by Greg Owens, Co-founder and CEO, Sherrill Manufacturing/Liberty Tabletop
There are few if any things that would be considered “pleasant” in a presidential political year but there is at least one thing that is positive. The process heightens awareness of issues that are important to all of us. It also forces politicians to spell out their policies in detail, albeit many times just political rhetoric in the end. This year is a bit different on one issue and that is trade, most notably as it relates to climate change and economic equality.
In the early days of the Biden Administration the campaign rhetoric is clearly becoming part of the policies going forward in the area of trade, particularly as it relates to our relationship with China. There are many similarities to the policies of the Trump administration but there are two key areas which are now forming an additional part of the policy towards China that are worth discussing. These are the impact of Globalization and China’s meteoric industrial raise on climate change and the human rights issues associated with production moving overseas that impact people here at home as well as workers in other countries. If you are concerned about climate change and believe in economic equality and human rights then you should keep reading. The facts behind what is driving the Biden Administration trade policy in these areas are both shocking and will likely end up with you changing how you spend your hard earned dollars on the products and services you acquire. If you are my age you remember a tv commercial from the 1970’s that depicted a Native American looking at discarded trash on the side of the road. He was so saddened by what was happening to the United States in terms of pollution that he had a tear running down his cheek. America spent the next 40 years cleaning up our act. We did it through regulation of industry from power generation to manufacturing. We did it through regulations on auto emissions, wastewater and trash disposal. This not only forced changes in our process it also forced changes in our products as things like lead were removed from gas, paint etc. If you look at the statistics on carbon emissions, acid rain and you look at the natural environment around you one might think that we were successful in changing the impact of our behavior on climate change. Not so fast. The truth is that we simply exported the problem to a place where the situation is far worse that it was here in the 1970’s. That place is mainly China but also other countries like India that have abysmal records on all of the issues that are important to you from climate change to pollution in our oceans. The harsh truth is that all we have done is exported the problem to places where we cannot see it. Recognition of this fact is playing a central role in policy shifts in the Biden Administration. This will hopefully result in major changes to the Paris Climate Accord which will shift the responsibility from industrialized nations that have taken steps to clean up their own act to China and other countries that will now be held accountable for their bad behavior and forced to pay the price if they play games and refuse to change that behavior. Stay tuned because the best way to do this is a country by country carbon tax at the import stage, not some sort of convoluted consumption formula that was part of the original agreement.
Racial inequality and economic inequality, in many cases the same thing, were a big part of the Biden Harris campaign. You might be asking yourself, what does that have to do with trade? The truth is that the impact of globalization on the American people has been of great benefit to the wealthiest Americans and has left the bottom half our wage earners out in the cold. When factories started shutting down in the 1970’s, a process that accelerated during the 1980’s and really took off when China was granted status in the World Trade Organization, the people who suffered most here in the United States were the workers in the factories. America basically shut down and exported production in dozens of industries leaving millions to try and find work in other fields. Textiles, pharmaceuticals, consumer goods, durable goods, electronics, automotive and aerospace are just a few huge examples. But it is not only line workers who suffered. Factories also employ engineers, tool and die makers, electricians, accountants, managers and legal staff. Manufacturing supports the ecosystem of the entire community from the pizza shop across the street, where workers buy their lunch, to the auto dealer in town who sells them a car. Where did these folks go? Many ended up leaving high paying manufacturing jobs with a pension and healthcare benefits for the service industry. Welcome to Walmart, here is your minimum wage job, 30hrs per week and no benefits. This created a huge rise in a new class of Americans, the working poor. For those who were unable to find work and simply dropped out of the workforce it put a huge burden on Medicaid and our social welfare system. Small communities, who depended on property and school taxes from factories were also left out in the cold as those facilities shut down and dropped off the tax roles. A disproportionately large percentage of those affected were African Americans and other minorities who now face a grim economic future. Who won out? Wall Street, mass market retail and those at the top of the income spectrum who were now able to import goods and services for a fraction of the price. Corporate profits skyrocketed while the bottom half of America paid the price.
As if that scenario is not bad enough one must also take into consideration what happened overseas when these iconic American brands skuttled their American factories and set up shop overseas. Workers were paid pennies and lived in absolute poverty, without basic worker rights, exposure to toxic substances and little or no worker safety regulation. The truth is they were treated like slaves. But like the scenario with pollution, this was all taking place on the other side of the world, out of sight from Americans and virtually uncovered by our media.
Now it is time to come to the point. Chances are that you, like me, do not believe in unchecked pollution of our air and seas. Chances are that you, like me, are appalled by the notion that abused and enslaved workers are producing the shoes and clothing that we wear and the forks we eat with. Imagine if you could watch a video of what the conditions were like inside the factory and in the surrounding community every time you pulled a product off the self or purchased it online. If you are like me you would probably put it right back on the shelf or click out of the website you are on.
Politicians are quick to talk and slow to act, as they operate within a bureaucracy. You and I on the other hand can start changing our behavior today. Buy American, as outlined in the Biden Administrations executive order and Build Back Better programs will perhaps one day get us there through government policy. We can get there today by doing it ourselves. Will it cost more? Yes, it absolutely will cost more, sometimes 2-3x what you pay for a cheap import. Why, because it costs more money to produce products in an environmentally responsible way and it cost more money to pay a living wage, provide workers with safe working conditions etc.. than it does to produce in a sweat shop in China. Is it worth it? I guess that is a personal choice we have to make. I hope you all will join me in walking the talk.