off shored then dead

7/24/2019 Off Shored then Dead

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Off Shored then Dead

The Frightening Correlation Between Unemployment, Off

Shoring Domestic Jobs, and Early Death

By James ! C"nningham, #hD

December, $%&'

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On finding wor())

The Left.

*There+s one economicsdri-en thing that matters enormo"sly to h"man

wellbeingha-ing a .ob #eople who want to wor(, b"t can+t find wor(, s"ffergreatly /ot ."st from the loss of income, b"t from their diminished sense of self

worth !nd that+s a ma.or reason why mass "nemployment, which has now been

going on in !merica for fo"r years, is s"ch a tragedy*

)#a"l 0r"gman, $%&$

12ar(ets do indeed fail, and that if indi-id"als or pri-ate enterprise cannot or will

not spend in the short term, then the go-ernment m"st act to boost employment3

) John 2aynard 0eynes+ &456 boo(, The General Theory of Employment,

Interest and Money

The Right

I amhearing from man"fact"rers that people are not moti-ated to ret"rn to the

wor(force beca"se they are 7en.oying8 their "nemployment ins"rance3

)9 :llinois State Sen Bill Brady

*The longer yo" pay people not to wor(, the longer they+re not gonna try to wor(

) 9"sh ;imba"gh

*#aying "nemployment benefits to !merica+s "nemployed, only ma(es them la


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1. The Plight of Middle-Aged White American#olitical scientists ha-e recently noticed a remar(able phenomenon Unli(e

anything seen in other ind"striali


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:n $%&5, there were 5?& million white people in the US age ?' to '? ith a death

rate of ?&5 per &%%,%%% in $%&5 abo-e chart abo"t &?&,%%% of these !mericans

wo"ld die in one year !ccording to the chart to right of the abo-e graph, well o-erone in fo"r are dying from "nnat"ral ca"sesG dr"g or alcohol o-erdose, l"ng cancer

smo(ing, s"icide, li-er damage pills or diabetes o-erweight B"t loo( at the

death rate in Sweden for e>ample :f we had their death rate of abo"t $%% in $%&5,

we wo"ld be sa-ing the li-es of H$,%%% people a year :ndeed, if we e-en had the

death rate we had in the year $%%% we wo"ld ha-e &&,%%% fewer deaths

2iddle aged blac(s and Iispanics d"ring this same time frame are not

e>periencing this awf"l problem Death rates for them declinedat abo"t $&A per

year/ote that the death rate t"rned in the wrong direction for o"r gro"p of older white

!mericas in the late &44%s Thi correlate !ell !ith o"r ne! direction in

man"fact"ring#!hich $riefl% tated !a& if ma'ing a (rod"ct re)"ire lot of

!or'er then find omeone ele to do it. Prefera$l% omeone in another

co"ntr% !ho !ill !or' for almot nothing--ho! a$o"t the *hinee. Ma%$e the

Me+ican. ,en the ietnamee. Doe it reall% matter/

B"t why do France, =ermany, the U0 Canada, !"stralia and Sweden appear

essentially free of this problem 2any of these co"ntries ha-e negati-e tradebalances They also a"tomate their factories and they all engage in some le-el of

off shoring .obs /one are free of racial intolerance

Two factors may be mentioned which might e>plain the differences First,

go-ernment s"pport in other co"nties maybe more rob"st for the laid off wor(er,

This s"pport can incl"de retraining, s"bsidies for new .obs, and other ser-ices See

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chart below The US program is at the bottom Spending ro"ghly &% times what we

do, Sweden is at the top !nother possible factor is disc"ssed ahead, starting on

page &&

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1990 2000 2010 2020

B Canada

J Australia

H France

F J apan

3 Sweden

1 UK

> US

A Australia

M Canada

N Ausrtralia

O France

Support of labour.Spending as apercent of G!" Co#ers$$training"public %ob creation" &iringsubsidies" e'po('ent ser#ices"

)ear

The B;S stated that in October $%&' we had abo"t &4 million wor(ers marginally

tied to wor( with abo"t 6H%,%%% who ha-e gi-en "p loo(ing, ! sad sit"ation

0. The ree Mar'et#rofessional economists ha-e always been adamant that the way to economic

prosperity was and still is thro"gh an "nfettered free mar(et Drop those awf"l

tariffs and other barriers to foreign prod"cts, and open "p trade Open "p those

mar(ets and we will all prosper :ndeed, they insist the whole world will prosper

By the mid&4H%s most nations had reco-ered from the ra-ages of $ and were

ready 9eady to t"rn on man"fact"ring in their new factories 9eady to p"t their

people bac( to wor( 9eady to e>port to the wealthy est Especially ready was

Japan, Taiwan, So"th 0orea, =ermany, Iong 0ong, Singapore and France TheSa"dis t"ned "p their g"sher oil wells !nd so it began

