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The New Economyís Latest Growth Industry:
Pink Slip Producer

Our Buy American Mention of the Week!
by Roger Simmermaker
August 25, 2003

Pink slip production may become Americaís most promising industry. If you donít have a job and are searching for one, you might try locating a company whose core business is churning out pink slips. Like bowling balls, paper is heavy, and thereís a good chance the position of pink slip producer wonít be lost to China since the shipping costs would be too high. And from the looks of the economic landscape, pink slip manufacturing could provide job security for a handful of Americans for most of the first decade of the new century.

You definitely arenít alone if youíre searching for employment. According to the Wall Street Journal, 611,000 jobs have disappeared since March 2002. Textile manufacturer Pillowtex closed 16 factories in July and laid off 7,650 people, generating more work for the pink slip industry.

Few Americans currently realize that the cost of mass layoffs to the economy as a whole is much greater than a simple rise in the unemployment rate, although it seems more of us are finally waking up.

America has locked itself into a vicious cycle that few understand. First, we allow our existing manufacturing jobs to gravitate overseas because we fail to protect them from cheaper foreign imports in the name of free trade and the spirit of global leadership. Then we spend hundreds of millions of dollars each year in trade-related assistance for the privilege of laying off hard-working Americans to retrain them for other jobs, usually at lower pay.

On top of that, we bid for private jobs with hundreds of millions of public (tax) dollars to lure foreign-owned manufacturers to this country so they can replace the original American-owned manufacturers we failed to protect. And, of course, foreign-owned companies pay fewer taxes back into the system compared to American-owned companies.

Mississippi Sen. Trent Lott says his state can "afford" to grant Japanís Nissan (44.4% owned by Renault of France) $363 million in direct incentives to create new jobs and make up for the steady loss of manufacturing jobs the last 24 months. Many of these job losses came right out of the textile industry. But Senator Lott isnít stopping there. He wants to lure Korean-owned Kia to his state next, which is sure to siphon millions more out of state and federal treasuries.

Laid off workers from the sixteen shuttered Pillowtex plants will receive $20.6 million of the $37.5 million North Carolina Governor Mike Easley requested to fund job retraining and two-thirds of workersí health care costs.

Spending millions of dollars on job retraining for existing U.S. workers to replace jobs we should have protected in the first place means many from the younger generation may never even be educated to enter Americaís "New Economy" workforce. The state of Virginia, reeling from 6,700 lost jobs because of foreign trade, is cutting 500 full time professors and offering a whopping 2,800 fewer classes at state universities. There isnít shortage of college-age students, just a shortage of the money available to educate them.

Trade protectionists donít argue against the prospects for newer and higher-skilled jobs for Americans, but what we donít understand, and what free trade advocates have failed to adequately explain, is why we must sacrifice so many "Old Economy" jobs for the "New Economy" jobs we are trying to create. It would be at least of some comfort if the "New Economy" jobs being created outnumbered the "Old Economy" jobs that are being destroyed, but they donít.

There is evidence, however, that some free traders might be coming around on the trade issue. Democrat front-runner Howard Dean, who supported NAFTA back in 1993, recently wrote a letter to the Wall Street Journal claiming that "one out of every four U.S. workers is free-lancing, employed in a temporary job, self-employed, or working part time." He went on to say that "this year more children will live through their parentís bankruptcy than through their parentís divorce" and that "teachers are being laid off, highways lack repairs, firehouses are closed." Democrat presidential hopeful Richard Gephardt, of course, has been a trade protectionist for years, although admitting so would be political suicide even today.

After the recall fiasco in California is over, Americaís failed trade policy may be back on the front burner as we continue to lose jobs to China and consumers get tired of looking at "Made in China" labels.

More and more Americans are beginning to connect the dots between mass job losses and the "Made in China" label. It is this writerís hope that a significant number of voters will be choosing their candidates for 2004 primarily on their stances on trade policy, because our nationís trade policy affects all Americans and not just those employed in manufacturing.

The 2004 election could literally transform Americaís trade policy into one that is fair for American workers in every industry. If that happens, protectionism might even become cool again as it was in the days of Abraham Lincoln and Teddy Roosevelt, much like patriotism became cool again after September 11. And only Americans who manufacture pink slips would need to worry about job security, and that wouldnít be a bad thing.


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