Skip to comments.Where the jobs are: There's an explanation for why the U.S. is choking on the dust of China & India
Posted on 01/02/2014 7:05:10 AM PST by SeekAndFind
A friend recently got stuck when he tried to explain to his son, who was struggling to find a job, how our economy got to be the way it is. He asked my help since I am a well-known crank on the matter. I offered him three short anecdotes:
Last summer I was in a Home Depot standing in front of a veritable mountain of new air conditioners. They were all from China, which was no surprise. But to be annoying I asked a passing clerk where they were made. He was a young man, hired more for the spring in his step than his knowledge of international sourcing. We both looked at the boxes, piled in a pyramid, eight levels high. The boxes didn't say anything about China. But they did say "Made in PRC."
"Are these from China?" I asked.
He paused a moment. "No, they're from Puerto Rico."
Or consider this example from last month: A textile factory in Italy caught fire and seven workers were killed. They were all imported Chinese nationals working for Chinese companies operating in Italy so they could put a "Made in Italy" label on their cloth.
A third example: The city of New York decreed a few years ago that each bedroom in the city must have a carbon monoxide detector. There are roughly 11 million bedrooms in New York City, so the law created a huge market.
Further, the devices have a life of five years, after which they must be replaced, so the continuing market was also guaranteed. A manufacturing enterprise could hardly find a surer customer base.
(Excerpt) Read more at latimes.com ...
The issue is not what we should do, the issue is HOW to do it.
Let's read your proposal instead of the same slogan
How should we do it?
Hire more Chinese to take those manufacturing jobs in America just like in Italy. It’s a win for America’s one percenters and a win for Americans!
The solution is very simple:
America needs to start bringing back American jobs.
For over an entire generation we have been exporting American jobs.
That must end. Bring back American jobs.
The solution is simple. Cut taxes and get government out of the way of business.
The American worker has always been more productive than other countries. Therefore if the tax and regulation situation is not too burdensome the employer can pay his workers more. Unfortunately the government has interfered so badly in the employment relationship that it is bad business to hire anyone (because you can’t really fire them).
Why expand a business if there is no financial reward to it? Government has stolen the financial incentive.
1)Get a different president
RE: America needs to start bringing back American jobs.
Please read Post #1 above.
This is very important, because I see the Chinese trying to do this here whether with Chinese nationals (there are several interesting Chinese "company towns" springing up) or illegal aliens.
They are also buying distressed property in the USA maybe to make dormitories.
The New York smoke detector should have had a made in the USA requirement.
Eliminate the minimum wage and virtually all “health and safety” regulations. Let the free market decide what a fair wage is and acceptable level of worker safety needs to be. Also, taxes should be slashed.
This is, of course, in and of itself a drastic violation of the free market and imposition on the personal freedom of each American who wants to do business with someone overseas.
OK, let us assume that conservative principles will allow us to support this, on the theory that it is necessary for a greater good. Lesser of two weevils and all.
What would be the unintended consequences of drastically restricting imports? Well, the first and most obvious would be a significant increase in cost of the goods everyone buys, most greatly impacting the lower end goods, in other words those most often purchased by those with less money. A true tax on the poor.
The increase in cost of goods would be significant. I'm not enough of an economist to determine how much, but I would suspect it would be in the vicinity of 20% or more at the least, for those items that are now imported.
This would equate to a cut in pay for all Americans. For some reason, people will sneer at lower prices, while nobody at all sneers at increased income.
As an interesting side note, some of those who support protective tariffs today are the same people who use the protective tariff of the 1860s to justify secession. Yet the protective tariffs of the 1800s was, in theory, put in place to protect American "infant industries" till they could compete with established European industries.
No such claim is made today. American consumers must provide corporate welfare forever to companies unable ever to compete in an international free market.
Do we really want to go down that road?
The managed-economy "solution" is to impose tariffs on imported goods that could as easily be made in the United States. However, that would be likely to trigger a trade war and the handful of American products that are exported would suffer. Such a practice also promotes second-rate quality in the American market by artificially protecting substandard work.
Another suggestion would be to discourage unions, and to keep pay in line with work performed. To pay someone $15 an hour to flip burgers is ludicrous. To give auto workers cradle-to-grave pensions is equally insane. Pass right-to-work laws in every state and outlaw closed-shop bargaining at the federal level.
