The rise of the supra-national mega-corporation over the past few decades has coincided, not surprisingly, with the political push to allow easy movement of corporate assets and jobs from one country to another. Governments eagerly bought into the idea — encouraged, of course, by their allies and campaign-funds-suppliers in the corporate world — that this off-shoring of manufacturing jobs to the developing world would bring prosperity to formerly impoverished regions, while simultaneously allowing the Western, developed countries to concentrate on nurturing the so-called “knowledge-based economy”, those sectors that required a highly-educated workforce. (I believe that this would be what is known by politicians as a “win-win”.)
The theory was that both these workers in the new Western economy and the corporate entities that off-shored their production would be able to benefit from the lower cost base offered by manufacturing in a poorer, developing country — the companies because they would enjoy larger profit margins, and the workers because, in their twin role as consumers of these manufactured goods, they would enjoy lower prices.
Well, it seemed like a good idea at the time, I suppose. Too bad it really didn’t work.
Oh, it worked pretty well for the companies, of course. By moving manufacturing to any area of the world where the local economic conditions are crummy enough to make even what would be a pitiable wage by Western standards look enticing, corporations have been able to reap fat profit margins (and this despite costs particular to off-shore manufacturing, such as after-hours counterfeiting of one’s product, shoddy manufacturing leading to increased recalls, and costs of transporting finished goods across oceans.)
Who it hasn’t worked for, unfortunately, are the citizens of the Western, developed economies who used to constitute the middle class. Remember the middle class? They were the workers who used to actually make things, for domestic consumption and for export, and who earned a reasonable wage for doing it. They were the ones whose jobs were centered in their communities, owned by local businesses, rather than by trans-national corporations who might decide tomorrow that an extra 0.05% could be added to the bottom line by moving production to somewhere — anywhere — else where there is no minimum wage, or sketchy environmental standards, or a slightly more corrupt government.
And those high-salaried, knowledge-based jobs that were supposed to replace the lost manufacturing jobs? Didn’t happen, alas. As can be seen from the graph below, which is derived from data released by the U.S. Congressional Budget Office, the average annual incomes for the vast majority of Americans (one assumes that the Canadian
data would not be very different) have stagnated at best, or declined at worst, over the past 30 years.
So I was happy to see the article in USA Today’s Money section entitled “Buy American Gets New Emphasis” (link here). As consumers, we need to realize that our buying choices have real consequences for our communities and our neighbors. When we make a conscious and thoughtful decision to buy something that is produced locally, or sold in a locally-owned business — or both — we are helping to create an economic future that is more vibrant, more stable, and more satisfying. When we mindlessly choose the cheapest product, sold by a company with no real stake in the economic health of the community (hey, it can always move somewhere else, right?), we sabotage our future and that of our children.
We as consumers and as workers need to sit up and take notice of the fact that buying locally is good for us and for our communities. It keeps jobs here, it keeps tax revenues here, and those jobs and tax revenues will keep our towns and cities vibrant and healthy places to live for generations to come.
Let’s not be those who know the price of everything, but the value of nothing. Happy Labor Day.