Since 2000, America has lost more than 10 million manufacturing jobs and at least 50,000 factories. It’s currently fashionable for conservative commentators and economists to say “outsourcing of our manufacturing is beneficial” because “it gives American consumers access to cheap foreign labor” and “creates wealth in foreign countries,” and we are all somehow better off. But how can “creating wealth” outside this country, and creating debt inside America, benefit Americans, especially those who lose their jobs to “cheap foreign labor?”
Manufacturing, including farming and construction, is the most value-producing force in our economy, along with providing productive jobs for Americans. American ingenuity and manufacturing prowess were critical in making the U.S. a world power. When America began out-producing our enemies in the manufacture of warships and warplanes, the tide turned in WWII. Manufacturing, coupled with trade unions, created the American Middle Class by delivering better wages and working conditions. The three decades following WWII – the Era of the American Middle Class – provided the greatest number of Americans with the most prosperity in American history.
But during the 1980s, union busting and “trickle-down” economics, courtesy the Reagan administration, shifted the tax burden away from wealthy individuals and onto the backs of middle class Americans. This increased tax burden, along with the accompanying reduction of worker protections and loss of higher paying union jobs, set off the disintegration of the middle class. Corporate America, as exemplified by Wal-Mart, Apple, and GE, etc., revealed a devastating new strategy to reduce labor costs – exporting manufacturing and service jobs. Large American corporations are ringing the death knell of the American Middle Class.
American innovation and creativity in all fields are the cornerstones of American greatness. American ingenuity in science and the arts, in medicine, in entertainment, in technology, in democracy, all coupled with economic opportunity is why America stands foremost in the world. Exporting American technology and innovation has the de facto effect of exporting American jobs and ultimately, stifling American ingenuity and creativity.
Like the rest of the world, we need to make our economy more democratic. Politically, we have a representative democracy, but we live under an economic oligarchy. The CEOs of large corporations, and other wealthy individuals, control our economy and, ultimately, the livelihoods of many of us. For example, a CEO can make a “hard decision” to lay off thousands of workers and outsource their service or manufacturing jobs. This can lead to an upsurge of profit for the corporation, jubilant investors, and a million-dollar-bonus for the CEO. But the laid off American workers have no recourse except to file for unemployment and try to find other, usually lower-paying, jobs. This is the real reason for our feeble economy and high unemployment. Tragically, we are still losing thousands of manufacturing and service jobs, every day. Shouldn’t workers have a say-so before their jobs are shipped overseas?
We need to enforce at least a 50/50 trade balance with our trading partners. “No Free Trade without Fair Trade” should be the rule. The trade imbalance with China is about 4 to 1, amounting to about $300 billion per year. This must be corrected by demanding that the Chinese buy as much manufactured items from us as we buy from them; carried out within five years by enforcing a 10% reversal each year.
But Congress has no stomach for correcting the disastrous imbalance of trade. Why not? Because its members take hundreds of millions of dollars of campaign donations from American and multinational corporations who want the current situation to remain unchanged. The money, American and foreign, is channeled through super PACs and corporate lobbyists such as the flag waving U.S. Chamber of Commerce.
So how do we reverse the outflow of manufacturing jobs? It’s obvious, place or increase tariffs on foreign manufactured items to make the prices comparable to the same items manufactured here. We could again start making our own clothes, furniture, appliances, televisions, computers, shoes, tools, etc. We could even take back the printing of our books and magazines, which mostly resides overseas.
Worried about paying higher prices at the store? Bringing back manufacturing and jobs and prosperity to America by ending our addiction to cheap foreign goods will require fortitude on the part of Americans and courage on the part of our politicians. The cost of domestic manufactured products will go up, but so will their quality and their manufacture here will support America and American jobs.
Americans must be willing to take action. “Buy American” must not only be a slogan. We must elect leaders who protect our jobs and technology and throw out politicians who dance to the tunes played by large U.S. and multinational corporations. We need to stand up, demand change, and follow through in the voting booth! And not be fooled by politicians, on both sides of the aisle, who appeal to voters’ values (social, “family”, “gun rights”, religious, anti-tax, etc.), while pursuing pro-corporate agendas that wreak economic harm on the very same voters they’re courting. Do we want a government which operates like a wholly owned subsidiary of Wall Street?
As manufacturing returns, our economy will improve because the many benefits created by manufacturing will remain in America. The trade imbalance and the outflow of cash will be corrected. Just as important is that American ingenuity and innovation will be tied to domestic production, and our scientists and engineers and inventors will be directly rewarded, both financially and spiritually, leading to still more innovative engineering and scientific progress. The trend of more and more foreign ownership of American businesses, real estate, and debt will be reversed as innovation and production is encouraged on our shores. The selling out of America will end and prosperity will return.
Full disclosure: I’ve been a small manufacturer for 40 years and operate a machine shop with conventional and CNC equipment. We export about 40% of our production.
Richard Parr is a Santa Monica resident