Monday, December 12, 2011

What's really killing American Jobs

The real issue with the American Dream, circa 2012.

We can’t compete.  This isn’t because we’re lazy and stupid, it’s because the structural impediments are too great.  No matter how hard we work or how smart we are, we cannot make anything as cheaply in the US as it can be made elsewhere, period, so be it, amen.  Doesn’t matter if it’s software or marbles.

There’s a famous interview that I saw on the Colbert Report, in which the CEO of the last US company to make marbles.  The link to this interview is below:

She, a small business leader, has one plea:  LEVEL THE PLAYING FIELD.

For a manufacturer of marbles from China, which she says is subsidized by their government (I don’t know if that’s ture - haven’t checked), they can produce marbles and ship them anywhere in the US for $0.28 / lb - bringing them half-way around the world, to any site in America.

For her US-based company, their energy costs alone, for Natural Gas, are $0.21 / lb, or 75% of the total cost for the Chinese company

So, I want to make sure that this point is not lost.  Even if you take American Labor, facilities, regulation, etc etc etc COMPLETELY out of the equation, she is spending 75% as much just for her energy as the Chinese company does to produce and ship the product, soup to nuts.

Apple makes a premium product (the i-phone) that they sell for a fantastic profit.  When last I checked, they had more cash on hand than the federal government.  You could reduce their tax rate and that of their top executives to zero, and it’s still not going to cause them to start manufacturing their iphones on US soil.  The ethos of the American corporation is "Why make a 1% profit when you can make a 300% profit?"

We have structural problems that destroy American jobs, and no one is even talking about fixing them.  Currency exchange rates, foreign subsidies for foreign industry, our health care system that burdens businesses with all of that expense and responsibility, tax systems that reward companies for hiring contractors rather than employees, and on and on and on.  

We need to drop the political crazy-talk and start having the conversation about what is REALLY killing American jobs, and start working the problem.

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