Then get the government out of business. Lower marginal tax rates on companies that hire or expand their use of domestic workers. Eliminate draconian regulations that cost businesses millions of dollars in bureaucratic red tape and protect no one.
Then there's the matter of educating our work force so that they can actually compete with people who are willing to put in an 8-hour day for 8 hours' pay ...
OK then here is a simple solution:
(It is a serious proposal)
America needs import tariffs. We have exported far, far too much “American” industry to China.
This is a huge problem, because China has five times our population, and an average wage a fraction of our own.
America needs to bring back true American industry. How to do this?
I say, we need import tariffs.
After thinking long and hard on this subject however, the only way I can think of to introduce import tariffs such that they don’t become a tool of Democrats, is a universal import tariff on EVERYTHING imported to America.
Oil. Food. Manufactured goods. All of it.
One. Universal. Flat charge on everything imported.
We however need to get started. America is in danger.
Don’t allow China to become stronger than America. (which is happening right now)
America has never, ever faced a competitor in the globe of China’s potential power. A billion people, all of whom will work (quite hard)
That will be the end. Period.
I like China. Quite a bit in fact.
But China is a very real, increasingly immediate threat to America.
I like China.
But I support America first.
Ask yourself, why have the jobs left ?? Because it’s increasingly expensive and difficult to do even the SIMPLEST things in Nanny-state America. After you’ve paid far more than your fair share of taxes, you then get to shave your margin even more complying with the ever-multiplying regulations and mandates. . .
For starters, we should stop treating countries like China, who are clearly not equal trading partners, identically to allied countries which are.
But then, who would BO get to buy all our bonds to finance his growing deficits?
I have been working on doing that here in Buffalo.
What America needs is entirely new industries. (See: fracking, which our government naturally is trying to destroy).
That will not happen on a large scale until we decide to: radically reform our tax code to stop destroying capital and punishing domestic investment; stop Federal subsidies for failing industries and for schools that teach hatred of American values rather than teach young people the skills required to grow and succeed; reverse the growth of the Federal government via central bank currency debasement and unchecked regulatory expansion, both of which drive businesses and capital overseas.
America can be a manufacturing power again, but not so much in the industries that have already departed as in entirely new, high-tech fields that are being crushed by Washington's mania for control and power lust, before they can ever get off the ground.
Without having to support the underclass in their lavish lifestyle, our economy would be booming.
If you want to bring America back, you have to make being in the underclass suck. It will encourage people to get out of the underclass, and will, of course, mean lower tax rates for the working classes.
The jobs left due to costs imposed by government regulations.
They will not come back unless those same regulations are rolled back.
And concentration camps for those that can’t cut it, those with limited IQ’s, those that would normally be perfect for filling manufacturing jobs?
I lived and worked in Nevada,Utah, and Arizona during half the 80’s and all of the 90’s.
The building boom was a direct result of illegal labor. Every residential building, and most of the commercial building was overflowing with cheap labor.
On commercial jobs in the 90’s, I watched starting wages for a journeyman metal framer go from 26 dollars an hour to 14 dollars an hour. The illegals learned the trade and were willing to work for 10 dollars an hour.
You could not find a supervisor or management job if you weren’t bi-lingual.
From a builder’s point of view. Illegal help is almost free. No insurance, no workman’s comp, no union headaches. Somebody gets hurt, they disappear because they have no papers. Somebody complains, ICE gets a phone call and the worker is rousted at his home in the middle of the night.
And it’s not just building. Look at the factory farms, and the meat packing business. Now that the latinos have moved up, most are now being taken over by africans and middle easterners.
My brother is a small business owner & I used to be his office manager so I know the struggles of trying to keep a business afloat in these troubled times. Heap Obamacare on top of all the other rules, regs, and confiscation of profit via every method Congress can think up and you have the reason why China, etc. are doing all the manufacturing ... it just doesn’t pay to do it here in the US. Get government OUT of business as much as possible ... free market, free enterprise. The “will” is still there & America has lots of entrepreneurs with ideas, but the “way” has been taken away by an overbearing, intrusive, confiscatory, Big Brother/Nanny of a government. For jobs to COME BACK to America, Big Government needs to GO.
