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How About a New Year’s Resolution to Stop Outsourcing the American Dream?

Jane White – Author, “America, Welcome to the Poorhouse” Posted: January 2, 2011 02:56 PM

Last month a new political group called No Labels announced their intention to loosen the grip of both parties on the political process. The group’s slogan is “Not left. Not right. Forward.” Yawn.

As Christopher Beam put it in a recent Slate post, “The group’s mission statement is so obvious… no one would ever disagree:” Beam offers an example: “`Americans are entitled to a government and a political system that works…’ Unlike all those groups that prefer a political system that doesn’t work?”

Why can’t we go one better and agree on critical issues that are facing everybody: our job market is shriveling and our political system has been hijacked — and it’s not the Republican takeover of Congress but K Street’s takeover of Capitol Hill.

When it comes to our economic malaise, as I’ve said before, neither party’s approach to economic stimulus is working, whether it’s Keynesian or libertarian. Let’s face it, if trickle-down tax cuts could kick-start the economy it would be humming by now. As for the government stimulus favored by the Democrats, while highway restructuring may put construction workers back on the job, it’s not going to replace the engineering jobs outsourced by Microsoft to China, where it now employs more people than it does in the U.S.

When I was growing up in the 1950s and 1960s everything our family owned was made here and wages and benefits were generous. Now it’s the opposite. As former Senator Byron Dorgan observed in his book, Take This Job and Ship It, in 1970 the largest US corporation was GM, which provided decent wages, pensions and health care. Now it’s Wal-Mart, whose products are mostly made in China and their employees’ average salary is reportedly $18,000. What’s more, their benefits are not only puny but we taxpayers often subsidize them. A study by Congressman George Miller shows that a typical 200-employee Wal-Mart store is very likely getting a taxpayer subsidy of more than $420,000 a year, including free school lunches for their employees’ kids along with housing assistance and healthcare subsidies.

As former Fed Vice Chairman Alan Blinder pointed out in a Dec. 17 Wall Street Journal op-ed, American companies are getting a big bang for their buck when it comes to the productivity of their workers but workers aren’t getting a payback: while productivity is up 86% since 1978, real average hourly earnings are roughly at 1974 levels.

Then there’s the issue of shipping jobs overseas. Nobody could reasonably argue that the U.S. should adopt a protectionist policy because it would deprive workers in emerging markets from joining the middle class. But somehow I’d rather my iPad was assembled in the U.S. rather than at Foxconn in China where 11 workers recently committed suicide because of stressful working conditions.

Take the recent decision by the World Trade Organization to uphold U.S. tariffs on Chinese tires. As Harold Meyerson pointed out in a recent op-ed in the Washington Post, the WT0’s decision wasn’t a triumph for the business lobby — the complaint originated with the United Steelworkers, whose members include rubber workers. On the other hand, U. S. tire manufacturers are perfectly happy to have the tires made in China.

Those who argue that outsourcing and its punitive effect on advanced-world wages is an inevitable byproduct of globalization ignore the strategy adopted by Germany, which manages to be the world’s second largest exporter AND pays their citizens decent wages. As Meyerson observes, hourly manufacturing compensation is $48 in Germany compared to $32 in the U.S.

The only problem more frustrating than the lack of good strategies, whether they are pro-consumer or pro-worker is the fact that the business lobby will shower big bucks on any politician with the moxie to support them. Wonder why financial service reform didn’t happen? As reported in the Washington Post on Dec. 26th, the 35 Congressional committee members in charge of drafting rules regulating the industry collected nearly half a million dollars from the financial industry in the first three weeks of June alone.

For that reason, I wouldn’t be surprised if campaign contributions from the Chamber of Commerce “inspired” Senate Republicans to recently beat back an effort by Democrats to end tax breaks for U.S. companies who send jobs offshore. It’s bad enough that the Chamber thinks nothing of bribing politicians to vote against legislation that would help American workers, but it has also opposed legislation that would require it to disclose donors who help fund its political ads.

In summary, No Labels is wrong. We need opinionated and gutsy progressives who — heaven forbid — team up with organized labor and push an agenda that lifts all boats, instead of only enriching people who can afford yachts. The future of the country is at stake.

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