Not so many years ago there were more than a million-and-a-half apparel workers in our country. It's true they didn't earn as much as cardiac surgeons, but their wages put lots of food on the table and sent many a youngster to college. Not anymore. Their factories are closed; the jobs long gone.
It's no wonder unemployment is so high. All the jobs are now overseas. Anyone doubting this is invited to check the labels on goods in our local retail stores, not only apparel, but just about everything, including dishwashers. And the label will most likely say "China."
No one begrudges the Chinese people an opportunity to pursue a better life, but factories in China should compete with U.S. factories on a level playing field. We often accuse Chinese factories of paying low wages and no fringe benefits. But the fundamental cause of this unequal competition is a subject that makes many people go "glassy-eyed" — foreign exchange rates between the U.S. dollar and foreign currencies.
It is generally agreed that Chinese money (called the Renminbe) is grossly undervalued against the U.S. dollar; some say as much as 40 percent. If the Renminbe was allowed to "float" to its true value, everything made in China would cost more in terms of U.S. dollars (and European currencies, too). Retailers would find that the wholesale costs of the merchandise they buy would no longer always favor Chinese-made goods. Consumers might pay a few dollars more for a shirt (or a dishwasher), but jobs would start coming back to the United States.
The Chinese government has been under continual pressure to let its money's value rise. Occasionally when the heat gets too much, China lets it trickle up a point or two until something happens to divert attention, such as an oil-well disaster in the Gulf. Then it remains stuck again.
Sometime ago, there was an important economic conference in China. Secretary of State Hillary Clinton and Treasury Secretary Timothy Geithner attended. High on their agenda was convincing the Chinese to let the value of their money rise. How convenient it was for China that a huge brouhaha blew up at the same time about the North Koreans sinking a South Korean ship. What a lucky coincidence for them.
There is an expression, "Power follows the money," and China has both in spades. It has been financing our national debt by buying billions of dollars of U.S. government bonds with money it earned selling its products here. In effect, it holds a mortgage on our country. This money makes it possible for the Chinese to control the value of their money, thus keeping the price of their goods cheap on world markets and their unemployment low. It makes it tough to deal with them.
Recently, there was a major economic conference in Canada. Everyone is supposed to have told the Chinese that they must let the Renminbe value rise. At the news conference, President Obama said he told this to Chinese President Hu in no uncertain terms. And, indeed, afterwards the Renminbe did rise, but only a few percent.
Our government needs to keep up the pressure. Perhaps we can help by looking at the labels before we make a purchase. And perhaps by the time I get around to buying another dishwasher, unemployment will have returned to normal levels, and the shipping carton will say "Made In The USA."
Lawrence Kallus lives in Anniston.
