, and the fifth is Austin, which is also a high tech area.
Says Intel founder Andy Grove, only about 166,000 people in the U.S. work in the computer manufacturing industry, a lower figure than when the first PC was assembled in 1975. "Meanwhile, a very effective computer manufacturing industry has emerged in Asia, employing about 1.5 million workers," says Grove. Unlike Apple, GE and HP, "[Intel is] making three-quarters of those chips in the United States, even though three quarters of its microprocessor chips are sold elsewhere. Intel employs 44,000 people in the U.S., more than half its overall workforce of 84,000," according to Robert D. Hof of Stanford Business Magazine online.
Grove knows first hand the price you pay if you don't make the stuff you invented:
When Intel's business consisted of making memory chips, we hesitated to add manufacturing capacity, not being all that sure about the market demand in years to come. Our Japanese competitors didn't hesitate: They built the plants. Asian countries seem to understand that job creation must be the Number One objective of state economic policy.
Grove's approach to re-source and re-shore jobs to the U.S.A?
Levy an extra tax on the product of offshored labor. Deposit it in the coffers of what we might call the Scaling Bank of the U.S. and make these sums available to companies that will scale their American operations. If the result is a trade war, treat it like other wars -- fight to win. If what I'm saying sounds protectionist so be it.
Grove offers Germany, which produces more high-end goods than China -- from autos to renewable energy -- as a role model. For one thing, management and labor have a more cooperative relationship, emphasizing on-the-job training and avoiding layoffs by substituting wage freezes or temporary shorter work weeks.
As I pointed out in a previous post, a little-discussed feature of the European Union is that it's a partnership between large employers and their workers, not just between countries. Works councils, which are mandatory at most companies, not only enable workers to have veto power over job losses but give them the right to meet with management to discuss mergers and the introduction of new technologies, says Steven Hill in Europe's Promise.
What's more, some of the most effective economies are unionized AND European. Four of the 10 best economies are the Netherlands, Sweden, Finland and Switzerland. The European Trade Union Confederation consists of 81 unions with 60 million members compared to the AFL-CIO, which represents only 10 million workers., according to Europe's Promise.
European countries also broker trade deals with other countries. As United Steelworkers President Leo Gerard put it, "If you look at the Scandinavian countries, if you look at Germany they've got strategies that include having a balanced trade agenda with China. If the Germans can have a balanced trade agenda why can't we?"
It will take time and effort to change our labor and trade policies but Americans deserve to know what companies are outsourcing/offshoring their labor so they can choose to boycott them, as I'm doing with Apple products. Unfortunately, the GOP-dominated Congress very likely doesn't want to offend major U.S. outsourcers, given that these companies are a major source of their campaign contributions -- the Chamber of Commerce is the top spender, shelling out more than $885 million since 1998, according to CRP.
Earlier this year the House Republican majority voted down the Peters Outsourcing Accountability Amendment introduced by Rep. Gary Peters of Michigan, which would have required publicly held companies to reveal how many of their employees work overseas. I would urge you to contact your Congressperson (or Peters directly if you're a New York resident) and urge him/her to ask Peters to re-introduce the bill. It's a first step in keeping the vital subject of bringing jobs back home on the front burner, not to mention throwing the bums out who would dare impede an effort to bring them back.
When electrical energy, taxes, environmental compliance cost are also only a tiny percentage of the US costs for the same items, then US businesses cannot afford to employ US citizens or even operate in the USA, except to retail foreign manufactured products to US consumers!
If the $1.00 of foreign labor and $1.00 of cloth to make that $10 shirt ($5.00 wholesale after distribution) that you and I bought at Walmart might cause that shirt to cost ($4.00 / 4% +$1material = $101.00) $101.00 wholesale and $140.00 retail if US labor was used to make that shirt. This is true of most other products.
This is does not include any additional overhead costs, payroll burden costs, environmental compliance costs, higher electrical costs, National Healthcare costs, work rules costs, profit and other normal business costs that are applicable only to US businesses.
With the total costs of US manufacturing included, this would further increase the cost of that US made shirt to the US consumer to the point that US consumers would not buy US made products.