The acceptance of foreign made prod"cts and off shoring yo"r own .obs, began

with a tric(le in the late &4H%s The first -ent"re of off shoring was a mo-e by the

comp"terchip ma(ers who set "p assembly plants in 2alaysia and Singapore !

tric(le of foreign made a"tos began !nd some apparel items appeared here

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By &44' the incoming tric(le became a ri-er, by $%%% a new 2ississippi 9i-er was

born, by $%%' a ts"nami had swept into o"r ports

!s the years went by, the US saw whole domestic ind"stries disappearG down thedrain went all optics prod"cts s"ch as binoc"lars and microscopes, domestic

prod"ction of cameras, telephones, and T sets disappeared e stopped ma(ingwriting tools :n decline or decimated were the ma(ing of bicycles, shoes, a"tos,apparel, tr"c(s, wooden f"rnit"re, hand tools, power tools, lawn mowers, tires,cardboard bo>es, lighting fi>t"res, light b"lbs, ship b"ilding, integrated circ"its,copy machines, fasteners, metal pl"mbing, earth mo-ing e"ipment, flooring,(itchen appliances, washing machines, machine tools, leather, semicond"ctor

processing e"ipment, robots, batteries, table wear, sil-er ware, aircraftman"fact"ring, steel forgings, fo"ndries, boo( printing, home lighting fi>t"res,comp"ters, -ac""m cleaners, battery chargers, calc"lators, paint br"shes, monitors

or(ers ma(ing apparel fell from 4%%,%%% in &44% to &K%,%%% by $%&& From theyear $%%% to $%&? we sh"t down 6%,%%% factories

e e>panded o"r ports to handle the growing -ol"me of imports ast containerships dropped the cost of o-erseas shipping

! meas"re of the e>tent of the new free mar(et trend or str"ct"re is of co"rse gi-en

by the trade balance :n the late &44%s it feel off a mo"ntain

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9ecent n"mbers not on the abo-e graph are@

$%&&)L'?K billion

$%&$) L'56 billion

$%&5) L?HK billion

$%&?)L'%K billion

These billions add grad"ally to the nation8s total debt, which is now aro"nd an

astonishing L6% trillion or abo"t L$%%,%%% per capita

:n reality, "nfettered free trade is a great force of world economicle-eling 9ich

co"ntries mo-e down, while poor ones mo-e "p E-eryone becomes mediocre

The soaring trade deficits hit US domestic man"fact"ring li(e a -iral pandemic

See chart below for the effects on man"fact"ring employment,

2. Reaon for the Decline in Man"fact"ring ,m(lo%ment#rior to abo"t &44% the US off shored -ery few .obs Met employment feel sharply

Close to '%A from its pea( in the &4?%s Still, the real -al"e of man"fact"ring

re-en"es rose 55A from &4?4 to &44% This was of co"rse d"e to -ario"s forms of

a"tomation This rise in labor prod"cti-ity may be seen in the chart below

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ith the ad-ent of off shoring strongly rising after &44%, the rate of rising

prod"cti-ity of US man"fact"ring ."mped From &4?' to &44% prod"cti-ity

climbed abo"t &HA per year, b"t after &44% it rose to 5&A per year This was ofco"rse d"e to off shoring -irt"ally all labor intensi-e operations, This left behind

the domestic operation already a"tomated, th"s changing the domestic mi>

3. The Partici(ation Rate

! more meaningf"l meas"re of employment is gi-en by the so called 1participation

rate3, which is the percent employed of the total ci-ilian labor wor( force This

wor( force is typically abo"t N the total pop"lation

The participation rate is the percent of the ci-ilian labor force who are employed,

The ci-ilian labor force is all those o-er &6, not inmates of instit"tions penal,

mental facilities, homes for the aged, and who are not on acti-e d"ty in the !rmed

Forces

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https://en.wikipedia.org/wiki/Penal_systemhttps://en.wikipedia.org/wiki/Mental_facilitieshttps://en.wikipedia.org/wiki/Homes_for_the_agedhttps://en.wikipedia.org/wiki/Penal_systemhttps://en.wikipedia.org/wiki/Mental_facilitieshttps://en.wikipedia.org/wiki/Homes_for_the_aged


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Below we see the participation rate of men between the ages of ?' to '? Their

decline accelerating somewhat in the late &44%s This negati-e trend is the most

serio"s of all age gro"ps shown This is the heart of their higher death rate

See below the labor participation rate for males age $''? for se-eral co"ntries

/ote that the US is on the bottom for the se-en ind"striali


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4. Again& !h% are White Men D%ing/

