Understandably these days you hear this a lot - American Jobs for American People. American People is defined by the constitution but what's an American Job? Is that a job that's at an American company? Okay, so what's an American company then? Is that one that is physically located in the United States? Like BMW or Nokia or IKEA? That doesn't sound right? So is it one that has a US mailing address registered with the government for tax purposes? That would make Haliburton - our largest defense contractor - unamerican. So what is an American company? We have to be able to define this to define an American job.
A reasonable definition might be - an American company is one that has most of its operations in the United States. By operations we mean they produce in the United States by employing Americans and they sell to Americans. So let's look at some giants then. Take GM - the mother and apple pie American company. Their plants in China have come under a lot of scrutiny but what about their global sales. GM sold more cars outside the United States than inside the United States in the last several years. 64% of sales was in foreign markets in 2008 and 59% in 2007. By our definition then GM is no longer an American company and hence their jobs no longer American. Well, GM simply has to be American and so may be our definition is wrong. Selling in other countries don't count - they don't make a company unamerican. Okay but why not? We want to protect jobs in GM plants from being outsourced but selling GM cars in other countries and thereby taking a bite of their production and displacing their jobs doesn't raise an eyebrow? I think I'll stick to my definition and declare GM unamerican. Let's move on.
And we are moving on to the housing sector. The good old construction jobs that the illegal immigrants are stealing. They should be good American jobs. Okay, so why is Iceland and Norway upset at us now? Oh, they bought a bunch of CDOs - those notorious derivatives of mortgage backed securities that are not worth the paper they are written on now. Foreign money was responsible for about 40% of the liquid capital that caused the housing boom and kept those good American jobs afloat. So may be those illegal immigrants did not get their fair share - after all they were not 40% of the entire housing market's job force - the builders, the brokers, the bankers, the realtors - were they?
How about good old "neither snow nor rain..." government jobs? Are they American jobs? What's that? China owns our debt? 25% of our debt is owned by foreigners and of that 40% is owned by China and Japan. Raising the FDIC insurance to $250K caused a run on foreign banks that funded our banks. What does all this mean? It means that the RMB and the Yen are paying a portion of our mailman's salary.
So, if you work for a large corporation with sizable foreign revenue, or if you work in the housing sector or if you even work for the government your job is not as American as you think it is. So ask yourself these questions. Do I not want my company to capitalize on the global growth but deal only in the saturated United States market? Do I not want the US dollar to be the reference currency of the world? Do I not want foreign investments in US banks making credit available to US borrowers? If you answered "No. I do not", then you have the right to an "American Job".
The point here is not to be heartless but it is in our hardest times that we must not shy away from the truth. We are intertwined beyond recall on this spec of dust in the universe and we must find global solutions to our real problems not succumb to political rhetoric.
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An American Job is a job which is filled by an American worker. Yes, in this global world everything is connected in real ways and pain in America is also felt around the world. BUT... We cannot continue to ship jobs overseas to reduce cost. It may be good for the other country but it is NOT good for America. It is short sighted by the companies in America. If they continue to put Americans out of work in preference of cheap labor in other countries, then Americans will stop buying goods. What has been keeping the economy going so well for the past 20 years is the non stoppable purchasing power of Americans. When that goes away (like you see now), then everyone loses. Not just the Americans but the whole global economy.
ReplyDeleteI agree with you on certain things but the notion of "shipping jobs overseas" comes from an assumption that the job is an American entity to begin with which is what I contest in the post.
ReplyDeleteI'm of the opinion that global companies must be allowed to hire best talent globally, period. Sometimes best means where there's best immediate profit. That might be shortsighted and selfish but its nevertheless capitalist. This goes globally too. Americans are hired by foreign companies and militaries all the time especially in the oil, infrastructure and energy sectors as they are the best on the planet.
Of course globalism causes hardships to common Americans but to put things in presepective if you make half the median income in this country you are in the top 1% of the people on this planet! So its a tough sell but I agree something's got to be done.
The American purchasing power has mainly been due to the American borrowing power more so than the American earning power. So the diminishing income has a diminishing effect on the economy but not a direct one. It could possibly be somewhat corrected by simply making the goods even cheaper.
Its a tough call and the solution may be multifaceted. Americans can no longer afford to drop out of school and expect to have any kind of a job. A college degree may become a prerequisite for median income jobs. Some Americans may even have to find jobs of their liking in foreign countries where those sectors have disappeared. Or, we build a giant wall around ourselves and invoke the affirmative action of protectionism but from within that iron curtain we can't really claim to have won the cold war.