Sunday, March 21, 2004
Protectionism and Outsourcing
This article by Ernest Hollings in the Washington Post makes a strong case against free trade. One of the key points is that trade between unequals is not really free. Tariffs are necessary to protect our standard of living. He also makes an interesting historical case for tariffs, showing how they were used to build America's initial manufacturing capability under the guidance of our founding fathers.
He gives the example of a 47-year old factory worker, who's job is sent overseas: "The Washington mantra of "retrain, retrain" comes up short. For example, Oneita Industries closed its T-shirt plant in Andrews, S.C., back in 1999. The plant had 487 employees averaging 47 years of age. Let's assume they were "retrained" and became 487 skilled computer operators. Who is going to hire a 47-year-old operator over a 21-year-old operator? No one is going to take on the retirement and health costs of the 47-year-old. Moreover, that computer job probably just left for Bangalore, India."
Realistically, that factory worker could probably be retrained as an auto repair technician or construction worker. However, he would need some help to relocate, get training and feed his family in the transition. It would seem fair to me that the company moving jobs overseas pay for this.
I expect to see both protective tariffs and legislation that makes corporations pay for retraining over the next several years. It's really inevitable. We can't keep going the way we are or we will be a third world country.
This article by Ernest Hollings in the Washington Post makes a strong case against free trade. One of the key points is that trade between unequals is not really free. Tariffs are necessary to protect our standard of living. He also makes an interesting historical case for tariffs, showing how they were used to build America's initial manufacturing capability under the guidance of our founding fathers.
He gives the example of a 47-year old factory worker, who's job is sent overseas: "The Washington mantra of "retrain, retrain" comes up short. For example, Oneita Industries closed its T-shirt plant in Andrews, S.C., back in 1999. The plant had 487 employees averaging 47 years of age. Let's assume they were "retrained" and became 487 skilled computer operators. Who is going to hire a 47-year-old operator over a 21-year-old operator? No one is going to take on the retirement and health costs of the 47-year-old. Moreover, that computer job probably just left for Bangalore, India."
Realistically, that factory worker could probably be retrained as an auto repair technician or construction worker. However, he would need some help to relocate, get training and feed his family in the transition. It would seem fair to me that the company moving jobs overseas pay for this.
I expect to see both protective tariffs and legislation that makes corporations pay for retraining over the next several years. It's really inevitable. We can't keep going the way we are or we will be a third world country.
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