When a Coin Drops in Asia, Jobs Disappear in Detroit
Last year, free trade hammered Michigan’s 11th Congressional District, located between Detroit and Flint, killing manufacturing, costing jobs and crushing dreams.
It’s not over, either. Another 11th District company, ViSalus Inc., told the state it would eliminate 87 jobs as of last Saturday, slicing its staff by nearly 400 since 2013 when ViSalus was the second-largest direct sales firm in the state.
The numbers are staggering. The Economic Policy Institute (EPI) released a report last week showing that America’s $177.9 billion trade deficit in 2015 with the 11 other countries in the proposed Trans-Pacific Partnership (TPP) trade deal caused 2 million job losses nationwide.
This trade deficit reduced jobs in every U.S. congressional district except two, EPI said, but Michigan’s 11th had the ignoble distinction of suffering more as a share of total employment than any other district in the country. It was 26,200 jobs. Just in 2015. It was tech workers in January and teachers in July and tool makers in August and auto parts builders in October.
Manipulation of money killed those jobs. It works like this: Foreign countries spend billions buying American treasury bonds. That strengthens the value of the dollar and weakens foreign currencies. When a country’s currency value drops, it acts like a big fat discount coupon on all of its exports to the United States. And it serves simultaneously as an obscene tax on all U.S. exports to that country.
Among the TPP countries, Malaysia, Singapore and Japan are known currency manipulators, and Vietnam appears to be following their example. EPI found that currency manipulation is the most important cause of America’s massive trade deficits with TPP countries. Trade deficits mean products are shipped to the United States rather than made in the United States. The math is simple. A drop in Asian currency means a drop in U.S. jobs.
EPI looked at what types of imports the 11 countries sent the United States last year to determine what types of industry and jobs America lost as a result. The overwhelming majority was motor vehicles and parts. That’s why Michigan was the biggest loser of all of the states. The auto sector was followed by computer and electronic parts – including communications, audio and video equipment – and primary metals – including basic steel and steel products.
In addition, EPI found job losses in industries that serve manufacturers, like warehousing and utilities, and services like retail, education and public administration.
Each of these kinds of losses occurred last year in Michigan’s 11th district, located in the heart of America’s car manufacturing country in southwestern Oakland County and northwestern Wayne County, where Detroit is parked just outside the district’s lines.
In January, in Michigan’s 11th, Technicolor Videocassette of Michigan, Inc., a subsidiary of the French multimedia giant Technicolor SA, laid off 162 workers in Livonia. That same month, what was once a vibrant chain of cupcake stores called Just Baked shuttered several shops, putting an untold number of bakers and clerks in the street, some with last paychecks that bounced.
In February, the Sam’s Club store in Waterford closed, throwing 122 in the street. Waterford municipal official Tony Bartolotta called it another “nail in the coffin” for the township’s east side.
In April, Frito-Lay told 17 workers that they’d lose their jobs later that year when it closed its Birmingham warehouse.
In July, 231 teachers in the Farmington Public Schools learned they would not have work in the new school year. One of them, 25-year-old Val Nafso, who grew up in Farmington, told the Oakland Press, “I hope things change where people who are passionate about teaching can enter the profession without 1,000 people telling them “Don’t do it…get out now.”
In August, DE-STA-CO, a 100-year-old tool manufacturer, told Michigan it would end production in Auburn Hills, costing 57 workers their jobs.
In October, Waterford laid off 39 firefighters. The township had received a $7.6 million grant in 2013 to hire them, but just couldn’t come up with local funds to keep them. That happens when factories close and bakeries shut down. Township officials told concerned residents they’d looked hard at the budget, “We started projecting out for 2017 and it flat lined,” Township Supervisor Gary Wall told them.
Later that month, FTE Automotive USA Inc., an auto parts manufacturer, told Michigan it would close its Auburn Hills plant and lay off 65 workers.
In the areas around Michigan’s 11th, horrible job losses occurred all last year as well, which makes sense since EPI found 10 of the top 20 job-losing districts in the country were in Michigan.
Ford laid off 700 workers at an assembly plant in Wayne County in April. GM eliminated a second shift, furloughing 468 workers at its Lake Orion Assembly Plant in Oakland County in October.
Auto supply company Su-Dan announced in September it would close three factories in Oakland County by year’s end, costing 131 workers their jobs.
In October, a division of Parker Hannifin Corp. in Oxford, Oakland County, that manufactured compressed air filters told its 65 workers they wouldn’t have jobs in 2016. “There’s a lot of people there that are paycheck to paycheck, and it’s going to hurt them,” Michelle Moloney, who worked there 25 years, told a reporter from Sherman Publications.
The threat of the TPP is that it does absolutely nothing to stop this job-slaughter. Lawmakers, public interest groups, manufacturers, and unions like mine all pleaded with negotiators to include strong provisions in the deal to punish currency manipulators. They didn’t do it.
They included some language about currency manipulation. But it’s not in the main trade deal. And it’s not enforceable.
Swallowing the TPP would be accepting deliberately depressed currency values in Asian trading partner countries and a permanently depressed economy in the U.S. car manufacturing heartland.
It’s the TPP that should disappear. Not Detroit.
