Sunday, October 17, 2010

Work Your Way Out

On the back of this industrial output, rose America’s middle class. High-paying manufacturing jobs in turn helped spur a robust and growing economy that had little dependence on foreign nations for manufactured goods and armaments...However, manufacturing, as a share of the economy, has been plummeting. In 1965, manufacturing accounted for 53 percent of the economy. By 1988 it only accounted for 39 percent of the economy, and in 2004, it accounted for just 9 percent...The loss of the manufacturing industry manifests itself most clearly in job losses. - The Trumpet

The wing-nut shell game continues as they on the one hand decry the loss of jobs and the high unemployment figures and yet at the same time were the architects of the policies that gutted the manufacturing sector which drove the job creation. The unfortunate truth that the politicians, pundits, and CEO’s refuse to tell the American public is that unless we retool our manufacturing base we will continue to have high unemployment. The current and future high unemployment numbers are not solely based on the recession. Prior to the recession we were seeing unemployment rising as the economy was supposedly humming along.

The historic fact is that you get out of a deep recession or depression by working your way out. You don’t get out of it through austerity measures or attacking the unemployed. You didn’t get out of it by giving tax breaks to rich folks. You build or make things. This presents us with an impossible scenario. We no longer make things. The engine that would power our economy back to profitability and high employment is now driving the economies of China, India, and Singapore. What we are witnessing in America today are the results that were predicted but roundly denounced when the whole outsourcing process began. You don’t have to be a Harvard educated economist to figure out that if you ship your middle-class creation mechanism overseas that you will have fewer middle-class people. In fact it’s probably easier to understand if you’re not Harvard educated.

Remember, how we were going to replace all of those “dirty” manufacturing jobs with “clean” new technical jobs. While granted there were people who were able to make the transition from the manufacturing sector to the technical sector the majority of people were not so lucky. Many of those living wage manufacturing jobs were replaced with low wage service sector jobs which did not offer benefits that many people were accustomed to. What the economist’s neglected to tell us was that there was going to be a segment of the population who would not be able to transition into the new technical jobs. This magnitude in the numbers of people who can’t transition is the real cause of the term “jobless” recovery.

According to one study, every 100 jobs in durable manufacturing support 372 jobs in other industries, while every 100 jobs in business services supports 164 jobs elsewhere in the economy. We are losing good jobs which will stimulate the economy (and we are left with the shit jobs).Stephen Hanson

As the American labor force has become more efficient and with the advent of robotics and other technological advances this places more pressure on an already shrinking labor force. When you combine these with the changes in the attitudes of the corporate elite from thinking of what is best for America to what is best for their short-term profits you have the current situation we as a nation find ourselves in. Let’s be clear the early industrialists were no angels and they clearly made enormous profits on the backs of their workers but one thing many of them understood was that they were Americans and they were guardians of a dream (the American dream) and their long-term success was tied to their workers long-term success. At no point in American history has there been this large of a discrepancy between the corporate elite’s salaries and their workers. The really sad fact for most Americans is that the media and the politicians have been co-opted by the wealthy into this mind game that none of the policies they have instituted have led to this American trauma.

The current state of affairs with the American economy is not some accident of nature or some perfect storm of naturally happening occurrences it was orchestrated by a group of greedy and unscrupulous people who presided over one of the largest transfers of wealth in the history of the world. And yet despite all evidence to the contrary we have these shell groups who on the one hand claim to be against bail-outs and yet they are being funded by those who created the need for the bail-out. This could only be created in America. Where else would you have a group of peasants with pitch forks and torches at the gates of the wealthy but not to demand equality but to bring more riches to them? It would be funny if it weren’t so tragic.

Every person familiar with business knows that labor is always your biggest expense and whatever you save in labor goes directly into your pocket, it is this mentality that has caused this new class of corporate titans to join the race to the bottom searching the world for the lowest labor costs they can find. We have supported our own demise through allowing the politicians to give tax-breaks to those who have shipped our jobs overseas.

There are those who claim that the days of American manufacturing are gone and will never return. They claim we are better served as a country because of it. I disagree because if you look at the fastest growing economies in the world they all make things. The other thing that is not being discussed is that when you outsource your production you also outsource your ability to innovate. Innovation is primarily done through the production process by workers who through the process recognize ways to create a more efficient or even a better way to create a product. Those innovations are now being made overseas. It’s not surprising that all of the new green and innovative products are now being developed and manufactured overseas. We have not only lost our production capabilities we have also lost our ability to innovate.

If we are to regain our leadership in the world we have to become a producer again. We will have to do it better and cleaner than we did it in the past and how they are doing it overseas. As a country we have to make some tough decisions about our future. Are we going to continue to ignore the evidence and continue to listen to the greedy or will we demand a return to the principles and policies that created the largest middle-class in history? That is the choice that lies before America.

“I have come to a resolution myself as I hope every good citizen will, never again to purchase any article of foreign manufacture which can be had of American make be the difference of price what it may” – Thomas Jefferson

No comments:

HTML stat tracker