July 6, 1998

 

SOME THOUGHTS FOR INDEPENDENCE DAY

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On the 222nd anniversary of this nation's independence, it brings me no joy at all to report the following.

Manufacturing, and its high-paid jobs, no longer stands as the biggest employer in our country. General Motors is now the largest employer -- in Mexico.

"Since 1978, General Motors has built more than 50 parts factories in Mexico, which today employ 72,000 workers, making its parts subsidiary, Delphi Automotive Services, Mexico's largest private employer," writes Sam Dillon in The New York Times. In Matamoros, "thousands of Mexican workers earn $1 to $2 an hour producing instrument panels and steering wheels for GM cars and trucks." The move to Mexico has become a target of UAW charges that GM is "putting America last."

In Juarez alone, there are 18 Delphi plants. Across from Juarez, in El Paso, Texas, the Times' Sam Howe Verhovek writes, "Four years after NAFTA lowered trade barriers, the cities along Texas' long border with Mexico that had hoped to benefit are struggling to become more than glorified truck stops as they watch their manufacturing jobs go south by the thousands." Unemployment in the border towns is higher than in Juarez and two to three times the U.S. average.

Ford, Chrysler, Mercedes and Volkswagen are also moving to Mexico. One might conclude, then, that all manufacturing that requires large pools of labor is going to leave America. U.S. workers cannot compete with Mexicans who earn $1, $2 or $3 an hour.

So NAFTA has guaranteed an endless hemorrhaging of our manufacturing base out of the United States, while the low-paying service jobs that are left can always go to a virtually endless number of new immigrants. What then happens to native born Americans?

And what about unlimited free trade, a policy never supported by our Founders?

The US is now running a merchandise trade deficit of nearly $260 billion a year, and accelerating. Last year's trade deficit in goods came in at just under $200 billion. Through these gigantic deficits, and World Bank and IMF loans, America is shoveling money out to nations that are capturing ever-larger shares of our home market. Asia has now begun to gear up to "export its way out of recession." Those exports are coming our way.

Emeritus Professor David Landes of Harvard, in a book being universally hailed, "The Wealth and Poverty of Nations: Why Some Are so Rich and Some Are so Poor" compares us to Holland of centuries ago: "As branches of manufacturing have shrunk before foreign competition, enterprises have discharged redundant labor or moved to lower-wage areas. New workers cost less than old. ... Poor immigrants have kept coming. Unions have struck, sometimes only hastening plant closings or transfers of orders to cheaper suppliers."

The British also embraced free trade as a "matter of faith," an "economic religion," writes Landes, and rejected all warnings that their industrial supremacy was vanishing -- for, to accept that was to accept a "challenge to the sacred."

Sacred to some, perhaps. To me, it sounds more like the giant sucking sound.



 

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