We have Exported American Jobs
ALAN GREENSPAN, to David Gregory on “Meet the Press” on August 1, 2010: “I think we’re in a pause in a recovery, a modest recovery, but a pause in the modest recovery feels like a quasi-recession. Our problem basically is that we have a very distorted economy in the sense that there’s been a significant recovery in a limited area of the economy, amongst high income individuals … Large banks, who are doing much better, and large corporations … are in excellent shape. The rest of the economy, small business, small banks, and a very significant amount of the labor force — which is in tragic unemployment, long-term unemployment — that is pulling the economy apart.”
Apple Inc. the company responsible for the iPad, iPod, iPhone, and Mac computers, had revenues $15.7 Billion in the quarter just ended. Their income before taxes was $6.136 Billion. Their net income after taxes was $3.253 Billion. Clearly the cost of making, advertising and distributing all their marvelous electronic gadgetry was the biggest issue for them. It was not their taxes. Of course lower taxes wouldn’t hurt. This data was collected from Morningstar.
All of the items they develop are manufactured in China or other countries that have much lower labor costs. That is the problem facing the United States and all major industrialized nations. Manufacturers must make their products in low labor costs countries to be more profitable.
The problem surrounding service jobs is in many ways even more alarming. Dozens of companies have sent their customer service departments to Asia. My own experience confirms this fact. Companies I have telephoned linking to a nation there include Citi Bank, Dell Computer, Earthlink, and the Los Angeles Times. Labor costs for those functions is at least one fifth the cost in the United States or Canada.
Where does that leave the unemployed Americans who used to work in factories or the service sector? The 22 million people affected by the Great Recession will either take lower paying jobs than the ones they used to have or they will have to find other professions.
Neither Republicans nor Democrats have offered one worthwhile idea that will re-employ those who have lost their jobs during the past two years. Lower taxes will not bring hundreds of thousands of jobs, that are no longer in America, back to these shores. The lower taxes that Republicans promote will add to the $1 Trillion or more of unspent money that corporations are now holding for some future investments and even higher pay for their already well paid management.
You may want to read “Newsweek vs Businessweek: Growing American Jobs.”
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