Most of the job loss is from off-shoring, not the recession.
I point to an editorial on the Huffington Post by Sen. Fritz Hollings. He's calling out D.C. and saying Washington is plain committing fraud on job creation by refusing to address trade and global labor arbitrage.
An important part of the job fraud is to make the people feel like the loss of jobs is due to the recession, not off-shoring. Long before the recession, South Carolina lost its textile industry; North Carolina lost its furniture industry; Detroit its automobile industry, and California its computer industry, etc. President Obama wants to increase exports, but we have nothing to export. Today, the United States has the export profile of an eighteenth century colony, with the only value-added products exported being chemicals, agriculture and airplanes. Last week, the Wall Street Journal announced that the largest chemical producer in the United States was off-shoring. Most of the job loss is from off-shoring, not the recession. But Washington acts as if nothing can be done to limit the off-shoring and protect our economy.
Globalization has developed into a trade war with production looking for the cheapest country to produce, with fierce competition for industry and jobs. Necessarily, every country has developed an industrial policy in this competition to protect its economy.
One can see the truth that job loss is not just this recession, but a long steady decline caused by global labor arbitrage. Just look at the total number of jobs in a particular occupational category over a decade. For one example, see this graph on information services jobs.
Hollings has a host of policy recommendations to fix the real problem and I personally would add a requirement that every single opportunity, from K-12 to the most advanced job in this country have a new affirmative action program attached, Americans preferred. Jobs in this country should go first and foremost to the citizens who make up the nation. It's obvious the United States cannot be the world's job market. I would also add to put an immediate ban on offshore outsourcing of all Federal and State contracts. Does it make sense to ship U.S. taxpayer dollars for jobs offshore? (No!) Below are Hollings suggestions, note the VAT is not a sales tax, it's an at the border adjustment tax.
- Since the U.S. has suffered a 5.8 trillion dollar trade deficit in the last ten years, President Obama should levy a 10% surcharge on imports like President Nixon did in 1971.
- Don't wait for a basic industry to go bankrupt like General Motors, but once production is endangered, institute import quotas or tariffs under Section 201 of the Trade Act.
- Activate the 1950 War Production Act reauthorized as the Defense Production Act of 2009 (S.1677). This requires the nation to have a ready supply of material necessary for our national security. Today, we can't go to war save the favor of some foreign country for supplies. Stop the off-sets for military sales and activate this law and policy, creating millions of jobs. President Kennedy used this law in 1961 to launch his 7-point program, saving the textile industry. Hearings before a Cabinet Committee determined that next to steel, textiles were the second most important to our economy. The Committee found in 1961 that "we can't go to war in Japanese uniforms."
- Stop subsidizing off-shoring and cancel the exemption of off-shore profits unless repatriated.
- Stop equivocating on "Buy American" and institute a "buy domestic" program like other countries competing in globalization.
- President Obama can boost exports, pay for health reform and start paying down the debt by replacing the corporate income tax with a 5% VAT. Three percent will more than replace the revenues from the corporate income tax; 1% will pay for health reform, and 1% will start paying down the debt. The ox is in the ditch. We don't have time for a study commission.
Hollings goes on to mention how mainstream Economists continue to consider it taboo to mention offshore outsourcing.
Not on this site! We represent the peanut galley, ya know the ones whose financial livelihoods are continually under attack. We're screaming it from the rooftops!