Of course not. They can continue to do what they've always done: become journalists.
That's the constant refrain of a singular Freeper (who shall remain nameless).
I've talked to him until I'm blue in the face about HOW to bring jobs back to America, but he has little interest in effective solutions. He prefers to spam every job related thread with his slogans.
I hear your frustration and share it. “Bring the jobs back” is ‘moron-mantra’.
I get really, really frustrated hearing Lars Larson’s diatribe against tariffs to level the playing field, “free trade” & all and that it will all even out.
‘Splain that one to me...
Educate ourselves. Here’s a place to start:
Study Adam Smith and David Ricardo. Learn about wine-and-cloth until you can explain to others why it has always made sense and created greater wealth for a country, city, region, company, or individual to specialize in the good where it has comparative advantage, and trading that good for the other things that are needed. This is all that’s going on between the US and China at it’s heart.
An intelligent person will instantly see the oppportunity. Rather than bemoan the shifting of production to lower-cost regions, find ways to take advantage of it. Research the value chain to understand where the profit zones are, and talk with users and customers to understand what they need that is not being provided - that is where opportunity lies.
Examples are all around us. Take the iPhone for example. One option would be to bring iPhone production to the US where it would raise the manufacturing cost to the point where only an elite few could afford to buy one, and Apple could not sell enough to stay in business. Until the inevitable failure happened, it might create a few hundred or even a few thousand jobs.
Or, do what Apple did and take advantage of low-cost manufacturing in PRC and elsewhere to produce the best product at the lowest possible cost. Sell millions of them, and enable others to use their intellectual assets to create software and accessory products. How many jobs have been created as a result of the iPhone? How much wealth exists within the Apple ecosystem?
Comparative advantage is an integral part of free enterprise economies. It’s only when gov’t gets involved with its misguided and always failed attempts to “create jobs” that economies collapse and unemployment results.
Capitalism, works every time it’s tried.
Some guy who makes surfboards in California wants to sell them in Taiwan. Cool. Comes up with order, but then problem. Taiwan has a tariff on imported surfboards. However, surfboards come in duty free. Now, not only can he not export his surfboards overseas to Taiwan, but a Taiwanese surfboard company can export them into the US duty free.
This happens all the time to our companies. Many other countries protect their industries while we favor let everything in approach. I don't know what the 'correct' approach is.
But, 'we' are more productive and innovative than ever before here. We are so productive we destroy jobs here.
Globalization has been great for countries that built up after WWII and other less developed ones. US, not so much.
The middle class was a fluke here, created by the destruction of Europe and Asia.
You forgot to post the actual solution to bringing back American jobs. Care to tell us how it can be accomplished?
I actually wrote this a few weeks back, but I’d like to repost it in this thread:
If I were to be made King and Dictator for a day, heres what I would do the following to fix the situation:
1) APPROVE KEYSTONE PIPELINE
2) LOWER CORPORATE TAXES TO CANADAs LEVEL (15%).
3) REPEAL OBAMACARE.
4) KILL THE ESTATE TAX ( AKA DEATH TAX )
5) DO NOT TAX ANY REPATRIATION OF CORPORATE PROFITS THAT COME BACK TO THE USA. ALSO, MAKE TAXATION OF PROFITS AND INCOME TERRITORIAL.
6) MAKE EVERY STATES RIGHT TO WORK STATES.
7) MAKE EVERY MUNICIPAL, STATE AND FEDERAL GOVERNMENT EMPLOYEES CONTRIBUTE TO THEIR PENSION AND HEALTHCARE THE SAME WAY MOST PRIVATE COMPANIES DO.
8) IMPLEMENT THE PENNY PLAN IMMEDIATELY TO SOLVE OUR BUDGET AND DEBT PROBLEMS:
9) OPEN UP MORE OF OUR FEDERAL LANDS TO DRILLING.
10) IMPLEMENT THE CHILEAN MODEL FOR SOCIAL SECURITY.
Well, thats a lot for one day.... but you want the economy to boom and create jobs ( and prevent them from going overseas)? Lets start with these...
The only problem with this is, both of our political parties are in bed with China, as well as all the funding - but China’s system is very strongly based on a system of bias toward Chinese.
