Monday, September 6, 2010
The era of cheap imports is over
Frank Sinatra, in his comeback album in the early 1970s, sang "What is America to me?" a patriotic reading of everything that was great about America at a time when the U.S. was at the pinnacle of its military power and just before the Japanese became big enough to pose a credible challenge.
We don't have another Frank Sinatra to sing what must be an obvious sequel to that song: What is America to me on Labor Day 2010? Or, more specifically, "Quo vadis, American laborers?"
No doubt, the songwriter probably would extol the virtues of American labor, but while Sinatra clearly believed every single word he uttered in his 1970s song, the songwriter would be hard-pressed to craft together inspirational words that he himself could believe in.
What is American Labor to all of us? What are its strengths, if it has any left, and what are its weaknesses, decidedly many more than its strengths?
Until recently, why couldn't we build cars as well as the Japanese and Germans? Why do American-made cars break down after four, six or eight years while Japanese cars just keep on ticking, like the Eveready bunny?
Why have the leaders of industry abandoned American labor in favor of Chinese, Indian, Japanese, Korean, Taiwanese and other Asian laborers?
No doubt, the biggest reason for the exodus of jobs from America is the cheap labor elsewhere. The Chinese will work ten-hour days for $5 to $7 per day. The Indians for just a little bit more. Every Chinese factory, though outwardly modern with all the modern equipment, bells and whistles, is on close analysis a sweatshop.
Chinese laborers are so depressed about their lot in life, even as they see Shanghai's skyline rise inexorably to the heavens many of them end up depressed, needing therapy, which of course is unaffordable to most of them. This has led to numerous suicides.
There was a time, in America's inglorious past, when it was the U.S. that had a clear advantage over its European rivals. We had slaves whom we did not have to pay a dime to work our farms and our mills, who worked twelve hour days in construction projects, such as the construction of the White House on Pennsylvania Avenue in Washington, D.C. for peanuts, three square and a roof over their heads.
A book by Harriet Beecher Stowe, "Uncle Tom's Cabin," chronicled the lives of slaves in America and convulsed American society and was partly responsible for the Civil War.
Earlier, during the age of the Romantics in Europe, Charles Dickens' A Tale of Two Cities put the magnifying glass on the misery of the poor, the oppressed, the exploited workers in France. The book was an indictment on the Industrial Revolution and the exploitation of workers by owners of capital and by the nobility in France. It was a reminder to all Europeans, particularly the British, that the Industrial Revolution was failing the working poor.
The Romantics, through their literature, changed Europe, granting workers and the oppressed more civil rights and employee benefits. The dignity of the individual was the focus of all reformist movements, which eventually led to European romantics railing against slavery in the U.S. The Europeans' opposition to slavery in the U.S. was of course partly based on their desire to even the playing field. How could they compete against American industries when the Americans held the distinct advantage of employing workers who were paid virtually nothing except a roof over their heads and three square meals?
Now it is American Labor that is railing against the sweatshops in China and elsewhere because American industry has discovered that goods could be manufactured in China and other Asian countries at a fraction of the cost to produce them in the U.S.
Yesterday, President Obama extolled the contribution of the U.S. labor movement to the creation of millions of middle-class Americans who have become the backbone of our democracy. We must not fail the middle-class, the President warned, for this would mean the end of the American experiment as we know it.
President Obama, clearly miffed at his critics and his perceived enemies - the business elites and other powerful defenders of the status quo - issued a challenge to anyone who would dare to confront him and further underestimate him.
"They talk about me like a dog," Obama challenged. The gloves are clearly off. From now until November, President Obama will be swinging.
I applaud this change. Obama must confront those who belittle him and who are spreading lies about him - that he is a secret Muslim, that he was not born in America, that he is a communist - and must beat his enemies to a pulp. Figuratively, of course. He is the President. No one in America is more powerful than him. He must learn to use that power.
In addition, however, President Obama must go before the American people with a Checkers speech. He must say something like this:
"My fellow Americans, During the past 19 months I have worked hard to improve the lives of Americans by creating jobs, by preventing many private and public sector jobs from disappearing. By all statistical measures, we have been successful. The economy did not get worse, in fact it is getting better and is clearly on the mend.
"My policies, however, have not resulted in the immediate creation of the eight million jobs that we need to put every American who is looking for work back in their jobs or new jobs being created by this great job-creating engine known as the American economy.
"Clearly, all of the blame must be laid at my desk. I am your President, and the buck stops at my desk.
"I apologize to all Americans who are long-term unemployed, who have taken jobs that are way beneath their training and experience, their families, especially the children who feel the pain of their parents whose prospects for finding jobs are either non-existent or very remote. I too feel your pain. I have tried very hard, but apparently I haven't tried hard enough.
"I need Republicans to cooperate with me in passing a job-creation bill in Congress. The stimulus bill has been successful but it has not been successful enough. I have grown impatient over the slow pace of the bill's job creation. The bill simply has not created as many jobs as we have hoped.
"I need the cooperation of Republicans and I want you to call your Republican congressmen and senators to implore them, even beg them to set partisanship aside and work with us Democrats to pass the $50 billion job creation bill. The bill will rebuild our roads, bridges and railroads.
"We have a crumbling infra-structure. Many countries have overtaken the U.S. in terms of modern infrastucture. We need some catching up to do. We also need to put Americans back to work. We need to prime the pump once more, to get our economy moving at a fast clip once again.
"I have bent backwards, I have coaxed them, cajoled them, humored them, but to no avail. The Republicans refuse to work with me, specifically, and with us Democrats in general. Nothing has worked. So now I must turn to you and ask you to call your Republican congressmen and senators."
This is the way his speech should have started yesterday in Wisconsin, but I understand why he did not start it that way. He had a score to settle, plus he was speaking to leaders of the labor movement. He needed to offer them a lot of red meat. Now that he has settled that score and presumably has stated his case before the labor movement's leaders, he needs to make the speech I have laid out for him above.
He should go before the American people once more and apologize for his anemic job-creation policies. And then he has to tell us what his $50 billion job-creation bill will accomplish.
American labor efficiency is unequaled in the world, but this has not given us an advantage in the world markets. American labor is expensive, but if Americans want to bring back some of the jobs that have been lost, the rest of America must be willing to pay more for the goods that they buy in the department stores.
There are no two ways about it: If Americans want their jobs back, they must be willing to buy products that are made in the U.S. which cost more than those made in China and other Asian countries.
We need this slogan on every car bumper: The era of cheap imports is over.
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Production quality has to do with systems and ethos, not just labor. When Japanese firms studied American mass production systems for their industrialization, they noticed the concept of an acceptable level of rejects, and instead many Japanese firms at the time opted for zero tolerance of faulty products.
ReplyDeleteIn the 19th century,France found it was lagging behind Britain in its Industrial Revolution, and found it could not compete on price. France then opted to compete in the market with quality, rather than cost, and survived well, as French products even today are considered more aesthetic (furniture, railways, lenses, clothes etc) and of sound build.
America has to find its niche, for its manufacturing to become competitive.
While I agree on the primacy of the working man, China's previous economic path was to make jobs a priority, with inefficient factories and work practices = as pure communism as possible. It was only in abandoning that model that China has become an economic powerhouse.
There are other countries with high labour costs that have manged to flourish - Germany and Switzerland for instance, and they have responded succesfully with quality and innovation. Denmark has taken the path of adding value to its agricultural products.
I agree that the USA is likely to pay more for its products, for the labour sector to thrive; but it must produce better products, probably unique products. It has such a technological advantage that Russia and China go to some trouble for industrial espionage; perhaps the answer lies in that technological advantage.