Jan 18, 2012|
Garland talks with Associate Professor of Economics and Finance, and Dept Chair and UNO about American jobs going overseas and new agreements companies in-sourcing back to the U.S.
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Automatically Generated Transcript (may not be 100% accurate)
It's Garland -- think tank on WW LA MFM and dot com team news talk and sports leader 504260187. B or 866889. OH seventy. And her -- think -- about two days. President Obama wants to in source American truck bringing back from over sooners. Held a news conference recently had a bunch of good fortune 500 executives -- about to board component Intel. Otis elevators ruled Roy it's in many more. And they also they -- gonna bring jobs back they didn't delineate how many good things so there were usually does a Labor Department data. Says manufacturing -- sure added that sector added 334000. Jobs over the last two years. That doesn't say how many Green and lost all go I look at. -- my notes here where's my notes. This is from the Bureau of Labor Statistics quarterly census of employment in wages every day in the United States were losing. Fifth team that factory and that's from. December of this year. So -- little confused as we know how we go about doing this and as usual. I say experts and join me to really give me some expertise sale console and saying that little bit better. Doctor Walter doubly in professor economics finance the Portland. Chair at Q and doctor welcome back to the show. How well what are what are your road what would your take on this can week in sourced jobs in any number back to this country. Well I mean so that's gonna be going on dubbed the company's gonna put that you know are simply gonna do whatever is the most profitable. And there's several things going on here obviously. The most the most obvious one is that. Companies are outsourcing. To foreign countries because they have lower labor cost. That's so one of the biggest issues and not the only thing going on -- because countries like India and China are actually growing. Much much faster than the western countries are. Sometimes say it's simply they want to put their factories where the growth that is where that where the people are buying the product. So there's a number of things going on key issues in this -- -- summit is. Is that one of the other issues that affect them is the tax structure. You know we have an issue where. That -- -- that we have one of the highest corporate tax rates in the world and so if. So right then and if if if some of the companies can keep -- There might raise your money abroad and keep it abroad. Then did they don't have a -- -- -- And that's where regular little confused because -- rebuilt all the time in fact I think we've got what is a one trillion dollars. In profits should abroad this company zoom from it. Taken overtaken -- -- my understanding -- all right so we're gonna 35%. Corporate tax rate that's the highest. In the industrialized world. That causes compared to Q1 trillion dollars out of the United States seem -- reduced Chinese labor costs rise in about 1520%. Brenda mine in the furniture business. They always -- the the big furniture and conventional North Carolina in recent years. Partly in reaction at all but now. Manufacturing furniture store and come back I get confused how can you come back with the 35%. Factory. Well again there's the you have to balance that -- our the -- it's as. Rates in other countries. Go up in fact China is finding their their losing jobs since you know. The Vietnam and Indonesia and places like that -- system they would we you know dot. The black garment industry -- -- those really low wage jobs to those -- moved around we used to have those of Boston was a garment industry and then. -- Japan's took those away from us and then Japan lost in the somebody else and there are going to be in China right now. I don't under understand and I. I held there and you know again China's labor cost up almost 20% -- one year. A lot of people movies city's potential social room rose. Etc. etc. and understand that the go to Tom wonder go to Vietnam they go to Sudan where -- maybe but hardly come back here. Well again. -- labor costs are only one component of that. You know we you do have transportation cost issues you have efficiency issues. And things of that sort so we -- of the companies that make these requests over and over again these calculations over and over again on a continuing basis of where's the best way to produced their -- again this this that the key thing about this summit is. You know I see this is two parts to it clearly a lot of this is political. But I did an election year. Jobs are the big issue the Obama administration has done very little. You know -- -- unemployment rate start to creep down but you know we're -- carriers and two. It's been well we're going into the Fortier. High unemployment rates. So it better the -- administration's record is very lousy and they realize they need -- home. Something number water at least look like they're doing something so a lot of this is just. First show. The second part of it is they -- terrible like a lot of where they're doing is what president Kennedy called jaw -- -- she's the one that made that famous. Where he's simply go to these industries and try to publicly. And you know. -- him on board by just. -- talking to them about bringing jobs back and then the Gerson and dove into doing it home and then not at all clear how effective that might be. The third devoted is again he has problems. I haven't seen this specific -- I was looking for. About doing something to affect the tax structure -- Which will not punish people that take. Think jobs away and also reward people that bring them back and I staff support that I wasn't able to get -- base that they were gonna do but I haven't been able to find what. Proposals are but -- -- if it's the last one is it is our -- which -- -- really make a lot of different. Doctor your vision I can imagine you would think that this is political. I'm not over the you know when the demagogues in the rebel against Ellison it's always. Think about President Obama stated desire to bring jobs back. To America and you doctor -- throws late payments. You know. Who's sharing the economics would -- bring what we call will be hanging on quotable I'll talk to the doctor. We're calling you oil man. Appreciate the call -- from the show. So good and able -- -- and appreciate you're com heroes big bonus today. Who has called OK I'm. -- -- -- 81 name which we -- -- the depression recession wouldn't wanna call it. Double digit figures on known mortgage rates and all that stuff and