The Courts Continue to Erode Our Jobs and Pay

Last Friday, a Federal Bankrupcy judge gave the green light to tear up it's contract with it fight attendants. It will be ineresting to see how pay and benefits are affected.

Unfriendly Trade Policy

I copied this snippet from the Kansas City Star. http://www.kansascity.com/mld/kansascity/business/15060639.htm.

Farm and labor leaders at a summit in Washington, D.C., last week called current U.S. trade policy detrimental to U.S. agriculture.

In a trade summit sponsored by the AFL-CIO and the U.S. Business and Industry Council, farm and labor industry leaders agreed that the World Trade Organization’s trade policy has created an uneven playing field for the U.S. and caused a record trade deficit. The current trade agenda has put American farms, businesses and workers in jeopardy by giving a competitive advantage to foreign producers, they said.

“Across the board, in farming, technology and manufacturing, American jobs are being outsourced,” said Tom Buis, president of the National Farmers Union.

The union maintains that currency manipulation, labor standards and environmental health and safety standards must be equal worldwide for domestic producers to compete fairly on the global market.

A Senator Steps UP

When research a news bit I heard about Ford laying off 22,000 more US based hourly employees, I came across an article in the Detroit News that I caught my eye. It lead me to a press release by Senator Stabenow (D-Mich). Here's the text from the release-

WASHINGTON -- A federal commission advising Congress on economic policies with China will hear a U.S. senator Monday who will argue the United States can no longer "ignore the fact that China is cheating" in committing unfair trade practices.

The six-year-old U.S.-China Economic and Security Review Commission will meet at the University of Michigan-Dearborn and will hear testimony from United Auto Workers President Ron Gettelfinger, U.S. Sen. Debbie Stabenow and U.S. Reps. John Dingell, D-Dearborn; Sander Levin, D-Southfield; and Thad McCotter, R-Livonia. Also testifying will be Leo Gerard, president of the United Steelworkers union.

The hearing, "China's Impact on the U.S. Auto and Auto Parts Industries," comes as Ford Motor Co., General Motors Corp. and Delphi Corp. are in the midst of cutting 80,000 jobs.

Automakers are encouraging parts suppliers to consider outsourcing to countries like China that have far lower labor costs, though they also criticize China for artificially keeping the value of its currency low.

"American companies are held hostage by China's requirements and then, receive no recourse when trade laws are violated," Stabenow will testify, according to an advance text of her remarks obtained by The News. "It means jobs are at risk, not because of competition, but because China is cheating the system. China is stealing patents, producing counterfeit products, and manipulating currency markets. These actions are illegal, period."

Stabenow casts the fight as a struggle to defend good-paying jobs. It's the latest in a series of events, largely by Democrats who argue the Bush administration isn't doing enough to insist on fair trade with China. Michigan Republicans in Congress have pushed the administration to take a tougher line with China.

"As a country and as the state of Michigan, we all should be fighting for these jobs. This is our middle class and this fight is about maintaining our way of life," according to Stabenow's text. Last year, the U.S. trade deficit with China hit an all-time high of $202 billion, 25 percent higher than 2004.

The Michigan Manufacturing Technology Council has estimated that the competitive advantage a $10 million manufacturing plant in China has over a comparable plant in the United States would largely be erased by a 30 percent currency revaluation by the Chinese.

The Bush administration has taken some action.

On March 30 the administration and the European Union filed a complaint with the World Trade Organization over China's "unfair" treatment of U.S. auto parts.

China's taxes on imported auto parts discourage automobile manufacturers in China from using imported auto parts in the assembly of vehicles, the United States said. China has regulations that impose a tax on imported auto parts equal to the tariff on complete automobiles.The Big Three CEOs have made what they call currency manipulation by China and Japan a top issue, saying it is an unfair trade practice.

The countries devalue their currencies, making U.S. products more expensive there and Chinese exports cheaper, they argue.

Its time that more of our elected officals step up and face what's really happening and quit pandering to big business. Write your congressman today!

