How America Is Turning into a 3rd World Nation in 4 Easy Steps

[Teamster Jeff]

1) Destroy Our Manufacturing Base

Tariffs were ditched and then Bill Clinton moved into the White House in the 1990's and continued Reagan's trade policies and committed the United States to so-called Free Trade agreements like GATT, NAFTA, and the WTO, removing all the protections that had kept our domestic manufacturing industries safe from foreign corporate predators for two centuries.

In the 1960's, one-in-three Americans worked in manufacturing, producing things of lasting wealth. Today, after jumping head first into one free trade agreement after another, only one-in-ten Americans works in manufacturing.

Over the last decade, 50,000 manufacturing plants in the United States have closed down and five million manufacturing jobs have been lost. They didn't disappear, they just moved away to low-wage factories like Foxconn, in foreign nations.

When manufacturing dies, the economy goes with it.

2) Harvest the Middle Class

America's working class no longer builds TVs or computers or furniture on assembly lines; they now flip burgers at McDonalds and turn down the sheets at Holiday Inns. And those high-skilled workers who used to design the marvels of manufacturing now manufacture credit default swaps and mortgage-backed securities on Wall Street.

Before NAFTA, the average American taxpayer earned an inflation-adjusted income of $33,400 a year. By 2008, that number dropped to just $33,000. Working Americans maxed out their credit cards and took out a second mortgage on their homes just to make ends meet. Eventually, even that wasn't enough to make ends meet.

On top of that, new financialized industries have risen up that specialize in harvesting even more wealth from the middle class. So-called private equity firms like Bain Capital execute a business model that depends on taking over American businesses, loading them with debt, laying off workers, and outsourcing labor to low-wage nations. Mitt Romney himself described Bain's strategy as "harvesting companies for a profit."

Even American factories that were more profitable than ever, like the Sensata plant in Freeport, Illinois, aren't safe from this outsourcing. Thanks to globalization, it's just a cheaper to employ labor in low-wage nations even if that means laying off 170 American workers and devastating an entire local economy.

3) Export American Wealth

There's a hefty price tag associated with transitioning from the world's largest exporter of manufactured goods to the world's largest importer of manufactured goods. That price comes in the form of trade deficits.

In 2011, the United States had a trade deficit of over a half-trillion dollars with the rest of the world. Essentially, $558 billion U.S. dollars is being pocketed every single year by developing nations that are now manufacturing the goods that used to be manufactured right here in the United States.

With their pockets overflowing with U.S. dollars, foreign investors begin buying up American industries. Every single second, more than $4,000 of American industry is being sold off to foreign investors.

4) Recolonize

With American workers desperate for any kind of opportunity to work, Foxconn and other foreign corporations now have access to a brand new pool of cheap labor.

We've seen other companies before Foxconn take advantage of these new low-wage American workers.

Ikea recently opened up a factory in Virginia, which just so happens to be a right-to-work for less state that's not hospitable to labor unions. In Sweden, where Ikea is based, workers earn at least $19 an hour and enjoy a minimum of 5 weeks paid vacation every year. Those are fairly high labor costs. So executives at Ikea have come to the United States, where they can pay workers just $8 an hour and give away just 12 days of vacation a year.

German auto manufacturer Volkswagen has also found an advantage in moving manufacturing back to the United States. They recently opened up a plant in Chattanooga, Tennessee - another right-to-work for less state. Unlike in Germany, where all the workers at major manufacturing firms are unionized, collect high wages, have good benefits, can go on strike, and sit on the company board and have a say in decisions about the company's future, none of that exists in Chattanooga.

In Chattanooga, workers are not unionized and make just $14.50 an hour. It's pretty clear what's happening, we're becoming the world's latest cheap labor source.

http://www.alternet.org/economy/how-america-turning-3rd-world-nation-4-easy-steps?page=0%2C1&paging=off