natural gas was -- died on pricing. Kaiser Aluminum I don't pure number OK okay closed down okay due to. The employees that they accept and and a decrease in pay are not take an increase from banks to keep their place open. Well they got there and close it down a move that. Facility and then hopefully piece by piece to Africa I believe it was. Okay you go drop -- you'll see there's nothing there others. So we're losing the boosting factory is a year that animal actors. To win over OK and they told employees they look and they even total. You don't take you know and except this we don't take it and they call their hand and they -- out of place and they should dial numbers contrary. That's that's what's happening across the board compressor is there. In these. -- in any way of turning not a brown. -- not on the big things like that. The beat of the factory to everything that's been the huge expense of moving that that's not gonna be moving back. Quickly I don't see how that that's likely to happen for something might go. The aluminum refinery in that would that we got here. You know they didn't think moving employees back and forth. -- always a much easier thing to do for for certain types of things but you know large manufacturing plants. The but he didn't you know we can't manufacturing plants in the auto all automobile plants from. Europe and Japan are all being building their plants in the United States. That became -- to -- lot of work in Japan they bill to be here because it's cheaper for them you know do or simply here than the built over there and and ship it. So you know it depends on what each of these situations a little bit different I I current certainly can't seats aluminum aluminum refinery is making a big. -- making a change. Or bear would -- when -- couple things so -- last night because -- keep hearing won't won't got to do is worlds change and -- to a technology based immigration based. Creativity based economy. And good change along with it. Somebody percent of engineers can pick and choose -- bridge where commuters universities or. Foreign -- and increasingly. They're returning home because opportunities here or greater. Number comes in addition Russia. They've got innovation -- the building for billions of dogs outside of Moscow Saudi Arabia. In the time it took in my 342. Years to getting ten billion dollar endowment. They built one university's science engineering ten billion dollars worth US consumers spend significantly more in print hated chips. Then the United States government spends on research and development. For the first unless you're over half of US patent for rewarded to none the US companies. China is replacing US and world number one high technology exporter in the World Economic Forum ranks US 48. And quality of math and science education. OK I think I assume what we have to go and how -- we get. Well again that that last one at the math and science education the real big one. I think clearly does so is state Louisiana and many other places everywhere you who have sued Google sort of working with the colder stem. Science technology engineering map. Focus at the universities and have that the lower levels to try to help with that that is a very big weakness that we have that. That you know the math anxiety that that we can they have as -- neither this country coming back to bite us. But didn't and then you've really got to start rebuilding that we do have a very good especially higher education system in general. Most people are still coming here we also do have you know we are still in spite of all those numbers. Creativity. Inventions -- things of that sort were still a world leader we've lost a little of that edge I think is what percentage. But I don't think we've lost yet we've got to make sure we don't lose it. And then our -- -- colleges educations. There's really won't -- what part of what gives us the edge there that's what what is our comparative advantage of I'm not. Completely worried IDC a trend that I have but something -- feel a little concerned about. But I think we've got till we still have a big edge of that area. Unfortunately the statement promote professor at Duke University -- engineer and screws us. Firms and -- tell tell where markets grow in the -- that's please of course like India and China and many others. But he used to be about saving costs. Now it's because that's where the opportunities are. That's where they can develop their futuristic technology is that true they can bring in lot of revenues. Through this developing products for a foreign markets. And they want to understand what we won't so they can keep giving it to us. You bring. Well yes I mean both men -- places that we are still the biggest market that the world self and but but we are I think India and China are growing a whole lot faster I just saw. The numbers that the World Bank put out there yesterday about growth rates and you know they've downgraded Europe to almost and small negative a little bit recession because of the Greek problem and things like that US growth rates been downgraded. That the places in the but China has been downgraded. But they've been downgraded to 8% so what practical -- we ideological -- which we haven't seen 8% and and in decades and decades of the miracle writers and -- -- It is a global terrorism is really -- really big and so that goes over the production goes sub's gonna follow that because that market is growing. Quick interview war one hero caller wants to -- -- News Corp. that's 35%. Corporate tax -- been in place. When a IA are texts yeah I -- for some reason I'm thinking that was the last so we've made big changes in that was in the Reagan administration. I think there were some changes during the Reagan administration I don't think we've touched got a lot since then. -- hunt for a very early on to. About new legislation. Legislation friend. -- -- But -- I would. Just think if you give kids -- sleep -- to sleep through and. Wind and muttered reading that about this issue and about how we would do and and authors and artists. Saying they're at the stop this being -- the movers and their products are being sold on the web site. I stumbled on an -- reading. And the amount of monitoring. This school alone in this country of. American citizens. We really don't know. There and at these videos. On the Internet that literally walk you through stealing their credit card stealing the -- we're. Hacking into a company. We're gonna ask a question coming up I know nobody's gonna stop using your iphones and Internet and email. But what are we going in this direction to win every had a poor world would go if you I don't trust using any of these devices.