According to the United Nations, more than 200 million people are unemployed worldwide. Population of adults looking for work is growing faster than new jobs. This problem could mean big problems in the near and long term U.S. job market. Politicians from both parties are pushing a new trade deal with Asia, The Trans-Pacific Partnership (TPP). Many critics think this trade deal would be worse than NAFTA as a catalyst for moving U.S. jobs offshore. If the data from the U.N. is accurate, developing nations will have more people willing to work for pennies on the hour. Our leaders need to promote fair trade that protects American workers, not free trade that only serves the interest of investors and their bankers.
Laura Clawson of the Daily Kos points out two levels of exaggeration in Walmart’s recent promise to sell more American made products. First, most of the products will be food products, not manufactured goods. No American factories will open to supply goods to the country’s largest retailer. Second, as Walmart takes over the business of more established grocers, it pays its workers lower wages. Some established grocers have unionized workforces and pay decent wages. When Walmart drives them out of business, it drives down pay. Consumers pay less, and their neighbors are paid less. Under this model everyone loses – unless their last name is Walton.
[On Sunday, this blog ponders work and life in “Sabbath.”]
Today’s Chicago Sun-Times features a depressing article on the decline of manufacturing in the U.S. and more locally in Cook County. Looking more deeply into the numbers, the problem is deeper and long term than the last decade. The U.S. has been losing manufacturing jobs since 1980. Between 2000 and 2010, however, the loss was staggering with the number of factory jobs shrinking from 17,321,000 to 11,580,000.
Part of the problem is cheap labor that is available in the developing world. An equally important factor has to be considered: greed. Operations that were profitable in the U.S.become even more profitable when companies can cut payroll and not adhere to regulations. Some people, including presidential candidate Michelle Bachmann, want to respond to this problem by making the U.S. more like China. That’s a mistake. In the most recent edition of the Atlantic, Orville Schell reports on the growth of sustainable manufacturing in China. What shocked me about this article was the American company leading the change: Wal-Mart.
There is a small bit of good news in the Sun-Times article. Manufacturing jobs ticked up a little from 2010 to 2011. More importantly, while the American economy has been down over the past few years, we are not facing what the country did during the Great Depression of the 1930s. We are still making things, and some of them reflect an interest in a better quality of life.
I met a friend yesterday for a few beers at Hopleaf, a bar in Chicago that specializes in beers from all over the world (However, it does not sell Budweiser or Miller.). We both drank beers that were brewed by local companies Metropolitan and Half Acre. The craft brewing movement is just one aspect of a growing economic trend in which products are made locally. While I write this post, I’m drinking Metropolis Coffee, which is roasted in an old warehouse located two blocks south of my office in Andersonville.
It’s easy to blame cheap labor and greedy CEOs for the loss of manufacturing jobs in America. However, we as consumers need to take some responsibility for this problem. Americans want cheap products. Manufacturers answer that they can only deliver what the customer wants if they can exploit cheap labor abroad. There is an alternative. Consumers can pay more and buy American, especially by buying local whenever possible. Many companies still manufacture in the U.S., and their products are available.
Will America ever be the world’s manufacturing leader again? Probably not. Both China and India have populations nearly five times as large as the U.S. Those countries will need factories to provide goods to their own people. Hopefully, rising standards of living in those countries will push wages up, which will make manufacturing in the U.S. more profitable. What can we do in the meantime? We can remember that there are still people making things in America. Buy American. Buy local.