Buying American has a price.
I took a quick glance at the cost of Asian call centers and the price of sending a container from China to the U.S.
Americans are re-thinking globalism. Politicians on both the populist left (Bernie Sanders) and the populist right (Donald Trump) have made a similar point that global trade creates problems in America. The Democratic establishment under Bill and then Hillary Clinton positioned Sanders as fringe. Trump changed the GOP. He condemns Paul Ryan-style free market conservatism and the GOP has mostly gone along. Market-oriented establishments of both parties were clear about who it was helping -- their donors -- but were in denial about who it was hurting. Trump changed it for Republicans. Democrats, too, are adjusting.
American's like things cheap. Business school economics is at odds with political life on the ground. Workers lose their jobs when factories move to low-wage countries, most conspicuously China. Workers are voters.
Globalized world trade brought some 700 million people in China out of crushing poverty, vastly improving their lives. But it also meant that wages for American workers have been flat for 40 years. Democrats argued that more and better education was the magic bullet. Everyone could go to grad school or coding boot camp. Republican politicians caught on earlier than Democrats that most workers didn't want to change and didn't want to re-train. Republicans, especially Trump, said the problem was external not internal. Don't blame America. Don't blame the worker for being uneducated. Blame Mexico and China.
That economic message lines up with the culture war message. Democrats want to fix Americans of their racism, misogyny, homophobia, right along with their job skills. Blame Americans. Republicans think old-fashioned Americans are just fine as they are. The problems are outside, either with woke ideas by liberals or job-stealing foreigners. Blame them.
I had a recent dose of buy-American reality. I experienced an unsatisfactory call to the help line of ADT, the alarm service for my farm house. A person spoke heavily accented English in a noisy, crowded call center. It wasn't his fault. I blamed ADT. Then I had a good experience when I called ADT the next day, having pressed the menu button for cancelling service. This agent was a native speaker of English in a quiet call center in Texas. ADT was making a business decision. "Help" was overhead, a cost, so go for cheap. "Cancel service" was lost revenue, so go for quality.
Call center employees in the Philippines make about 25,000 Philippine pesos a month, which translates to about $450. Indian call center employees make about 15,000 Indian rupees a month, or $200. So there you have it. The American call center employee is at least seven times as expensive as offshoring it. Hard to compete on price.
I put on a tee shirt this morning. The tee shirt was an American brand made in China. I paid $15 for the tee shirt. Every 40 foot shipping container can carry about 50,000 tee shirts. Costs to ship from ports on the Pearl River Delta to Los Angeles are back to about $2,000. It costs four-cents per shirt to ship it here. The similar container could handle 75 full-size refrigerators, only $30 each on a $2,000-plus item.
Americans who presume that physical distance and transportation costs will protect American workers need to re-think. Free worldwide communication and efficient shipping are probably good things for the world, but not for American workers. Protecting American workers means pitting them against American consumers, ourselves. Americans educated by free-market economics professors need to reflect on the "externalities" they learned about in the same classes. Free trade and a connected global economy creates victims here. They vote.
We have seen in other countries, and now the U.S., that disgruntled people are open to populist demagogues. Trump is a symptom. Indicting and convicting him won't fix the underlying problem that created a large discontented group of people open to a populist demagogue. The politics of a democracy needs to adjust enough to protect democracy. It is in the interest of both parties to facilitate that.
[Note: to subscribe to the blog and get it delivered by email every day go to: https://petersage.substack.com Subscribe. The blog is free and always will be.]
17 comments:
Obviously global trade is a huge issue. This is nothing new, at all. Democrats have advocated for fair, INTERNATIONAL wage, labor and environmental standards.
I am so sick of hearing that tired, old cliche about coding (thanks to the android). It is old fake news. Try substituting "high tech," which is broader and makes much more sense.
There are two sides to the equation. Wages may be lower, but the goods are cheaper. The flip side is higher wages AND higher prices. We can't have one without the other, so pick your poison.
