Millions of American jobs have been lost in the last few years. Shipped to China, Mexico, or other places with cheap labor, miniscule taxes, and impotent governments. The places which took American jobs, all had several things in common. Things which America used to possess, but no longer has. Skill? Ability and desire to work? Hardly. American workers are the best in the world. Education? Learning has little to do with factory work, which has vanished. Tax benefits for corporations who ship jobs overseas? Partially, and perhaps this should be examined, but not here.
Corporate chiefs need to show profits for their shareholders, and if they can save millions in labor costs, this makes the bottom line for their corporations a lot healthier. Think of seventy five cent an hour labor in China vs. ten bucks an hour in the US, and that isn’t a difficult decision for a corporate CEO to make. A buck an hour in India, giving out bank balances or booking vacations, vs. ten times that amount or more in America, and it isn’t difficult to see why it has happened. Personally, I will not deal with any company who has Indian reps answering the phone, but it makes no difference to the vast majority.
How can the Chinese make seventy five cents an hour, and survive? Stop and think about it America. When I was a kid, I made seventy five cents an hour, and did very well. I could get a Coke for a nickel, five gallons of gas for a dollar, and paid $43 a month for a really nice apartment. What has happened? Two things. (1.) The buck has self destructed because of endless printing of it by Congress and the Federal Reserve. Spending what they take in is from the dark ages. (2) Americans are so over-taxed, that every single thing we buy, eat, or use, is taxed severely. Pick up the phone, and pay huge taxes on the bill, and the same with the electric bill, or gas bill. Taxes like you wouldn’t believe! Payroll, Social Security, Medicare, unemployment, and other taxes are taken out of every single paycheck, along the electric, gas or telephone road to your doorstep. The payroll taxes of people who drill for the gas, install the phone lines, generate the electricity, make out the bills, make the paper and ink for the bills, the makers of the computers who figure out the bills, the people who make the meters who tell how much you have used, the people who made the machinery which drilled for the gas, machinery which cut the trees for the utility poles and made the paper, people who built the trucks, ladders, and tools used by the crews who see to it that your gas, electricity and telephone get to you. The payroll taxes for the oil refinery employees, tire manufacturers, steel workers, two way radio makers, battery makers, wire makers, pipe makers, engine makers, and the list is infinite. Literally, every single person who makes anything used to drill for gas, generate electricity, or provide telephone service, is highly taxed by Uncle Sam, as well as the states, but in the main, it is Uncle Sam’s taxes on the payrolls of millions of those who work to provide you with electricity, gas, and telephones, that add up to a huge bite.
The monthly bills have federal and state taxes added to them, but that is only what the bill payer sees when he writes that check. Think of the taxes deducted from the oil well workers, insulator makers, wire and pipe makers, switchgear makers, glass makers, and every single person in the long chain of employees necessary to get you to say “Hello,” or to stay warm or well lit.
As I have said in a previous column, a loaf of bread probably has 95% of its cost in the long chain of taxes, and a pittance for the flour used to make it. Does this get us back to seventy five cents an hour, if all these taxes were eliminated? Maybe not, but it would be a start. There’s a lot more. See, every building in this long chain to get your gas, juice, and phone, have property taxes on them. Buildings used to make the pipe, wire, computers, billing offices, pumping stations, generator buildings, machinery makers’ buildings, and the like, all have property taxes on them. These buildings have insurance on them, and the long chain in the insurance providers all have payroll taxes, property taxes, utility taxes, and so on, on them. The property and payroll taxes on the makers of desks, office machinery, paint, plaster, lumber, bricks, electrical fixtures, outlets, wire, breakers, transformers, and once again, the list is long. Actually, this can go on virtually forever, as far as taxes are concerned.
Every telephone, electric, and gas bill, has costs on it for the entire chain. Imagine the taxes on the food chain, with property taxes on farms, super markets, distributors, and that chain, not counting taxes on delivery trucks, tractors, fertilizer, labor, and that chain is infinite. It’s the entire cost of living, and doing anything, which makes labor costs as high as they are. Couple that with huge dollar degradation, and you have a buck that is worth maybe a couple of pennies, compared to 75 years ago, and guess what? Not only are taxes on every single needle, roll of thread, wire or copper tubing horrendous, but taxes on everything in the long chains to the consumer unbelievable also. If the dollar hadn’t lost 98% of its value, and Congress had not spent itself into oblivion, to keep getting re-elected, I might once again be happy making seventy five cents an hour, and no jobs would have left America. I brought home about seventy cents out of my seventy five, and taxes on the entire chain were miniscule Today, a $10 an hour employee, may take home $6, and the taxes on the chain are huge, making the cost of living so high, that the $10 an hour employee, can’t make it, whereas my seventy five cents an hour allowed me to do quite well. Know of any really nice apartments available for $43 a month, like I had?
Turn the clock back to when I was making seventy five cents an hour. No, take ten dollars an hour today, and subtract the taxes and dollar degradation which has occurred in the last 60 years. What do you get? You get a stable dollar, low taxes, and no jobs leaving America. You get a clerk in a store, which I was in my Dad’s drug store, making seventy five cents an hour, and doing very well. As new technology came on the scene, jobs were created, factories built, and everything was being made, right here in America, by Americans. We exported, and didn’t import. Our balance of trade was enormously on the positive side. We were the envy of the world, not the laughing stock. Everyone owed us, we didn’t owe them. China was in the dark ages. How did it happen? It all happened in Washington D.C. at the hands of 535 Representatives and Senators. The same Senators who sold their votes on Christmas eve to destroy our health system. I’m not so sure it will pass a second time, as America is really angry. Hang onto your hats, because the tea party gang, the 9/12 gang, Glenn Beck watchers, and a huge part of America, have had a belly full of the 535 in D.C. which have ruined us, and we’re going to clean house next year. I hope it isn’t too late, because I love America, and hate Washington D.C., even though I was born and raised there.