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home : opinions : columns February 26, 2015


3/20/2012 9:59:00 PM
Column: Work relocates faster than communities adapt
Tom Cantlon
Courier Columnist

In my column of Feb. 22, I wrote about how communities need long stretches of time undisturbed by war or economic crashes in order to grow cultures and healthy economies. As that column was about time, this column is about place.

The head of the World Trade Organization, Pascal Lamy, provided a good summary of this idea in the Christian Science Monitor on March 1. He expands on something we already know about modern manufacturing, that a product is not made in one country. It used to be that Detroit made cars and Japan made electronics. Now an electronic design is made in Silicon Valley, software for it is created in India, transistors and subassembly in Vietnam, final assembly in China, then back on our West Coast it gets warehoused and distributed.

The point is that rather than countries or cities creating a certain product, they are simply providing a certain step in the chain. That's important because it's relatively easy to switch to some other region to provide that step in the chain. China itself may find a decade from now that corporations find it cheaper to have final assembly done in Vietnam. That's already happened in a few cases. International companies have no national loyalty and will go wherever it is most cost effective.

So even if Detroit created a lot of jobs by becoming, say, the hub of the manufacture of complex medical instruments like CAT scanners, it's a tenuous position that could be gone again in a decade. Hence, Mr. Lamy's accurate statement, "Social and economic fabrics cannot develop at the same pace, and they take considerable time to adapt to the changes to which they are subjected ... triggering dramatic social shocks ... painful social insecurity in job markets...". Things are not just changing faster in time, they are changing faster in physical location and those locations can jump from one country to another, or one side of the globe to another, quickly.

In terms of the free-market and production efficiency, and international corporate profit, this is all great. As this gets faster, though, there comes a disconnect between efficiency and humanity. Between market time and human time.

There has always been the ebb and flow of different kinds of manufacturing as the industrial era developed - ebb and flow of certain regions being the hub of certain work - but it happened slow enough that people had time to adapt. The last generation could retire from the old kind of work while the next generation was learning the new kind of work.

Human time remains constant. We still have about the same number of years to live, to mature, to work. Plus humans don't want to move, and for good reason. Consider someone who takes some college while young to learn a trade, gets employed, grows in that career, and suddenly all the need for that career moves across the globe. They have their choice of being unemployed for a long time while their region tries to adapt and they try to get into a new field, or move to another part of the country and learn the trade that's in demand there.

All of that is normal, but at a faster rate now, and at a cost. Does the entire extended family move or just the ones out of work? What happens to the local social fabric and culture? All the support that people get when they have family nearby and long-time connections to the community? All the help the community gets when people have deep roots and know one another and work together? When it all happens at a human pace it's manageable. When the pace quickens, there's a price. A common harp these days is that businesses can't do well in an unpredictable environment. Well, the same is true for individuals and families and communities.

Am I condemning everything new and wanting to live in the past? No. Just pointing out what's new in the landscape. And asking a question. How do we partly accept the new reality, and partly steer it to occur in ways that work for us? Not just for market efficiency and corporate profits, but for humans?

Can that be done? Or does each region just have to be grateful when some international business brings in tons of jobs, the community gives away all kinds of tax breaks and freebies, builds up a support network of roads and stores and all, and then when it moves away just be grateful they had it good for a while?

On a national scale it's a big question mark. For a very few unusual communities, like Prescott, we might just have a lemon squeezer that could make something good out of this. That will have to be for another time.



Tom Cantlon is a longtime local resident, business owner and writer. Contact him at TomCantlon@TomCantlon.com.



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Reader Comments

Posted: Saturday, March 24, 2012
Article comment by: The Rev

@Dog I hear ...parts of that. Parts?

In any given market there would seem a point at which decreases forced within that market comprised of large outputs that are consumed domestically, in surplus and exported would parallel the requirements of that market. In essence, a symbiosis would occur for a period before competing markets adapted or the original market develops an alternative to the output.

How far off am I?


Posted: Friday, March 23, 2012
Article comment by: City Dog

@Rev, "At what point...should protections take precedence over revenues" The point is at the intersection of the cost of production, and the margin of profit. Plus or minus 1 cent, of course. Cost of production assumes the cost of externalities like pollution controls. Somethings are cost prohibited in terms of environmental cost, regardless of the short term economics of production or lure of jobs. Neither should We not be subsidizing the outsourcing of US production by tax policy while pursuing destructive labor and environmental policy. Just ask George Bush about his free market policies.

Posted: Friday, March 23, 2012
Article comment by: The Rev

More broadly, could the US implement new trade tariffs without a MAJOR backlash? At what point (if any) should protections take precedence over revenues?

Posted: Thursday, March 22, 2012
Article comment by: Hokas Pokas

I am really sorry, Tom, I just don't understand why people insist on "re-inventing the wheel." Maybe it is just me but I just do not see how you can blame migration and the damage done to communities on corporations and the "speed" of change. What Mr. Lamy and you observe with regard to human migration has been going on since the dawn of man.

@Mr. Aberdeen:

In your universe with the infallible centralized government overseeing all, and regulating and taxing all, we would have less competition and higher prices. The mythical $50K income would evaporate into nothing. Soon there would be a call for the $100K income, and so on.

I would be willing to bet that companies like Wal-Mart and Costco have done far more to improve the standard of living of the average American than ANY government program.


Posted: Thursday, March 22, 2012
Article comment by: The Rev

Tom C, your grasp of economics surpasses mine. What effect would a small tariff on American petroleum exports have upon the market?

Posted: Thursday, March 22, 2012
Article comment by: Gysies Rule

at rapid relocation.

