week of 2/11/04
  Cheap goods cost jobs 
By Becky Johnson

John Davis, a worker at Blue Ridge Paper Products’ Canton mill, is launching a side venture this spring. He’s going to begin breeding fancy show rabbits. In his quest for reams of cage wire and other supplies needed to start his brood, Davis stumbled across a dealer that made him rethink his orders.

“Our wire is all American made,” the supplier told him over the phone when Davis questioned the slightly higher prices.

It hit close to home for Davis. The paper mill he works for just announced a workforce reduction of 100 jobs. He and his wife then logged hours of Internet research on the origin of the wire sold by other suppliers.

“I’ve found it is slightly more for the American-made wires,” Davis said. “I bargained the guy down to within about $15 to $20 a case. I’m willing to pay that. If there were more people who took the time to do that, it would lead to more American jobs.”

This answer was the top response by those stopped on the streets in Waynesville last week and asked for ideas on how to stop job loss.

“If we’re able to buckle down as a city, a county, a state and a nation to buy American — and it would take a concerted effort — it would bring more jobs here,” said Maureen Miller of the rural Haywood County community of White Oak. Miller admitted to driving a Honda, but added her Honda was made at an American auto factory.

Conversely, Paul Runnebaum of Clyde recounted his disappointment last year when he took apart the headlight on his supposedly American-made Harley Davidson to discover the lamp parts were made in Germany and Sweden. Runnebaum didn’t have a solution for American job loss, but said that “somebody better stop something. Pretty soon nobody ain’t going to be working and the government is going to have us all on welfare, even me and you.”

Runnenbaum related the issue to a recent episode of “60 Minutes” where a reporter compared the price of golf clubs — Callaway clubs cost $2,500, but a duplicate model made in Southeast Asia sells for $250. “It costs more to buy American,” Runnenbaum said.

Instead of standing by while cheap foreign labor undercuts American workers, Davis said the government should step in with tariffs.

“Level the playing field so companies here can compete without going out of the country,” Davis said.

But are Americans willing to give up $15 coffee makers from Taiwan and $2 hand towels made in India?

“I like cheap things,” said Bill Serle of Waynesville, the publisher of a regional tourist guide. Serle amended his answer, claiming that he would buy more American made products but he can’t find them on the shelves any more. “Thank God I’m retired,” he added.

“I would pay more, but not substantially more,” Donna Towsey of Waynesville said of her willingness to buy American. Towsey is still carrying a guilty conscious after telling her employees there was no money for raises last year.

“Yes and no,” said Loretta Moody, an auto service worker in Waynesville. “Wal-Mart used to be all made in America. I used to be proud to shop there. We’re getting quantity these days instead of quality.”

Moody’s mother has been through two plant layoffs in five years. She now works at Associated Packaging plastic plant in Waynesville, but Moody’s now-cynical attitude toward the economy leads her to believe it is only a matter of time until that plant shuts down, too.

News of the downsizing at Blue Ridge Paper came at a particularly tough time — on the heels of four other plant closings in a three-county area for a total of 1,400 job losses in 13 days.

Generally, corporations are rewarded by the private market system as well for cutting jobs and moving plants overseas. These moves cut costs and therefore increase a company’s profits, at least in the short term.

The same month 1,400 WNC workers were sent home with pink slips, they flipped on the evening news to beaming reports of the improving economy.

Over the past 15 months, the Dow Jones Industrial Average has gone up 40 percent. But many of these profits came at the expense of American workers, who were cut loose in order to improve profits, boost stock prices and please the shareholders insatiable demand for higher returns. A recent report in the Wall Street Journal cited big spending is back by Wall Street stock traders, who received a 25 percent increase in their end-of-year bonuses over last year. Lamborghini, Porsche and Rolls-Royce purchases in Manhattan are up. Private jet companies are reporting a boost in lavish party and pleasure flights by Wall Streeters.

“The rich keep getting richer,” Paul Runnebaum of Clyde lamented. 

Free trade

As presidential candidates stump the country with talk of jobs and the economy, Western Carolina University Professor Bob Mulligan says the real solution is going to come from the private sector. In the meantime, the country should forget about competing in the traditional manufacturing arena, at least on low-end goods like Nikes or Levis.

“I think we can be competitive in producing high value goods, but not the goods that Western North Carolina has traditionally specialized in,” Mulligan said. American workers need to maintain their role as the innovators and creators of new technology and goods. As other countries start producing the item cheaper, Americans must be prepared to constantly one-up the world with fresh merchandise and commodities to be emulated.

“I don’t know what we’re going to come up with over the next five or 10 years, but somebody is going to come up with these new products and new industries,” Mulligan said.

An unfortunate trend now, however, seems to be the outsourcing of high-tech computer jobs to India and other tech savvy countries. Even service industry jobs, like customer service call centers, are going overseas to countries where workers speak fluent English.

Nonetheless, leveling the playing field by imposing tariffs on imported goods is a terrible idea, Mulligan said. Higher prices at Wal-Mart would be the least of the worries.

“If you think we have a bad economy now, you don’t want to see what would happen if we imposed tariffs,” Mulligan said. “Any jobs you can preserve in a protected industry you’re going to lose jobs spread out through many other industries.”

Take the steel tariffs, for instance, said Mulligan. They helped American steel workers but hurt the American auto industry, which had to pay more for steel. In addition, America would be subject to penalties under the World Trade Organization. For every tariff American imposes, other countries would retaliate with tariffs of their own against U.S. goods. 

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