Where Have All The Jobs Gone?

Where have all the jobs gone? Companies sent them to Asia and Mexico. No! Not General Motors and all those other mean corporations. You and Me. We sent them to other, cheaper countries. The trend started fifty, sixty years ago—back when nobody noticed.
Actually it started before World War II—when cheap, schlocky Japanese goods flooded our markets—and the Japanese even renamed a city USA so that they could proclaim the goods as being made in “USA”. Of course we did the same price undercutting to Europe in the 1800s when cheap, schlocky American goods flooded European stores.
I wrote yesterday that “cost” didn’t matter. Oh, but in one sense it did. We wanted to own more and more goods, clothes, toys and stuff at a price that could be afforded on declining middle class salaries. You couldn’t manufacture enough goods at such a low cost in the United States.
We insisted on having our cake and eating it too. So first one store started buying its toys, shoes, goods and merchandize from a foreign source that paid its workers between 60 cents a day and a buck an hour. That store started taking business away from stores that sold higher priced (American) goods.
Having a sound sense of self preservation, the next store started buying foreign stuff, and then the next and the next. Stores like Walmart cut their prices and bragged that they sold American merchandise. I talked to a truck driver once who explained to me that the goods were indeed “American”. “I drove truckloads of American cloth to the docks, where they were shipped abroad to be made into clothes,” told me. “Then I drove the clothes back from the docks to the store.”
By the 1960s you couldn’t buy a television made here—and it was hard to find a pair of shoes made here either. Nobody cared. TVs were cheap; shoes were cheap. WE—the American consumers—drove the economic mechanism that outsourced production.
The companies merely responded to the oldest economic law of all—make enough money to pay your corporate taxes and your workers or go out of business. In order to do that, to induce the American consumer to buy your goods, you had to outsource.
But no one really noticed. American auto companies were still pumping out cars and pickups, paying assembly line workers enough for them to go into Walmart and buys outfit after outfit of those “American” clothes. Everything is beautiful (as the song goes).
That lasts about as long as a Ponzi scheme. We began to reach a tipping point at which enough Americans no longer had high paying jobs that 1)the pressure to outsource grew even greater and 2) there eventually weren’t enough people with money to buy anything.
By this time the rows of factories along Muskegon Lake here in Michigan were torn down and out of business. The foundries that had built the engine blocks for our trucks and tanks in World War II were gone forever. Somebody in Asia was building them now.
A buyer explained to me why it was harder to buy shoes that fit. Shoe makers in Korea had a different notion of a size 10 than did a shoe making factory on Taiwan. “So,” he said, “the same brand will have size tens that fit differently, depending on which country they are made in.”
Of course the process goes on. Factories in Vietnam undercut the cost of manufacturing in China. One can only assume that manufacturers in Somalia will eventually undercut Vietnam. And desperate Americans—caught like gerbils on a treadmill—must keep buying cheaper and cheaper goods in order to have a whole new wardrobe every season.
The problem lies with you and me. I remember having an argument with a neighbor lady years ago. She bought a new coat every year from a discount store for a very low price. It needed to be replaced in a year. I pointed out to her that if she went to a higher end retail store (since out of business) she could buy an attractive coat for twice as much that lasted five or six times as long.
She was horrified. “I LIKE having a new coat every year!” (She also was of the opinion that buying store brand groceries told the world you couldn’t afford better—and you never, ever wanted anyone to think that!) So she went on forcing jobs offshore.
I recall going to a restaurant in New York with some friends years ago. The waitress was a monster out of urban legend. I’ve never had ruder, worse service. It was gratuitously insulting. At the end of the meal, I told my friends I was not going to tip.
They were aghast. “But she depends on our tips.” I suggested that if tips were important to her she might earn them with a touch more congeniality. In horror they left their own tips; I believe they even made up for mine. As I listened to them, it dawned on me that the real issue was that they did not want anyone—including that ghastly waitress—to think they were “cheap”.
The fear of looking “cheap” is one of the deadliest conditions a shopper can suffer from. (Trust me, the very rich have no such concerns—if they are going to spend a dime, they expect a dime’s worth of value in return.) It’s largely a middle class phenomenon. “I’m driving a Buick, but I wouldn’t want anyone to think I couldn’t afford a Cadillac”.
That’s why we need closets full of clothes so we don’t wear anything twice in a week—or in a couple of weeks. To afford that appearance, we have to buy lots and lots of outfits—at the lowest price we can possibly find. And so we drive jobs offshore.
I once a read an article comparing Parisian secretaries with New York secretaries. The French woman had two or three outfits that wore very well. She wore them twice a week as needed. The New Yorker had many (cheap) outfits that she staggered throughout the month.
Personally, I think the Parisian described in the article was more sane. But we, with our cars, our furniture (my davenport was bought in 1956—you simply couldn’t find a replacement of comparable quality today), our clothes and our goods have put ourselves on a treadmill at an unsustainable pace.
Don’t blame the corporations for driving jobs offshore. We taught them to do it with our insistence on quantity over quality. It’s just that we may be coming up on that magic moment in all Ponzi schemes where the stack of cards falls over on itself.