The Ugly Truth About Trumponomics

Robert Reich

Robert Reich Former U.S. Secretary of Labor, Professor at Berkeley

When Donald Trump spoke at Boeing’s factory in North Charleston, South Carolina—unveiling Boeing’s new 787 “Dreamliner”—he congratulated Boeing for building the plane “right here in the great state of South Carolina."

But that is pure fantasy.

Trump also used the occasion to tout his “America First” economics, stating “our goal as a nation must be to rely less on imports and more on products made here in the U.S.A.”

Trump seems utterly ignorant about global competition—and about what’s really holding back American workers.

Start with Boeing’s Dreamliner itself. It’s not “made in the U.S.A.” It is assembled in the USA. Most of the parts and almost a third of the cost of the entire plane come from overseas.

For example:

The center fuselage and horizontal stabilizers came from Italy.

The aircraft’s landing gears, doors, electrical power conversion system—from France.

The main cabin lighting came from Germany.

The cargo access doors from Sweden.

The lavatories, flight deck interiors, and galleys from Japan.

Many of the engines from the UK.

The moveable trailing edge of the wings from Canada.

Notably, the foreign companies that made these parts don’t pay their workers low wages. In fact, when you add in the value of health and pension benefits, most of these foreign workers get a better deal than do Boeing’s workers.

These nations also provide most young people with excellent educations and technical training, as well as universally available health care.

To pay for all this, these countries also impose higher tax rates on their corporations and wealthy individuals than does the United States. And their health, safety, environmental, and labor regulations are stricter.

Not incidentally, they have stronger unions.

So why is so much of Boeing’s Dreamliner coming from these high-wage, high-tax, high-cost places?

Because the parts made by workers in these countries are better, last longer, and are more reliable than parts made anywhere else.

There’s a critical lesson here.

The way to make the American workforce more competitive isn’t to build an economic wall around America. 

It’s to invest more in the education and skills of Americans, in on-the-job training, in a healthcare system that reaches more of us. And to give workers a say in their companies through strong unions.

In other words, we get a first-class workforce by investing in the productive capacities of Americans—and rewarding them with high wages.

Economic nationalism is no substitute for building the competitiveness of American workers.

***

Reposted from AlterNet.

Robert Reich served as the nation’s 22nd Secretary of Labor and now is a professor of public policy at the University of California at Berkeley. His latest book, Aftershock: The Next Economy and America’s Future, is now in bookstores. His earlier book, “Supercapitalism,” is out in paperback. For copies of his articles, books, and public radio commentaries, go to www.RobertReich.org.

Posted In: Allied Approaches

Union Matters

Freight can’t wait

From the USW

From tumbledown bridges to decrepit roads and failing water systems, crumbling infrastructure undermines America’s safety and prosperity. In coming weeks, Union Matters will delve into this neglect and the urgent need for a rebuilding campaign that creates jobs, fuels economic growth and revitalizes communities.

A freight train hauling lumber and nylon manufacturing chemicals derailed, caught fire and caused a 108-year-old bridge to collapse in Tempe, Ariz., this week, in the second accident on the same bridge within a month.

The bridge was damaged after the first incident, according to Union Pacific railroad that owns the rail bridge, and re-opened two days later. 

The official cause of the derailments is still under investigation, but it remains clear that the failure to modernize and maintain America’s railroad infrastructure is dangerous. 

In 2019, 499 trains that derailed were found to have defective or broken track, roadbed or structures, according to the Federal Railroad Administration’s database of safety analysis.

While railroad workers’ unions have called for increased safety improvements, rail companies have also used technology and automation as an excuse to downsize their work forces.

For example, rail companies have implemented a cost-saving measure known as Precision Scheduled Railroading (PSR), which has resulted in mass layoffs and shoddy safety protocols. 

Though privately-owned railroads have spent significantly to upgrade large, Class I trains, regional Class II trains and local, short-line Class III trains that carry important goods for farmers and businesses still rely on state and local funds for improvements. 

But cash-strapped states struggle to adequately inspect new technologies and fund safety improvements, and repairing or replacing the aging track and rail bridges will require significant public investment.

A true infrastructure commitment will not only strengthen the country’s railroad networks and increase U.S. global economic competitiveness. It will also create millions of family-sustaining jobs needed to inspect, repair and manufacture new parts for mass transit systems, all while helping to prevent future disasters.

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