The False Promise Of Anti-Globalization
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Politics and Activism

The False Promise Of Anti-Globalization

The future, or lack thereof, of the US Manufacturing class.

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The False Promise Of Anti-Globalization
The Center for Land Use Interpretation

2016 has undoubtedly been one of the strangest years in political history, and not just in America where a businessman and a career politician have become the two most disliked presidential candidates in history. The United Kingdom voted to leave the European Union in the referendum colloquially known as “Brexit”, the Philippines elected Rodrigo Duerte, an unapologetically politically incorrect candidate who has praised extra-judicial killings of criminals (an act multiple human rights groups have fiercely condemned), and the Turkish President, Erdogan, has been limiting the freedom of the press and of speech in his country while, at the same time, courting entrance into the European Union by limiting the ability of refugees to use his country as a conduit into Europe. More than at any time in recent memory, current global politics has been driven by fear and anger, despite the world being less violent and dangerous than at any point in history.

One of the main threads within this cloak of fear is a large push from Western countries against globalization. Trade deals and treaties have become the target of anger regarding the loss of jobs to overseas markets, fears regarding immigration for both economic and security reasons, and rising nationalistic tendencies, both in the United States and around the world. In the United States, most of the anger towards globalization stems from trade deals, such as the North American Free Trade Agreement (NAFTA) and the not yet passed Trans-Pacific Partnership (TPP), upending manufacturing jobs. Candidates from both ends of the political spectrum (Bernie Sanders and Donald Trump) have promised to repeal NAFTA and veto the TPP if elected to the presidency, an idea which has wide bipartisan support.

Unfortunately, anger directed at trade deals is built on the shaky assumption that, if we eliminate these trade deals, manufacturing jobs will return to the United States and Americans in the rust belt states can get back to work. So the idea goes, for example, if we remove free trade between Mexico and the United States, companies will not be willing to pay the import fees to sell their products in the United States market and will relocate back to the United States, despite the higher labor costs.

Manufacturing jobs in states such as Ohio, Pennsylvania, Michigan, and Indiana would return and these states would go back to their former glory as manufacturing giants. Baltimore, Youngstown, and Pittsburgh would once again become the chief producers of steel used in US construction; Ohio would once again be a hub for production of pipes for purposes as diverse as construction and sewage. However, it is extremely unlikely that the United States could ever return to its status of an industrial giant due to a multitude of factors, whether or not the USTR purges itself of all trade deals. Furthermore, the loss of trade deals such as NAFTA and an exit from the World Trade organization (WTO) would have a multitude of negative effects on every American consumer.

First of all, let’s take a closer look at the claim that an exit from trade negotiations would create jobs in America. Quite simply, there are a huge number of factors that would prevent that pipe dream from ever coming true. Due to the United States being first and foremost a capitalist economy, companies will only move their jobs back to the United States if it is cheaper than staying overseas and importing products into the States. Therefore, any factors that would severely limit profitability decrease the likelihood of American manufacturing jobs returning, even if we force companies to pay importation fees. Firstly, since NAFTA was implemented in 1994, national environmental regulations set by the Environmental Protection Agency (EPA) have become more stringent, which increase the costs of manufacturing in the United States as all byproducts and contaminants produced have to be better accounted for and mitigation efforts have to be more frequent than in, say, a factory in Mexico.

Secondly, and most importantly, automation would likely take the place of American workers. Already, companies such as German manufacturer Adidas have begun to replace their workers with robots. In the United States, where manufacturing workers are typically unionized and therefore receive a much, much higher pay and more benefits than their counterparts in Mexico and Eastern Asia, companies that relocate to Pennsylvania would see their labor costs skyrocket. In Mexico, the companies pay sweatshop workers around $3 per day (which is absolutely inhumane, I am in no way condoning this behavior, only reporting it); in the United States, companies would need to pay their unskilled assembly line workers almost four times that daily wage PER HOUR. If there were comparable rates of efficiency between Mexican and American labor (and the companies would need to hire the exact same amount of workers to produce the same products), companies would see their labor costs rise over 30 times on salary costs alone. The best way for companies to avoid this rise in costs would be to replace their workers with robots. Rather than employing several hundred employees to work assembly line, the company would only need to hire several engineers to serve as maintenance and a few workers to ensure product quality.

