The easy solution is rarely the right one. Some people don’t like to admit they’re wrong. If someone drove his or her wagon into a swamp, rather than face the arduous task of cajoling the critters to back it out, or to get out themselves and pull, they might just abandon the wagon. It’s easier, right?
“Former Michigan Gov. Jennifer Granholm says the old theory that government can cut taxes and businesses will use the savings to create jobs in the United States no longer applies,” an annarbor.com article said. “’Not in a global economy where overseas workers can make $1.57 an hour,’ she told a crowd of about 400 people gathered Tuesday night inside the Michigan Theater in Ann Arbor.”
“A business’ responsibility is to maximize the shareholder return, and you’re going to invest those extra dollars where you can maximize the return,’ she said. ‘And that return isn’t going to be maximized nowadays in the United States. It’s going to be maximized elsewhere.’”
Thank you, Granholm, for stating the obvious. I’m not complaining about that, mind you. Just because it’s obvious doesn’t mean anyone is listening. But our esteemed Canadian-American has a good point and worse than that, there isn’t really a good solution. To get an idea of Granholm’s solutions, you probably have to read her book or ask her during her office hours at University of California-Berkley.
The problem here is the money trail. Some of you might be thinking, “Tax penalties for overseas jobs!” All right, so the jobs flood back to America, which means we have to rebuild our industrial and infrastructural base.
That means more jobs too. Now the problem: All those workers will be making at worst minimum wage, which is around seven dollars. That’s seven times what the overseas employees were being paid, which means costs go up. Probably not seven times, but up all the same.
Now someone out there will mention if prices go up, wages and everything else will go up too and eventually the economy will sort itself out. Okay, I’m not an economist, but that initial rise in costs is worrying because right now the economy is recovering at a very slow and fragile rate. Messing with that house of cards is not going to help.
So how do we get the jobs to stay in America? Carefully. First and foremost, we need to make it harder for corporations to duck their tax obligations and we need to make it harder for them to send jobs overseas.
This will help the whole world, because what nation wants its economy based on foreign jobs when they could build their own economic base?
The time for quick and decisive action was when those jobs started to pour away from us. That time has come and gone, but we still have a chance to prevent it from occurring again. We just can’t be hasty about it.
Pulling this wagon out of the swamp is not going to be easy. It’s going to take time and careful planning, and the results will probably not be immediate, either. Going about this quickly could be worse in the long run, though, because, as much as this hurts to say, Granholm is right.
