If we look at the results of the case study about Shovel Inc. what do the people of the United States get out of this market model. US Steel loses a customer and may have to lay workers off, American workers lose their jobs at Shovel Inc., the rest of us get to save around $3 on a snow shovel that now has a plastic handle instead of wood and the blade is possibly made of a lower quality steel. In my book this isn't that good of a result for the citizens of the United States. The question is what can be done to change it, and should something be done to change it.
I would say that definitely something needs to be done about it. The blue collar middle class is very quickly disappearing from our country and they have always been the rock bed on which the rest of the economy is built. Of course IT people are really just fancied up blue collar types and so we still have them, but I know so many IT people that have been laid off as jobs are outsourced to India, etc. it's a bit frightening. The outsourcing would be another issue and go back to the discussion about what was not covered by Frontline so we won't get into that right now.
So now that we know we need to do something what can we do. The most obvious would be to put restrictions on imported goods, making the appeal of moving manufacturing outside of the US not as appealing. These could be simple tariffs or more complex tariffs that are geared at forcing other nations to insure their people are payed a higher wage. The appeal of cutting labor costs by 98% is one of the main appeals to moving jobs out of the United States. If we limit or don't allow imports from nations that don't pay a decent wage then we would limit the number of companies willing to move their jobs out of the United States.
We could also look at the big box stores as the new manufacturers of our age, since it is mostly service industry jobs that are replacing the manufacturing jobs. We could insure that they pay their employees a decent wage, provide them insurance, and retirement benefits. This would be similar to the support that employees got during the labor movements reforming industry.
We could also work harder at encouraging our citizens to save more and spend less. Our voracious appetite for consumer products is one factor that has led to this new market model. With so little savings in this country and such a large trade deficit we are sitting in a position where the survival of our economy is completely dependent on other nations. This is a risky position in which to find ourselves.
We could also increase the taxes on the wealthiest individuals in our country. In our country today the wealthiest individuals can easily get out of paying a dime in taxes every year. With the jobs moving out of the country and the wealthiest individuals reaping the rewards of the increased profits, none of that increased income is finding its way back into helping the government function or keep the deficits at a reasonable level.
We could subsidize certain industries that we feel must be protected, like steel and other heavy key industries that are seen as necessary for a country to survive on its own. During World War II we rose to power in large part because we could survive without being dependent on the rest of the world. It is important to insure that we can always feed ourselves, clothe ourselves, and supply key products like steel.
We could take a much stronger stance against other countries who refuse to open up their borders to imported US goods, and work hard to encourage self sustaining economies in third world countries. Instead of El Salvador using every inch of its farm land to produce coffee to be sold in the US market we should encourage them to create a self sustaining economy that creates a more balanced market system, rather than one which only generates revenues for the large coffee farm owners. Helping to develop a more independent market and middle class in these countries helps to protect US jobs because it raises the salaries being paid in such nations.
As you can see there is a lot that we can do to change things. But what specifically should we do? That will be the next series as we begin to actually look at the numbers and figure out what we need to do to help insure a stable economy in the US.
