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Lou Dobbs Tonight
Thanksgiving Stunner: President Bush Visits Baghdad; U.S. Continues To Lose Textile Jobs To Foreign Markets; China Agrees To Buy Large Quantities Of U.S. Made Auto Parts
Aired November 27, 2003 - 18:10 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ANNOUNCER: This is a special holiday edition of LOU DOBBS TONIGHT for Thursday, November 27. Sitting in for Lou Dobbs, Kitty Pilgrim.
KITTY PILGRIM, HOST: Good evening. Tonight, "Exporting America," our special report on the alarming trend of sending American jobs overseas. It's an effort to save money for companies because foreign labor is cheaper. But it's a big business practice that carries an enormous cost to the American economy.
More than two million American jobs have been exported in the last two years alone. The United States trade deficit with China is currently at record levels, and Americans are buying tens of billions of dollars worth of overseas products every month.
Tonight, we'll hear from Commerce Secretary Don Evans about the Bush administration's plans to stem the flood of American jobs offshore. And former U.S. Ambassador to China, James Sasser, talks about America's trade relationship with China and what that means for millions of out of work Americans. He will join us.
And some good news. Some American companies are fighting to keep American work workers on the job.
We begin tonight with what many call the global race to the bottom. Major retailers are in competition to sell their products at the lowest possible price no matter what the cost to the American worker. Too often, the so-called race to the bottom is leaving the American worker in last place.
(BEGIN VIDEOTAPE)
PILGRIM (voice-over): A Nike store in New York City. Ninety- nine percent of all Nike sneakers are made Asia, in factories like this one in China. At the Gap, 95 percent of products made in China and 50 other countries.
All-American J. Crew, not exactly. Eighty percent made in Asia. Wal-Mart, the largest retailer in the world, and the largest importer of goods made from China, $12 billion worth a year.
Retailers are buying more from overseas, and millions of U.S. manufacturing jobs have migrated to low-wage countries. American workers lose out. BRUCE RAYNOR, PRESIDENT UNITE: Manufacturing workers in this country, $14, $15, $16 an hour with benefits, some of them more than that. They're not jobs you get rich. These are people that are making it to the lower middle class. Those jobs are wiped out.
PILGRIM: Workers are cheaper overseas. The National Labor Committee has found in some extreme cases Chinese workers making just 3 cents an hour. A comparative retailing study by a private research group found U.S. workers making $8 an hour, while they were making $1.15 in the Dominican Republic, 35 cents in Mexico, 65 cents in Thailand, and 15 cents an hour in Indonesia.
CHARLES KERNAGHAN, NATIONAL LABOR COMMITTEE: It's true, we are engaged in this race to the bottom where companies move production, like on a chessboard, in search of the lowest wages. In the United States, workers are being pitted against desperately poor people in the developing world in this race to the bottom.
PILGRIM: The profit is enormous. The markup on the product is exponential. The National Labor Committee found a Nike T-shirt that cost $20 in the United States is made by workers in Honduras making 6 cents an hour. A Sean John long-sleeved T-shirt selling for $40 is made in Honduras by workers making 15 cents an hour.
(END VIDEOTAPE)
PILGRIM: The pressure has been on retailers to monitor working conditions abroad even if they don't own the factories themselves. Major retailers have joined the Fair Labor Association to work with government to improve working conditions abroad.
The world's largest retailer, Wal-Mart, is currently China's fifth largest market. Wal-Mart imports $12 billion worth of Chinese goods every year. As a nation, the United States is expected to record a staggering $130 billion trade deficit with China by the end of this year. But the debate about how to control the deficit has become more than a matter of economics.
In a highly political move, China has announced deals to buy millions of dollars worth of U.S.-made cars and auto parts. Those deals, however, will barely dent the massive trade imbalance.
Bill Tucker reports.
(BEGIN VIDEOTAPE)
BILL TUCKER, CNN CORRESPONDENT (voice-over): In Washington, D.C., Commerce Secretary Don Evans presides over the signing of billions of dollars worth of deals with Boeing and General Electric. In Detroit, China's vice minister of commerce signs multi-billion- dollar deals with Ford and General Motors, under which the automakers will ship 5,000 vehicles a piece to China. But here's the problem: the cumulative trade deficit with China in the first nine months of this year alone is greater than $77 billion.
LAEL BRAINARD, BROOKINGS INSTITUTION: This is an absolutely tried and tested pattern with the Chinese. What the administration, what Congress and what U.S. businesses need to do is say, hey, this is not enough. Yes, we're happy to get your deals, but there are fundamental problems in our trade with China that need to be fixed.
TUCKER: But it would appear the companies and the politicians are content to take the money and smile. And the deals are worth a lot. But their total value barely exceeds what we are now buying routinely from China in any given three-month period. And for that reason, at least one trade strategist doesn't like the deals, saying the ongoing trade deficit with China cost Americans their jobs and ultimately threatens American business.