According to the US Government Labor Bureau of Labor Statistics at:
ftp://ftp.bls.gov/pub/special.requests/ForeignLabor/ichccpwsuppt01.txt
The basic industries such as manufacturing steel, copper, lead, petrochemicals, aluminum, plastics, chemicals, refining, cement, and etc. are not environment friendly, so I guess that US citizens do not want those jobs to be in the USA.
Manufacturing of finished materials such as Pipe, Wire, Cement are also relocated to outside of the USA.
Or maybe we can get along without any (industrial) jobs that make any of the things that we consume!
The USA needs to re-industrialize in order to generate and create new NATIONAL WEALTH and new JOBS in the USA, in order to stop mortgaging and/or selling existing NATIONAL WEALTH to get US Dollars (that we paid to foreign manufacturers) back from foreigners in foreign industrialized nations to pay for government activities (and also imported products).
Future wars might also (will probably) be industrial wars where the nation with the most wealth creating industrial manufacturing production will win the economic war by producing more NATIONAL WEALTH!
Some people say that was how the US won WWII!
And non-wealth producing nations like the USA might destroy their own economies with (deficit) government spending which will impoverish all of their citizens by selling and/or mortgaging existing NATIONAL WEALTH and spending the proceeds for federal government activities!
After the early pioneers and settlers could produce enough necessities of life (food, shelter, clothing) for themselves and had an excess to also support a (rudimentary) civilization, they would then combine their meager resources/or and tax themselves to hire public sector bureaucrats as teachers, soldiers, water system operators, police, firefighters, and other services but they limited the cost of these bureaucrats to the number and the bureaucrats pay that the wealth producers could afford and/or wanted to support.
The producers would also pool their resources and hire contractors to construct roads, bridges, water systems, sewer systems, and other infrastructre that allowed the producers to become more productive.
These tax supported government bureaucrats and government contractors did allow the producers to become more productive by relieving the producers having to worry about providing those services for themselves (and for the producer’s families), but the producers limited their expenses for bureaucratic provided services to the limitations governed by the amount of tax revenues that they wanted to pay.
The principles of limiting the amount of wealth that can be skimmed off from the wealth producing workers in the form of taxes to pay for bureaucratic services and government contracts is still applicable.
When manufacturing is moved overseas, other functions such as R&D, engineering, accounting, and customer service tend to move offshore too.
To all of you struggling out there I have to ask what will it take for you to boycott the very companies mentioned in this article as well as others that participate in rampant layoffs, unchecked outsourcing and keeping the payroll profits for themselves?
What will be the tipping point to actually boycotting these companies and undermining their power for good? Now, I had to give up the smartphone for the cheap, most basic phone for the food stamp folks. Yes I said it.Never been on food stamps in my life but now I am.Whomever hates me for this can lump it, take it down the road and dump it.Would like a job but none to be had especially since now you're a criminal for being unemployed. I'm waiting for fascists to make that an arrestable offense.
After all the debates what will make you boycott those companies? The holidays are coming up so.Boycott the corporations that delight in boycotting the American worker.They're boycotting you aren't they?Hand them red slips!
Why blame the businesses?
If a business's competitors take advantage of cheaper foreign labor, cheaper energy, and cheaper environmental compliance costs, then the competitor will have less expensive products, and the business with the more expensive products made with US citizen labor in the USA will go bankrupt because the US consumer will not buy the more expensive US made product.
Both major political parties and their political contributors, mostly the various foreign manufacturer paid lobbyists, directed and influenced (bribed) our lawmakers to ratify the FREE TRADE AGREEMENTS that removed the import tariffs that protected the jobs of US citizens working in US industries, and this is the cause of most of the US factory closings and job losses to overseas locations.
The US jobs are not going to be recreated back to the USA without "Extremely High Import Tariffs" that are high enough to prevent imported products. What do you think that the future of the US worker will be?
These jobs are gone forever and they will never return until US labor, electricity, energy and environmental manufacturing costs are reduced to meet or be less expensive than foreign location manufacturing costs.
