Black People, Wanna know Where the Jobs REALLY Went?
on December 7th, 2004 at 2:50 am“The China price.” They are the three scariest words in U.S. industry. In general, it means 30% to 50% less than what you can possibly make something for in the U.S. In the worst cases, it means below your cost of materials. Makers of apparel, footware, electric appliances, and plastics products, which have been shutting U.S. factories for decades, know well the futility of trying to match the China price. It has been a big factor in the loss of 2.7 million manufacturing jobs since 2000. Meanwhile, America’s deficit with China keeps soaring to new records. It is likely to pass $150 billion this year. (I strongly encourage you to read the rest of this article in BusinessWeek magazine. It goes into further detail on this issue.)
All throughout the presidential campaign, Kerry along with his other spokespeople kept reminding black folks that since Bush took office over 2 million jobs have gone overseas. I always knew that although this may have been true, there was still a lot more to the story that black people were not getting. Without going too far back, you can look to Clinton’s decision to admit China into the World Trade Organization (or WTO) as a major factor in this issue [Please Note: This is not an attempt to point the finger at either party. History tells us that BOTH parties are just as guilty of this negative trend that is eroding our economy.]
To understand the effects of countries like China joining the WTO, all you have to do is go to your nearest appliance store, or even call customer support for a product that you may own. For example, just a couple of years ago if you were in the market to buy a brand new computer, you would be looking at least shelling out roughly $1200 – $1400. Today, you can buy a brand new PC for between $350 – $500 (in some cases, this may even include the monitor.). Another example is calling customer support. I cannot tell you how many times someone in India has picked up my call. Sadly, in most cases I am the one giving them the training. This has NOTHING to do with their intellect, but it has everything to do with American companies who see one thing: Cheap labor.
As I kinda eluded to earlier, for the past couple of years, there has been a major price war going on in the PC market. You can also see similar price wars in many other fields that requires manual labor.
There is a huge difference between your typical American worker and a worker from a country like China. For starters, legitimate American workers must have company-sponsored health insurance as well as paid time off. Then there is also all the other “perks†that you may get depending on the type of job. Most American workers do not realize the amount of money that is invested in them by their company. We just assume that the “extras†that we get from our company are free.
Here is a small peek into how companies select workers in China and other poor countries:
American companies like Wal-Mart and Sears initially set up production facilities in the northern city of Tianjin, where wages averaged 50 cents an hour and employers were mandated to provide workers health and retirement benefits, overtime pay, pension insurance and sick days. But then the companies began pulling out of Tianjin and moving their work to booming sweatshops in China’s southern coastal provinces. Wages were cut to as low as 13 cents an hour, benefits eliminated and work shifts stretched to 14 or more hours a day, seven days a week.
Chinese entry into the WTO will further globalize the “race to the bottom,” forcing China’s poor to compete against the poor of Bangladesh, Haiti and Mozambique. By pitting the poor populations in the Third World against each other, companies are able to move their operations (or their subcontracting) to whichever region offers the lowest wages, and weakest environmental, health and safety laws. (more...)
For a moment, think of yourself as the head of a very large manufacturing company in a highly competitive market. Would you continue to pay American workers top dollar resulting in higher prices than your competition with the very high probability that you will loose everything that you have worked for for so many years, or would you look overseas for cheaper labor? Trade off will be that although many of your American employees would have no job, you and your family will be well taken care of while at the same time you are literally paying pennies for your workers. I think any honest person who has never been in that situation would have to take great pause before answering that question. I think that a lot of us would like to say that we would be pro-American worker, but if it means the difference between succeeding and failing in business, I think that many people would consider outsourcing to stay in business.
I hate the fact that the American government has placed our workers in direct competition with those in poorer countries who would take just about anything to get a job (that sure says a lot about us). The blue collar worker (you can also add engineering and technical people as well. [a reader reminded me of that. Thanks]) here in America will now have to be willing to accept lesser pay and/or longer hours if he/she wants a lasting career. It is a no-win situation. The way I see it, unless we are willing to pay additional for the products that we enjoy, the days of the blue collar worker here in America are numbered.