CONSTANTINE MENGES, HUDSON INSTITUTE: If they're taking jobs today, millions of jobs, you can count on the fact that that $65 million Boeing airplane that will be sold now to China will in five years be produced by China for $15 million or $10 million and will drive Boeing out of business. I mean, China will take whole industries over with its unfree labor and unfair trade practices if it keeps going the way it's going.
TUCKER (on camera): In the end, these are the kinds of deals that create the headlines that look good for the Chinese and play well for an administration as it heads into an election year. But they don't do anything to fix the problem.
Bill Tucker, CNN, New York.
(END VIDEOTAPE)
PILGRIM: Lou Dobbs recently spoke with Commerce Secretary Don Evans after he returned from a trip to China. Lou began by asking Secretary Evans about the Bush administration's plans to fight the ballooning trade deficit and about what his message was to the Chinese.
(BEGIN VIDEOTAPE)
DON EVANS, COMMERCE SECRETARY: I delivered a very strong message to them that, look, we love competition in America. We're the best competitors in the world. But we're going to demand a level playing feel.
We're going to demand that our competitors and our workers here in America are on the same -- are on a level playing field with everybody else in the world. And what I talked about when I was in China was their lack of enforcement of intellectual property rights. What I talked about in China was a continuing subsidies that enterprises receive from state-owned banks.
What I talked about in China were non-performing loans in their banks. The official numbers 30 percent. I think it's probably closer to 50 percent.
LOU DOBBS, HOST: Right.
EVANS: And what I talked about in China was the importance of them continuing to pick up the pace of meeting their WTO obligations and opening up their markets to American workers and American products.
DOBBS: Technology, aerospace amongst our chief exports to China. Again $130 billion deficit. Jobs are also a leading export from this country to China, a country that has to produce somewhere between eight and 10 million jobs a year just to maintain pace with this population growth. How long can we sustain this?
EVANS: Well, Lou, I think it's important to always point out how dynamic our own economy is and how many jobs we're creating in the American economy. You know, people, when they see the unemployment numbers, don't realize that our economy creates about eight million jobs a quarter. And so there are eight million new jobs out there every quarter for American workers.
Do we lose jobs? Yes, indeed, we do. And the key is to always have a net increase of job gains.
But we have an incredibly dynamic economy. As I travel the world, the world marvels at our ability to create new jobs in this country. Over the last 20 years we have created some 40 million new net jobs. To give you the example of the last 10 years, we created about 342 million new jobs, we lost 324 million jobs, for a net gain of 18 million jobs. So we've got a -- we've got a job-creating economy here in America.
DOBBS: Mr. Secretary, did I just hear you take credit for job growth during the Clinton administration?
EVANS: No, I took credit for it during the Reagan and the 1990s. What I said was, over the last 20 years, we've created some 40 million new jobs in this economy. That would be the Reagan, that would be Bush, that would be Clinton.
DOBBS: I think that is -- I have to say, Mr. Secretary, my compliments. That is one of the more intriguing constructions of job creation. And you're exactly right. And I admire the bipartisan approach to job creation.
In point of fact in this country, though, we have to, as you suggest -- 150,000 jobs have to be created every month to maintain pace with our population growth. We approach that in the most recent months reported, 7.2 percent GDP growth. If this economy can maintain that, it's going to be a very happy time.
We do have some significant issues. Amongst them, high-value jobs being exported overseas, outsourced by corporate America. The numbers, according to the most recent University of California survey, 14 million jobs at risk. This is not the free trade world that most people were talking about a decade ago, is it?
EVANS: Well, you know, Lou, this is a more integrated economy, more interlinked, more networked economy than anybody thought imaginable, even 10 years ago. But the CEA just had a report that I looked at that said when our imports increase in a sector of our economy, jobs also increase in that sector our economy. And it's because how integrated and interlinked this global economy is becoming.
And Lou, I think it's very important for everybody to realize that this is not a zero sum gain in the global economy. This is a win-win. When you see jobs created in other parts of the world it really has a very positive impact on the American economy.
DOBBS: I assure you, I'm not thinking of it as a zero sum gain. I'm thinking of it in terms of $503 billion current account deficit, last year about $2.5 trillion sitting out there of potential foreign ownership of the assets of this country. Fourteen million jobs that are vulnerable to outsourcing, and the significant exportation of high-value jobs, which just raises a host of issues.
I understand your perspective. But would you not concede that the issues are so complex and so important that we've got to evaluate those very real threats?
EVANS: Lou, what I would say, it's very, very important for us to continue to create the environment for competition. I think competition is the key to continuing to grow our economy and the global economy. Competition on a level playing field, because what competition does is it leads to innovation ,which leads to higher productivity, which leads to economic growth, and which leads to a higher standard of living.
I think that's exactly what's happening in the American economy. I think we'll see it happening in the global economy.
DOBBS: Mr. Secretary, I'm with you all the way, as long as competition, efficiency and productivity don't become code words for cheaper labor. You don't mean that?
