Action needed on off-shoring of jobs
By Roger Bybee at Mar 26, 2010
Will Emboldened Obama Begin to Fight Overseas Job Relocations?
By Roger Bybee
President Barack Obama seems to have regained his footing and fighting spirit in his last-minute drive for healthcare reform.
But will he bring this feistiness to the crucial fight for jobs? Will he be willing to target job-exporting corporations in the same fashion that he made insurance corporations the rhetorical enemy (although they're ultimately the biggest winners in the final bill signed into law this week) during the last stages of the healthcare battle?
For President Obama, the moral imperative is clear. Given the desperation evident in so many factory towns across the Midwest and elsewhere, Obama needs to stand with working Americans who are fighting to save their communities and preserve our productive base.
America is in the midst of an extraordinary, unprecedented jobs crisis. The most revealing statistic to remember is not the latest national unemployment rate, but the fact that the United States had virtually zero net job growth in the past decade. Zilch. Nada.
During every decade since WWII, the United States gained 22 percent to 38 percent in employment. But in the last decade, the gain was zero. We lost 5.6 million manufacturing jobs during that time, which were offset by employment gains in primarily low-wage service jobs.
'YOU DONT WANT WORKERS'
'Why is this happening? Look at the basic philosophy of U.S. corporations, in the words of leading corporate research economist Allen Sinai: "American business is about maximizing shareholder value, you basically don’t want workers."
Then consider the 17 plant closings by General Electric in just the latter part of 2009. Or listen to the statements of Emerson Electric CEO David Farr, who blames high corporate taxes, medical reform, and labor rules for shifting as many jobs out of the U.S. as he possibly can:
Farr is crudely practicing the psychological and polticial maneuver known as "projection," where you ascribe your own actions to others. It isn't the U.S. government that is destroying jobs; it is Farr and Emerson themselves. U.S. corporate taxes are among the world's very lowest; medical reform should actually help U.S. firms like Emerson to become more competitive; and labor laws in the U.S. are almost certainly the weakest of any major nation.
In short, what Farr is really seeking is the lowest possible wages and the maximum employer power over workers and the local government.
Whirlpool—the recipient of millions in federal stimulus money—is closing down its Evansville, Ind., plant and "stimulating" its profits in Mexico by setting up a new 1,100-worker plant there. But such moves actually don't significantly benefit the Mexican economy, as wages are too low to create much buying power among the workers, the component parts are largely made elsewhere and shipped in, and the profits go back to Whirlpool headquarters.
But these relocations increasingly leave discarded factory towns like Evansville with few prospects except for irreversinble decline--unless there are major federal interventions in the form of public-job-creation programs and strong new curbs on relocating jobs outside the nation. Local efforts—public investment in tourism or sports facilities, developing technology centers, luring in "creative class" entrepeneurs, and tax subsidies—have all failed to produce a broad-based recovery in virtually every town that they have been tried.
The policial dimension of the jobs crisis should also be obvious to President Obama, as the state of the economy almost always determines the outcomes of national elections.
OBAMA LOSING SUPPORT
In February 2008, candidate Barack Obama gave a fiery speech denouncing corporate relocations and NAFTA-sytle trade deals outside a GM plant in Janesville, Wis. The speech was a key ingredient in Obama winning over a majority of white working-class voters in the Wisconsin primary. However, GM closed the Janesville plant 20 months later.
With Obama failing to re-ignite the industrial economy, enthusiasm for the president has been dropping in Janesville, according to City Council President Bill Truman, a UAW member who lost his job at a GM supplier when the auto plant shut down.
"When Obama came to Janesville, he spoke great words about keeping the Janesville GM plant open," recalls Bill Truman about the speech, which was a key moment leading to Obama's big Wisconsin primary win. "Did he do enough? I don't think so."
Truman senses growing disappointment with Obama's response to the dire conditions in towns like Janesville. "From the water-coooler talk around Janesville, they've lost some of their spark for him."
Obama could regain much of his lost "spark" if he began pressuring Corporate America to begin creating jobs in communities like Evansville and Janesville once again. The president could point to the unprecedented jobs crisis and start calling upon major corporations to display loyalty to the workers, communities, and the nation that produced their original wealth.
OVERWHELMING OPPOSITION TO 'OFF-SHORING' JOBS
Public support for moving against the relocation of jobs to low-wage states is broad, now including Republicans, the college-educated, and, I would venture, more than a few Tea Party types. Here are summaries of some of the most important studies:
- 77 percent of Americans oppose the outsourcing of jobs to foreign nations, according to Pew Research.
- "The U.S. public is nearly unanimous in its support of requiring that both labor (93 percent) and environmental standards (91 percent) be included in trade agreements," according to the Chicago Council on Global Affairs. In ranking the importance of possible foreign policy goals, 76 percent of Americans gave the top rating to "protecting the jobs" of the country's workers, according to the same poll.
- "A large majority—68 percent—of those surveyed in a new Fortune poll says America's trading partners are benefiting the most from free trade, not the U.S." The explanation for the current economic slowdown most frequently cited by respondents: "U.S. companies sending jobs overseas where labor is cheaper," says Fortune magazine.
- An AP-Yahoo News poll conducted mostly in April 2008 "found that most Americans have a negative view of trade agreements." Of those polled, 64 percent said that increasing trade between the United States and other countries has hurt the economy, while just 22 percent said it has helped.
- "By greater than six-to-one (61 percent to 9 percent), the public says free-trade agreements result in job losses rather than in new jobs," according to a Pew study. "A solid majority (56 percent) says that free trade makes wages lower in the United States.... A majority of independents, or 52 percent, had a negative view of free trade, compared to 50 percent of Democrats and 43 percent of Republicans."
- A University of Maryland/Knowledge Networks poll found that 53 percent of the American public is critical of U.S. government trade policy and wants greater efforts to improve the lives of workers at home and abroad, and to protect the environment.
- "In 1997, 58 percent of college graduates said globalization had been good for the U.S. while 30 percent said it had been bad, according to a poll conducted for the Wall Street Journal and NBC News," Greg Ip reported in the Journal. "When the poll asked a similar question this past March, opinion had flipped: 47 percent of graduates thought globalization was bad and just 33 percent thought it was good."
GO AFTER 'BENEDICT ARNOLD' CEOs
This opposition is not new, it has just reached a critical mass where the major media can no longer totally ignore it or merely mock it as "protectionist." For example, NAFTA was opposed by 64 percent of Americans, but was promoted by the full weight of the Clinton administration, corporate America, Mexico, and virtually all of mainstream media including all but two or three of daily papers then in existence.
Similarly, the Permanent Normalization of Trade with China in 2000 generated the opposition of 79 percent of the public, according to a Harris poll (4/00). But again, an all-out lobbying campaign by the Clinton-Corporate America team prevailed—including $26.5 million for a single fundraising event.
Clinton was able to get away with those kinds of shameless anti-worker ploys because the economy was producing some wage increases and generating jobs during his term. But Obama walked in after eight years of George Bush and zero job growth and with wages falling, and some 7.8 additional job losses following the Wall Street meltdown.
American workers are in no mood to see their communities decay before their eyes while their tax dollars help send Whirlpool to Mexico, or Chrysler, which after receiving government "bailout" dollars also moved some of its U.S. operations to Mexico.
If Obama wants to get serious about jobs and recouping the sharp drop in enthusiasm among working people, he needs to challenge what John Kerry once called "Benedict Arnold CEOs."