IE Business Daily Business news for the Inland Empire.
Carrier Corporation, a leading American manufacturer of Air Conditioners announced this week that it was closing its plant in Indianapolis, laying off 1,400 workers, and moving operations to Mexico. Ford Motor Company also announced it was doubling production of vehicles, in Mexico. Oreo Cookies announced it is closing its manufacturing plant in Chicago and moving it to, yes you guessed it, Mexico!
Disney and Southern California Edison recently laid off hundreds of IT workers after forcing those employees to train their replacements, foreigners brought in through the H1B Visa program.
Does anyone see a pattern here?
When the North American Free Trade Agreement (NAFTA) was ratified by a Democratic Senate and officially signed by Democrat Bill Clinton it was hailed as a new day for American jobs and economic growth. Similarly, The Trans-Pacific Partnership (TPP) agreement hailed by Democratic President Barack Obama, fast tracked by a Republican House and Senate, and signed last week is supposed to similarly benefit American prosperity.
Yes, they really believe this.
America has been bleeding good-paying, skilled manufacturing jobs to third-world countries for the last three decades. There are reasons for this. Some of them are practical and some are simply greedy.
The United States has become a regulatory nightmare for companies to do business in. The national government has imposed ridiculous and unnecessary environmental standards, labor regulations, energy standards and moratoriums.
Some states, like California, have piled on to these regulatory burdens with illusory efforts to control CO2 emissions (what people exhale as part of breathing) and even stricter labor and business standards which have driven the costs of everything higher that Californians have to purchase, for everything from gasoline to electricity to buying a house. California also boasts by having the highest poverty rate in the country and thirty percent of the country’s welfare recipients.
While some of these regulatory standards have made improvements, the continual push for even stronger regulatory burdens runs into the economic law of diminishing returns where the costs increase dramatically for fewer and fewer improvements. These laws, like the California Environmental Quality Act are now routinely used by environmental and labor extremists not to improve the quality of life, but to stop development and leverage labor agreements.
Yes, California and the United States governments are partially responsible for the loss of jobs, both to other states and to other countries.
But the story doesn’t end there. American Corporations, which have benefited from over two centuries of American economic freedom and American work ethic have become less “American” and more international. American corporations founded in our country care less about their workers and their country than ever before.
Enabled by free trade agreements and encouraged by negative regulatory and taxation policies, they now find doing business in corrupt countries like China and Mexico more profitable while maintaining price levels for goods that were supposed to benefit Americans.
Can anyone imagine Ford changing over its manufacturing plants to build tanks or airplanes if a war were to occur as they did during both World Wars?
The acceleration of American jobs going overseas and over our borders is not lost on the American public. Voters are fed up with what they see as the selling out of the American Middle Class by politicians of both parties.
Donald Trump and Bernie Sanders are expression of this angst which is now boiling over against the “mainstream” of both Republican and Democratic parties.
The Republican Presidential Primary has been roiled by these issues which are evident in the focus on illegal immigration and the exporting of American jobs, caused by Donald Trump, while the Democrats are more focused on the vacuous argument of undefinable “income inequality.” Both issues are directly relatable to the stagnant wages of the middle class and the reduction of opportunities for economic advancement which are the current malaise in America.
But only Donald Trump is actually talking of the cures for these situations; the reduction of job stifling American regulatory policies, rewarding companies that continue to employ American workers, punitive policies against those that do not, and controlling America’s borders.
When American corporate Icons like Disney and Edison no longer care about Americans, everyone can see what the problem is.