A Senator Steps Up

When research a news bit I heard about Ford laying off 22,000 more US based hourly employees, I came across an article in the Detroit News that I caught my eye. It lead me to a press release by Senator Stabenow (D-Mich). Here's the text from the release-

WASHINGTON -- A federal commission advising Congress on economic policies with China will hear a U.S. senator Monday who will argue the United States can no longer "ignore the fact that China is cheating" in committing unfair trade practices.

The six-year-old U.S.-China Economic and Security Review Commission will meet at the University of Michigan-Dearborn and will hear testimony from United Auto Workers President Ron Gettelfinger, U.S. Sen. Debbie Stabenow and U.S. Reps. John Dingell, D-Dearborn; Sander Levin, D-Southfield; and Thad McCotter, R-Livonia. Also testifying will be Leo Gerard, president of the United Steelworkers union.

The hearing, "China's Impact on the U.S. Auto and Auto Parts Industries," comes as Ford Motor Co., General Motors Corp. and Delphi Corp. are in the midst of cutting 80,000 jobs.

Automakers are encouraging parts suppliers to consider outsourcing to countries like China that have far lower labor costs, though they also criticize China for artificially keeping the value of its currency low.

"American companies are held hostage by China's requirements and then, receive no recourse when trade laws are violated," Stabenow will testify, according to an advance text of her remarks obtained by The News. "It means jobs are at risk, not because of competition, but because China is cheating the system. China is stealing patents, producing counterfeit products, and manipulating currency markets. These actions are illegal, period."

Stabenow casts the fight as a struggle to defend good-paying jobs. It's the latest in a series of events, largely by Democrats who argue the Bush administration isn't doing enough to insist on fair trade with China. Michigan Republicans in Congress have pushed the administration to take a tougher line with China.

"As a country and as the state of Michigan, we all should be fighting for these jobs. This is our middle class and this fight is about maintaining our way of life," according to Stabenow's text. Last year, the U.S. trade deficit with China hit an all-time high of $202 billion, 25 percent higher than 2004.

The Michigan Manufacturing Technology Council has estimated that the competitive advantage a $10 million manufacturing plant in China has over a comparable plant in the United States would largely be erased by a 30 percent currency revaluation by the Chinese.

The Bush administration has taken some action.

On March 30 the administration and the European Union filed a complaint with the World Trade Organization over China's "unfair" treatment of U.S. auto parts.

China's taxes on imported auto parts discourage automobile manufacturers in China from using imported auto parts in the assembly of vehicles, the United States said. China has regulations that impose a tax on imported auto parts equal to the tariff on complete automobiles.The Big Three CEOs have made what they call currency manipulation by China and Japan a top issue, saying it is an unfair trade practice.

The countries devalue their currencies, making U.S. products more expensive there and Chinese exports cheaper, they argue.

Its time that more of our elected officals step up and face what's really happening and quit pandering to big business. Write your congressman today!

IndiaInfoIT

If you want a good chuckle, just jump here to see the propaganda blog about offshoring. They show studies about how offshoring is good and India isn't responsible for job losses in the US, its task automation that is the main culprit. If you read down the menu they then list how they are predicted to pick up 79,000 legal jobs by 2015. Which is it task automation or the offshoring of our jobs for cheap labor?

Just as a side note, tragically, this weeks bombing of the train stations leaves one to wonder if the dispute with Pakistan over Kashmir will lead to further unrest in the area. What will the Multi-nationals do then?

Labor Rates in China

Back to the Bureau of Labor Statistics again, in a reseach paper filed by Judith Bannister of Bejing Javelin Investment Consulting Company the real hour labor rates were investigated. In the report she cites the difficuty in obtaining consistant and accurate data across the provences. It's reported that the fully burdened average hourly wage in China is $0.57. Bear in mind this is for an employee that is forced to work 14 to 16 hours a day in often times unhealthy conditions, six to seven days a week, live in employer provided apartments for which they a high percentage of their take home, purchase inadequate meals provided by the employer. These condtions have eeb discussed in previous posts. These same employers rarely let the workers take time off even for marriage or bereavement. So even though they may make $0.57 an hour what is the effective net pay of the average employee?

Is this free trade or free labor for our US multinational firms?

