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Lightsaber: The Era of Offshoring U.S. Jobs Is Over


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2020 May 13, 8:08pm   504 views  1 comment

by MisdemeanorRebel   ➕follow (12)   💰tip   ignore  

Some say crises don’t so much alter the course of history as accelerate changes already underway. That’s certainly the case when it comes to the coronavirus pandemic and the offshoring of American jobs.

In recent years, businesses have been rethinking the way that overextended, overseas supply lines expose them to unacceptable risks, a reassessment that got a boost from President Trump’s reorientation of U.S. trade policy. A lemming-like desire for “efficiency” had caused many of them to move manufacturing over the past two decades to China, Vietnam and Indonesia, among other places.

They did so to save on labor costs or to avoid environmental standards, but that wasn’t the whole story. Offshoring was a trend that morphed into a craze. Egged on by Wall Street analysts and management consultants, or simply swept up by the herd mentality of their peers, businesses came to see offshoring as something they were expected to do to serve the interests of shareholders. Many failed to weigh independently the long-term costs or meaningfully consider alternatives.

For business, this strategy paid off in the short term. Cheap labor meant higher profits. But for America, the effects were traumatic. The United States lost five million manufacturing jobs. That, in turn, devastated towns and contributed to the breakdown of families, an opioid epidemic and despair.

Trade policy actions in the 1990s and 2000s magnified this disaster by making offshoring easier. The decision in 2001 to establish permanent normal trading relations with China is the most regrettable example. Until then, the president had to make a determination every year whether to renew so-called most-favored-nation status, which allowed China to export to the United States at mostly single-digit tariffs, and Congress could challenge that determination.

China’s most-favored-nation status was always renewed, but the uncertainty effectively raised the risk-adjusted costs of investing there. After 2001, that uncertainty went away — along with at least two million American jobs.
https://www.nytimes.com/2020/05/11/opinion/coronavirus-jobs-offshoring.html?smid=tw-share

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1   steverbeaver   2020 May 14, 12:32am  

Nope. You can count on American voting habits, particularly women's, to make sure those jobs stay gone.

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