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April 24, 2015

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Don’t blame U.S. companies that ship jobs overseas

Anger at American manufacturers for moving their operations to other countries is somewhat misplaced. Americans and, for that matter, everyone in the world demand the lowest prices for the goods they buy.

In response to that demand, American manufacturers go where there is a virtually unlimited labor pool, low wages, a favorable tax structure and little environmental regulation — China, Vietnam and South Korea.

The manufacturing sector of the American economy is like the king of rock ’n’ roll: It’s gone and it isn’t coming back. With our comparatively high minimum wage, confiscatory taxation policies and draconian environmental regulations, American manufacturers have been forced into the role of financiers of overseas factory operations.

We could bring manufacturing back to our shores if we were willing to pay dearly for the privilege.

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  1. What caused the American manufacturers to go overseas? Bob says the answer is three-fold:
    1) comparatively higher wages
    2) high taxes
    3) environmental regulation.

    Don't blame wages. When maufacturing operated successfully here, wages were still higher than the rest of the world. But taxes and regulations weren't as extensive as they are now.

    Government-imposed taxes and regulations put such heavy a burden on manufacturing that manufacturing could no longer operate profitably. Don't blame the workers' wages. American workers always made more than workers in other countries. It's the taxes and regulations.

    Present day example: Pres Obama declared a moratorium on offshore oil drilling (government regulation.) The drilling rigs moved to Brazil. 150,000 American jobs were lost.

    Then, Pres Obama turned around and gave a several billion dollars to Mexico to finance their start-up operations to drill for oil in the same area of the Gulf where our own wells had been closed.

    What causes manufacturing to leave this country? We do, because we are the government that imposes the taxes and regulations that kill our jobs.

    We created a government to work for us. Yet, we permit the government to become so powerful that it drives away our jobs... and we have nothing to say about it.

    Similar scenarios have played out over and over in every conceivable business and industry during the past 50 years. Yet resiliant American citzens continue to bounce back from job losses and figure out other means of productivity for themselves.

    But we never effectively address the root cause. We ignore the insidious, growing government. We fail to realize that a government powerful enough to give you everything you want is also powerful enough to take everything you have.

    We are our own worst enemy.

  2. "Where ARE the JOBS!" the republicant's keep screaming at President Obama.

    They know full well where the JOBS ARE, how they came to BE THERE, and why THEY AREN'T COMING BACK.

    Sponsored by your friendly neighborhood enabler, the Repbulican Party.


  3. I disagree with the letter writer. Anger at the companies for shipping American jobs overseas (or up to Canada or down to Mexico or South America) is justified.
    The corporate world managed to convince the American government that "maximizing shareholder value" was the sole purpose of a corporation and its directors and officers. That enabled companies to ship the jobs out of America and to hell with the American workers or the communities, and to hell with America.
    America can restore a large portion of those jobs by passing some protectionist laws. Realize that goods made in America are done with fairly paid workers and generally effective regulations. You cannot compete with foreign countries which have virtually no regulations, and who exploit their workers.
    By the way, I am not a union member. I was a self-employed lawyer in Canada my entire career. I just know when a government has been conned by the corporate sector.

  4. Bellview,

    Sorry it is not justified. If you want to blame someone look in the mirror. Americans buy the best product at the best price. If they are unwilling to pay extra for an American made product then that the resources (material and labor) used to produce that product have a higher valued use than the low valued product they're making.

    In other words, Americans don't value the product enough to justify the high expenses on maintaining the use of those resources to that particular end.

    There is no way to put this nicely, but protectionism is just stupid.

  5. Where to begin...

    JanK says: "Don't blame wages. When manufacturing operated successfully here, wages were still higher than the rest of the world. But taxes and regulations weren't as extensive as they are now."

    Minimum wage in the United States: $7.25 per hour, which equates to approximately $1,260 per month

    Minimum wage in Vietnam: $45 per month

    Minimum wage in China: $141.00 per month

    Minimum wage in Pakistan: $66 per month

    Minimum wage in South Korea: $555 per month

    If one thinks that these differences are not a factor in what country a manufacturer locates a factory, you have another think coming.

    Frombellvillecanada wrote: "America can restore a large portion of those jobs by passing some protectionist laws. Realize that goods made in America are done with fairly paid workers and generally effective regulations. You cannot compete with foreign countries which have virtually no regulations, and who exploit their workers."

    Protectionist trade tariffs do not work. The second highest trade tariffs in US history were the Smoot-Hawley Tariffs of 1930. While they did not cause the Great Depression, they certainly made it deeper and longer than it otherwise would have been. I suppose in a perfect world everyone would purchase only goods and services produced in his own country. Unfortunately, this isn't a perfect world.

    Lastthroes wrote: "The letter writer is repeating a common mantra of the right -- that middle-class Americans should no longer expect to earn livable wages so don't even think about trying to slow our race to the bottom. In this worldview if you're a low income worker, tough luck, but if you happen to be among the wealthy elite, more power to you."

    I respectfully defy you to show me where I wrote the the ideas expressed in your post. What you have done is infer from my words a scenario that suits your own particular worldview. I have been forced by upheavals in the American economy to change careers four times in my life. I'm 65-years old and have been a business owner in the lumber and construction industry, the healthcare industry, the insurance and securities industry and am now teaching in a post-secondary school setting. I have absolutely no sympathy for anyone who flatly refuses to acquire the necessary job skills to enable him to be at least employable in our economy.

    And, finally...

    Okra wrote: "Bob Glover obviously has no idea what "draconian" means."

    Tell you what, Okra; send me an E-Mail to [email protected] and you and I will put up $100 apiece to make it interesting. Then we'll both take the standard Stanford-Binet or the Wechsler Intelligence test. Winner. Take. All.

    Love and kisses to all...

  6. hookershaky wrote: "Do you really think that no minimum wage and no environmental laws is fair or even sustainable ?
    Draconian- I thought this new comment policy was suppose to foster honesty"

    I respectfully point out that your Freudian slip is showing. Again, that pesky, old inference raises its ugly head. Did I say that no minimum wage and no environmental laws would be preferable to what we have now? I attempt to deal in realities and not fairy tales. If you believe that the EPA's regulations are not draconian, you have obviously not been forced to deal with representatives of that agency on a construction project of any size.

  7. All the rest of the commenters posting their opinions on my letter did not raise sufficiently cogent arguments or interesting enough ideas to merit a response. Try harder next time.

    Ciao...or Chow...or Chow-Chow...


  8. Wanna take me up on my challenge, Okra? Or...are you yellow?

  9. There is one factor that limits much of what the government could do to make the US more competitive: the WTO. Add in that China became a full member in 2001 and you have the makings for a disaster here.

    If all trading partners had equal economic policies then the WTO and the theories that say a rising tide lifts all ships might have merit. But the gulf between China and the US (and other free world economies) make it impossible for fair competition to exist.

  10. That answers my earlier question. You're nothing more than a lot of hot air and not man enough to accept a challenge. In the words of Carl Childers [the Sling Blade guy]. "Fact a tha bidness, don'cha say another word ta me. Ah'm threw listenin' ta tew."