You can view the report here.

A Great Site

While researching today I came across this site. It does a great job of discussing the issues.

American Economic Alert

Please take the time to check it out.

Labor Statistics

The Bureau of Labor Statistics reports for June show an increase of 121,000 in June. Service sector jobs and mining (interesting in light of all the minig accidents lately) showed upward trends. The unemployment rate for June remained unchanged at 4.6%.

There is a spot of good news (cut and pasted from the June report);

In the goods-producing sector, manufacturing employment edged up in June(+15,000), following a small decline in May. Over the month, employment wasup in transportation equipment, machinery, and electrical equipment and appliances.

Mining employment grew by 6,000 in June. The industry has added 114,000 jobs since its most recent low in April 2003, largely reflecting gains insuport activities for oil and gas. In June, construction employment was essentially unchanged for the fourth consecutive month.

Dumping

My son arrived in Tokyo today, besides missing him and wondering what's he doing, it sparked memories of how we first feared the Japanese taking our auto manufacturing from us, then our TVs. Japan still has our cars, Toyota may well be the largest car manufacturer in the world by years end, but it lost much of its electronic business to China. Does Japan fear what China can do to its jobs like we do here at home?

Last night on Lou Dobbs, Kitty Pilgrim filled in as the achor and covered a very interesting story about China dumping agricultural products in the US and our government is nearly powerless to stop it. It seems that our recourse is to fine the company doing the dumping, but before pour government can collect, the company goes out of business and reopens under a different name.

Here's a quote from the show--

PILGRIM: Tonight, this nation's failed trade policies are jeopardizing the future of U.S. farmers. Washington is refusing to uphold trade laws and collect anti-dumping duties against communist China, and Congress is standing by as China dumps cheap agricultural products on the American marketplace.

CASEY WIAN, CNN CORRESPONDENT (voice-over): Bill Rhodes is a central Florida honey producer. Since 2003, he's seen American honey prices plunge from $1.50 a pound to less than 80 cents today. He blames a flood of even cheaper Chinese honey and the failure of the U.S. government to collect anti-dumping duties owed by honey importers.

BILL RHODES, HONEY PRODUCER: We are getting killed, not only people in the bee industry, but any other form of agriculture that has to compete with cheap labor.

WIAN: Rhodes' employees earn $9 to $12 an hour. Fuel costs are also squeezing him. But China is the biggest problem. China paid just over $1 million in anti-dumping penalties to U.S. honey producers in 2005. But the Customs Department failed to collect nearly $10 million owed by Chinese importers. They often exploit a loophole in U.S. law allowing importers to delay paying anti-dumping duties for years. When Customs come to collect, the importers are out of business, operating under another name.

MICHAEL COURSEY, TRADE ATTORNEY: This is fraud on a scale that Customs was totally unprepared to meet. The Chinese, who are engaging in this type of activity, are exploiting weaknesses in U.S. law.

WIAN: Other American agricultural products, including garlic, canned mushrooms, apple juice concentrate, and crawfish, are also impacted. In fact, for every dollar Customs collected in the anti- dumping duties on those five products since 2003, it has failed to collect $15. Critics say Congress, not Customs, is to blame for failing to require importers to post a cash deposit to cover anti- dumping duties.

Is this what our government terms as free trade? Free for the Chinese maybe! Free to do what ever it wants to harm our economy. Free trade maybe, but certainly not fair trade. How many more jobs do we have to lose before our representatives, senators and other elected officials wake up and taste the bitter taste of honey dumped on our shores?

The Real Effect of Lost Manufacturing Jobs

A Chicago Tribune article today discussed a woman who is living in extreme poverty. Here's the link Chicago_Tribune.

Some interesting paragraphs in the article are worth quoting here:

Illinois also leads the region in a grim subset of that category: the group of nearly 724,000 residents, including Sirko and her children, trapped in what experts call "deep poverty."

Specifically, deep poverty means a family of four is living on $9,675 or less per year. For the past year, Sirko's income--donations from friends and family, plus a few hundred dollars made through treasure hunting--has been about $3,000, not including food stamps and the recent arrival of welfare.

