“…Truth be told, globalization to this point has created few, if any, new jobs in or outside of America. In fact, with the exception of workers in Communist countries, like China and Russia, it’s actually caused a decline in the standard of living for most working people globally…”
It’s The Economy Stupid… The Global Economy… Stupid
By Si Contino
As printed in The Bucks County Courier Times
With most large American corporations now becoming American multinational corporations – incorporating off shore, paying little to no taxes, employing cheap foreign labor – some important new questions need to be asked.
First, what is the American economy? Second, by what metric do we gauge the vibrancy of that economy and its ability to generate personal prosperity; and third, are the old standard measures: the stock market, unemployment, inflation, and job creation, still valid, truthful economic indicators?
If one is able to gauge the vitality of America’s economy via the stock exchange; how then, does its strong performance benefit the average American? The fact is… for the most part it doesn’t.
With the advent of globalization, (formerly American companies now having workforces, infrastructures and technologies located worldwide), there is little direct relationship between them and the micro-economies of most American’s.
One often wonders then, why it is that positive market performance is touted by the mainstream media as if it were something the average working American should celebrate; as it’s the transnational investor who reaps, most directly, those market windfalls.
Truth be told, most working Americans hold no market investments whatsoever. If they do, they’ve usually acquired them through an employer sanctioned benefits package. Unfortunately, that perk automatically makes them, and their jobs, more vulnerable to a global workforce bereft of such advantage.
Today, because of globalization, every employment benefit from healthcare coverage through retirement income is in jeopardy; as all workplace benefits, in and of themselves, constitute competitive disadvantages.
The next question becomes: can the US economy maintain a competitive advantage, globally, if forced to maintain social programs like: Social Security, Medicare, and Unemployment Compensation, etc., when having to compete with the third world?
The answer: of course not – but that’s where privatization comes in. Privatization will allow these programs to devolve and die – out of sight – within the private sector; causing much less pain politically and without a direct cause and effect linkage to globalization.
In circa 1982, President Reagan changed the methodology for calculating unemployment. He determined that the US military should be included in the statistical baseline used to calculate unemployment. Unfortunately, that not only skewed the unemployment figures it also made economic extrapolations generated from them meaningless.
Moreover, rather than extract unemployment data from income tax forms, our government chooses instead to draw its unemployment figures from the number of claims filed; which means once your benefits have expired, working or not, you’re automatically off the rolls and presumed employed statistically.
The US government doesn’t include some very costly everyday expenses in their inflation statistics. Many of these items have recently experienced hyperinflation. Items such as tolls, and fuel – even domestic expenses: haircuts, plumber’s bills, etc., are excluded from statistical analysis.
What then is the major negative inflationary pressure? YOUR WAGES! Luckily, when adjusted for inflation, they have remained stagnant over the last thirty years.
Job creation: The federal government doesn’t maintain statistics regarding the number of jobs lost to the global economy. So when someone quotes job creation numbers, those figures conveniently enough, can’t be measured with respect to concurrent job losses.
Also, there’s a built in relativity within political discourse when discussing global job creation. To our federal government a job at Wal-Mart or McDonalds is equivalent to a job at Ford Motor Company or US Steel; irrespective of the vast differences in pay, healthcare benefits or working conditions.
Additionally, according to the Department of Labor, most new American jobs are created by newly formed small businesses. However, according to that same agency, upwards of 90% of those new businesses will fail within their first year of operation… taking with them any newly created jobs.
Truth be told, globalization to this point has created few, if any, new jobs in or outside of America. In fact, with the exception of workers in Communist countries, like China and Russia, it’s actually caused a decline in the standard of living for most working people globally.
What’s needed today is a whole new lexicon that speaks truthfully to America’s working people regarding their economy, their country and its changing social contract. Only then will our government regain its lost credibility.
However, if that conversation does take place, one salient question must be answered: qui bono?
About the author
Si Contino has been a lifelong resident of Bucks County; is married and the father of two adult children. After pursuing undergraduate studies in the 1970’s, he acted in various capacities within the corporate setting, including owning and operating his own business.
Send Si Contino an E-mail: letters@phillyBurbs.com