Last week I was watching a container ship being unloaded when I realized that this common sight in our ports is a vivid illustration of why the American economy and standard of living will continue to fall. Huge ships like this one carry at very low cost the manufactured products made in low-wage countries that now fill every store.
Politicians of both parties never talk about container ships. They'd rather talk about jobs, jobs, jobs. Republicans have their solution and Democrats have theirs but no mainstream politician, even the craziest Tea Party type, wants to turn the clock back and reverse progress. Nobody wants those ships to stop coming to our shores, do they? We live in a global economy, right? Our kids have to get lots of smarts to compete in that global economy, right?
Nobody, but nobody, questions the the need for those ships to bring us our laptops and cellphones and nice clothes and coffee beans...
We deserve a decent standard of living, don't we? And don't we deserve good jobs with good wages so we can buy the stuff on those ships? Why can't we all have jobs that pay us good wages?
The reality is that a for-profit system exerts a constant pressure to drive costs (i.e. wages) down. And ever since Henry Ford, businesses that could lower the skills level of workers outperformed those that require skilled and inevitably more expensive workers. And those cheap, low-skill workers are plentiful everywhere on Earth except here and in Western Europe.
In a recent interview with Laura Flanders, AFL-CIO chief Richard Trumpkamade the obvious point that "world class economies make things" and we, of course, do not. Hence, our wages, or standard of living, is going down. Unless people in this country manufacture useful products, all the noise about creating jobs and educating our workforce for a global economy is, Trumpka suggests, just so much hot air.
How did it happen that the world’s greatest industrial power, the nation that turned back fascism 60 years ago, has become the kind of economic and social wasteland described by Glenn Greenwald in his recent posting "Collapsing Empire Watch? " The fact that the US now ranks 49th in life expectancy and 19th in child-well being, among other disastrous indicators, shows how far this country has fallen, for all the inane ranting about how special we are.
Long, long ago corporations discovered that they could outflank organized workers by finding someone who would work for less. As long as there was a mass of unemployed people ready to step in as strikebreakers, wages could be suppressed to a bare subsistence level. As the US standard of living rose and unemployment fell in the period after 1940 thanks to massive government spending, union organizing and a labor-friendly Democratic party, it became more difficult for American companies to find enough starving and impoverished people in this country to serve their purposes.
Oh there were plenty of starving people who would work for 9 cents an hour. They just didn’t live in the USA. They lived in places like China and Bangla Desh and Thailand and Pakistan. Then in 1956, at the height of post-war prosperity, a trucker in South Carolina named Malcolm McLean came up with a very simple and beautiful idea that would make this untapped labor pool accessible. Why not, Malcolm asked himself, ship everything in large containers that could easily be loaded in a factory in one place and sent anywhere on earth, whether by truck, train, or cargo ship?
One problem, though: The powerful longshoreman’s union, the ILWU,controlled the ports and longshoremen were tough guys unwilling to give up their livelihood in the interest of efficiency and greater profits for the bosses. Years of litigation followed and slowly the union lost ground. It helped matters along that, no matter how tough, the longshoremen had been organized by an unaffiliated radical named Harry Bridges who spent a lifetime fighting off charges of being a communist. And the ILWU was not popular with the AFL-CIO, which expelled the troublesome leftist union in 1950.
By the 1990s new factors made container ships, and the global trade it carried, even more attractive. The growth of the Internet allowed shipping companies like the Korean-owned Hanjin to offer a very easy means of setting up and tracking shipping orders anywhere on earth. Manufacturers could now send design specifications to factories thousands of miles away and direct the finished products to retailers. The growth of giant retailers like Walmart simplified the process even further. (For a look at the starving people who make all that shiny stuff in your local Walmart, check out the Boycott Walmart site.)
The number of industrial workers, contrary to US myth, has doubled and tripled in these past few decades, although only in places where people were hungry to accept that nine cents an hour rate. And if workers in, say, Mexico became restless, factories could easily be moved to some other impoverished county like El Salvador where people would be happy to get those nine cents. The rabble-rousers who had made trouble for the owners would be left behind, the target of wrath for suddenly unemployed workers. And the death of communism 20 years ago left rabble-rousers without any coherent ideology to guide them.
Manufacturers moved freely throughout the new world created by the collapse of the Cold War's divisions, making goods in places where workers cannot afford to buy them, and shipping them to where they can. Up until 2008, the imbalance was covered by shipping money to the consumer nations where the recent credit bubble allowed unproductive masses of the US and Europe to consume and throw away products with abandon. The delicate arrangement was bound to collapse sooner or later, and helped along by Lehman Brothers and AIG, the collapse came a little sooner than expected.
And so, the world system riding on container ships has faced a crisis for the past two years. There is enormous manufacturing capacity, millions of low-skilled workers standing ready to take any job offered, empty containers ready to be filled – but a dwindling number of people willing or able to buy the products. Mainstream Democrats at least understand how the game works and their standard prescription is to give consumers the ability to buy things. But that can only be a temporary solution.
Perhaps the longer solution, from the owners' point of view, will be for the US standard of living to drop to Bangla Desh levels, when American workers become docile enough to work at starvation wages. But still, the problem is who will consume what they make? A wealthy China, perhaps?
Or there is the old-time socialist answer: Rationalize the means of production for the benefit of working people. Not too likely, considering the virulent reaction of the owner class to the slightest hint of such thinking.
Maybe, the only remotely attainable solution is that most conservative and classically 19th century Republican solution: High protective tariffs combined with strong federal direction and support for industry. China certainly offers a model for such economic nationalism, and that example may prove an inspiration.