For example, 300 United Steelworkers jobs are moving from Indianapolis to Mexico because…? The standard “cause” proffered over and over (and over …) for job loss in the manufacturing area is that these jobs are lost because of “automation” and “technology.” But does that interpretation hold up?
The first thing we might ask is if there is new technology that is available in Mexico that is not available here or is available cheaper there. Is this the case? No, actually, the equipment those 300 workers worked on is being shipped to Mexico, too. Do the workers have skills superior to those here in the U.S. No one claims this and it doesn’t seem reasonable. We might also ask whether the numbers of jobs added in Mexico is fewer than lost in the U.S. (If automation is a cause of job loss, you would need fewer workers.) I suspect, but cannot prove, that the number of jobs added in Mexico is actually greater than lost here.
Clearly the reasons are two fold: in Mexico wages are lower, much lower than here. And, secondly, that old equipment won’t be needed to be upgraded for environmental concerns any time soon. So, the purpose of moving those jobs, and I argue, many, many others, is to access cheap labor and weak environmental laws that allow further value to be extracted from older operating equipment.
Compare this “attitude” of American businesses with that of Germany. (It is an attitude and a strategy; it is not being forced upon U.S. executives because of circumstances. Gosh what else can they do?) Germany uses the most advanced (aka expensive) technologies in the world and manufacturing workers in Germany earn much more than their U.S. counterparts. But manufacturing jobs make up 22% of the German workforce and account for 21% of Germany’s GDP. U.S. manufacturing jobs make up only 11% of our workforce and only 13% of our GDP.
Germans spend more making their products and keep their jobs in country with a strategy that if the quality of the products is high enough, people will pay enough extra to cover those costs and, well, they don’t seem to allow greedy executives to make changes in companies that benefit only the greedy executives.
How do you think that is working for Germany and its manufactured goods (Mercedes-Benz, Audi, BMW, Siemens, BASF, SIG Sauer, surgical instruments, musical instruments, kitchen appliances, etc.)? Would you say that “Made in America” compares favorably with “Made in Germany” at this point?
Why do we let U.S. business executives export quality jobs to other countries to extract short-term profits that benefit the executives but leave the companies they are “leading” in less competitive shape? Why do the companies? (Hint: the CEOs pack their Boards of Trustees of these corporations with cronies who will rubber-stamp their plans.)