- When humor goes so goes civilization.
- Erma Bombeck
The words of wisdom from above and if they are really good, come from above. We will need some laughs to keep our heads together because the economic outlook keeps seeing plagues.
First Plague
You could argue that the Taft-Hartley Act of 1947 reopened the coffin for American labor. It paved the road for outsourcing. The first site was the South with the right-to-work laws. Then, any foreign soil that offered a manipulative currency and or, land concessions, tax privileges and similar bribes.
After the 1950s, Europe was on better footing. However, their big industries needed a boost. They found it in the US. With a little state supported help, manufacturers in Europe and Japan realized that they could undercut US corporations. The slow destruction of the manufacturing power that was the US began. It would go full force when President Clinton signed NAFTA trade agreement. Millions of middle class jobs were lost and the exodus formed the Rust Belt. The last firms are being killed off with the lie of globalization. Many of these people went to states like Florida because that state does not tax income. The state boomed its population by over 25% from 1980 to 1990. It is now the third largest state by numbers. This group of citizens will learn that service orientated jobs is a life of subsistance.
Meanwhile...
The service industry and housing grew. Developers grabbed any commercial property that had traffic flow. Retail chains bid for the leases to these sites. We built too many. The overexpansion led to creative destruction within the retail field.
Joesph Schumpeter
He developed the idea of "creative destruction" from Marx who claimed industrialization would be its own destruction. To give you an example, think of vinyl records. The innovation of the eight track put the end to records. Tapes took less space to store and move. Then, the disc put the eight track out of business - creative destruction.
In economic terms, manufacturing jobs were gone. People turned to find something else to get bye. It is like Charles Darwin's, "Origin of Species." When one food source vanishes, animals sought and adapted to find something else.
This opened the door to the service and hospitality industry. There will arise two different problems. For retail, it was competition. Everyone wanted to be the next Sears, but they were all selling the same imported crap. Advertising helped, but in the long run, only a fad like with designer jeans. The same cut-throat action for consumers showed itself in the kingpin of shopping, the mall. The over-supply led to the destruction.
When the new millennium arrived, Wall Street discounted the loss of old economic icons like Sears and jumped on the band wagon of Walmart. They hopped onto online retailers like Amazon. Internet shopping has added to the slow death of brick and mortar locations. The early advantage of no sales tax began the razor cuts into the retail sector. Job losses mounted as strip shopping and malls died off. Wall Street paid no attention on how citizens existed. Sadly, many faked a disability and took an early retirement with a life on the dole. Many others get by with the help of food banks or cut rent costs by living on the street or RVs. They suffer because there are few wage livng jobs. In addition, the few service jobs available are in competition with excessive immigration that only cuts wages and everyone suffers. We, at Evolution have chronicled the loss of retail jobs and the catastrophy continues. The first list is the firms who refused to outsource, but with no help from our government, they too are moving offshore to complete this plague. The second grouping is the ongoing struggle to survive.
Harley Davidson, Whirlpool and its subsidery, Kitchen Aid, Levi's, Wrangler, Crayola, Wilson Sporting Goods, New Balance, Craftsman Tools, Converse, Gibson Guitar and yes, even Hershey's.
Retail Closing:
American Freight is closing. Advanced Auto Parts is dropping 700 stores. 7-Eleven, Denny's, and Best Buy are closing outlets. Macy's, Family Dollar, JC Penny, Foot Locker, Rite Aid, CVS, Walgreens, Victoria's Secret have and continue to close stores. Sears, once over 2,000 is down to one.
Cargill, the giant in grains is culling jobs. Why, you ask? Because labor costs cut into profits.
The list of banruptcies continue with Spirit Airlines. Each week there is new firms heading toward the economic graveyard of KMart and Radio Shack. As for those of you that may be seeking a better job or just work, keep in mind the wisdom of humor with my favorite, Rodney Dangerfield, "Always watch out for number one, but don't step in number two." Peace.
