International Marketplace
America is increasingly connected to the rest of the world as a global
economy
becomes more important. We participate in the international
marketplace both as
providers of goods and as consumers. How we buy and sell
affects us both in
terms of what goods we can choose from, but also what jobs
are available, and
what kinds of industries will come to dominate our
economy. One of the most
important changes in recent years in our place in
the global economy is the
dropping of trade barriers with such political
moves as the approval of the
North American Free Trade Agreement (NAFTA).
This has had an impact on our
economy which has filtered down to the everyday
lives of our people, both as
workers and as consumers. On the one hand, NAFTA
has been good in that it has
caused the dropping of tariffs by Mexico and
Canada, making U. S. goods more
affordable in those countries. This has
helped to stimulate some areas of the
American economy by opening up new
markets to sell our products abroad. In
urging the passage of NAFTA, the
Clinton Administration publications said that
NAFTA would increase high
wage jobs, boost U.S. growth, and expand the base from
which U.S. firms and
workers could compete in a world-wide market. It predicted
job gains of
approximately a million due to increased Mexican exports, and
suggested that
by 1995 there would be approximately 200,000 more high wage jobs
created due
to the opening of free markets. The industries most expected to
benefit were
those dealing in computer technology, machine tools, aerospace
equipment,
telecommunications equipment, electronics, and medical devices -- all
areas
where wages were already 12 per cent higher than the national
average
(Expanding (1993), 3-5). Such growth in jobs would have an effect on
the workers
and their communities, giving a boost to both individual wealth
and the
community itself. These benefits spread outward to other areas of the
economy,
helping people who have jobs in retail, construction, and other
areas where
workers spend their paychecks. However, there is another effect.
As a result of
the cheaper labor in Mexico, participation in this part of the
international
marketplace has led to the loss of many American jobs in
certain industries,
such as the garment and textile industries. After four
years of stability,
apparel industry jobs plunged suddenly last year, falling
more than ten percent
from 945,000 at the end of 1994 to 346,000 in 1995. In
addition, 42,000 jobs
vanished in the fabrics industry for at total shrinkage
of 141,000 jobs. These
jobs represented 40 percent of all manufacturing jobs
lost in the United States
last year ("Squeezing" (1996), D1). Carl
Priestland, an economist for
the American Apparel Manufacturers Association,
predicted that this year another
America will likely lose up to another
50,000 jobs in the industry
("Squeezing" (1996), D1). These losses especially
affect workers in
small towns like Pisgah, Alabama, and Granger, Texas. The
approximate 100 people
let go in Pisgah this year were emotionally
devastated. Not only are they seeing
their specific jobs disappear, they are
also faced with seeing the entire
industry vanish from their area, taking
their opportunities with it. One
example, Martha Smith, who lost her job
sewing children's clothes, is now
enrolled in a state-sponsored program to
learn clerical skills. She is thereby
trading a blue-collar position for one
which is in a low-paying and overcrowded
field. In fact a great many of the
over 650 people who lost sewing jobs in
Alabama this year are women
struggling to support their families
("Squeezing" (1996), D1). They face a
market where they have few
skills and little to offer. Given the largely
female makeup of the sewing
industry, it is unfeasible to try to fit all
these displaced workers in the
clerical field. And on top of that, when a
plant such as the one in Pisgah
closes, the entire town and region suffer.
Many such towns are dependent on one
employer. When that employer leaves for
cheaper labor in Mexico, the local
economy cannot easily recover. Local
merchants lose their customer base;
suppliers to the mills lose their
markets. In the textile industry, the danger
to the worker from NAFTA is
twofold. First, there is the danger of moving the
plant and its jobs to
Mexico, where labor costs are considerably cheaper.
Second, there is the
increase in importing cheaper textiles and sewn goods from
Mexico, where
they are already lower-priced due to the cheap Mexican labor.
