November 02, 2004
The Price of Freedom

Pat gets a discount no-prize for bringing us this NYT piece about what might be the final decline of the US textile industry:

For many years, textile and clothing factories in the mill towns of the Carolinas - originally drawn from New York and New England decades ago by the prospect of inexpensive nonunion workers - have been closing one after another as the industry migrated abroad in search of ever-cheaper labor. Now, this gradual loss may be about to turn into a rout.

On Jan. 1, the global system of country-by-country quotas regulating the $495 billion international trade in textiles and apparel is scheduled to be eliminated.

The article goes into great, predictable, detail about how a small innocent Southern town is being decimated by foreign competition and government neglect. Which is, on the face of it, sincerely tragic and rather difficult for a free marketeer to argue against. Until you re-phrase the question:

Should we all be forced to pay six billion dollars more for our clothes to ensure a few thousand people get to keep their jobs?

There are some of you out there who will respond with a raucous "yes!" Who would be quite willing to pay a premium for a "made in USA" tag. To which I say "more power to you!" It's your money, it should be your choice, and if you decide to help these people with your dollars then great, that's the way it's supposed to work.

But the cold hard truth is we're not doing it. To this day I can sing "Look for the Union Label", a jingle to a commercial run thirty years ago in an attempt to get people to "buy American" textiles. It didn't work then, and it's not working now. No matter what smoke and mirrors main stream media and union organizers try to distract us with, the bottom line is it's not the government's fault the textile industry is in free fall. It's ours.

Our penance? Being forced to do our patriotic duty. That's right folks, they're not asking you to "buy American", they're telling you. That is, ultimately, what quotas and trade barriers are all about. Taking choice out of our hands and putting it in the hands of those who think (sometimes with the best of intentions, sometimes not) they know better than we do. Technocratic stasis at its purest.

Noble as saving jobs for rural, poorly educated citizens is, where does it stop? If we save the textile industry, why can't we save the auto industry? The dairy farmers? The steel mills? The bell hops? The travel agents? And who decides which industries get protection, and which ones don't? I may personally be able to afford an extra $4 per shirt, but for a lot of people $4 can make the difference between being clothed and going naked.

To which, of course, technocrats intone the world over "We are the Ones Who will Decide Who Should Pay More and Who Should Pay Less." The truly sad thing is many of you actually believe them. So instead of a free market in which we get to decide who stays and who goes, we end up with a cabal of elite who do whatever they please while ensuring the "rabble" (i.e. you and me) bear the brunt of their decisions about what is fair and what is not.

America has one of the most efficient, mobile, and educated workforces in the world. We work more hours and produce more per hour than any other country on the planet. Sophisticated companies producing sophisticated products are constantly building factories in this country because increasingly wealthy consumers around the world are demanding sophisticated products with phenomenal quality and unsurpassed capabilities that can only be built here. As the world gets wealthier, our supernaturally capable mousetraps are causing them to pave a path to our door.

"Well, that's all well and good Scott", I can hear you say, "but that doesn't hide the fact that textile jobs are still moving overseas. You're just blowing smoke, because obviously we can't compete there, and perhaps anywhere else."

To which I say, to be blunt, bullshit. There's no reason our textile industry can't leverage our superior infrastructure, work ethic, technology, and educated workforce to carve giant chunks out of the hides of anyone who tries to take us on.

Well, no reason except one:

Current trade adjustment assistance, largely aimed at training workers for new jobs, was denounced by factory owners and union officials in this region as too little and too difficult. (emphasis added)

Anyone outside a union who's ever had to deal with one will be the first to tell you about the insanity organized labor imposes on a business. My dad to this day can regale you with tales of bolts on spacecraft that went untightened because union regulations specified only a certain person could turn the wrench. No matter what their (admittedly powerful) emotional appeal, modern labor unions wrap a noose around the neck of any industry that touches them. They may protect, for a time, but when the trap door of competition is opened instead of bouncing on the ground below, coming up bruised but otherwise fine, all a hapless worker will hear is a sickening "snap".

To be honest, I don't think it's fair that someone who's dedicated their lives to a company should suddenly be facing destitution just because the company bosses made stupid decisions. That's why I support easier access to higher education, tort reform and lower taxes to make selling houses more profitable, even loopy things like moving subsidies to make it cheaper to go from one end of this country to the other in search of a job. But I do not think we should all be punished with higher prices just because factory managers and the leadership of the unionized workers refuse to face reality.

I don't say these things as some sort of pseudo-academic who's never had to face these decisions myself. I would still be in Arkansas in a radically different situation if, fifteen years ago, I had been able to find work there. The sad truth is nothing I could do was of value in Arkansas, so after wrenching and horribly disruptive events in my life I ended up (ultimately) in Northern Virginia, where I could send out twenty resumes and get five replies back per week.

If I'd had the opportunity to avoid it all, would I? Without knowing what I do now, facing those risks with no guarantee, absolutely, I would have done anything to avoid it. Am I, my family, my city, my state, my country better off because I couldn't?

The work I do now, that I never dreamed of doing fifteen years ago, helps other people. Helps them keep their family members from killing themselves. Helps others stop the demons from talking them into slashing themselves with razors. Helps them eat a pill instead of a bullet. Helps me raise a family, and buy a house, and pay my taxes.

Yes, it was terrible. Yes, there was pain. No, it wasn't fair. But am I now better off?

What do you think?

Posted by scott at November 02, 2004 06:48 PM

eMail this entry!

