Over the Labor Day weekend, President Bush announced the creation of a “Manufacturing Czar” to help keep manufacturing jobs in the United States.
In my opinion, I hope the move helps, but the idea is probably a bit late.
For the past several administrations, we’ve been hearing about how the North American Free Trade Agreement (NAFTA) was supposed to improve buying power for Americans. Cheaper goods coming into our country from Canada and Mexico were to give Americans lower prices and a higher standard of living.
Great for Canada. Great for Mexico. Crappy for the United States. The problem is that without a strong manufacturing base in our country, we don’t have a financial base to spend money on all those lower priced items.
President Bush promised a "trade and manufacturing policy that will put an end to the hemorrhaging of manufacturing jobs and keep good paying jobs in this country for our workers." Again, I say the idea is just a bit late.
The ripple effect of some of these trade agreements we’ve stumbled into makes it cheaper for companies to produce their goods in other countries and then ship those goods to the USA. In other words, some products that used to be made in America by Americans making $10 per hour are now made by people in foreign sweatshops earning $10 per day (if they’re lucky).
But wait: I’m still scratching my head about paying $100 for a pair of tennis shoes that cost less than $10 to make. Weren’t goods supposed to be cheaper? Where does all that extra money go? Oh, yeah, I forgot – a big chunk goes to Michael Jordon’s bank book so he can remind you about how those shoes give you magical powers. In fact, those shoes are so good you may even be able to jump to the front of the unemployment line.
With NAFTA, some companies that have plants in both the USA and in Canada are moving the bulk of their operations to Canada. One source tells me that it’s cheaper for his company to manufacture product in Canada and pay the extra shipping costs down to the USA than it is to pay the wages expected by American workers.
One of the arguments I’ve heard in favor of NAFTA and other trade agreements over the last decade is that since we’re moving into a knowledge society, the USA does not need a manufacturing base. Poppycock. We’ve been hemorrhaging jobs for a decade and our trade imbalance is the worst it’s ever been. It’s taken this long for our country’s leadership to acknowledge that? We need both knowledge jobs AND manufacturing jobs, or we won’t be viable as a player in the world market. After all, what happens when the other countries have the same knowledge we have?
Sadly, even when it comes to our military, we are now importing. The October 9 edition of The New York Times revealed that we were importing tooling and parts for Tomahawk missiles. There used to be a large complex of buildings in San Diego that built Tomahawks. Those buildings no longer exist. This is outrageous.
And some of you may recall an earlier column in which I pointed out that according to Business Week, Europe’s Airbus was setting up a plant to manufacture US military aircraft. Can anyone tell me what’s wrong with these pictures? Our own government buying from overseas companies instead of American ones? Does anyone understand the meaning of the term “ripple-effect?”
So here’s the situation in a nutshell: Americans want to earn top wages, but we want to pay bottom dollar for what we buy. The problem? Bottom dollar products are made overseas, so buying bottom dollar products sends our money overseas and leaves American products sitting on the shelves collecting dust.
We can either eat the cake, or we can have the cake, but we can’t have it both ways.
Bottom line: We moved too fast as a country in abandoning our manufacturing base. Those who own manufacturing firms need to think in terms of ripple-effect before they abandon their American workforce and move operations elsewhere. I heartily applaud President Bush for creating a “Manufacturing Czar.” I just hope the job carries some real authority for change, and doesn’t simply provide oversight on how the hospice room is decorated for the US manufacturing industry.