First, let me state clearly that I do not presume to have the answers as to why American jobs are being shipped overseas. However, I will throw some thoughts out there for us think about.
Americans and multinational firms have worked hand in hand for years, contributing largely to America’s prosperity of recent times. However, this partnership has been in heavy decline over the past decade, with US multinationals shedding approximately 2.9 million US workers since 2000 and picking up approximately 2.4 million workers overseas.
The easiest thing to blame it on is cheap labor and greedy executives. Jeffrey Immelt, CEO of GE and head of the White House Council on Jobs and Competitiveness, said that "the era of globalization around cheap labor is over. … Today we go to Brazil, we go to China, … India, because that’s where the customers are." Many of those customers Immelt refers to are multinationals that did move factories abroad for cheap labor and which need GE there to supply them. However, the era of globalization around cheap labor is still upon us. The yearly trade deficit with China regularly runs in the hundreds of billion dollars, proving that cheap labor is still a heavy influence driving globalization, but this is hardly the only dynamic driving our jobs overseas.
The American worker/consumer has a role to play in this game as well. First, the American workforce is old. Older workers, who carry a lifetime of raises and benefits hikes, are the most expensive to keep. Advanced countries such as our own with an aging workforces have huge social costs that demand higher taxes and higher public debt. This can get the multinational companies looking elsewhere. As to the American consumer, we throw our hands up in outrage over the “greedy executives” who ship American jobs overseas just so they can take home their big bonus at the end of the year, yet we think nothing of buying a foreign product because it is cheaper. Hypocrisy? I think so. It’s not for me to say whether either is right, but we cannot have it both ways. If we condemn a multinational company for shipping jobs overseas, we must condemn ourselves for purchases foreign products.
Could it also be that the American worker is not what he/she used to be? While it is true that companies will look for cheaper labor, most will only do so to the extent that it is reliable and can get the job done right. Scores from the 2009 Programme for International Student Assessment showed 15-year-old students in the U.S. performing about average in reading and science, and below average in math. Out of 34 countries, the U.S. ranked 14th in reading, 17th in science and 25th in math. In the United States of America, “average” should never be acceptable when it comes to our education. Whether the blame lies at the feet of the teachers, parents, government, students, or our current society is up for much debate, but the statistics show that the American student/worker is not considered the most educated.
A final reason I’d like to mention is our own government tax policy. Over the past four decades, every other major trading country in the world has put into place a border-adjusted business consumption tax. This places American companies, on average, at an 18% tax disadvantage with our competitors. Meanwhile, foreign manufacturers of goods shipped into the United States don’t have to pay our corporate taxes, along with receiving a tax credit on their business consumption tax back home. For example, Germany enjoys an advantage of 19% under this system. That means that a 19% tax is added to the cost of a Cadillac when GM exports it to Germany. And when a Mercedes makes its way to the U.S., not only does the German manufacturer not have to pay a similar tax, it also receives a refund from its own government on the 19% tax it paid for the goods and services that went into building their car. How’s that fair trade working out for you? Until we level the playing field and implement our own business consumption tax, American companies will be at a consistent disadvantage to their overseas competitors.
With all that being said, there is hope at the end of the tunnel. Supply and demand is starting to push up production costs in countries like China, and some economic forecasts are predicting a return home for some of these manufacturing jobs. However, it important to remember how much power that you, the American consumer, hold in your hands. Here is a Top Ten Reasons to Buy American list compiled by madeinusaforever.com:
10) Foreign labor standards allow unsafe worker conditions in many countries. When you buy American you support not only American manufacturers but also American workers, safe working conditions, and child labor laws.
9) Jobs shipped abroad almost never return. When you buy goods made in the USA, you help keep the American economy growing.
8) US manufacturing processes are much cleaner for the environment than many other countries; many brands sold here are produced in countries using dangerous, heavily polluting processes. When you purchase American-made product, you know that you're helping to keep the world a little cleaner for your children.
7) Many countries have no minimum wage restrictions, or the minimum wage is outrageously low. When you choose products made in the USA, you contribute to the payment of an honest day's wages for an honest day's work.
6) The growing lack of USA ability to manufacture many products is strategically unsound. When you seek out American-made goods, you foster American independence.
5) The huge US trade deficit leads to massive, unsustainable borrowing from other countries. Debt isn't good for you and it isn't good for America.
4) Foreign product safety standards are low. For example, poisonous levels of lead are in tens of millions of toys shipped to the USA. When you buy toys and other goods made in the USA, you can be confident that American consumer protection laws and safety standards are in place to protect your family.
3) Lack of minimum wage, worker safety, or environmental pollution controls in many countries undermines the concept of "fair and free trade". No Western nation can ultimately compete on price with a country willing to massively exploit and pollute its own people. When you buy only American-made products, you insist on a higher standard.
2) Factories and money are shifting to countries not friendly to the USA or democracy. When you avoid imported goods in favor of American-made items, you help ensure that the United States doesn't find its access to vital goods impacted by political conflict.
1) As the US manufacturing ability fades, future generations of US citizens will be unable to find relevant jobs. Buy American and help keep your friends and neighbors-and even yourself-earning a living wage.
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