Friday, July 2, 2021

US jobs going to China..a problem since the 1980's

 I recall as far back as the 1980's public concern about manufacturing jobs being outsourced to China because of their cheaper labor, so cheap it offset the cost of shipping products to the US. Perhaps the real danger is that China was able to "steal" our technology, our intellectual property, and ignore US patents and trademarks. They became even more competitive with US manufacturers and the result was the demise of much of the midwest industrial sector.  At the time in the 1980s, the popular line fed most of the unquestioning was not to worry, we are changing to a modern, information-based economy, and like the days when the horse and buggy were replaced by the automobile, the workers would just have to adjust and become info techies.  The result was the rust belt as US factories closed, and the labor force was unable to make the adjustment to an "information economy."  China simply became information savvy by simply copying the technology we supplied them. To become competitive, automation took the place of much of the human role in manufacturing, resulting in a loss of jobs.   It was a downward spiral.  In the meantime, environmental concerns in the US meant that the manufacturing potential was shifted to windmills, electric cars, solar panels, and the future of what was to be manufactured changed.  This dislocation and the angst it produced spilled over to politics.  It was a major contribution to the rise of Donald Trump to the presidency in 2016 and hope erupted his government policies of tariffs would be the equalizer that restored the rust belt to its former glory.  In 2020, Trump's approach was not working well enough and Biden, running as a blue collar class throwback to restoring the manufacturing sector a different way and tackling the China steal with new vigor cut into Trump's rust belt gains.  The question becomes can Biden do any better.  It is no longer a question of restoring the manufacturing sector in the US; it is how.. 

An issue of note is restoring the rust belt and reviving the manufacturing sector to its former importance. Both Trump and Biden have or are addressing the problem of whether the US should be more of a manufacturing economy. Trump and Biden were not free traders though Trump tried the tariff approach and the costs were just passed through to consumers. Labor unions were dissed. Biden is supporting more of a subsidy approach eventually paid for with more debt or higher taxes and greater support of union labor through his jobs programs and government purchasing policy. He has positioned himself outside the made in China issue by hammering home his jobs policies...geared to restart the manufacturing sector in the USA.. The reason? Politically neither Trump nor Biden could afford to lose rust belt states. Biden's pro-union and support of government purchasing for made in America is his platform and his jobs legislation and that helped turn the rust belt bluer because Trump's approach did not turn the tide re Chinese importation.

There is indeed a big difference between official government action in "selling out technology to China" and the private sector doing it. However, government can also influence the private sector with inaction as well as action. What do consumers want has also been the driver of both government and the private sector.. Look at your clothes labels, your small consumer goods, your electronics, and you will also see how much consumers value cheap goods. We as consumers are just as guilty. Are consumers willing to pay more for higher tariffs on Chines imports or for Made in the USA products? Per Pogo: we have met the enemy and they are us. US manufacturers would and should keep products made in the USA lower is a question of public policy influencers.


 

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