MORNING MESSAGE
“Free Trade”: The Elites Are Selling It But The Public Is Longer Buying
Look at the support for Democrat Bernie Sanders and Republican Donald Trump, especially in light of Sanders’ surprise 20-point comeback in this week’s Michigan primary. With primaries coming soon in Ohio, Illinois, Missouri and North Carolina, will Sanders’ trade appeal resonate again?
VIOLENCE ERUPTS ON TRUMP CAMPAIGN
Attendee of Trump rally punches black man in the face. Politico:“‘Yes, he deserved it. The next time we see him, we might have to kill him,’ said John McGraw, 78, in an interview with ‘Inside Edition’ … ‘We don’t know who he is. He might be with a terrorist organization.'”
Trump campaign manager throws reporter to the ground. Politico:“Donald Trump’s spokesperson flatly denied on Thursday that campaign manager Corey Lewandowski roughed up a reporter for the conservative website Breitbart, and suggested she was fabricating the incident in a desperate bid for attention. A roughly two and a half minute audio recording of the incident obtained by POLITICO — while not definitive — supports the reporter’s version of the events…”
Trump university students pressured to give good ratings. NYT:“…hundreds of pages of legal documents, as well as interviews with former students and instructors, suggest the surveys themselves were a central component of a business model that, according to lawsuits and investigators, deceived consumers into handing over thousands of dollars with tantalizing promises of riches.”
TRUMP SKATES IN DEBATE
Mellow Republican debate. Bloomberg:“When challenged by his rivals on the debate stage Thursday, Trump brushed them back briefly, as though they weren’t worthy of his response. It was a cautious performance from a candidate known for the exact opposite. None of the other final four contenders … seemed especially eager to challenge him.”
“Trump rivals try to blur the differences on trade. W. Post:“‘My position has always been we want to have free trade, but fair trade,’ said Gov. John Kasich (R-Ohio). ‘But we don’t want to lock the doors and pull down the blinds and leave the world.’ … [Cruz] made a feint toward protectionism but then swung right into his free-market principles … Sen. Marco Rubio (R-Fla.) took a similar tack.”
Time explores why Trump’s rivals didn’t attack:“Marco Rubio’s restrained performance had its roots in regret [to] resorting to personal insults … Cruz’s immediate goal is to let Trump winnow the field by winning Florida … For Ohio Gov. John Kasich, a subdued debate was business as usual.”
Trump turns right on health care. Politico:“…his language has changed — to boilerplate GOP ideas which date back to the Reagan administration. In the last few days, a batch of GOP establishment talking points have appeared on his website, lining up his radically anti-establishment campaign with mainstream Republican thinking on how to build a better health care system.”
Hedrick Smith warns GOP not to dismiss populist uprising:“… with widespread alienation among the Republican rank-and-file, the GOP elite’s effort to excommunicate Trump may backfire. It may not only wind up splitting the Republican Party, as pundits now suggest, but it may further stoke the fires of class conflict within the Republican Party…”
DEMS FIGHT FOR FL
Bernie tells FL to ignore the polls. W. Post quotes:“What all of the pundits said, and what all of the media said, is Bernie Sanders and the political revolution can’t win in Michigan. Guess what? We won in Michigan.… if there is a large voter turnout … we are going to win here in Florida.”
Bernie targets Latinos in 5-minute Spanish-language spot. The Atlantic:“The Spanish-language ad illuminates the challenges [a female farmworker] faces in trying to provide for her family. ‘Voy a luchar mientras,’ she says in Spanish: ‘I will always fight.’ About three-quarters of the way through, Sanders is shown speaking at a meeting of the National Association of Latino Elected and Appointed Officials, decrying the conditions at the farmworker’s field.”
OBAMA ON THE RISE
Obama approval at 3-year high. Gallup:“President Barack Obama earned a 50% job approval rating for the week ending March 6, his highest weekly average since May 2013 … Obama is doing significantly better than his most recent predecessor, George W. Bush, who had a 32% job approval rating in March 2008.”
State dinner for Canada PM emphasizes climate crisis. NYT:“Mr. Obama and Mr. Trudeau also pledged to cooperate in preserving the Arctic, and to move more quickly to carry out agreements made in climate talks in Paris last year.”
NYT on when Obama may nominate SCOTUS justice:“…many on Capitol Hill expect the announcement to come before the Senate breaks next week for two weeks into early April, allowing Democrats to press a new front in the nomination fight just as Senate Republicans return home to face questions about it. And they anticipate that Mr. Obama would make a decision before he leaves on what will be a high-profile trip to Cuba on March 21.”
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The more Americans hear about the Trans-Pacific Partnership, the more disgusted they become. In an election year, that matters.
Republicans know that jamming this terrible deal through Congress will hurt their chances in November. That’s why they’re planning to sneak it through in the lame-duck session after the election is over.
Mitch McConnell knows that he could lose the Senate if his majority goes on the record. Not only will the TPP ship jobs overseas, but allows polluters challenge environment and safety laws in corporate tribunals where the outcome is all but predetermined.
That’s why we have to turn up the heat now. Campaign for America’s Future will get legislators on the record so voters can make their voice heard. We need to raise public awareness of the sweetheart deals and carve-outs that will send jobs overseas and raise drug prices.
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