EVANS: No. You know, Lou, look, I think it's very, very important, as I did in China, continue to press the issue to the world that we love to compete, but it's going to be on a level playing field. We're all going to play by the same rules.
DOBBS: Commerce Secretary Don Evans, we appreciate your time.
EVANS: Sure, Lou. Good to be with you.
DOBBS: And we appreciate your getting tough. Thank you.
(END VIDEOTAPE)
PILGRIM: Coming up: a Chinese company that is stealing U.S. technology. All you have to do to prove it is check out a Web site. Peter Viles will have the report and the Web site.
Then, millions of American jobs already shipped offshore. Former Ambassador to China, James Sasser, talks about what that means for the American worker. Ambassador Sasser is our guest next.
And fighting back. The companies that are trying to keep Americans on the job right here at home. Casey Wian will report.
(COMMERCIAL BREAK)
ANNOUNCER: LOU DOBBS TONIGHT continues. Now, "Exporting America."
PILGRIM: While the United States trade deficit with China is building to record levels, China is stealing U.S. technology. Global piracy of technology is a problem that costs American companies an estimated $200 billion a year. An Oregon technology company is just one of China's victims. The Chinese company has stolen and counterfeited its entire product line right down to its Web site.
Peter Viles reports.
(BEGIN VIDEOTAPE)
PETER VILES, CNN CORRESPONDENT (voice-over): Pop quiz: which company is the American original and which is the Chinese...
Videx makes data collection systems. So does Vdiax. Its web site has an American flag and boasts, quote, "American technology." But look closely. The word "American" isn't even spelled correctly. Vdiax is the fake.
Somewhere in China it is counterfeiting the entire Videx line of hand-held data machines.
ANDY HILVERDA, VICE PRESIDENT, VIDEX: This is made by us here in Corvalis (ph), Oregon. This one here is made in China.
VILES: Videx is a growing company that employs 50 people in Oregon and has known about the counterfeiting for a year. Its sales in China have collapsed, falling more than 80 percent. And now those fake products are showing up elsewhere in Asia.
REP. PETER DEFAZIO (D), OREGON: This is unfortunately not a new problem with China. It's a recurrent problem.
VILES: On behalf of Videx, Defazio wrote to Commerce Secretary Don Evans and trade representative Robert Zellick, asking them to do something, anything to stop the counterfeiting.
One option, to file a complaint with the World Trade Organization. But a spokesman for Zellick says the administration prefers to deal directly with China on the issue.
From time to time, the Chinese government does stage a symbolic destruction of pirated goods. But counterfeiting is still rampant, despite agreements with Washington to protect intellectual property in 1992 and again in '95, the USTR said this year, quote, "China remains one of the last countries in the world that fails to use its criminal law to go after commercial copyright pirates and trademark counterfeiters."
Peter Viles, CNN, New York. (END VIDEOTAPE)
PILGRIM: Our next guest says the White House has accused China of unfair trade practices, including currency manipulation and blocking U.S. exports to China for its own political reasons, to use China as a scapegoat for economic problems in this country.
James Sasser is a former U.S. ambassador to China, also a former senator from the state of Tennessee. Lou Dobbs recently spoke with the ambassador and began by asking him about the growing trade dispute with China and what he would propose as a solution.
(BEGIN VIDEOTAPE)
JAMES SASSER, FORMER U.S. AMBASSADOR TO CHINA: We've got to make a decision about where we're going. I mean, the United States over a period of a number of years has been the chief advocate of free trade, has been the chief advocate of globalization and now, when it starts biting us, we start crying about it.
And that's just one of the effects of globalization.
LOU DOBBS, HOST: Well...
SASSER: The European countries are hit even harder than it's hit us.
DOBBS: I guess, when you're in pain, should you cry? Should you not, when there's a problem that is reaching crisis proportions, not deal with it, I guess is my question to you.
You mentioned $100 billion in purchases in U.S. securities, both debt and equity. Further purchases by Japan. They're not doing us any favors there, as you well know, ambassador. Those are claims on ownership of U.S. assets. That's not...
SASSER: No, no.
DOBBS: That's not particularly great.
SASSER: Well, no. These -- they're parking a lot of the money that's going from the U.S. to China and to Japan is being parked in the federal treasury. The federal treasury uses those bonds to finance the deficit, which keeps interest rates low here.
DOBBS: This is where -- now what do you do with a poor fellow like me, ambassador? I don't like high deficits. I don't like exporting jobs. And I think we ought to have a responsible, fair trade policy that does not result in such an inequity in the relationship.
And I sure don't like our overseas competitors in this world trade system holding, as they do, $2.5 trillion worth of claims on American assets.
SASSER: Well, Lou, that's just -- that's just the way the cookie crumbles these days. And the truth is that American corporations operating in China make larger profits in China than they do any other foreign country in this world.
DOBBS: That's just -- that's just awful, but what about the people who are losing their jobs? At what point do -- well, I mean, we don't just simply say the cookie crumbles here. We've got to go a little farther than that, Ambassador.