Such dire straits often get overshadowed amid the million-dollar homes and upscale malls of Chicago's five collar counties, though poverty is increasing there too, with nearly 200,000 people counted as poor, according to 2003 Census figures. The state's surge in poverty, as documented in the bipartisan Heartland Alliance's 2006 Report on Illinois Poverty, can be traced to a combination of factors: the loss of more than 225,000 manufacturing jobs in the last 15 years, soaring housing costs and cuts in social services due to the state budget crisis of the past several years.

It's worth your time to read this as the woman featured in the article lost her good paying job when her job left Illinois. The article quotes some very interesting statistics.

Independence Day

On this Independence Day Weekend, it is hoped that our politicians take the time to reflect what true independence means, free from undue influence by lobbyists whether it is business or the over influence of religions. Freedom from trade imbalance and budget deficits to return our great nation to its once high status in the world opinion. Most importantly return to fair trade policies not free trade policy.

It's time for our elected officials to remember why they were sent to Washington--- to represent the people who sent them there.

On a separate note may we all remember the men and women who are will to pay the ultimate sacrifice in the service of this great nation!

Apple Abandons it's India Support Center Plan

BusinessWeek reports that Apple has shelved it's plan to build a support center there. Apple's reasons were not clear according to the report. They have laid off several workers there.

Could this be just the tip of the iceberg? Let's hope that others will follow Apple's leadership.

The Irony Continues

First, an article in BusinessWeek, IBM calls it's outsourcing "strategic people sourcing". What a nice term. Do you read low wages and lost jobs into the quaint phrase?

When the manafactuing jobs started to leave this country during the Clinton administration, the buzz was this was good for our ecomony, the workers of decent paying jobs would simply be retrained and earn even higher paying service jobs. As even more "free trade" agreements were signed, white collar jobs left our shores for low wage counties such as India. Now your taxes are reveiwed in India, by someone earning $12,000 a year that doesn't eaven pay US taxes.

Even worse, 40 states use offshore call centers for their unemployment compensation. This is so ironical, the government condones and even supports our jobs leaving this country, the displacement of our highly productive workforce and when these people who losst their jobs go to file for unemployment benefits they actaully working with the very people who displaced them. Not only did we lose the tax revenue from our workers, we pay (eaquals higher trde deficet) some cffshore company that does add to our tax coffer thats pays some low paid worker who also pays no taxes to the state. Wouldn't it make more sense to provide a job to a local worker and collect taxes to help relieve the burden to the state?

Pensions - Hidden Burden

A Wall Street journal article in on Friday's front page discusses how big businesses are complainiing that pensions are making them uncompetitive in the market place. It's a very interesting article, in it they discuss items like GM cuts retirement for 42,000 workers, however the retirment plan for the "rank and file" works is flush with cash, "containing $9 billion more than need to meet thier obligations for years to come." Yes thats a 9 followed by 9 zeros.

Accourding to the article, what's hurting them is the executive pensions. That separate program is burdening GM by $1.4 billion and growing. Here's the most interesting quote of the feature "Even as many reduce, freeze, or eliminate pesions for workers-complaining of the costs- their executives are building up even bigger pensions, causing the companies' financial obligations for them to balloon."

It's an interesting article about how executive pensions are growing while the workers shrink. I highly recommend you read it.

Free Trade or Free Labor?

According to the China Labor watch, the average worker in China works 100 hours a week and earns 900 yuan a month, recieves no benefits, job security or a voice in their working conditions. Most are not earning enough to support their families.

How long can this last before the worker stands up and demands a competetive wage? Is this a stable economy in the mid to long term? If China tries to fix it, the foriegn investment will leave for cheaper markets.

In the meantime, Americans are losing thier jobs for what we would consider in our civilized society for near slave labor in China. If the average American realized the working conditions in the Far East, would they really buy goods in Wal*Mart?

You might find this report particularly interesting...

http://www.chinalaborwatch.org/upload/Wal-MartLungcheongReport.pdf

Exporting America

How many communities have been devistated by outsourcing and offshoring? Lou Dobbs does a great job in his book Exporting America describing what happened to towns like Sycruse, NY and Galesburg, IL.

