In Circleville, Ohio, population 13,000, the local RCA television-manufacturing plant was once a source of good jobs with good pay and benefits. But in late 2003, RCA's owner, Thomson Consumer Electronics, lost a sizeable portion of its production orders and six months later shut the plant down, throwing 1,000 people out of work.
Thomson's jobs have moved to China, where cheap labor manufactures what the American consumer desires -- from clothing to electronics -- and can buy at "everyday low prices" at the local Wal-Mart .....
To understand the secret of Wal-Mart's success, Smith travels from the company's headquarters in Bentonville, Ark., to their global procurement center in Shenzhen, China, where several hundred employees work to keep the company's import pipeline running smoothly. Of Wal-Mart's 6,000 global suppliers, experts estimate that as many as 80 percent are based in China .....
When trade agreements were signed between the U.S. and China in the 1990s, bringing China into the World Trade Organization, American political and business leaders embraced the idea. China's 1.2 billion people were viewed as an enormous untapped market for American-made goods. The reality, experts say, is the opposite. China's exports to the U.S. have skyrocketed.
[Update: Since this program first aired in 2004, Wal-Mart's sales have increased 30%, approaching $325 billion for 2006. And the U.S. trade deficit with China has nearly doubled, expected to hit $230 billion in 2006.]
At a salary of only 50 cents an hour or $100 a month, Chinese labor is an unbeatable bargain for international business. And the Chinese government is doing everything it can to be sure the country's infrastructure supports the export business. Ten years ago Shenzhen's main port did not exist. Today it's on the verge of becoming the third busiest port in the world .....
"If people were only consumers, buying things at lower prices would be just good. But people also are workers who need to earn a decent standard of living," says economist Larry Mishel of the Economic Policy Institute. "The dynamics that create lower prices at Wal-Mart and other places are also undercutting the ability of many, many workers to earn decent wages and benefits and have a stable life." .....
This is little consolation to the unemployed workers back in Circleville, Ohio. Steve Ratcliff, a long-time worker at the Thomson plant puts it simply: "If you want these low prices, then you go buy your products from Wal-Mart. But what does that actually do for this country? It's putting people out of work. And it's lowering our standard of living. That's the bottom line."
Ironically, for Ratcliff and his former colleagues, there are new jobs coming to town. In a patch of farmland right next to the vacant Thomson plant, Wal-Mart has broken ground on one of its new Supercenters. But the Wal-Mart jobs will represent a steep cut in pay from the $15 to $16 an hour workers made at Thomson, and a far cry from the pension, health care, and job security benefits that have long been the norm in manufacturing.
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