AMERICAN JOBS LOST TO “GLOBALIZATION” ARE GONE FOR GOOD

…Example of a closed US Factory

 

Politicians that say they will bring back American jobs are wrong.

 

Okay, it’s time I for me to dive into the issue of being for or against international trade.  How do I feel about NAFTA, CAFTA, TPP and the whole trade globalization issue.

 

Well, those individuals that say these trade agreements took away American jobs, they are correct, but you’re only getting part of the story.

 

Yes, it is true that over the decades, the US has lost thousands of factories and factory jobs.

 

But I have to say, as a retired marketing executive that spent my business life working for Silicon Valley high tech organizations, these trade agreements that did take away some businesses and factories, many  would have gone away anyway, with or without any trade agreements.

 

Think about it.

 

At one time, industries that were important to the US such as steel, shoe manufacturing and the textile industries, they all left the US for other countries due to automation , lower taxes, and to locations where labor was cheaper, but other industries eventually came along and replaced those US businesses. 

 

The US is the leading country in offering the newer technologies.  Take for instance, all the new high tech industries that have started in the US.  You have thriving industries today that didn’t even exist a decade or two ago.  Just look at social media alone for what’s happened over in the last decade. 

 

How long have Twitter, Facebook, Google, Instagram, Yahoo, Amazon, Netflix, YouTube and Apple (since the iPhone) been making all the headlines.  How many years ago was it that the largest companies in the US were companies like IBM, Exxon, Sears, Xerox, Motorola, US Steel, DuPont, all the airlines and all the rail road companies.  Many of these companies either no longer exist or they have changed their focus or they hold a much smaller market section.  Many are now being replaced by global companies such as Samsung, LG, the new Apple, Oracle, Cisco, SAP and others that didn’t even exist 20 years ago.

 

Yes, there is still H-P, IBM, Microsoft, Intel, Exxon, Xerox and others that are around, but they have all had to adapt to the changing world.  Others that didn’t or couldn’t keep up, have pretty much disappeared.  Companies such as the one that made the Blackberry, and the Palm Pilot and those like Nokia, Pan Am, Amoco Oil, Inron, Oldsmobile, Blockbuster, Pontiac, Woolworths, Borders Books and General Foods.  These companies didn’t do anything wrong, but the world changed around them and they didn’t.  Probably with the advent of the Internet, that in itself was gloom and doom for many of those that couldn’t or wouldn’t adapt.

 

The politicians that keep saying that they will bring those old jobs back to the US are for the most part totally wrong.

 

There is a reason that having an American high school diploma isn’t what it was 30 or 40 years ago for getting these new jobs.  Those old jobs today are mostly overseas because the world has moved on in America and the new jobs require a different level or kind of knowledge.

 

Think of it this way.

 

A 15 year old teenager today, raised in the average middle class family was probably raised knowing how to use different computers and a smart phone.  You’ve probably seen the TV ad where it says “Having teenage grandkids is like having free technical help.”  The ad then shows two teenagers visiting their grandparents.  The grand parents say to them: “We’re so glad you could come.”  Then the grandmother hands the two teenagers their laptop, smart phones and other high tech items saying: “None of these are working, come on in.”  The two grandkids just look at each other while holding all the grandparents high tech items.

 

It’s just a another sign of the times.

 

America probably doesn’t want those old jobs back anyway, especially if they would only come back at the hourly pay that is being paid in Mexico or Vietnam.  No one in the US could live on those wages.

 

What America needs is an educational system that seriously prepares its new workers for the technologies of the future, not the past.  Those factories that had 2000 employees in 1975, due to today's automation, probably only employ less than 500 employees today, if they even exist today.

 

All you need to do for understanding this is go to YouTube and look at the video of how the Amazon warehouses are working today.  The computerized warehouses today will use 10-50 employees where it used to use 200-300 employees.

 

When I was an executive, we had one administrative assistant (then they were called Secretary’s) for every two or three executives, maybe four execs at most.  That was before the coming of personal laptops, tablets and smart phones.  Today, at a local Silicon Valley company, the upper management personnel have one admin assistant for every 70 employees.  The executives and managers use their own laptop computers and phones to do what the assistants did for them before.

 

The economists who think free trade has harmed US manufacturing actually see benefits in the TPP trade agreement.  The experts argued last year that although import competition did help produce a “momentous decline” in US manufacturing, “We believe blocking the TPP on fears of globalization would be a mistake.” They noted that the pact would promote trade in knowledge industries where the United States has the biggest advantage and that “killing the TPP would do little to bring factory work back to America.”

 

Donald Trump, the so called “businessman”, is today totally out of touch with real economic trends. He speaks of Japan as though it were an economic powerhouse, when Japan has actually suffered for two-decades in a manufacturing slump.  (Many of the Japanese cars that Trumps says are being shipped to the US are actually being built in US factories.)  Trump also describes a surging China, when the real numbers show China’s manufacturing growth is sagging.

 

But Trump is a real-estate guy and hotel-keeper.  He doesn’t realize that because of low energy costs and high productivity, the United States is “seeing evidence of an American manufacturing renaissance”. This is according to the Boston Consulting Group. The number of US executives who plan to add production capacity at home has increased by about 250% since 2012, according to BCG.

 

Trump and Bernie Sanders are currently both swinging a wrecking ball on globalization and trade.

 

The right answer is to help the workers, retrain those who are being hurt as the economy evolves.  Do not shut down the global trading system.

 

Remember, globalization means that if the demand isn’t being satisfied here, the customer will just go somewhere else.  Another sign of the times.

 

Copyright G.Ater  2016