The three great essentials to achieve anything worthwhile are: Hardwork, Stick-to-itiveness, and Common sense. Thomas A. Edison

t seems the harder work, the more l!ck have. ThomasJefferson

People want to know they matter and they want to be treated aspeople. -----"amela Stroko

Throw yourself into some work you believe in with all your heart, livefor it, die for it, and you will find happiness that you had thought ouldnever be yours.! "#ale $arnegie

Iere is one theory !s is clear from the chart below showing incomes of -ario"s

racial and gender gro"ps in the US, white males ha-e been the top earners for as

far bac( as we can find data Th"s, white men ha-e an expectationof high

economic performance The le-el of disappointment and stress a person feels "pon

fail"re is f"nction of his e>pectations :t depends on how far we fall hen white

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men fail to find wor( at age ?' to '?, when they may be con-inced they will ne-er

wor( again, the le-el of agony m"st be ma>ed o"t Some then essentially gi-e "p

and adopt a destr"cti-e life style and perish before their time hen the Iispanic

or Blac( person cannot f"nd wor(, the fall is not as deep

5. ree Trade. Poition from the Right

Free trade and globali


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s"stained economic reco-ery and longterm growth)2ost !mericans en.oy the

fr"its of international trade and globali


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9. The :"m$er of Wor'er Off Shored

:n the mid&44%s corporations disco-ered offshoring :t was li(e a gift of their own

personal highyielding gold mine 2an"fact"ring costs went down, labor rates and

associated costs of benefits pl"nged, and sales grew with the e>panded foreign

mar(ets, and lower prices #rofits, stoc( prices and CEO compensation too( off

li(e a Sat"rn roc(et

2ost of the off shoring went to China, where in $%&5 wor(ers earned abo"t L$H

per ho"r This compares to the US n"mber of abo"t L$%5 per ho"r :n $%%', the

Chinese wor(er made 6' cents an ho"r

Below is a chart showing the n"mber of .obs off shored by US m"ltinational

companies By $%%K, &&4 million .obs had gone off shore E>trapolation of this

"pward trend to $%&5 gi-es &?? million by $%&5

The n"mber &?? million by $%&5 correlates well with a -al"e determined "sing an

alternati-e method of calc"lation The -al"e added dollar -al"e of all prod"cts

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man"fact"red in China in $%&5 was L$6 trillion This re"ired abo"t &%% million

factory wor(ers Th"s the dollar prod"cti-ity of Chinese man"fact"ring was

L$6>&%&$Q Q &%% >&%6 wor(ers R L$6,%%% per wor(er :n the year $%&5, according to

orld :ntegrated Trade Sol"tion, China e>ported to the US, goods -al"ed at L564

billionDi-iding the $6,%%% -al"e into L564 billion gi-es &?$ million wor(ers ma(ing

prod"cts to be shipped to the US This is remar(ably close to the &?? million

n"mber abo-e Since China has few name brands of its own, most of these wor(ers

are doing contract man"fact"ring for US companies s"ch as !pple and I#

;. The pense of domestic labor and inad-ertently (illing off a few tho"sand laid

off wor(ers, large m"ltinationals greatly benefited by off shoring which, again,

began its sharpened "pward ramp in the mid to late&44%s See chart below for

soaring corporate profits

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!t the same time o"r larger corporations begin b"ilding -ario"s di-isions and

operations in foreign -en"es See chart below

By the year $%%6, many m"ltinational corporations had more people off shore than

at home See graph below

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E-ent"ally these large corporation gained s"fficient political clo"t to .awbone

their ta> b"rden down See graph below From the late &4?%s, corporate ta> rates

fell by abo"t H%A

1=. The Price of *or(orate


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!nd we are sorry abo"t dropping all those pension plans we offered years ago

They were ."st too e>pensi-e Iow abo"t a nice ?%&0 in the stoc( mar(et that yo"

mostly pay for

!nd it8s a shame abo"t the demise of the !merican middle class B"t that is not o"rfa"lt either e ser-e world mar(ets now, not ."st the US

11. Sol"tion to the Pro$lem

e co"ld list political sol"tions to these problems, s"ch as ta> incenti-es to

increase domestic man"fact"ring e co"ld B"t why bother

!s( Bernie Sanders where the political power lies

The greater irony might be that altho"gh the present assemblage of 9ep"blican

candidates for #resident tend to blame -irt"ally all problems on Obama, the sicessi-e ta> rates, the problems disc"ssed abo-e were created

primarily by !merican pri-ate enterprise #retty m"ch, all by themsel-es

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off shored then dead

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