Monday, August 06, 2007

Who in Congress Fights For U.S. Businesses/Jobs?

Another example of why high-paying manufacturing jobs keep leaving the U.S.:
A member of the House appeared before the commission alleging that China is manipulating its taxes and currency to keep wages artificially low as a way to keep U.S. businesses from gaining full access to the Chinese market. China undervalues its currency—the yuan—and provides Chinese companies with a 17 percent tax rebate that is funded by taxes imposed on American-produced goods, said U.S. Rep. Duncan Hunter, R-Calif. That makes it difficult for American manufactures to compete fairly in the global market, he said. “It is this uneven playing field that undercuts American markets and wipes American products off the world’s shelves,” he added.

The idea of “free trade” with China is “a simplistic ideal” because the reality is that China is conducting “predatory trade” supported by low wages, Hunter said. Wages in China range from 25 cents to $1.50 per hour in some areas, and companies can get “pretty skilled Chinese labor” for 25 cents per hour, he said.

The old Farmer-Labor Democrat Party was said to represent the worker, with big business represented by the GOP. Both workers and manufacturers lose out with trade policies like these, and both the Democrats and Republicans can share the blame. But as we approach the next election year, you would think there would be a mad dash to fix it if for no other reason than to get the support of labor and/or business groups like NAM. So far, all is quiet on the fair trade front.


ccburro said...

The impression I have gotten from what I have read is that the MAJOR reason that manufacturing/service/professional jobs have been (and will continue to be) relocated or outsourced to China/India is the MUCH cheaper wages, along with the quality of work obtained for those wages. I don't think either party has a solution for this long-term problem. This tendency makes the continued existence of a large middle class in the U.S. unlikely... Also, our HUGE negative trade imbalance and debtor nation status is likely to get worse, followed by increased economic bifurcation/dislocation of the U.S. society.

Do you have any views as to what should/could be done re this problem?

Anonymous said...

I'm confused. Are you pro trade, or not pro trade? Are you pro free trade?

A posting last month had you railing on about NAFTA trucking, so I'm just wondering where you're coming from.

AZAce said...

Let me clarify it for you: I strongly support free trade that is reasonably fair and that is accomplished in the interest of our national security.

ccburro makes some excellent points I would like to post on later.

Anonymous said...

What is "reasonably fair?" Should trade agreements be used to also negotiate agreements on labor and environmental issues?

For you, what rises to the level of whether something is in the interests of our national security?

Should, for example, Mexican Hass avocadoes be permitted to enter the US market? Or are you concerned about supposed phytosanitary issues?

AZAce said...


Fair, as in no 20% tariff on one side and none on the other.

Security, as in inspect trucks for contraband at the border.

It's just my definition of "reasonable." Yours may be different.

AZAce said...
This comment has been removed by the author.
ccburro said...

I'm quite conflicted here re allowing Mexican truckers to transport their goods within the United States--free trade/market is the best way of promoting innovation and efficiency and providing consumers with the best in price and quality. However, with the pressure of globalization, U.S. businesses are almost compelled to outsource where feasible.

What will this mean for the stability of the U.S. and the American Dream? What jobs will be available for the 20% to 30% of high school students who don't graduate--or even those high school graduates who do not get additional training/schooling? If they can't find jobs that pay enough for survival, how many of these will end up as criminals/drug addicts which will end up costing society $20,000/year for imprisonment?

This is why allowing Mexican truckers to transport goods within the United States concerns me--another job category to experience outsourcing. Trucking is one job category which pays decent wages for which you don't need much technical training or college.