Posted: Thursday, March 22, 2012
Article comment by: Tom Cantlon

Rev, evidently a lot of it is. Like some of the columns, this one is not a partisan issue at all. It's just the evolution of how the modern global corporate world and modern manufacturing work. And what it does to our communities, which should be a concern to all. And without taking any stance, wondering out loud how we can get the best of the benefits of it while minimizing the problems. What to do about it? For some, regardless the topic, it's to do nothing but argue partisan points while the issue goes unaddressed. Even when the column is partisan, some posts devolve to "my side good, your side bad" , which is okay, but without addressing that actual points in the column, or the links supporting it. Even people who sometimes have good posts fall into that habit too easy. Still, there are good posts, as many of yours are, and people I hear from or talk to who don't post but have useful thoughts on the topic of the day. A column like this invites people to, regardless of topic launch the same old partisan thing, or just mull the topic over and they have nothing particular to post, or just post their incomplete musings which would be interesting to hear.


Posted: Thursday, March 22, 2012
Article comment by: Richard Aberdeen

The purpose of import and export taxes, in addition to raising government revenue, is so citizens of a country are protected against encroachment by cheap labor elsewhere. In a wise nation, which the United States sort of used to be a long time ago, import and export taxes are constantly tweaked nation by nation, to prevent American companies from finding it profitable to use labor elsewhere and, prevent foreign nations from selling cheaper goods.

Today, not only are such taxes often used in the opposite direction, both parties have allowed multi-national corporations to avoid paying their fair share of corporate taxes with all manner of draconian alterations to the tax code, allowing huge profits to be exempt as long as there is a PO Box outside of our borders. Multi-national corporations earning many billions of dollars end up paying very little and sometime no taxes. President Obama has proposed closing some of these worst loopholes, but of course, the Republican Party and Blue Dog Demoncrats utterly oppose such sanity.

Thus, we continue to lose work for our citizens to the lowest wage bidder elsewhere and, American especially small business continues to have to compete against foreign nations sometimes paying less than a dollar per hour in wages. The problem is not due to unions and the high cost of labor here, as many conservatives pretend. Rather, it is because corporations rule our government and, their puppet-master politicians more and more are pulling strings of congressional legislation in their favor and, against we the people.

If we had a wise government run by patriotic leaders, EVERY American willing to work could have a good job earning a minimum of fifty thousand per year and, our nation could compete far better on both a national and international playing field, leveled wisely by adjusting import and export taxes so international companies could not undercut business within our borders. Of course, hell is likely to freeze over before the Republicans actually agree to be patriotic for change.


Posted: Thursday, March 22, 2012
Article comment by: City Dog

When the industries are relocated to a community and that community extend bonds, grants, infrastructure, build schools and community facilities to accommodate the population growth driven by that industry, that community needs development agreements that require pay back of that investment to the community should they pull out. And, to be in the first position should that company or corporation go bankrupt.

Posted: Thursday, March 22, 2012
Article comment by: Real American DISABLED VET USN Retired

A STRONG REPUBLICAN PRESIDENT!! WHOSE's THAT TOM?? Is he or she going to throw their hat into the race soon? Its getting late.. All they have running now are a bunch of losers..


Posted: Thursday, March 22, 2012
Article comment by: The Rev

I remember the NAFTA vote differently. The GOP openly supported the item yet in the Senate twenty seven Democrats approved the measure with an almost even counter balance of twenty eight in opposition. Had such events happened today would the media report them as an inter-partisan civil war? Guess it depends on the Party in the battle.

More importantly does anyone have ideas on this matter besides kicking out the Progressives or euthanizing the Conservatives? Are we really just posting on these stories for our egos?


Posted: Wednesday, March 21, 2012
Article comment by: Another knuckle head comment from the Tea Pot !!

NAFTA was passed by a Democratic president, and Republican congress. Just look up votes. Prett yeasy. The blue collar reps opposed the treaty because they knew the giant sucking sound (Ross PERot) would really happen. Dems in congress overwhelmingly opposed it while the REPUBS passed it,

Tom S: I would call your remarks a sample of revisionist history. MITT or NEWT will only make things worse. They have proven to be part of t he problem .... not the solution. Thanks for supporting OBAMA. You only drive the independents to him. Awesome strategy. Never thought a TEA POT would try that.


Posted: Wednesday, March 21, 2012
Article comment by: The Rev

Good questions. Import tariffs?

Posted: Wednesday, March 21, 2012
Article comment by: O.K. Mr. Steele

Prove your premise, show us information that proves your point about regulation and litigation. I'll be waiting...

Posted: Wednesday, March 21, 2012
Article comment by: Here's a thought, accept reality

Yep, things change. As the USA entered the 20th century, buggy whip manufacturers had to either, change their business, or go broke. And, they did so, without any interference, or support, of the federal government. Personally, that makes a lot more sense to me than having the government use tax money (or more commonly now debt sold to China) to subsidize the production of unneeded buggy whips for 50-60 years

Posted: Wednesday, March 21, 2012
Article comment by: Tom Steele

Government regulation, taxation policies and heavy litigation have as much to do with the loss of manufacturing in the United States. Beginning with NAFTA, and its lost promises moved a lot of jobs to other countries along with American machinery to produce product. The promise of high pay, better air and water quality and improved working conditions never materialized. Labor unions went along with this move to the internationalization of Americas middle class. Yes, our high labor costs was one factor, but with five percent of the worlds population we have over 50 % of the worlds lawyers and all the costs to the economy they absorb. Add the highest level of corporate taxation and draconian regulations on manufacturing and continued movement is assured. Note Apple was loosing money until they moved all manufacturing to China and neighboring countries. Hopefully, a strong Republican president will be able to reverse this process for our future benefit.



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