SASSER: I agree with that. But we are the author of our own misfortunes here.
DOBBS: I take full responsibility. You can blame me personally. What I'm crying out for here, Ambassador, is a solution because it cannot, can it, go on?
SASSER: Well, I'm not the wisest man in the world. I don't know what the solution is. But the economists tell us that over time, globalization will level out. It's going to be a very, very painful process, I think, to absorb these vast labor markets in China and India and Mexico.
DOBBS: Well, as I look around...
SASSER: But that's the direction we're headed.
DOBBS: Well, it may be the one we're headed but I kind of react when people tell me that we don't have control of our own destiny in this country.
As one that's been responsible for shaping that destiny, I'd just like to get from you a sense of what in the world is so spectacular about having Wal-mart as the fifth largest importer of Chinese goods? What is so spectacular about the outsourcing of American jobs?
What is so spectacular about raising all of these barriers to U.S. exports, at the same time pushing down wage levels in this country?
This doesn't sound to me like it has a happy ending when it levels out.
SASSER: Well, now Lou, you're making a very passionate and strong argument there. I would question some of your facts.
DOBBS: Let's go.
SASSER: China, for example, has joined the World Trade Organization. They are busy now, lowering tariffs, which is causing vast unemployment in the Chinese-state-owned industries. They have 200 million people in their country unemployed, and they have to create 20 million jobs every year.
So I feel badly about our workers, but there are workers in other countries that have severe problems as well.
DOBBS: Not to put too fine of a point on it... SASSER: If you think our problems are bad, wait till you see the Europeans'. I mean, they've been running these double digit unemployment rates now for years.
DOBBS: Ambassador, not to put too fine a point on it, the fact is I care about those American jobs before I care about the Chinese. I care about American capital before I worry about European capital.
And I can't for the life of me understand why American lawmakers and policy makers wouldn't have that set of priorities to begin with.
SASSER: Well, Lou, it has been the American multinational corporations who have pushed globalization.
It's American multinational corporations that wanted the trade pact with Mexico. It's American multinational corporations that wanted to force open the China market with WTO.
When I say we've done it to ourselves to a certain extent, we have. But this is the way the world works now.
DOBBS: The way the world works...
SASSER: We cannot wall ourselves off.
DOBBS: Ambassador, I wouldn't have us wall ourselves off for anything. We're the farthest thing from being walled off.
But when we start tearing up the working -- hard working men and women of this country where their jobs, the jobs, the average pay is declining, where those jobs are fewer, where we are giving up on the issue of tariffs. The president, this administration, as you know, a huge decision to make on whether or not to lift those tariffs on steel or face retaliation from the European Union.
At what point do you say, the pain is too great for Americans...
SASSER: I think...
DOBBS: ... and put that as a priority?
SASSER: I think that's a statement for Americans to make for themselves and to make it through their lawmakers.
DOBBS: Don't you think this should be at the forefront amongst the top issues for our Democratic candidates and this president to deal with in this election year?
SASSER: Oh, I most assuredly do.
DOBBS: Ambassador, you and I have just reached absolute agreement on an issue. Ambassador James Sasser, it's always good to talk with you. Thank you for being here.
SASSER: Lou, good to talk to you.
(END VIDEOTAPE)
PILGRIM: Coming up next in our special report "Exporting America," Americans fighting back against visa programs that allow one million foreigners to work in this country, in many cases taking jobs from higher paid American workers. Bill Tucker will report.
And "Face Off," a controversial trade proposal that could cost a lot more Americans their jobs. Congressman Adam Smith says more free trade will open markets for American countries in this hemisphere, and Congresswoman Marcy Kaptur says it will come at the price of American jobs.
They "Face Off" next.
(COMMERCIAL BREAK)
PILGRIM: Few immigration programs are more controversial then our foreign worker visas. An estimated one million foreigners working in this country entered on H1B and L1 visas.
Many of them hold technology jobs once held by higher paid Americans who are now unemployed. Those workers are angry. They're angry, but they're not acting like victims. They're fighting back.
Bill Tucker reports.
(BEGIN VIDEOTAPE)
BILL TUCKER, CNN CORRESPONDENT (voice-over): America's high-tech workers are not going quietly onto the unemployment lines. Among other things, they're actively lobbying Congress to stop what they see as an impending disaster.
SONA SHAH, SOFTWARE PROGRAMMER: It's now or never. I really don't think America can afford to lose the tech industry. And I really think that's what's happening.
TUCKER: Sona is a computer programmer who lost her job to a lower paid H1B visa worker.
These are historically the top five companies using H1B visa employees. They're all tech companies but these visa programs are not just a threat to high-tech workers. H1Bs are issued for accounting, architects and design, managerial and administrative positions and yes, even television positions.
Sources within CNN admit that a little less than two percent of its workforce are H1B visa workers. CNN will not officially confirm that number, nor is it legally required to.
MICHAEL GILDEA, AFL-CIO: As this issue stays out in front, I think there will be growing public resentment about how these programs function and more and more pressure to reform them.
