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History

Trade Deals And Outsourcing

If the job you have is ever outsourced, just know this: you will always be able to gain employment as a bartender, waiter, or cashier. Regardless of the amount of education or training you have, the service sector is the lone part of the economy that seems to be growing. 

The good-paying jobs that once existed are becoming fewer.

Anyone who has been around for the past 40-50 years has seen a robust manufacturing economy wither away like a dying rose bush.  Whatever term is used today — offshoring or outsourcing – manufacturing jobs are leaving or have already left the US faster than Nyquist crossed the finish line at the Kentucky Derby.

So, the majority of jobs created, which our government touts at the beginning of each month as our economic recovery makes progress, are service sector jobs. The Bureau of Labor Statistics’ Occupational Employment and Wages Summary was released last March. It tells us that the largest occupations are retail salespersons and cashiers (8.1 million jobs). Food prep and serving workers, office clerks, registered nurses, and customer service representatives were also included as some of the largest occupations.

With the exception of nurses, the survey reported in its summary that “most of the largest occupations were relatively low paying.’’

The problem here is that if the only work available is in the service sector, you may have to work more than one job to support a family. Some of the economic experts reporting on our economic decline are saying that the addition of new jobs each month are by people who have taken multiple, part-time jobs, usually in the service sector. In other words, that particular man or woman lost a good-paying, full-time job, and is attempting to make ends meet with two lesser paying part-time jobs.

This raises a concern – the shift from a production economy to a service economy is a negative shift. A service economy has fewer producers. And this is at the same time that consumption is growing. After all, what is actually produced in a service economy? If little or nothing is being produced, but people keep consuming, consumption will eventually dry up, leaving the consumers with little to no cash to consume any more. Then, the little that is produced won’t be bought up. Goods sit on shelves, collecting dust; and newly built homes don’t get purchased.

So what will consumers do next? Borrow? In an economy that has been tightening up, borrowing is less of an option. And in a service economy, when people are working more than one job to pay the bills and eat, it would be tough to pay back a loan with interest on top of the monetary obligations you already have.

The North American Free Trade Agreement (NAFTA) has contributed greatly to outsourcing. According to a Huffington Post article, from 2011, the Economic Policy institute estimated that 682,900 jobs have been outsourced.  That many jobs might seem like a drop in the bucket, but the AFL-CIO says that over 60 percent of those jobs were in manufacturing.

The AFL-CIO article also said, “NAFTA (and the NAFTA-style trade agreements that have followed) provided large corporations with special incentives to invest outside the United States.’’ This means more potential American jobs go elsewhere. Fortunately, the US now has plans on renegotiating the NAFTA agreement.

The latest free trade agreement is the Trans-Pacific Partnership (TPP), which President Trump withdrew the US from with a recent Executive Order. This was the controversial trade deal that was negotiated secretly in 2015. American citizens were not allowed to know its content. According to reports, this trade agreement would have led to a loss of national sovereignty to corporations. The question to ask is why was this agreement so secret if it’s being touted as a benefit to American citizens?

All of the free trade agreements that the U.S. is involved in (14 total) have not been a benefit. Jobs have been lost and our economy suffers because of it. With manufacturing/production jobs being outsourced to other nations, we will become a country exclusively centered on a service economy, and because of that we’ll see more economic deterioration.

About pm

Teacher, writer, and freedom lover.

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