One of the American presidents – was it Reagan? Yammered on about the trickle effect in the economy. What he neglected to mention was that the trickling was shit – it was trickling before but it is well on its way to being a wash-out for all of us.
I have mentioned the danger before but I really don’t think enough people truly “get it.” They believe their jobs to be, relatively, safe. No. Uhuh. Here’s how it is going down, currently:
Few raw materials are produced in North America anymore.
The raw materials that ARE produced are shipping offshore for manufacturing. North American manufacturers close – steel industry for example. Automotive industry, another example. Textiles and clothing – yet another example. Food is also being shipped offshore for processing.
Processing also includes packaging. Another industry dying in North America.
Freight forwarding – operations are being outsourced. Nothing you do at work cannot be done far more cheaply, offshore.
It is simple – perhaps too simple for people to really understand:
Corporations are always on the lookout to decrease assets and expenses. Always on the lookout for ways to increase net profit and of course, profit on share to the shareholders.
They look to underdeveloped and “developing” countries where material, labour and final production costs are significantly lower than their current location.
In underdeveloped and developing countries, there is a huge potential cheap labour market. These people may be skilled and if they are not, are willing to be trained at rock bottom cost to the corporation. No employee rights, no benefits, no sick days, no paid holidays…constant operation at minimal cost and bother. What corporation would walk away from that? None. Special dispensation from governments falling over themselves to open the economic doors to investment and jobs; corporate heaven.
Anything done on computer or run through a computer can be done through outsourcing and done far more cheaply. The internet and intranets have made this not only plausible but possible.
Payroll systems, accounting systems, inventory systems – everything can be run offshore. Everything.
This is happening now, as I write this – a boardroom is planning a move that will see North Americans out of work. Corporations have no loyalty to their country of origin, they have no compassion for the single mom tossed out because of “re-structuring”. The only and I do mean, ONLY loyalty a corporation possesses is to profit. Your company may have a lovely little employee handbook where they discuss stress levels and employees as valued members/associates but words, dear friends, collections of the letters in the alphabet with no real meaning.
Consider single mom – she’s been tossed out. She can’t afford daycare anymore and there are more single moms like her; daycares start to lay off staff – not enough children. She certainly cannot afford new items, nor can a lot of other folks, stores begin to close. More for sale signs or forclosure signs show up in communities but no one is buying. Taxes remain high and climb higher because of the social impact of so many out of work. Budget cuts to all sectors by government with less available tax dollars to throw around; hospital beds close, medical and non-medical staff are laid off. Elder residences start to thin out as families are no longer able to meet the monthly rents and upkeep for their elderly relatives. Staff is laid off.
No one can afford to shop – warehouses containing products produced overseas lay off personnel. Transport companies required to transport the products for distribution see their loads decrease, their warehouse and drivers see lay-offs.
Communication companies see less demand for their services – if it comes down to buying food, paying a utility versus a cell phone bill or internet invoice? Food and warmth will always win out.
No money to go out for dinner – restaurants lay off or even close. More unemployed.
This is not a doomsday scenario. This is happening right now and you won’t hear about on the popular media because many of these media outlets are owned by the very corporations taking full advantage of offshore operations. They aren’t about to advertise that they are dismantling the economy of an entire continent.
The sun that shone our our fiscal behinds has set. It is rising in the east, where labour is cheap, utilities are cheaper and it costs so much less to have a chair manufactured from raw to finished in China than it does in the U.S. or Canada.
There is nothing we can do, you and I, except do what we can to adjust to this new reality ahead of us. In 10 years, this blog won’t be here because I won’t be able to afford the internet but it won’t matter because neither will you. There will be no job around the corner. Unless you live around the corner from China, India, Sri Lanka, Indonesia or Thailand.