Last month Thomas Friedman wrote an op-ed piece in the New York Times on a bill in
Congress meant to punish China for its alleged currency shenanigans. Mr. Friedman urged that the bill be pushed forward in order to scare the Chinese but argued that enacting it would be a terrible thing because it would lead to a trade war. Given our enormous trade deficit with the Chinese, I am not so sure why a trade war with them would be so bad, but what do I know.
What most interested me about Mr. Friedman’s op-ed piece was his advice on making a “sustainable dent in our unemployment problem. Mr. Friedman posed the question, “how do we adjust our labor market to the simultaneous intensification of globalization
and the I.T. revolution, the biggest thing happening in the world today?” Mr. Friedman baldly stated, “we are never going to get those labor-intensive assembly jobs back from China — the wage differentials are far too great, no matter how much China revalues its
currency.” But not to worry. All those Americans currently out of work due to the impacts of globalization will simply need to shift to a new type of work. Mr. Friedman urges the adoption of a policy designed to promote jobs that entail “high-value ideation”. “We need to focus on “Imagined in America” and “Orchestrated From America” and “Made in America by a smart worker using a phalanx of smarter robots.”
According to NPR, sometime in the next few weeks, the Whirlpool Company will be shutting down its Fort Smith manufacturing plant; as a result more than 1,000 people will lose their jobs. Many of those workers have worked their entire adult life at the Whirlpool plant. Prior to reading Mr. Friedman’s op-ed piece, I had never before read the
word “ideation” so I had to look it up in the dictionary. The definition of ideation is “the
capacity for or the act of forming or entertaining ideas.” I wonder how these 1000 workers in Fort Smith will transition into a “high-value ideation” position? Who will pay them once they have fully developed their ideation skills? How many of us has ever developed an idea that someone would be willing to pay us for?
Don’t be dismayed though. If your ideation skills are stunted, there are other jobs that may be more in your wheelhouse. Mr. Friedman discusses Hong Kong as a possible model for the U.S. to emulate as we move from a manufacturing country to a post-manufacturing country. Mr. Friedman points out that while Hong Kong used to have a robust manufacturing sector, these days 97% of its economy entails the provision of services. “One reason is that Hong Kong has transformed itself into a huge tourist center that last year received 36 million visitors —23 million from China. The U.S. Commerce
Department says 801,000 Mainland Chinese visited the U.S. last year, adding $5
billion to the U.S. economy. More Chinese want to come, but, for security reasons, visas are hard to obtain. If we let in as many Chinese tourists as Hong Kong, it would inject more than $115 billion into what is a highly unionized U.S. hotel, restaurant, gaming and tourism industry.”
I am not sure if Hong Kong’s embrace of a service economy offers many lessons to this country. The city-state of Hong Kong has a population of 7 million people. The continental nation of the United States has a population of 300 million people. Hong Kong is the world’s eleventh largest trading entity but the overwhelming majority of its “exports” consist of importing things from China and re-exporting them to places like the United States. I am fairly skeptical that America is going to replace Hong Kong as China’s “re-export” country of choice given that Hong Kong is, last time I checked, part of China. And while geography is not my strong suit, I think Hong Kong is closer to mainland China than we are.
Still Mr. Friedman’s main point is that we might be able to transform unemployed manufacturing workers into waiters, maids, and masseurs for hordes of Chinese tourists clambering to visit this country. All we need to do is convince 23 million Chinese tourists to visit our shores each year and bingo, we will have developed a $115 billion Chinese tourist industry, Today, three-quarters of all Chinese tourist visits entail Chinese tourists going to Hong Kong or Macau; Macau, like Hong Kong, is also part of China. Hong Kong and Macau appear to be much closer to China than say, Fort Lauderdale or Bar Harbor. Still the Chinese should not be scolded for limiting their “international” travel to nations close to home like Hong Kong and Macau. Want to guess which two countries currently provide the most visitors to the U.S.? If you guessed China and Botswana, you would have been incorrect. Surprisingly it was Canada and Mexico, who just happen to be located just to the north and south of the U.S respectively, that supplied the most visitors to this county. Want to guess the two foreign countries that Americans visited more than any other last year? Do I even have to tell you? Ok, it was Canada and Mexico. Expecting 23 million Chinese tourists to visit our shores on an annual basis anytime soon seems to me to be a tad over optimistic.
I feel for Mr. Friedman. He does his best, but trying to convince Americans that it is ok to just sit back and do nothing as large portions of our manufacturing sector wither away and die is a hard sell. The 1000 Whirlpool workers in Fort Smith who will be without a job this Christmas will doubtless take little solace from Mr. Friedman’s advice on job retraining opportunities they should undertake in this glorious age of globalization.
But it doesn’t have to be this way. Globalization is not a force of nature like hurricanes. Globalization occurred as a result of decisions made by human beings. CEOs who knew they could realize a higher markup on a purse made in China as opposed to a purse made in Wisconsin. Consumers like me who were not willing to spend a dollar more to buy a broom made in this country by the Libman Company. But those days are over for me and you can decide they are over for you as well. Seek out American made shoes, cars, furniture, clothing and anything else you need to buy. The old saw “there isn’t anything made in this country anymore” is a lie. Just check out the firms I list on the right margin of my blog. Visit the websites listed there and you will discover great products you can buy that are made in this country. We American consumers are more powerful than we realize. We can create jobs for members of our extended American family if we decide to buy the wonderful products those family members make. So get shopping!