Unless we rebuild our manufacturing base, America cannot restore prosperity By Michael Payne Online Journal Contributing Writer Feb 6, 2009, 00:28 The upcoming economic stimulus package will help to temporarily stop the bleeding and buy some time. But America cannot and will not rebuild its economic foundation unless the driving force behind it is based on manufacturing and selling products made by American labor. When we lost that base after several decades of rampant outsourcing the rusting of our economy began and now it will take monumental efforts to get it back.
Millions of American manufacturing jobs have now been lost, as they have been outsourced to other nations of the world. America has been transformed from a powerful engine of manufacturing to a docile service economy, and this has been disastrous for our nation and our workers.
To briefly review this debilitating movement of manufacturing jobs overseas, American CEOs found, beginning in the 1980s, a new innovative way to substantially increase corporate profits while, at the same time, increasing their already exorbitant salaries and bonuses. They became fully aware that there were numerous nations where workers would work long hours for very low wages. And so they began the process to distance themselves from the American worker and move manufacturing jobs to overseas nations where there were basically no unions, work rules, regulations, or other impediments to the proliferation of corporate profits.
As that movement escalated, our nation underwent a dramatic change. The American workforce experienced a rapid, continuing decline in jobs in almost every sector of our manufacturing industry. Those millions of solid, good paying jobs disappeared as corporations took advantage of the cheap, plentiful overseas labor.
Corporate profits and CEOs were the big winners. The stock market gained enormously by this move to outsourcing, while the clear loser was the American worker. Corporate America made the most of this opportunity to utilize the cheap labor in every area of the world, from Mexico to Asia, with China emerging as the greatest beneficiary. Corporations and our government called it free trade and globalization and preached this message to America incessantly. And so, the American manufacturing workforce was dealt a deadly blow from which it has not been able to recover.
Is it any wonder that America is now in an economic and financial crisis almost unparalleled in history? As the massive movement of outsourcing our jobs was eroding our domestic manufacturing base, did anyone fully comprehend its future impact on our economic base? As millions of jobs left America, there was a massive shift from the manufacturing workforce to the service industry. Hourly salaries of $15 to $25, and higher, were replaced by those that paid either the minimum wage or not much more.
Slowly but surely this drastic change in income took its toll. More and more Americans took equity out of their home values, used their credit cards far too much and, generally, adopted a retrenching type of strategy to try to stay afloat. At the same time creative mortgage lenders were enticing unwary buyers into subprime and other questionable type loans, and credit card companies were aggressively promoting greater use of their plastic. Millions of Americans were unwittingly letting themselves slide into enormous debt. While these events are not the only cause of our current economic crisis, they are certainly a major contributing factor.
As products from China and other exporters flooded America, the purchasing power of many Americans rapidly declined. So now corporate profits also are rapidly declining, causing massive layoffs and further losses in consumer purchasing power. This is a vicious cycle that is feeding upon itself and has thrown us into a dangerous, growing recession.'
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