If the world is going to pave a way to our doorstep to buy our better mouse trap then why do we have a trade deficit of over 600 billion dollars. China in the next couple of years will produce 47+ percent of the world's textiles. The rural south is not the only place that workers are suffering, read the article again. What if your workplace decides that the people in India could do your job for a lot less than they pay you. Do you think you could send out resumes and have another job in a few days or would you be working at McDonald's? I am hanging on tight and trying to retire next year. During the Bush's first term my retirement fund lost 1/3 of its value. I maybe be a greeter at Walmart next Christmas but I will not be a nurse at the VA. My choice not theirs. The article I sent noted that the unions were part of the reason there was not training but the main reason is that the jobs have gone, high tech jobs to India,etc. We can never again compete if we are playing by different rules that are our trading partners.

Ask Kay Dalton about outsourced jobs. She is sitting drawing unemployment, she didn't have unemployment the first two years she was looking for a job and could only find part time with no benefits. She is not sitting in Ar. she is in Dallas TX.

I don't argue as well as you. But I do see things from a different perspective.

Posted by: Pat on November 2, 2004 11:37 PM

Here's what we have typically done - we've opened new markets for products - products that we've produced ourselves (think about the steel industry, the electronics industry, etc.). We've then been able to bankroll these industries and make them profitable. Once they're established, they become commodities - and they migrate outside our borders - again, think steel and electronics. However, the ingenuity remains here.

Now - how do I say that, especially when the new electronics all seem to come from overseas? Those are commodity items. The vast majority of custom-engineered products are still produced here in the states. As a manufacturer, if I need a custom machine, I drive myself over to my local machine shop and they build it. Why - because it's still cheaper to produce custom parts here. The same can be said for software and the like. Yes, I've heard of some companies outsourcing their software development, but the results have been mixed (basically because you have to deliver incredibly detailed specs to have it worked overseas, there are different laws when you run into disputes, and the fact that American programmers are more knowledgeable on the current computer languages and equipment than Indian counterparts).

This is a good thing - it means we're still the leaders in terms of ingenuity, economics, etc. That means we get paid the most money/item because of the inherent knowledge-base that we possess. Does that absolutely suck for people in areas where the towns basically die? Yes. No doubt there - and this has happened to me as well. I've been laid off twice due to inept management. And guess what? Because I took the time to invest in an education (paid for by myself), worked hard and NEVER assumed that the gov't owed me anything, and have moved to where the work is (not a concept that is too dis-similar to what our ancestors did on the savana...), I'm doing fairly well for myself.

Again, would I like there to be something we could do for these folks? Yes, I would. I'd love to see an even greater emphasis on education - something that is pounded into their heads. I'd also like to see a much greater spirit of innovation in the country in general. The person that the article quotes as saying something to the effect that the factories were always there and should always be there doesn't sound like someone who is looking for innovations. If they were, they might've come up with cheaper ways to produce their products - thusly under-cutting Chinese prices. I'd also really like to see people start to take a long-term view of the future. If they did that, instead of focusing on short-term gains (which is what unions migrated to doing) which ultimately end up hurting the economy, then we wouldn't be in this position as well.

Posted by: Ron on November 3, 2004 01:51 PM

There is much to discuss here. Unfortunately I'm up to my ankles in dealing with my house. Let me try to hit one point.

When the labor movement got seriously cranking in the early 20th century there were efforts to be linked internationally with other unions. This was denounced as Communism and groups who had foreign affiliations were under severe pressure.
Our unions therefore stopped at the shoreline. That is all well and good and beneficial to Americans at large. Wages were held up, allowing for the creation of a strong middle class because if you did not pay someone a decent wage, they could go across the street to the union shop and get a decent wage.
Corporations went global however over the last 40 years. When that did our unions did not, partly due to the Communism charge I mentioned earlier. So now the Corporation had a huge advantage over the workers, both here and elsewhere. They could get people to work for slave wages, indeed one might simply call it slavery, and therefore put anyone paying a decent wage out of business.
We need a universal minimum wage, universal environmental standards, etc. Without such reforms we will continue a race to the bottom which will lead to the destruction of our middle-class (as well as any hope for a middle-class elsewhere) and the bifurcation of our societies.
If all we have is the Uber-wealthy and the poor barely scraping by we have the kindling for a social conflagration similar to the French Revolution. This should be avoided strenuously even if a pair of socks must become more expensive.
Not exactly short I suppose.
Thanks for posting the article.

Oh, and "tort reform" is last thing we need. The only recourse we have with weakened regulation is the courthouse when corporations harm people.
I highly recommend the film "The Corporation" to show some of the reasons why I'm so passionate about this.
Ad Astra Per Aspera,

Posted by: Kevin on June 30, 2009 09:13 AM

Yeah, life tends to interfere. But this'll always be here :).

The opening of KGB archives has revealed that many international union movements, including those in the US, were in fact being bankrolled by Comintern. The charges, in other words, were well-founded.

A counter-argument to "union shops created living wages" is the history of the textile industry after reconstruction. Jobs fled from heavily unionized northern plants to virulently non-union Southern states, to the point many papers in the 20s and 30s decried the South "stealing" industrial jobs from the North.

Union jobs do not create living wages, economic growth does. Unions impede economic growth by constraining business flexibility. Unions create unsustainable business conditions through their wage and work rules.

The problem with top-down regulations is not what happens two weeks later, but what happens two, ten, twenty years later? Create a universal minimum wage, which artificially raises the cost of labor beyond what the local markets will bear, and job growth will be frozen. Create universal environmental standards, which artificially raise the price of land and capital resources, and economic growth will be frozen.

And who gets to set the standards? Do you really mean to suggest that the entire world should be paid at least $6.55/hr US? That a power plant in a remote corner of Sibera should meet exactly the same environmental constraints as one located near Chicago?

Posted by: scott on June 30, 2009 01:38 PM
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