Vietnam is the answer to the question in the title of this article.
Vietnam’s minimum wage rate is .28 cents an hour. Environmental standards are lax, if there are any, and labor unions are non-existent. Those conditions will make it likely that more American jobs will be exported overseas because the labor, health, safety and wage standards are much less than even in China. If it wasn’t financially feasible to ship US jobs to Vietnam, a trade pact with Vietnam will make it so, and send tens of thousands upon thousands of US jobs there. Let’s face it, jobs are the number one US export.
But there’s something even more sinister than meets the eye. Millions of jobs in Mexico, Central America, Peru and Chile will also be threatened with exportation to Vietnam and China under the Trans Pacific Partnership (TPP). In which case, US exports will decline.
Maquiladora zones are located in Mexico and elsewhere in Latin America. These are free trade zones established by the United States and the host nations, such as Mexico, Honduras and El Salvador. The zones allow US manufacturers to assemble products in the zones, and then ship them duty free to the United States. Wages are bone poor in the Maquiladora zones, as low as $7.50 a day in Mexico’s northern zone, but they are higher than in Vietnam and China. China’s minimum wage is a little more than double Vietnam’s .28 cents per hour.
The parts assembled by US manufacturers in the Maquiladora zones must be made by US companies. This has been negotiated. In 2013, US corporations shipped $51 billion worth of parts manufactured in the United States to the over 3000 US factories in the northernmost Maquiladora zone in Mexico. That zone is twelve and a half miles deep and stretches from the Gulf of Mexico to the Pacific Ocean.
That 51 billion dollars of exports supports 250,000 American manufacturing jobs. The people who earn a living with those jobs spend their hard earned cash in their neighborhood grocery stores, stereo stores, clothing stores, computer stores, automobile dealerships, real estate companies, restaurants and more. That’s how those 250,000 manufacturing jobs keep another 400,000 to 800,000 people employed in other areas of the economy.
That doesn’t count the tens of thousands of Americans that mine the iron ore, or the rock, or chop the trees to make paper and houses, or manufacture cement, or who mold metal into products, and other producers of raw materials, or the people who operate the electric companies that power those 250,000 soon-to-be-lost manufacturing jobs. That’s another 100,000 US jobs in mining, smelting, excavating and other jobs dealing with raw materials that will be lost. Those jobs support another 200,000 to 300,000 service sector jobs.
But that’s not all. All of these jobs pay state, federal and local taxes that support schools, road building and maintenance, forest service jobs, fire and police, and a lot more government jobs. This is another 100,000 jobs that will be lost.
The Trans Pacific Partnership appears to be geared toward rendering obsolete the Maquiladora zones. Why else would Vietnam be a party to this agreement? The Vietnamese aren’t going to be purchasing a lot of American goods and services simply because those people can’t afford to do so.
When the Trans Pacific Partnership becomes law, kiss those jobs in the Maquiladora zones goodbye. Kiss that $51 billion dollars in US exports goodbye. And that’s just for the exports to one of these zones.
In El Salvador, 230,000 apparel workers will likely lose their jobs, which will be shipped to Vietnam if the TPP becomes law. Tens of thousands of workers in other central America nations will also lose their apparel manufacturing jobs in the zones. These people sew many of the clothes people wear in the United States and elsewhere. However, the rules of the zones state they can only assemble finished products. And that’s only in one industry.
Over 200,000 American workers supply the parts necessary to manufacture those clothes. Fabric, yarn and thread are made in US factories, and are then exported to Central America. Kiss those exports goodbye. Kiss those 200,000 plus American jobs goodbye, as well as the hundreds of thousands of US jobs supported by those manufacturing jobs.
We’re looking at the loss of billions of dollars of exports yearly, and millions of US jobs, if the TPP becomes law. And that’s only with the loss of two zones.
With the loss of jobs in the zones on such a massive scale, wages will drop like dead flies in Central America. That happened in Mexico after Nafta, which drove millions of people into the USA illegally.
Hundreds of thousands, and perhaps millions, of people will be forced to migrate to the United States illegally, and not because they want to migrate. This will depress the wages of millions of American citizens and put incredible pressure on our social service tax dollars, which will be greatly weakened by the loss of jobs.
So who benefits from the TPP? The difference between the old higher wages and the new lower wages will go straight into the pockets of rich shareholders and CEOs via higher corporate profits, rising dividends, and soaring share prices. Working people will pay the price. In other words, the TPP will redistribute massive amounts of income from the 99 to the 1 percent. That’s what it has been negotiated to do.
That’s one reason why Wall Senator Ron Wyden supports the Trans Pacific Partnership, along with President Obama, Mitch McConnell, Orrin Hatch, and Wall Street wing of the Republican Party. The TPP is an income redistribution scam.
AFL-CIO President Richard Trumka hits the mark in the video below.