TUCKER: And pressure's being applied. Representative Rosa Delauro has introduced legislation to reform the L1 visa program, which allows companies to transfer employees within a company from overseas and to limit for the first time the number issued.
REP. ROSA DELAURO (D), CONNECTICUT: These are high level jobs which people have a degree for. We cannot use the L1 visa program as a back door to displacing American workers, to paying people lower wages.
TUCKER: the sense of urgency couldn't be stronger in the eyes of those who've lost their jobs, particularly for Natasha Humphries, who was fired by her employer Palm, after she trained the employees that replaced her.
NATASHA HUMPHRIES, SOFTWARE ENGINEER: It's a race to the bottom. They're looking for the cheapest dollar, and it's for the best price, for the most talent that they can find.
And so it's really important to me to demonstrate to other individuals that you do have recourse. You know, if we organize, if we mobilize, and gather our resources, you know, maybe we can effect legislative change.
TUCKER (on camera): The H1B visa was created back in 1990 to allow companies to bring in foreign labor to ease a labor shortage. They last five years, they can be renewed and no one is certain how many workers are under the H1B visa program in the United States.
Bill Tucker, CNN, New York.
(END VIDEOTAPE)
PILGRIM: As many as 14 million American jobs are at risk of being exported. That is, according to an alarming new study from the University of California at Berkeley. The study is a sobering warning for just about any American worker whose job involves sitting at a desk, talking on the phone or working on a computer.
Peter Viles reports.
(BEGIN VIDEOTAPE)
VILES (voice-over): They call it the new wave in the outsourcing revolution: high-paying white collar jobs that can be moved overseas easier and faster than factory jobs were. Jobs in insurance, legal research, data analysis, call centers, payroll and other back office activities.
ASHOK DEO BARDHAM, UNIVERSITY OF CALIFORNIA, BERKELEY: I think we are right in the beginning, this trend has just started.
VILES: That from the co-author of a new University of California study that says as many as 14 million jobs are at risk. That's 11 percent of the U.S. workforce. Average annual salary in those jobs, a shade under $40,000. Biggest group of jobs at risk, 8.6 million in office support.
The threat's strongest in cities built on high-paying service jobs, cities like Boston, New York, San Francisco and San Jose. And where are the jobs going? India, which will have 17 million workers available in information technology by 2008 and is already becoming America's tech support office.
REP. BRAD SHERMAN (D), CALIFORNIA: Let's say you call an 800 number to get information about your computer. You're calling Bombay. As a matter of fact, they've trained people there to say that you've reached Houston, Texas. But they're in Bombay.
VILES: It really doesn't matter how hard Americans work or how productive they become. These are the average salaries for programmers, $60,000 to $80,000 in the U.S., $23,000 to $34,000 in Ireland, just under $9,000 in China, even cheaper in India and watch out, India, cheaper yet in Poland and Hungary.
(on camera) Now, whether these jobs are actually sent out of the United States or not, the mere threat of outsourcing can have negative consequences. Chief among them: that threat tends to drive down wages here in the United States.
Peter Viles, CNN, New York.
(COMMERCIAL BREAK)
PILGRIM: Coming up, "Face Off," two very different views on a controversial proposal to expand the free trade area well beyond our borders. Congressman Adam Smith is for the proposal and Congresswoman Marcy Kaptur is against. They will "Face Off" here next.
(COMMERCIAL BREAK)
PILGRIM: The massive shipment of U.S. manufacturing jobs overseas has changed the lives of millions of Americans. This summer one community in North Carolina was especially hard hit when textile maker Pillotex was driven out of business by cheap foreign labor and cheap imports.
Despite efforts to retrain laid-off manufacturing workers for other jobs, the problem in places like Canopolis (ph), North Carolina is that better jobs are hard to find.
For thousands of people now struggling to find new jobs, free trade carries a very steep cost.
Peter Viles has the report.
(BEGIN VIDEOTAPE0
UNIDENTIFIED MALE: Look at this new statement, which is the Internet is the next level.
VILES (voice-over): After 15 years in a factory, Brenda Miller is retraining for a new job in a county where unemployment stands at 11 percent.
BRENDA MILLER, LAID-OFF PILLOTEX WORKER: The workers are not doing good. There are no jobs to replace the jobs that they have lost.
VILES: Pillotex, a maker of sheets and towels, shut down in July, driven out of business by cheap imports. Nearly 5,000 workers lost their jobs.
DONALD MALLO, HUMAN RESOURCES, PILLOTEX: Our people adapted; they were loyal. They would do anything to make this company survive, and we tried different ways to let that happen, just we're not successful.
VILES: The federal government responded with $20 million in emergency aid to extend unemployment benefits, offer free tuition at community colleges, and pay 65 percent of the cost of health insurance.
KRISTY CARTEE, LAID-OFF PILLOTEX WORKER: I know a lot of people were still paying $1,000 a month just for healthcare.