Americans cannot live in China permanently, unless they are of the Chinese race.
Americans cannot own Chinese manufacturing. Not in the majority. American companies operate in China as minority “owners”.
All manufacturing in China, is majority owned by Chinese. All manufacturing in China is likewise done, by Chinese nationals.
Every time you buy something imported from China, you have eliminated an America worker, in part. Do that with 60% of everything sold in America (or whatever is the current rate) and you are eliminating a significant portion of America’s working class.
There are five times as many Chinese, as Americans.
China could absorb every single job in America.
FIVE TIMES OVER.
America needs to start playing defense, now.
Do not interpret my opinions as those of someone who is against China.
I am not.
I am however (strongly) against the willy-nilly way in which America’s future is currently being sold to Chinese production lines.
America needs protection. America needs to produce things, and support our own nation in the world.
Stop selling out America.
The unnoticed and unmentioned 9000 pound gorilla in the room.
Automation is in the process worldwide of eliminating jobs that are suitable for lower-IQ people.
They won’t ever disappear entirely, but they will become a smaller and smaller part of the job market. This is a worldwide process, it is simply more obvious and farther along in higher-wage societies.
This was predicted in considerable detail 15 years ago in The Bell Curve. Every one of their predictions has come true and accelerated.
They wrote the book to encourage society to have a debate about what to do with those people for whom there is no real economic demand. IOW, those for whom there aren’t and won’t be any decent jobs.
IMO, another IQ point falls out the bottom of the economy every two or three years, and it is probable the process is speeding up.
Since you are asking the serious questions that much be asked, I’ll take the liberty of reposting the following link:
Boston Consulting Group has been leading the effort to educate businesspeople on the return of US Manufacturing and “reshoring” for the past two years or so. Their research reports with specific details as to why this is happening, which regions will benefit most, and which industries will be most affected can be obtained from their website (registration may be required but it’s painless). BCG is one of the top consulting firms and they have received accolades for their work in this area, despite skepticism from some quarters who just demand “bring back US jobs” :-)
The bottom line is BCG echoes the point I made - it’s all about comparative advantage, which includes much more than just the cost of labor. Read the reports. It’s the best stuff out there that addresses the question you ask.
Thanks for the link. I have bookmarked it for reading.
Reduce Corporate taxation. Also, simplify taxation. Tax fulfillment costs have become a significant burden on smaller businesses.
Reduce the vast panoply of EPA and other environmental regulations. Companies aren't going to relocate to a country where wood stoves can be declared illegal.
Remove arbitrary, vindictive Government (we all remember Gibson's guitars, I hope).
Get rid of Obamacare. America isn't France. Companies need employees to work more than 29 hours a week, and that's only a small piece of the anti-competitive madness pouring out from Obamacare.
Well, hope this was helpful.
Not to mention Mexico. Called AT&T customer service and it was in Mexico.
There are two huge problems with this.
A very large percentage of the underclass is not capable of being significantly productive. Their IQ is too low. There is no real demand for anything they're capable of doing, and this will only get worse.
Even for those in the underclass who are intellectually capable of contributing to society in a significant way, many if not most have learned attitudes, habits and ways of thinking that will prevent them from succeeding, even if they have a desire to do so.
WE DO NOT KNOW how to change such attitudes, and if we did, attempting it without the consent of those involved would be an egregious violation of their rights.
Here's my proposal: First, we bring American jobs back. Then, we profit.
That would result in a Chinese company being established in the US, which would import the circuit board, casing, and box from China, have illegals stick the board into the case, and the case into the box, which would be labeled "Made in USA".
It's not a solution. The solution involves radically gutting the EPA, Dpt of Labor, and OSHA regs so it stops being unworkable to operate in the US.
As stated by Professor Henry Higgins: "By Jove, I believe he's got it!"
All the posters above you with their comments on regulation, taxes, etc. - they were merely dancing around your well-made and central point. OTOH, US manufacturers can be rightly and properly accused of failing to account for the full cost of doing business in overseas locations. Taking manufacturing overseas has become the panacea response to the overreach of government in all the ways pointed out by others here. That's poor management, IMO.
RE: Called AT&T customer service and it was in Mexico.
How was their English?