Another fallacy is that manufacturing no longer exists in the USA. This is not true in the South. One of your blogs recently mentioned the factories in South Carolina, for example. But manufacturing still exists in other Right To Work states, not only SC.
Bad customer service is very common these days. It seems to be an epidemic, in person or on the phone. Another option is to contact the company via social media or direct messaging. Also, demand to speak to the supervisor or manager. Take the time to make a complaint, when necessary.
It is Democrats, not Republicans, who advocate for social safety nets for poor, low income and middle class Americans, including the minimum wage, unemployment insurance, universal healthcare, etc. Democrats, not Republicans, support workers' rights and unions.
It appears that this blog was written out of anger and frustration after a bad customer service experience. We have ALL been there, and it sucks. But please do not promote misinformation and fake news.
By the way, there is a cell phone service company that promotes their "all US-based customer service" in their television ads. They also promote their low-cost service plans and industry customer service awards.
Maybe we should try singing the praises of the companies who offer real "customer care" and a good product or service at a fair price.
Wikipedia has a list of auto assembly plants in the United States. Hopefully it is complete and up to date, but reader beware (as always). Readers can also Google (or whatever search engine you prefer) for this information.
Some folks make lame excuses for the many people enamored of a traitor like Trump, claiming they’re just hapless victims of globalist elites who shipped their jobs overseas. People in the U.S. want a wage they can survive on, so the “elites” shipped the jobs overseas to countries that don’t, enabling their "victims" to buy all the stuff they want at the cheap prices they insist on. When circumstances cause prices to rise, people pitch a fit and there’s hell to pay.
Don’t expect Walmart to be stocked with items made in America anytime soon. If it were, all those victims would just shop somewhere else.
The low prices enabled by global trade are the economic equivalent of fentanyl. Our globalist elites have addicted a significant fraction of the country to both.
If we pulled the industrial jobs back here, people who got those jobs, and got their self respect and dignity back, would be willing to pay the higher prices for goods made in the USA. People living good lives would not be vulnerable to the siren songs of demagogues.
Our globalist elites forced American labor to compete with workers earning third world wages. I still remember Ross Perot, saying NAFTA would produce a “giant sucking sound“ as all the jobs left America.
We now have knowledge workers in the mainstream media (who typically supported globalism) worried about competing with AI, whose cost of labor is essentially zero. What goes around, comes around.
I highly value and respect older people. As we all know, this blog is written by a senior American and attracts an older audience (possibly mostly white and male also).
Some, but certainly not all, members of the Silent Generation, Baby Boom Generation (born 1946-1964) and even Gen X (born 1965-1980) resent and were harmed by the acceleration of technology in the workplace and the rise of globalism in the decades after Worl War II.
But this is 2023. The high tech, global economy and culture are normal for Millennials, Gen Z and Generation Alpha. Maybe this blog needs to accept some of the realities of today, instead of complaining about the Clintons in the 1990s. And remember, in spite of everything, Bill Clinton was re-elected. The Clintons were considered relatively young, hip and forward thinking at the time ("bridge to the 21st century," health care for all Americans, "Don't Stop Thinking about Tomorrow," "I didn't inhale").
Globalism and technology are facts of life. What exactly did the former Occupant accomplish for working Americans? Did I miss something?
Millennials and Gen Z will be the biggest voting block in the next election. We need to start thinking more about what they want and expect from our leaders. They are not stuck in the 20th century. (No offense, I was born in the last century also.)
I keep thinking that Americans don’t somehow DESERVE a better lifestyle than people born in poverty stricken areas. So what’s wrong with sharing the wealth with Chinese, Mexicans, Guatemalans, etc? I have a relative who spends more on disposable crap for his kids than a large number of Chinese workers. How fair is that?
Having tried the Cell phone company you mention, and canceling it after 30 days of continuous dropped calls, or no service available, and having several friends with the same type service issues, I opted to return to my original, and current cell service Company.