We can argue many points and you make valid ones but when my people boycotted the bus companies so they can sit on a seat wherever they wanted to, the bus companies gave in.
No money, no power, period. They respond to lack of profit.
When you see Chase Banksters you see 'em from an intellectual perspective. They didn't trade your ancestors to make money, AIG didn't insure the ship of people who may have been your ancestors. this is why you seem to think you can negotiate with them. There's no negotiation with people in corporations. Maybe you will never participate in a boycott but to the millions of us out there with years of unemployment, it's becoming feasible.
Federal Government Deficit spending of borrowed money on non-income producing projects such as hiring the unemployed to create infrastructure will destroy that US economy, and then that will destroy the USA society which will then evolve into something resembling Greece, then Mexico, and then Somalia!
Each civilization has always strived and desired to create sufficient government financial resources to perform the following services for the general public, to relieve the general public from being individually responsible for providing these services:
1. Provide for the common military defense.
2. Pay for the construction of the common infrastructure elements that we all enjoy.
3. Pay for police, fire fighters, educators, and a judicial system.
4. Take care of those citizens that cannot take care of themselves.
Provide various other non-essential government expenses such as libraries, museums, zoos, parks, hospitals, NASA and other nice but unnecessary feel good services that serve the total population.
Maybe this should be a part of the definition of civilization.
Read somewhere that the labor cost savings for an iPhone is only $10
Just saying...
Starting with President Clinton's NAFTA in 1993, the US government has wholesale eliminated the import tariffs on almost all of the products that the US consumes.
Those import tariffs previously protected the wage scales and benefits of the US workers.
Those actions also sent the wealth creating activities to foreign nations.
That wealth is now being created in those foreign nations.
President Clinton also signed the repeal of Glass-Stegall which changed Wall Street into a gambling casino, and that caused the current financial crisis that started in 2007.
These freshly printed paper US Treasury Bonds, T-Bills, and other security instruments that the US government prints and then sells to people in industrialized nations to get back some of the US Dollars that US citizens paid them to manufacture the imported products that US citizens consumed have ABSOLUTELY NO VALUE, except that they can be used to purchase title to privately owned businesses, factories, casinos, hotels, farms, land, ports, breweries, refineries, forests, ports, breweries, refineries, commodities, commodity futures, and other privately owned assets that are located in the USA instead of Gold from Ft. Knox.
Maybe the maximum value of any country’s sovereign debt should equal the total value of the (private and government) owned tangible wealth located in that country, because that wealth is the property that is mortgaged (or available to be redeemed for the debt instruments) as security for US Treasury Bonds, T-Bills, US Dollars and other US security instruments, and/or other sovereign debts.
Both of these major political parties are in favor of creating more and more free trade legislation, which destroyed US industries and the industrial employment opportunities for the average US working person.
I am looking for another political party that will work for the re-industrialization of the USA.
I believe that it might be easier to take over another party compared to creating a new party as Ross Perot did in 1992.
I just “googled” up the Prohibition Party's website http://www.prohibitionparty.org/platform.html and they are trying to sell their website address for $949.00.
They apparently do not have a party platform adopted since 2008 which was about the last time that they up-dated their website.
That platform stood for balanced budgets, and other generally conservative fiscal spending restraints.
Their website said that a new party platform will be available soon last summer.
Maybe myself and the unemployed should contact them and suggest that they adopt a position favoring the re-industrialization to create US jobs as an issue for the next US presidential election.
I did not see any information on their website promoting the return to legal prohibition of alcoholic beverages in the USA, so maybe I could join that party.
I would consider joining the Green Party, except that they want an even cleaner environment which means closing down more and more US industries and then exporting more of the few remaining US industries and jobs to overseas countries where the environmental costs and the labor costs are less expensive.
We must somehow repeal existing free trade legislation (and environmental laws) in order to re-industrialize and reverse the balance of trade if we desire to somehow employ US citizens instead of foreigners to manufacture the things that US citizens consume.
Why instead stop regulation, and bring the race to the bottom home, when you can insist on decent standards of production for imported products, and export good environmental practice to China.
Lots of environmental protections require investment and jobs at home to implement.