The Jobs Go Out, Like the Tide
Mike Dorning of Bloomberg has an interesting article on "The Slow Disappearance of the American Working Man." The statistics set forth in the article are dire. Only 63.5% of American men have jobs, very near the low recorded in 2009, itself the lowest level of male participation in the labor force since these statistics were first kept in 1948. The number of men working in the prime earning years between 25 and 54 is just 81.2%, and the median real wage for men has declined 27% between 1969 and 2009.
The article also notes one of the causes: "Corporations have cut costs by moving manufacturing jobs, routine computer programming, and even simple legal work out of the country." But the article, like all the presidential candidates, treats this massive outsourcing as a force of nature, akin to the tides, about which nothing can be done. Actually, something can be done about outsourcing, and was done for most of American history. That something was the tariff. And we are not going to see sustained improvement in jobs and wages until we begin to remember what earlier generations of Americans knew about protecting American industry and American jobs.
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Tom Piatak delivers a typically clear and pointed note. Others may be noticing. LewRockwell.com has reprinted a series of facts from the Economic Collapse blog pointing out these and similar issues. The September Atlantic has a piece by Don Peck on the disappearing middle class with many relevant observations. Near the end Peck hints at a "New Protectionism" (my expression, not his): "Fortunes on Wall Street have grown so large in part because of implicit government protection against catastrophic losses, combined with the steady elimination of government measures to limit excessive risk-taking." We protect what we value. The eliding of the tariff since the Kennedy round of GATT in the sixties and the abolition of Glass Steagall in the nineties reflect our leaders' lack of commitment to protecting the American majority. Here are links to the articles:
p://lewrockwell.com/rep2/us-middle-class-rapidly-shrinking.html http://www.theatlantic.com/magazine/archive/2011/09/can-the-middle-class-be-saved/8600/
In the letters section of yesterday's local paper a woman complained about the difference in wages between men and women. Apparently there is another bill in Congress to address this issue. I'm sure the Congress will take action to ensure that the reduced number of men and women who have jobs will be making the same low salaries. Unemployed men and women already earn equal wages. That part of the "plan" seems to be working.
Tariffs are bad economics. They will only shift the problem, not eliminate it. A different group of people will be poorer: those who must pay more for the goods currently brought in cheaply from elsewhere. They will have less money for other goods and will have to forgo them. Their standard of living will decline, as will that of te merchants where they used to spend the disposable income they no longer have. Those with restored manufacturing jobs will gain. Everyone else will lose. The only answer that will improve living conditions for all will be for Americans to acquire th education and skill set to produce the higher valued products that China, India, Mexico, and others can't. Otherwise it's a zero sum game.
Mr Hyams gives the standard libertarian/liberal response. Of course, they can never prove their theories because economic life is not a laboratory and none of them studies history carefully enough to draw convincing conclusions. But even if they could, they leave out all the information that is essential. They assume, 1) that we do not and should not care more about our own people than we do about the Chinese, and 2) that the current winners in manufacturing--China, India, and Mexico--are not nightmares for the working classes. It is possible to argue that blue collar workers in the US have been paid much too much--I think they have--but the only alternative is not slave labor or the disgusting working and living conditions that prevail in other countries. Finally, what he also ignores, is the difference in tax policies that give a strong competitive edge not just to Third World countries but to Japan and EU countries, which reward their own countries and punish importers. Until we force them to level the playing field or level it ourselves, it is utterly fatuous to make high-minded statements about free trade. There never has been free trade and there never will be.
The rich and powerful always set the policies to benefit themselves. So long as the rich and powerful belong to one nation, that nation tends to benefit, but when the ruling class becomes transnational, then policies are set--as they are in the USA--exclusively for the transnationals who are happy to move their money--and if necessary themselves--offshore.