VILES: Still, laid off workers are swamping community colleges. This expects 2,000 students from Pillotex alone.
RICHARD BROWNELL, ROWAN-CABARRUS COMMUNITY COLLEGE: We're chock- a-block full in every direction on both campuses, day and night. We've spilled over into other public spaces. We're using high schools at night.
VILES: Among the most popular career paths at this community college, nursing, automotive repair, truck driving, heating and cooling systems maintenance.
Brenda Miller hopes for a job in marketing.
MILLER: We hope that by the time we get our degrees that during this two-year period there will be some kind of economic turnaround in the state to where when we graduate, there will be jobs to go to.
VILES: Peter Viles, CNN, New York.
(END VIDEOTAPE)
PILGRIM: Coming up, fighting back, American companies that are doing everything they can to keep American jobs on American soil and finding that it's also good for business.
Casey Wian will report from Pamona, California.
(COMMERCIAL BREAK)
PILGRIM: The ongoing exporting of American jobs to cheap overseas labor markets has simply devastated manufacturing and high- tech workers in this country.
However, we also have some good news tonight. There are some American companies trying to hard to be responsible corporate citizens, trying to hard to keep Americans on the job. And they're finding that keeping those jobs at home is also good for business. Casey Wian reports from Pamona, California.
(BEGIN VIDEOTAPE)
CASEY WIAN, CNN CORRESPONDENT (voice-over): Hayward Pool Products considered moving some operations overseas.
PAUL ADELBERG, V.P. MANUFACTURING, HAYWARD POOL PRODUCTS: We can actually produce a product more cost effectively with better quality, more reliability and less risk than going offshore.
WIAN: Haywood transformed itself using the Kaisan manufacturing process, first popularized in Japan by Toyota. Simple changes, such as color coded tags for parts management and a resigned factory floor, increased productivity by 37 percent.
Almost nothing is wasted. Even tiny scraps of plastic trimmed from parts are recycled.
(on camera) It used to take Hayward workers about an hour and a half to switch out one of these giant ejection molds. Since adopting the Kaisan manufacturing techniques, the job can be done in less than 20 minutes.
UNIDENTIFIED MALE: Bring the setup parameters to the specifications and it will help us do a quicker start-up.
WIAN (voice-over): And Hayward is not stopping there. This week a group of Kaisan-trained executives from other companies are helping figure out how to cut that time to just ten minutes.
WILLIAM SCHWARTZ, IBM CONSULTING: We see a tremendous migration of production work to off-shore entities around the world, Mexico and especially in China. And companies are using these strategies to counter that flow, to be more productive, to be more cost effective and to keep jobs here in the U.S.
WIAN: Software developer Integnology is one tech company bucking the off-shoring trend. CEO Basheer Janjua, a U.S. citizen, says there's a large supply of displaced American I.T. workers with more skills than their overseas counterparts.
BASHEER JANJUA, CEO, INTEGNOLOGY: I would rather give them a chance, because if you are a master work, you know, you have a masterpiece. Yes, it's cheap but quality's cheap, it's late, it's not on schedule, you missed the market. So do the math. In total, you're losing.
WIAN: Web site designer M3I Works doesn't bother bidding for business that's extremely price sensitive but instead focuses on clients seeking local customer service.
LINDA GOLD, CEO, M3I WORKS: Programmers in Indian are making anywhere from $10 to $15 an hour. Our programmers here are making anywhere from $40 to $120 an hour. So if I have to compete on price, I don't enter the contest. WIAN: One way she levels the labor cost playing field is by using more college interns.
Casey Wian, CNN, Pamona, California.
(END VIDEOTAPE)
PILGRIM: Tonight's thought is on giving thanks. Quote, "We have been the recipients of the choicest bounties of heaven: we have been preserved these many years in peace and prosperity. We have grown in numbers, wealth and power as no other nation has ever grown," unquote. That from Abraham Lincoln.
Coming up, your thoughts on our special report, "Exporting America." including one interesting idea about how to motivate lawmakers in Washington. State with us.
(COMMERCIAL BREAK)
ANNOUNCER: "LOU DOBBS TONIGHT" continues.
PILGRIM: Finally tonight a look at some of your thoughts on "Exporting America."
From New York City, "Thank you for pointing out that there are positions other than free-trader or protectionist. Only fair trade, with basic environmental and wage agreements, will protect American manufacturing jobs." That from Drew Vandiver.
From Houston, Texas, "Many people claim that in attempting to level the playing field, we have become involved in a race to the bottom. Maybe the filthy rich multi-national corporations ought to put their money where their mouth is, rather than letting their executives continue to abscond with it by way of fraudulent investment practices, ridiculous salaries or packing it into their golden parachutes." That from Karl Schaeffer.
From Lancaster, Pennsylvania, "The answer for the joke called free and balanced trade is simple. Notify every member of Congress that a plane carrying Chinese replacements has just departed Shanghai for Washington, D.C. This would give a new meaning to 'recess appointments'." Timothy Trimble.
