Globalism plus Outsourcing Equals American Dispossession
Despite the economic recovery, the
unemployment rate has risen to a nine-year high. How can
Part of the answer is the decline
in U.S. manufacturing jobs. Between January 2001 and May
2003, US manufacturing jobs declined by 13.3 percent.
(The jobs continue to decline. As of June the loss is
14.1 percent on a seasonally adjusted basis.)
Every state and the District of
Columbia lost manufacturing employment. New Hampshire
lost nearly 21 percent of its manufacturing jobs during
Massachusetts, Vermont, Washington,
Colorado, Maine, North Carolina, Arizona, South Carolina
and New York lost jobs in the range of 15-18 percent.
Pennsylvania, Mississippi and
California lost 14 percent of their manufacturing jobs.
Ohio, Texas, New Jersey, Virginia, Illinois, Oregon,
Connecticut, Michigan, Tennessee, and Florida lost 12-13
percent of manufacturing jobs. Most of the remaining
states lost between 9-11 percent of their manufacturing
Some of these lost jobs might be
recovered if the economy gains strength. However, most
appear to be jobs that have been moved abroad in order
benefit from lower labor costs. US labor that costs
$26 an hour can be had in
China for less than a dollar. Moreover,
Chinese workers don`t file claims that drive up the
workman`s comp tax rate on employers.
The U.S. with its population of
289,000,000 only has 14,727,000 manufacturing jobs left.
If the US continues to lose manufacturing jobs at the
same rate over the next 28 months, only 12.7 million
jobs will be left.
Question: Will the U.S. still be a
superpower when it can no longer make anything and
is dependent on foreigners for manufactured goods?
As the U.S. makes less and less of
what it consumes, it runs a massive
trade deficit. We pay for these foreign-made goods
by giving up
ownership of our assets–our companies, our real
estate, stocks and bonds. Thus, foreigners gain not only
the incomes from the manufacturing jobs but also the
profits, rents, capital gains, dividends and interest
from the assets.
A country that loses income streams
from millions of lost manufacturing jobs, and from the
trillions of dollars in assets it no longer owns, is a
country that is losing a lot of income.
Allegedly, we are gaining it back
in lower prices from
cheaper foreign-made goods. But once the trade
deficit drives down the
dollar, the foreign-made goods won`t be cheap any
longer. We will have the twin evils of high prices and
The current economic path is one of
declining living standards. How long do we have left
before the question becomes: How much worse off are we
It requires a lot of economic
growth to offset the loss of high productivity
manufacturing jobs and lost asset income and control. Is
there a new sector to take the place of manufacturing in
driving the economy?
The “new economy” was supposed to
be based in
“information technology” and services. But those
jobs are also leaving the U.S. at a rapid rate. The
Internet makes if possible for “knowledge jobs” to be
performed abroad. Workers in
India, China, and the Philippines check into their
New York, Boston, Chicago, and Los Angeles offices to
receive and deliver their assignments.
These foreign “knowledge workers”
displacing American engineers, designers,
radiologists, stock analysts, accountants, and
researchers, in addition to clerical, customer service
and telemarketing workers.
European countries have high
unemployment rates among
young university graduates, because welfare-burdened
companies cannot afford to hire. Is the U.S. also
creating millions of educated unemployables because the
jobs for which they are trained go to foreigners?
If Americans wake up one day and
discover that their economy is not for them but for
foreigners, there will be political hell to pay.
Democrats will blame President Bush
for the jobs lost during his term, but Bush is not to
blame. Americans have failed to understand that
conditions in the world have changed. These changed
conditions have implications for their jobs and
Until recent years, Americans had
few competitors outside Japan and West Germany.
Socialism engulfed the rest of the globe. Beginning in
the mid-1980s, England, France and Italy privatized
socialized economies. China took “the capitalist
Soviet empire collapsed. Mexico undertook reforms.
These developments created
investment opportunities abroad that socialism had
blocked. Suddenly vast pools of skilled and unemployed
labor were available to U.S. multinational corporations.
Wal-Mart could abandon U.S. suppliers and stock its
shelves with goods made in China.
During the post-WW II period,
Americans benefited from high levels of
education, technology and capital. This made
Americans highly productive and protected them from
competition from cheap foreign labor that had less
capital and technology with which to work. High-paid
U.S. labor could produce so much more per hour than
cheap foreign labor that U.S. employment had nothing to
This has all changed. Today capital
and technology can go anywhere, and they go to where
labor is the cheapest.
This makes “globalism”
a direct threat to U.S. living standards. A number of
economic factors, such as existing contracts and
mortgage debt, make it impossible for U.S. wages and
salaries to quickly adjust downward to Chinese and
Indian levels. Therefore, Americans will continue to
lose ground in the global labor market. The “jobless
recovery” is one indication of this lost ground.
Craig Roberts is the author with Lawrence M. Stratton
The Tyranny of Good Intentions : How Prosecutors
and Bureaucrats Are Trampling the Constitution in the
Name of Justice