I've created a link to Lou's site, it's worth the read.

Ford Plans Future Expansion in Mexico

As Ford works hard to convince you it's an American company, the Detroit Free press has learned through a leaked document that outlines how it intends to invest $9.2 Billion into Mexican operations. According to the article that I read this morning in USA today, a plant that was planned to build in the USA could go to Mexico as well as significant other investments south of the border.

The document titled "Way-Forward-Mexico" shows how Ford could save $1.8 billion a year with the plan. A spokes person for Ford acknowledges the document but neither confirms or denies the plan is moving forward.

With the current cut-back in hourly workers and future investments moving to Mexico, whose going to be left that can afford to buy a Ford? Low paid Mexicans or unemployed US workers?

So Where do You Begin?

Ever time you make make a purchase you are making a choice. You pick out size, you determine if it's your style and color, how much can you spend. Yet many of us never stop to think where it was made and who made it. Was it made in a factory with proper lighting and saftey procedures? Was it made by an environmentally responsible company? Was it made by adult or child labor? Was it constructed in a sweat shop? We rarely ask ourselves these questions. Free trade is not fair trade.

You can use Google or MSN or any seach engine for "made in America" or "buy American" as a start. You can also take a look at Lou Dobbs site which I posted his link and look at whose exporting our jobs.

When you shop look for where its made and make your choice. The product you buy just might save your job, literally.

Michigan Governor Calls on Bush for Fair Trade

I spend a lot of my time in Michigan, so I pay attention to the politics there. I've not heard much that convinces their Governor understands how to attract jobs to the state which i s ranked as one of the worst states in economic development. But the last few days have have turned my head.

In her radio address to the State on June 9th, made a call to the President for fair trade, not free trade. Here's a quote from the State's webpage summarizing her address and actions;

“There is no question that Michigan has the best workers on the planet,” Granholm said. “But our workers and manufacturers need a level playing field. Right now, they’re being asked to play with one arm tied behind their back.”

Earlier this week, Granholm sent a letter urging the Bush Administration to use the new trade negotiations with South Korea to eliminate that country’s unfair trading practices so American and Michigan auto manufacturers have a fair opportunity to sell their products overseas. The Governor said any new trade agreement must lead to open and immediate access to South Korea’s market for domestic auto manufacturers.

Last year, South Korea sent 730,000 vehicles to dealerships across the United States, while the U.S. exported only 4,000 vehicles to South Korea. This is the result of South Korean trade barriers that discriminate against cars, trucks, and SUVs built right here in Michigan. “In a manufacturing state like Michigan, the automotive capital of the world, these issues are so important for our families,” Granholm said. “That’s why I’ll continue to be a strong advocate and a loud voice in favor of trade that’s fair to our products, our businesses, and our workers.”

Here's the link to the page if you wish to read it yourself;
http://www.michigan.gov/som/0,1607,7-192--145097--,00.html

We need more of this from the various states and our elected officials.

Our Auto Market

When I was young, many many years ago, the Japanese had just made significant inroads into the US automobile market. The over-confident Big 3 auto makers were making huge gas guzzling cars. The Japanese car makers were making these small gas efficent cars. The gas crisis hit and guess what cars were selling. Chrysler even required a government bail-out (meaning your tax dollars). BUY AMERICAN bumper stickers were prevailant everywhere.

Three decades later, the Big 3 are back to making even bigger cars and along comes three dollar and more a gallon gas. Foreign car producers are still kicking Ford and GMs butts. (I left Chrysler out as it's now foreign owned). For the most part the American manufacturer lost its competiteve edge and rely on rebates to sell their cars. Both Ford and GM are facing huge losses and the bonds are facing junk status.

With all that doom and gloom, there is still light. Ford and GM still produce some good models that are nearly competitive in the market today. The best thing you can do, if you are a concerned citizen such as myself is to look for American made products including your cars when making your next purchase. Buying American, like the old bumper stickers said, supports your friends and neighbors, reduces our trade deficit, and might even help keep your job here at home.