There are hidden costs.
Air, land and ocean pollution. Health and safety issues will cause unrest in foreign lands. The quality of a lot of this stuff is bad. American consumers buy cheap goods that don't last, which they discard, creating waste, and buy again so they don't actually save any money in the long run. This is also dependent on low oil prices, which are subsidized by tax payers.
Inflation is also a result. Overall quality of life suffers as people struggle to afford basic necessities. Is there a connection between drug addiction and despair?
Republicans' only value is to protect the profits of their donors. This only works if they also pander to the prejudices of religious fanatics, homophobes, and racists, as we increasingly see a majority reject conservatism and unfettered capitalism as fundamentally corrupt and unpatriotic.
Democrats do promote "Buy American", but not loudly enough, and not by pushing harder on legislating worker protections, starting with the minimum wage, tax reform and universal health care.
I hope the Anonymous commenter is correct, that Millennials and Gen Z will be the biggest voting bloc in the next election. I just wish they could also be the occupants of Congress and the White House. Boomer's have done enough damage, but don't seem to know when to quit. Poor Feinstein can't remember where she's been recently, and most Republicans can't even name the president. Too much dementia in our ranks.
PS: There's something awfully self-defeating about blaming others for our addictions, whether it's "globalist elites" or drug cartels.
When you destroy the livelihoods of entire communities by exporting their jobs to the Third World, It’s not surprising that some of those people would fall into negative behaviors like crime and addiction. There is a spectrum of mental health, and not everyone is equally capable of handling the stress of becoming economically and socially adrift.
These are our people, despite the globalist elites’ willingness to toss them into the trash; it is those elites who belong in the trash instead.
While I appreciated almost all of this column, I think you erred in attributing the stagnation of U.S. wages to the cheap manfacturing overseas: "Globalized world trade brought some 700 million people in China out of crushing poverty, vastly improving their lives. But it also meant that wages for American workers have been flat for 40 years." The wages in the manufacturing jobs that stayed in the U.S. haven't been the problem. The problem has been in the service sector, which increasingly outdistanced manufacturing as a percentage of the workforce. Service workers historically depended on the federal minimum wage to set their wage. We all know that it has gone up far far more slowly than the cost of living, thanks to the political power of corporations. Like manufacturing and mining, the service sector wages could have improved had the union movement made significant gains there, but it hasn't. Walmart is the largest private sector employer in the U.S., and it has successfully stymied efforts to unionize its workers. Wages in the service sector finally began rising in 2022 when employers had so much trouble hiring, plus blue cities and states raised the minimum wage much higher than the federal.
There’s a correlation between addiction, whether to alcohol or other drugs, and criminal activity. The national Institute of health lists peer pressure, physical and sexual abuse, early exposure to drugs, stress and parental guidance as factors that affect a person’s likelihood of drug use and addiction. They must have overlooked the global elites. Regardless, the key to overcoming the problem isn’t waiting for jobs to come back (there are plenty) but accepting responsibility for one’s own behavior – no excuses.
What Herb said is true, but this also means that our globalist policies helped China become the menace to world peace and freedom that it is today. We defeated Soviet communism and then went right on to create the next monster.
Correction:
Based on additional research, Millennials and Gen Z will be the biggest potential voting block in 2028, not 2024. My apologies. However their power and influence are increasing each year.
Readers can Google "Millennials and Gen Z in 2024" to learn more. Brookings has a helpful article dated February 27, 2023.
If China only knew that our globalist elites account for its success. They’re probably under the impression their own policies made China a force to be reckoned with, but no. It was the same globalist elites that created the Trump phenomenon and so much crime and addiction in the U.S. We’re all only pawns in their game, so no need to blame ourselves for our behavior - the devil made us do it.
Clearly China had something to do with its own rise but so did US trade policy, designed and implemented by our globalist elites. China didn’t give itself “most favored nation” status.
Post a Comment