International trade is a primary generator of business growth in Western New York. And a tremendous number of jobs are dependent on it.

How do we know this?

New York State is the third largest exporter of manufactured goods compared to all other states. Based on U.S. Census Bureau calculations, more than 280,000 of New York's higher-paying jobs are dependent on it. And a huge number of jobs are supported by New York's service exports. Trade, no doubt, is very important to New York!

Trade is also essential to our region.

In the Buffalo-Niagara Falls metropolitan area, the manufacturing sectors with the largest employment are also among the state's top merchandise export industries. What does this mean?

Take the local transportation equipment industry for instance. It is Buffalo-Niagara's largest manufacturing employer and New York's second largest merchandise export. It stands to reason: as Ontario auto producers (one of our principal customers) buy more auto parts from local manufacturers, we benefit.

Jack Davis, the outspoken trade protectionist who attempted to unseat Rep. Tom Reynolds in the 26th Congressional district last November, has made trade the scapegoat of virtually all our economic problems. Although his intentions are good, his trade policy recommendations, if implemented, would be disastrous for Buffalo-Niagara.

If Mr. Davis had his way, he would raise import barriers in an attempt to isolate producers from foreign competition. In response, foreign countries would retaliate by keeping U.S. products out. This would have an enormously negative impact on New York State, especially local auto parts producers who heavily rely on Ontario auto factory orders.

Overall, we would lose more jobs than gained. In fact, if we did the exact opposite—and eliminated all barriers to trade—we would create jobs! According to the U.S. International Trade Commission, if all U.S. trade barriers had been eliminated in 1999, more jobs would be gained than lost—a number representing only one one-hundredth of 1 percent of the labor force. Plus, total output would have increased by $60 billion.

Furthermore, if U.S. tariffs were raised, imported consumer products would become much more expensive, hurting local families. In turn, less disposable income would be available for education, health care, rent or the mortgage. And local factories that incorporate foreign components in their products would have to raise prices or absorb the difference.

New technologies and innovation, which have significantly boosted productivity, are primarily responsible for the loss of manufacturing jobs—not trade. As a result, fewer workers can produce much more than ever before. Surprising to many, U.S. manufacturing production has rapidly increased, not decreased, over the last 50 years, according to the Federal Reserve.

Consider this: would we have wanted to stop rising productivity in the U.S. agricultural industry that caused the number of farm jobs to fall from 9.5 million in 1940 to 2.2 million today? Currently, U.S. agricultural output can virtually feed the world. America did not “lose” 7.3 million farm jobs: they shifted to emerging industries. As a result, we became more efficient and prosperous.

Would we want to go back and save buggy maker jobs at the expense of auto workers, dump ATMs because they eliminated bank teller positions or destroy voice mail because it replaced receptionists?

Since 1970, the U.S. economy generated 60 million net new jobs. What's more, the Department of Labor projects a net increase of another 21.3 million from 2002 through 2012, with 96 percent in the service sector.

How well do service jobs pay? Over the last decade, the U.S. service industry has become highly sophisticated. In turn, average hourly earnings for service production workers have already caught up to those in manufacturing, according to the Bureau of Labor Statistics.

In his December 2004 op-ed entitled, What Would John Wayne Do?, Jack Davis applies John Wayne-era solutions to today's challenges. This is part of the problem.

Today, technological advances, the fall of Communism and globalization are shaping a new world. In response, we can elect representatives who recognize this and take actions to improve the region's competitiveness or chose policymakers who hope the world of John Wayne returns.

Trade is not the cause of local economic ills. It's one of the few bright spots on our economic horizon.

This article appeared in the Tonawanda News, February 17, 2005
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John Manzella
About The Author John Manzella [Full Bio]
John Manzella is a world-recognized author and speaker on global business, competitive strategies and the latest economic trends. He also is founder of the ManzellaReport.com and Manzella Trade Communications, Inc. His latest book is Global America: Understanding Global and Economic Trends and How To Ensure Competitiveness.




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