Jobs Going Overseas

Listeners frequently call my radio program to complain about companies who are sending jobs overseas. Although it is easy to blame the companies, there are many cases in which the companies tried to keep jobs at home but lost out because of competition from Chinese manufacturers.

An article this month in the Washington Post tells the sad story of the Cooper Tire plant in Albany, Georgia. For years, workers heard about their rivals in Chinese factories. Managers urged employees to run production lines faster and more efficiently in order to help the company keep up. But they were unable to do so, and 2100 Georgians lost their jobs. Why?

At Cooper Tire, the wages were $18 to $21 per hour. In China they were a fraction of that. The plant was subject to all the U.S. regulations governing health-and-safety, work hours, and the environment. Chinese plants are exempt from these laws and are notorious polluters.

Trade laws also benefit the Chinese. They are granted free and equal access to the American market. But the rulers in Beijing don’t reciprocate. The Chinese manipulate their currency to keep export prices low and even grant a rebate on it value-added tax on exports to the U.S. while imposing a value-added tax on goods coming from the U.S.

The impact has been predictable. In the last three years, the number of Chinese tires imported to the U.S. has more than tripled. Their share of the U.S. market rose from 5 percent to 17 percent. Over this same period, the share of the U.S. market served by U.S. factories declined by a similar amount. More than 5,000 U.S. jobs were lost.

Pat Buchanan sees this as part of a larger trend. He notes that since 2001 (when George W. Bush took office) the U.S. has run $3.8 trillion in trade deficits in manufactured goods. That is more than twice the trade deficits we ran for imported oil and gas.

Pat Buchanan agrees with President Obama’s tariff on Chinese tires. When two people from opposite ends of the political spectrum agree, perhaps we should listen. I’m Kerby Anderson, and that’s my point of view.