We love hearing from you. Send us your thoughts at LouDobbs@CNN.com.
That's our show for tonight. Thanks for being with us. Have a wonderful, safe and happy Thanksgiving. For all of us here, good night from New York.
END
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Continues To Lose Textile Jobs To Foreign Markets; China Agrees To Buy Large Quantities Of U.S. Made Auto Parts>
Aired November 27, 2003 - 18:10 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ANNOUNCER: This is a special holiday edition of LOU DOBBS TONIGHT for Thursday, November 27. Sitting in for Lou Dobbs, Kitty Pilgrim.
KITTY PILGRIM, HOST: Good evening. Tonight, "Exporting America," our special report on the alarming trend of sending American jobs overseas. It's an effort to save money for companies because foreign labor is cheaper. But it's a big business practice that carries an enormous cost to the American economy.
More than two million American jobs have been exported in the last two years alone. The United States trade deficit with China is currently at record levels, and Americans are buying tens of billions of dollars worth of overseas products every month.
Tonight, we'll hear from Commerce Secretary Don Evans about the Bush administration's plans to stem the flood of American jobs offshore. And former U.S. Ambassador to China, James Sasser, talks about America's trade relationship with China and what that means for millions of out of work Americans. He will join us.
And some good news. Some American companies are fighting to keep American work workers on the job.
We begin tonight with what many call the global race to the bottom. Major retailers are in competition to sell their products at the lowest possible price no matter what the cost to the American worker. Too often, the so-called race to the bottom is leaving the American worker in last place.
(BEGIN VIDEOTAPE)
PILGRIM (voice-over): A Nike store in New York City. Ninety- nine percent of all Nike sneakers are made Asia, in factories like this one in China. At the Gap, 95 percent of products made in China and 50 other countries.
All-American J. Crew, not exactly. Eighty percent made in Asia. Wal-Mart, the largest retailer in the world, and the largest importer of goods made from China, $12 billion worth a year.
Retailers are buying more from overseas, and millions of U.S. manufacturing jobs have migrated to low-wage countries. American workers lose out. BRUCE RAYNOR, PRESIDENT UNITE: Manufacturing workers in this country, $14, $15, $16 an hour with benefits, some of them more than that. They're not jobs you get rich. These are people that are making it to the lower middle class. Those jobs are wiped out.
PILGRIM: Workers are cheaper overseas. The National Labor Committee has found in some extreme cases Chinese workers making just 3 cents an hour. A comparative retailing study by a private research group found U.S. workers making $8 an hour, while they were making $1.15 in the Dominican Republic, 35 cents in Mexico, 65 cents in Thailand, and 15 cents an hour in Indonesia.
CHARLES KERNAGHAN, NATIONAL LABOR COMMITTEE: It's true, we are engaged in this race to the bottom where companies move production, like on a chessboard, in search of the lowest wages. In the United States, workers are being pitted against desperately poor people in the developing world in this race to the bottom.
PILGRIM: The profit is enormous. The markup on the product is exponential. The National Labor Committee found a Nike T-shirt that cost $20 in the United States is made by workers in Honduras making 6 cents an hour. A Sean John long-sleeved T-shirt selling for $40 is made in Honduras by workers making 15 cents an hour.
(END VIDEOTAPE)
PILGRIM: The pressure has been on retailers to monitor working conditions abroad even if they don't own the factories themselves. Major retailers have joined the Fair Labor Association to work with government to improve working conditions abroad.
The world's largest retailer, Wal-Mart, is currently China's fifth largest market. Wal-Mart imports $12 billion worth of Chinese goods every year. As a nation, the United States is expected to record a staggering $130 billion trade deficit with China by the end of this year. But the debate about how to control the deficit has become more than a matter of economics.
In a highly political move, China has announced deals to buy millions of dollars worth of U.S.-made cars and auto parts. Those deals, however, will barely dent the massive trade imbalance.
Bill Tucker reports.
(BEGIN VIDEOTAPE)
BILL TUCKER, CNN CORRESPONDENT (voice-over): In Washington, D.C., Commerce Secretary Don Evans presides over the signing of billions of dollars worth of deals with Boeing and General Electric. In Detroit, China's vice minister of commerce signs multi-billion- dollar deals with Ford and General Motors, under which the automakers will ship 5,000 vehicles a piece to China. But here's the problem: the cumulative trade deficit with China in the first nine months of this year alone is greater than $77 billion.
LAEL BRAINARD, BROOKINGS INSTITUTION: This is an absolutely tried and tested pattern with the Chinese. What the administration, what Congress and what U.S. businesses need to do is say, hey, this is not enough. Yes, we're happy to get your deals, but there are fundamental problems in our trade with China that need to be fixed.
TUCKER: But it would appear the companies and the politicians are content to take the money and smile. And the deals are worth a lot. But their total value barely exceeds what we are now buying routinely from China in any given three-month period. And for that reason, at least one trade strategist doesn't like the deals, saying the ongoing trade deficit with China cost Americans their jobs and ultimately threatens American business.