Either way,
American blue-collar workers are increasingly losing their jobs. And
these
workers are not themselves in the higher paid blue-collar jobs.
Lacking
specialized skills, they are at the mercy of market forces which
are
increasingly against them. This is part of a larger pattern. Fifty
workers in
Granger, Texas, are no longer employed by the Ca-Ce-Len
Manufacturing Company.
Ten years ago there were more than 500 rural Texas
towns and hundreds of others
across the South and Midwest where such contract
garment factories were the
mainstay of local economies. Today there are
barely two dozen such jobs left.
The displaced workers often move into
even lower-skilled and lower paying jobs,
such as working in nursing homes.
And they experience a deep sense of bitterness
for their loss. (Verhovek
(1996), A10). Likewise, the heavy truck and equipment
section of the
automotive industry has likewise moved many of its plants to
Mexico to
take advantage of the cheap labor. This type of action leads to the
loss not
only of jobs and the human cost, but also to the loss of heavy
industry. It
is one example of the type of change that is moving our economy
more and more
to one with a service industry base rather than an industrial
base. For
example, John Deere along with Navistar International, North
America's
biggest producer of school buses and trucks, eliminated 3,000 to
5,000 jobs this
year in its huge factory in Springfield, Ohio, and will move
its heavy truck
production by 1999 ("Squeezing" (1996), D1). Similar
complaints have
been made about job and industry losses to other parts of the
world also,
especially to Third World nations where labor is very cheap, and
the goods that
are then imported from those same companies can undercut the
competing goods
made in America. This has a good immediate effect for the
consumer, since they
are able to buy more inexpensively, but the overall
effect will take down the
everyday standard of living. One effect of the
global marketplace is in the
political area. As more of the economy becomes
internationally integrated, the
fears which it causes effects the way people
vote and what policies are chosen.
Also, there becomes more of a desire
for international companies to try to
influence American politicians, and
this leads to the possibility of Americans
losing power with their own
government. The recent controversy over the foreign
political contributions
to the Clinton campaign and buying influence are one
example of this (Cohen
(1996)). There are also foreign reactions to American
influence based on the
global marketplace which affects our relations with
foreign countries. While
this may seem not to have an immediate everyday impact,
it does affect
policies of our government which filter down in a variety of
ways. One area
which is definitely affected by the international marketplace is
the type and
quality of goods available to consumers, and especially the type
of
entertainment we pursue. As an example, Japanese electronics have largely
taken
over the field in both television and music related areas. Now, with
new
standards just agreed to on digital television for worldwide use, an
extreme
change is on the horizon. Over the next decade, it is expected that
every
American home will have to replace their current televisions with
wide screen
digital models or else buy converter boxes in order to watch TV.
These TVS will
also be used similarly to desktop personal computers, and will
have a major
effect on the computer use of the average American also. By
1998, when
broadcasters are expected to be sending out the necessary signals,
TV and
computers are expected to be integrated, which will also affect people
who use
the internet. This will lead to a major change in both how we
communicate and
receive information, and how we are entertained (Brinkley
(1996)). Thus, the
international marketplace affects the jobs we have, the
industries we work in,
how much we are paid, what our government policies
are, and how we spend our
leisure time.
Bibliography
Brinkley,
Joel. (1996, December 2). The age of digital television is finally
upon us.
The New York Times. [Online]. Available: America Online,
keyword:@Times.
Cohen, Roger. (1996, November 16). Global forces batter
politics. The New
York Times. [Online]. Available: America Online,
keyword:@Times. The NAFTA:
expanding u.s. exports, jobs, and growth (1993).
Clinton Administration
Statement on the North America Free Trade Agreement.
Washington: GPO.
Squeezing the textile workers: trade and technology force a new
wave of job
cuts. (1996, February 21). The New York Times, p. D1. Verhovek, Sam.
(1996,
January 15). In small town texas, the sewing stops. The New York Times,
p.
A10.