Winners And Losers

Winners And Losers

Courtesy of Michael Snyder at Economic Collapse 

When you mention the word "globalism" to most people, they think of something that is going to happen someday in the future.  But the truth is that globalism is already here.  At this point we essentially already have a one world economy.  Goods and services flow across national borders more freely today than at any other point in human history.  A major economic event on one side of the world instantly affects financial markets on the other side of the world.  Labor has become a truly global commodity.  You can go to the exact same fast food restaurant or buy the exact same iPod on six different continents.  A whole host of international trade agreements are making national borders economically irrelevant. 

Today our "big box" stores and shopping malls are jammed full with products that have been made overseas and it is becoming increasingly difficult to find American-made products.  The reality is that it has now become undeniable that globalism has arrived and we are now part of a world economy that is integrating at lightning speed.  Unfortunately, all of this globalism has created some very clear winners and losers.  But most middle class Americans are in such a deep sleep that they don’t even realize that they are the losers.

The sad truth is that as work has become a global commodity, middle class American workers have been placed in direct competition with the cheapest labor in the world.  For years the U.S. economy was so strong that nobody really noticed that it was bleeding thousands of jobs every single month.  But now that 14 million Americans are unemployed and the U.S. economy is literally hemorrhaging jobs people are starting to sit up and take notice.

Let’s take a look at one recent example.  Ford Motor Company has just announced the closure of a facility that produces the Ford Ranger in St. Paul, Minnesota.  Approximately 750 good paying jobs are going to be lost.

But isn’t Ford doing better these days?

Sure.

Don’t people still need Ford Rangers?

Of course they do.

Minnesota Governor Tim Pawlenty even offered Ford a multi-million dollar incentive package full of tax cuts and job creation incentives to keep the factory going.

Basically, Pawlenty did everything except get down on his hands and knees and beg Ford to keep the plant open.

But it wasn’t good enough for Ford.

So where is Ford going to make those Ford Rangers now?

Well, the statement issues by Ford did not say, but it did offer some clues….

"Ford continues to concentrate on implementing the plan we initiated four years ago to streamline our plant operations and better leverage our global platforms. At this time, the Twin Cities Assembly Plant does not fit into our global manufacturing strategy."

Did you notice that the world "global" was used twice there?

In other words, Ford plans to move their factory some place where labor is cheaper.

But the truth is that this is happening in every industry.

Between 2004 to 2008, tire imports from China increased 215 percent by volume and 295 percent by value.

During that same time period, tire manufacturing in the United States fell by 25 percent.

It turns out that there are lots of people who are willing to make tires for near slave labor wages in China.

In our new "global economy", American workers are just far too expensive.  So middle class manufacturing jobs are fleeing our shores at a staggering pace.

Since 1979, manufacturing employment in the United States has fallen by 40 percent.

Are you alarmed yet?

You should be.

The truth is that we did not have to merge our economy with nations like China.  China does not have the same minimum wage laws that we do.  China does not have the same environmental protection laws that we do.  In China, companies can treat their workers like crap.  As a result of open trade with the United States, scores of shiny new factories have opened all over China while once great manufacturing U.S. cities such as Detroit have degenerated into rotting war zones.  We continue to expand trade with China even though their communist government stands for things that are absolutely repulsive and has a list of human rights abuses that is seemingly endless.

But politicians from both parties swore up and down that globalism would be so good for us.  Now we have created a network of free trade agreements that would be virtually impossible to unwind.  The following are just some of the free trade agreements in force around the world right now….

The ASEAN Free Trade Area (AFTA)
The Central American Integration System (SICA)
The Central European Free Trade Agreement (CEFTA)
The Common Market for Eastern and Southern Africa (COMESA)
The Commonwealth of Independent States Free Trade Agreement (CISFTA)The G-3 Free Trade Agreement (G-3)
The Greater Arab Free Trade Area (GAFTA)
The Gulf Cooperation Council (GCC)
The North American Free Trade Agreement (NAFTA)
The Southern African Development Community (SADC)
The South Asia Free Trade Agreement (SAFTA)
The Trans-Pacific Strategic Economic Partnership (TPP)

Of course the most important trade organization of them all is the World Trade Organization (WTO) which is constantly working to expand world trade and further integrate the economies of the world.

But the American people don’t understand all this.  They just want the U.S. government to do something to create more jobs. 

But whenever the U.S. Congress tries to do something nice for U.S. workers like raising the minimum wage or requiring companies to give them more benefits it ends up backfiring.

Why?

Because those things make American workers even more expensive and it gives companies even more incentive to send our jobs overseas.

We have recklessly merged our economy with economies around the world that are far less developed than our own.  Unless this thing is reversed, it is inevitable that the standard of living of American workers will be forced down until it approximately matches workers in the rest of the world.

Already, millions of high-paying manufacturing jobs are being replaced by low-paying service jobs.

The U.S. Labor Department’s 2009 Occupational Employment and Wages report found that retail sales, cashiers, general office clerks, food preparation and service workers, and nurses were the occupations with the highest levels of employment in 2009.

Retail sales and food service workers?

Those are jobs for 17 year old kids.

But today apologists for this flawed system tell us that we just need to suck it up and take two or even three low paying jobs because things will never go back to how they used to be.

So has globalism created any winners?

Of course.

As I noted yesterday, the folks down on Wall Street are doing quite well.  New York state Comptroller Thomas DiNapoli says that Wall Street bonuses for 2009 were up 17 percent when compared with 2008.

The reality is that the exploitation of very cheap foreign labor has enabled many large global corporations to make insane amounts of money.  Things are very good if you are at the top of the food chain.  According to Harvard Magazine, 66% of the income growth between 2001 and 2007 went to the top 1% of all Americans.

In addition, our elected officials are doing quite nicely these days.  According to an analysis by The Hill, the 50 wealthiest members of the U.S. Congress saw their collective fortunes increase 85.1 million dollars to $1.4 billion in 2009.

Yes, it is very profitable to be part of America’s ruling class.

Meanwhile, tens of millions of average Americans continue to suffer.  Recently a user on Unemployed-Friends named Jim shared his tragic story….

It is really sad.