So, while we would see a small uptick in employment rates in these areas, they would be for white collar workers who don’t currently have much trouble finding employment, not the blue collar workers who were originally punished with the passing of NAFTA. And with the robots performing assembly, efficiency and product quality would be improved, saving the company more money in the long run. It’s foolish to think companies won’t seriously consider this method of “insourcing” labor as it will increase their profits substantially when compared to employing American workers. This scenario would sink the belief that eliminating trade deals would bring back manufacturing jobs; companies may return but that doesn’t guarantee that jobs will. Furthermore, as automation spreads to other industries such as transportation, we could see a huge decline in non-skilled employment in the United States. Truck driving is one of the most common jobs in the United States, and, as Tesla and Google achieve the self-driving vehicle, many, many people will lose their jobs and need to find other, non-skilled labor.

Lastly, even if companies do return, their ability to produce livelihoods for their workers would be significantly diminished and the meager benefits wouldn’t even extend to all communities that used to depend on a manufacturing economy. The city I live in, Baltimore, MD, once a major producer of steel, won’t experience the benefits of new manufacturing jobs for one simple reason – the port is too shallow for new, huge container ships to enter. And this problem isn't limited to Baltimore; the harbors of Portland, Wilmington and Charleston are also too shallow and bridges in ports in New Jersey and New York are too low for container ships to pass under them. Our current infrastructure significantly limits the United States' ability to be a major exportation hub. Luckily then, if our trade deals are rescinded, we likely wouldn't even be effective exporters, so the infrastructure issue would be minimal in the long run. Without trade deals, all companies that send products to overseas markets in Europe or Asia would have to pay the same importation fees they were trying to avoid by relocating to the United States. While most of their consumers live in the United States, they would lose a significant share of their market by being unable to sell their products overseas, forcing downsizing and layoffs for their new workers. Really, the only companies that could survive in this new paradigm would be the small companies that exclusively produce their products for American consumers (who, more than often, are already manufacturing in the United States). All other companies would be strangled by the lack of market access and issues with exportation infrastructure.

So it is clear that anti-globalization gives an assortment of sparse benefits for some manufacturers while not actually creating more jobs for Americans. If there are few benefits for manufacturers, are there any benefits for the average American consumer? That could help explain the overwhelming high support against TPP. The answer is very clear: absolutely not.

As stated numerous times above, if we eliminated all trade deals than all items than all companies that export to the US would have to pay tariffs. Now, the companies are likely to just pass those fees onto the consumer by raising prices. Seems harmless enough, right? Wrong. A huge amount of goods bought and sold by regular people in the United States are imported. The United States imports a majority of its crude and refined petroleum from Canada, so oil prices would rise. Most naturally grown foodstuff (except for corn) is imported, so supermarket and restaurant prices would rise substantially. Are you a daily coffee drinker? Probably not for much longer, as Hawaii is the only state in the United States that grows coffee beans. Other major imports include computers, cars, tires, liquor, medical instruments, and a whole host of products used in laboratory research. Imports touch nearly every industry and every American citizen; eliminating trade deals would make living here unequivocally more expensive. One of the only ways for the United States Government to mitigate the damage this rise in the cost of living would cause is to raise the minimum wage. While this is already an extremely polarizing issue, raising the minimum wage to $12 or more would have one clear impact relative to this article, businesses would have an even larger incentive implement automation in their factories, eliminating any of the benefits that anti-globalization could have caused.


So what is America to do? The families affected by the loss of blue collar jobs haven't gained much financial independence in the last few decades. Their anger regarding their loss of employment is very legitimate, but, unfortunately, there aren't any viable solutions to bringing those jobs home. Similarly, truck drivers could soon see themselves out of work if self-driving cars become as popular as they are predicted to be. Our innovative economy is going to leave several large portions of our population behind. In my opinion, the best way to approach this issue is through increased social spending. Providing better public education and more options to make higher education more affordable (such as expanding the pell grant program) would help break the cycle of blue-collar employment. Likewise, welfare programs and universal health insurance coverage allow those that lose their jobs to have a less meager livelihood and more resilience towards economic shocks. Anti-globalization will not solve the issues surrounding US manufacturing jobs, and the United States government needs other solutions to help those hurt by NAFTA and other trade deals.

I would also like to thank my dear friend Jeff Freeman for inspiring this article through our always interesting conversations. Thanks for always challenging me to think critically and inspiring me to work for what I believe in. I also appreciate how shiny your head is.

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This article has not been reviewed by Odyssey HQ and solely reflects the ideas and opinions of the creator.
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