I think you & Donald Trump are singing the same song on this subject! :-) People laugh when “China” is the second word out of his mouth, but he (and you) would be correct.
“The power to tax is the power to destroy”.
We have to adjust our tax system to recognize the changes in the global economy. Currently we punish domestic productivity through income taxes, and encourage consumption of foreign-made products through relatively low sales taxes. Income taxes also provide an excuse for a corrupt government to interfere in economic activity at every level, through sale of exemptions and manipulative regulation. For the economy to flourish, all this must stop.
1. Eliminate all income taxes by constitutional amendment. Abolish 98% of the IRS. Replace with taxes on consumption, specifically on products that mostly enrich foreign producers and provide jobs/expertise overseas. Do not tax domestically produced energy, materials, and food.
2. Rebalance federalism to restore power to the States. Get the federal government out of most functions: Education, HUD, HHS, Labor, OSHA, mortgage finance, intrastate crime, etc. Have the States collect the consumption tax revenue, and pass on some to the federal government, as they agree is necessary for defense, foreign relations, and anything else of truly “national” scope.
Obviously the chances of these things passing are nil. What are really needed are things citizens can do despite the government. Buy local. Invent things.
"Bringing back manufacturing to America" would result in Chinese laborers being replaced by American robots.
My local supermarket has people with Downs syndrome doing sweeping, helping bag groceries, and putting the shopping cards where they should be.
If we got rid of illegal immigrants, the low-IQ population could go back to their traditional jobs: lawn work, cleaning (both in business and in homes), etc.
They could also stop having 10 kids per low-IQ woman.
It’s not China who is screwing American workers; it is US policy. It is not Free Trade, but financial and regulatory regulation. When companies are privately held, they do not offshore manufacturing, but publically held corporations do it as a matter of course.
The stockholders are the ones selling America and often those who own the majority of the stock are the very workers losing their jobs. They are also the first ones to complain when their 401Ks are losing value. The CEOs and large investors, looking only for short-term profit, don’t care about long-term consequences and the workers and products suffer agonizing deaths.
The overall financial impact of offshoring is generally negative, but the immediate profits can build a hell of a parachute and the small stakeholders are happy to see the increase in their portfolios. Unfortunately they invariably lose any of hte appreciation because the big boys bail out before the palne crashes. It’s all part of the Esau Generation outlook: I will have mine now!
Not only is Chinese manufacturing owned by China, the PLA owns most of the companies and there isn’t even an attempt toward copy or trade rights enforcement. Every company who offshores to China has effectively given up all rights to their products.
There is only one long-term solution: eliminate the multi-generational underclass.
Make it no longer workable for an unemployable single woman to have children. Eliminate welfare entirely.
America used to have a lot of competitive advantages. Good infrastructure, educated workforce, huge natural resources, the English language, rule of law and (moreover) the Common Law.
The last five are currently being suppressed by Alinskyite politics. But they are not gone. If America brings them back (kicking out the EPA would be a good start) then it will regain and retain industries.
A new factor is that America now has the enormous bonus of 'Eagle Diesel'. That is beginning to make a huge difference. If Government intervention in Fracking can be avoided, industry will begin to return to America - if only to get at the cheap energy.
Here’s how you do it:
Reduce the minimum wage to 15 cents an hour.
Make organizing or belonging to a union a capital offense.
Eliminate OSHA, FDA, EPA, DOE and other impediments to production.
Take all DOD contractors, and make them wholly owned subsidiaries of the military, with complete control over production.
Make all intellectual property rights property of the government.
Make all foreign intellectual property open to copying or theft.
Bring back forced prison labor, and sell labor to preferred companies.
Bring back debtors prisons, and sell labor to preferred companies.
Bring back indentured servitude, and set the bar too high to escape.
Let the government be a major stakeholder in all businesses.
Do not allow foreign businesses own any real property.
Allow only a minority stake in a business for all foreign businesses.
Discourage any imports other than intellectual property and capital.
Encourage foreign investment and technology transfer in return for record profits.
If you can implement these ideas here, then you may just be able to get those jobs back from china and mexico. That’s how the competition plays the game, and that’s why we’ll lose in the end. Get in bed with communists, and don’t compain when you lose all you have.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.