What You Can Do to Improve Your Standard of Living While Jobs Continue to be Sent Overseas
posted in Used Car Donations |Reduction of manufacturing jobs in the United States is a result of a number of factors. The long term results of those loses is likely to have severe effects on the economy in only a few short years. You are expected to see reduced standards of living in your lifetime.
Why Manufacturing Job Loss?
Corporate profits has to be one of the primary issues. When labor costs are high, profits may be increased by lowering labor costs. Stockholders like to have higher profits and management has no choice but to act in response. Increasing automation or using low priced labor are the key ways to reduce manufacturing costs. For countless products, using foreign labor will be the optimal way to reduce manufacturing expenses.
The next step required was to pass tax and import/export laws that will permit outsourcing of manufacturing. With the expectation of higher profits, manufactures could offer incentives to politicians to pass laws like NAFTA (North American Free Trade Agreement) that allowed easy outsourcing of manufacturing jobs. NAFTA removed trade barriers between Mexico, the United States and Canada. It also removed taxes on imports and exports.
US companies saw this as a “foot in the door” that gave them permission to contract out a myriad of jobs to low wage countries. Manufacturing and service positions have fled this country. Just look at the nation your clothes are manufactured in to finally see the consequences of these kinds of laws and agreements.
What Are the Effects of Massive Outsourcing?
The government’s Education Resources Information Center released a report regarding the effects of NAFTA on American workers. Their investigation indicated that the “North American Free Trade Agreement (NAFTA) will result in lower wages, fewer jobs, and generally reduced living standards for the majority of U.S. workers.”
The AFL-CIO reports that since 2000 the US has lost 5 million manufacturing positions and 850,000 information sector positions which have been shipped overseas.
Manufacturing job loss extends into numerous other sectors. Many people from the grocery store, restaurants, hardware stores, department stores all can lose their positions too. Job loses also affect property values, city services, and local schools. Right when children of former workers need the best education possible, the schools suffer and have to downgrade their instructional curriculum.
As a consolation to unemployed workers a Trade Adjustment Assistance program is available. This program allows for cash payments to workers enrolled in full time schooling.
The fact is, today workers in labor jobs have to increasingly compete with low wage workers in Mexico, China and other countries. Such competition must lower the standard of living of all workers involved in unskilled and skilled labor occupations.
Effects on the US Economy
With fewer goods manufactured in the United States, people have to buy goods produced abroad. This implies that our trade balance is alway a trade deficit. In January of 2011 we decided to buy $46.3 billion more than we sold to foreign countries. This floods other countries with US dollars. This excess of dollars lowers their value on currency exchanges.
In addition, our financial system is so bad and our political system so shattered that the Government has to borrow 42 cents for every dollar they spend. Because of this, the United States is the foremost debtor nation of all time.
The result of all this is that the economic stability of the United States is right now increasingly questionable. The mounting price of gold, a standard of value, shows that the US dollar is quickly losing value. With hope that the government will alter course dimming, the future of the dollar and the savings of millions of Americans looks darker and darker.
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