It seems that the largest obstacle to create jobs and enhance manufacturing in the United States isn’t taxes, regulation or unions. Businesses are not leaving the United States to escape high taxes or regulations. They are leaving to low wage countries. Back in the late 1970s and early 1980s, Japan was the country many businesses wanted to move into. They moved there to take advantage of their lower wages, but once the Japanese people began to demand a little more money, the businesses left to China, which by then was industrialized enough to support these new factories. Now China is starting to lose low end manufacturing to places like Vietnam and the Philippines, citing wage increases as the reason for the outsourcing.
I don’t blame the CEOs or even the boards of directors for the outsourcing of American jobs; I blame the investors on Wall Street, the financial sector. Companies like JP Morgan and Goldman Sachs, hold more influence on a company than the consumer or the small investor, like average people that have a 401(k). Wall Street firms are in the business of investments, and they need to make as much money as possible, even if it ultimately ends up destroying the manufacturing sector of the United States economy.
Think about this, an investor in Spain or South Korea has a bigger mouthpiece than you, the American citizen. If the Spanish investor believes the American worker makes to much money and he could make 5% more in his dividend check, he will make the CEO outsource the American job to Vietnam.
America has this law that publicly traded companies must make every attempt to increase profitability for their investors. If the investor believes that the publicly traded company is not making every attempt, the company can them be sued for millions of dollars. Now, the workers on the factory floor don’t have a say in this, even if he or she has a 401(k) in the business. Their influence is not a important as the 20K shares, say Goldman Sachs owns.
What America needs more of are community, private, and family owned businesses that serve the local area rather than the global community and its investors. With more of them, the influence of foreign and domestic billionaire investors will be muted. Responsible businesses will stay and serve the community, rather than a handful of investors at Goldman Sachs or in Spain.
Large corporations, who have over the last thirty years crushed the small business owner or have bought them out, put too much emphasis on maximizing shareholder value and not enough value into society. This is a direct reaction, not to the heart of the CEO, but the greed of the global investor class.