We Should Protect Our Jobs

American corporations now have more employees overseas than within our own borders. The time has come to protect American jobs, which is something we have done before to good effect. The alternative can only weaken the country. After all, it does no good to have cheap imports if nobody makes enough money to buy them.

First, take a look at this graph from Real World Economics Review, 17 August 2012, by David Ruccio. It shows that in less than a decade, multinational corporations have diminished the number of employees in the US and increased them abroad. Combined with the ever decreasing pay for jobs in the US, this trend foretells a decrease in the level of American wellbeing.

“Protectionism” has a sullied name, but it has been used by practically every nation at one time or another. The US protected its nascent industries in the 19th century by placing tariffs on the kinds of imported goods we were just beginning to make. It worked. Soon our manufacturers became the world’s best, and the tariff was no longer needed.

American corporations now have more
employees overseas than within our own borders.

The global economy has eroded the US world position in more than one way. Overseas workers in poor countries are driven by their poverty to work for minimalist wages, which workers at home cannot compete against for obvious reasons. Manufacturing has moved from one low-wage country to another with ever lower wages as conditions improve from competition in the first country. It seems pointless to try to recover these jobs. Rather, we should concentrate on manufacturing that should never have left in the first place.

China, with a population over four times greater than ours and a certain wild west mentality in manufacturing, has been a primary violator of laws of intellectual property. For instance, Chinese firms have bought American high-tech products, flat-out copied them in violation of international copyright laws, manufactured them with cheap Chinese labor, and sold them back to the US, in the process bringing bankruptcy to the firms from which they stole. An obvious step our government could take would be to disallow these imports and challenge their distribution elsewhere on the basis of international copyright violations.

The US government is presently trying to implement a plan rewarding American companies that keep jobs here rather than outsourcing them. This reward can be in the form of a tax break or other special privilege. Disincentives for outsourcing jobs may also be helpful.

Corporations could sponsor promising college students in return for pledged service to the sponsor only within the US, using matching government funds. This would help assure a steady supply of talented young Americans in the work force, thus keeping us competitive.

Restructuring of US tax laws to disallow many of the offshore tax shelter schemes employed by corporations would help. Their cooperation would be encouraged if such changes included implementation of a lower nominal corporate tax rate. (Our nominal rate is very high, although virtually no one pays the nominal rate, and many pay no tax at all.)

Other possibilities include in-plant manufacturing boards consisting of management and labor personnel, which has been mandated in Germany for many years and proven to be highly effective at preserving high quality and efficiency with healthy pay. Implementation of such boards in the US would demonstrate that all personnel have the same goal, and would end the destructive adversarial situation that has always characterized the American working world. Manufacturing cooperatives at several scales from local to national would help to coordinate manufacturing efforts and avoid waste and duplicated effort. These cooperatives should include representatives for government, corporate management, worker unions, and transportation. We have barely begun to make use of cooperative effort, rather than brute force competition.

Here is an Article by Gene Quinn worth checking out: “A Manufacturing Strategy for 2012: Keeping Jobs & IP in the U.S.”

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Published in: on 2012/09/28 at 9:00 am  Comments (3)  
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3 CommentsLeave a comment

  1. While I understand the sentiments driving this post, I think you would agree that none of these would be possible without an equal and opposite backlash from the poorer manufacturing-focused countries.

    I’m saying this because coming from India, it’s a huge issue back home as well. The rich in India are willing and able to pay premium prices for branded American/European products while the poor farmers and retailers cool their heels. If protectionism in the US does come into force with the kind of measures you suggest, it will immediately backfire with the third world imposing tariffs on what’s largely free trade now. And that will reduced US revenues from reduced exports of high-priced (anyway non-competitive) products.

    I’m sure the US govt knows it or else things wouldn’t have been as they are. And I’m only touching the tip of the iceberg. Coz if indeed we were to bid farewell to free trade – which is one of the founding planks of the free world – we ironically risk supporting arbitrage and a monopoly. I’m not sure if you’re ok with that, but for me, it would be a greater loss to backtrack on centuries of hard earned economic systems and principles.

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    • Generally speaking, I’m very much for free trade. What we call free trade, however, is rarely actually free. Corporations work hard to give their products an advantage others don’t have. I would endorse protectionism as a temporary expedient only, to restore balance to global enterprise that has become distorted by various government and corporate manipulations. I would hope it would reverse the long decline that American workers have experienced because of these global corporate machinations.

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  2. We’re both saying the same things – that protectionism can be viewed as a short term panacea in your economy as well as ours – although I doubt its efficacy coz I fear the global and corporate machinations you refer to will defeat the whole damn exercise. Bluntly put, the third world can’t survive without American aid – and the US can’t survive without a market, aka the third world, to sell its goods in. And I’m not even talking about the economic aspect of the decade long war against terror. It’s one hot button that can stay off-limits I guess 🙂

    Anyway this is a good, thoughtful post.

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