A casual read of last Tuesday’s edition of The Herald might not excite most readers, but for me it illustrated the dynamics of today’s global economy.
On Page A7, I learned that a long-standing Farmington firm decided to close its doors after 137 years of manufacturing woolen felt and industrial fabrics. Chas W. House & Sons once employed as many as 100 workers, many of whom are now looking for work because men and women in foreign countries will perform the same jobs at a much lower pay rate.
I’ll ignore that poor men and women in foreign lands now have a source of sustenance, and concentrate on the sorrows of job loss. But while the Farmington closing shed some jobs, a deal made possible by international commerce could bring more than 80 decent-paying jobs to New Britain. Kudos to Tenergy Water, which will manufacture large-scale water treatment products designed by Christ AG of Switzerland.
A common argument made by the opponents of globalization is that society suffers as jobs are exported. And yes, because of competition from foreign labor, the Farmington employees no longer have sellable skills. But their loss is temporary, as long as they retrain.
According to Chas vice president Pat Burwood, the company’s employees have been approved for federally funded job retraining so they can enter any of the country’s burgeoning job markets, like pharmaceuticals, home construction and nursing. George W. Bush has proposed increasing job-retraining funds, so that should help. Now, Gov. John Rowland, a notorious retraining funds-cutter, needs to follow his lead.
The globalization system demands more effort from and institutes more instability in the lives of Americans, but it does not chain honest men and women to long-term unemployment. However, if the country were to erect tariffs to fight globalization, other nations would follow suit, limiting the United States’ total spending, the true cause of real unemployment.
With a little effort, workers can recover from globalization-style job loss, or structural unemployment. But we cannot turn around the market forces of cyclical unemployment, which occurs when the country cuts total spending on goods and services too heavily.
Tariff walls would contribute to such an end by destroying our export potential and spurring the exodus of foreign and domestic capital as profits decline. Such developments compose a negative picture for the Wall Street mainstay. And jobs are not created when business leaders are unsure about the future of the stock market.
For example, none of the New Britain jobs created by the deal would have been possible. If the United States heavily taxed all imports, as some naysayers have urged, then so would Switzerland. This would increase the cost of goods made in the United States, and Christ AG would look elsewhere for a manufacturer.
Those impatient with the country’s unemployment rate, which is from 0.2 to 0.7 percent above what economists consider full employment, need to remember that the economy has begun to rebound. It should continue to do so as long as the development stimuli provided by tax cuts is not rescinded.
Our nation is not a static one; the economy rises and falls. Instability presented by corporate accounting scandals and 9/11 contributed to this smaller-than-perceived figure. Nevertheless, anti-globalization is not the answer; patience, flexibility and dedication are. The mid-to-late 1990s will rise again, as long as we remain calm.
In the meantime, turning from A7 to the front page, I was delighted to see the giant picture of the Osmotron that our workers will turn a good salary making. That mechanical monstrosity is the best news this city has seen so far in 2004.
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