CONSTANTINE MENGES, HUDSON INSTITUTE: If they're taking jobs today, millions of jobs, you can count on the fact that that $65 million Boeing airplane that will be sold now to China will in five years be produced by China for $15 million or $10 million and will drive Boeing out of business. I mean, China will take whole industries over with its unfree labor and unfair trade practices if it keeps going the way it's going.
TUCKER (on camera): In the end, these are the kinds of deals that create the headlines that look good for the Chinese and play well for an administration as it heads into an election year. But they don't do anything to fix the problem.
Bill Tucker, CNN, New York.
(END VIDEOTAPE)
PILGRIM: Lou Dobbs recently spoke with Commerce Secretary Don Evans after he returned from a trip to China. Lou began by asking Secretary Evans about the Bush administration's plans to fight the ballooning trade deficit and about what his message was to the Chinese.
(BEGIN VIDEOTAPE)
DON EVANS, COMMERCE SECRETARY: I delivered a very strong message to them that, look, we love competition in America. We're the best competitors in the world. But we're going to demand a level playing feel.
We're going to demand that our competitors and our workers here in America are on the same -- are on a level playing field with everybody else in the world. And what I talked about when I was in China was their lack of enforcement of intellectual property rights. What I talked about in China was a continuing subsidies that enterprises receive from state-owned banks.
What I talked about in China were non-performing loans in their banks. The official numbers 30 percent. I think it's probably closer to 50 percent.
LOU DOBBS, HOST: Right.
EVANS: And what I talked about in China was the importance of them continuing to pick up the pace of meeting their WTO obligations and opening up their markets to American workers and American products.
DOBBS: Technology, aerospace amongst our chief exports to China. Again $130 billion deficit. Jobs are also a leading export from this country to China, a country that has to produce somewhere between eight and 10 million jobs a year just to maintain pace with this population growth. How long can we sustain this?
EVANS: Well, Lou, I think it's important to always point out how dynamic our own economy is and how many jobs we're creating in the American economy. You know, people, when they see the unemployment numbers, don't realize that our economy creates about eight million jobs a quarter. And so there are eight million new jobs out there every quarter for American workers.
Do we lose jobs? Yes, indeed, we do. And the key is to always have a net increase of job gains.
But we have an incredibly dynamic economy. As I travel the world, the world marvels at our ability to create new jobs in this country. Over the last 20 years we have created some 40 million new net jobs. To give you the example of the last 10 years, we created about 342 million new jobs, we lost 324 million jobs, for a net gain of 18 million jobs. So we've got a -- we've got a job-creating economy here in America.
DOBBS: Mr. Secretary, did I just hear you take credit for job growth during the Clinton administration?
EVANS: No, I took credit for it during the Reagan and the 1990s. What I said was, over the last 20 years, we've created some 40 million new jobs in this economy. That would be the Reagan, that would be Bush, that would be Clinton.
DOBBS: I think that is -- I have to say, Mr. Secretary, my compliments. That is one of the more intriguing constructions of job creation. And you're exactly right. And I admire the bipartisan approach to job creation.
In point of fact in this country, though, we have to, as you suggest -- 150,000 jobs have to be created every month to maintain pace with our population growth. We approach that in the most recent months reported, 7.2 percent GDP growth. If this economy can maintain that, it's going to be a very happy time.
We do have some significant issues. Amongst them, high-value jobs being exported overseas, outsourced by corporate America. The numbers, according to the most recent University of California survey, 14 million jobs at risk. This is not the free trade world that most people were talking about a decade ago, is it?
EVANS: Well, you know, Lou, this is a more integrated economy, more interlinked, more networked economy than anybody thought imaginable, even 10 years ago. But the CEA just had a report that I looked at that said when our imports increase in a sector of our economy, jobs also increase in that sector our economy. And it's because how integrated and interlinked this global economy is becoming.
And Lou, I think it's very important for everybody to realize that this is not a zero sum gain in the global economy. This is a win-win. When you see jobs created in other parts of the world it really has a very positive impact on the American economy.
DOBBS: I assure you, I'm not thinking of it as a zero sum gain. I'm thinking of it in terms of $503 billion current account deficit, last year about $2.5 trillion sitting out there of potential foreign ownership of the assets of this country. Fourteen million jobs that are vulnerable to outsourcing, and the significant exportation of high-value jobs, which just raises a host of issues.
I understand your perspective. But would you not concede that the issues are so complex and so important that we've got to evaluate those very real threats?
EVANS: Lou, what I would say, it's very, very important for us to continue to create the environment for competition. I think competition is the key to continuing to grow our economy and the global economy. Competition on a level playing field, because what competition does is it leads to innovation ,which leads to higher productivity, which leads to economic growth, and which leads to a higher standard of living.
I think that's exactly what's happening in the American economy. I think we'll see it happening in the global economy.
DOBBS: Mr. Secretary, I'm with you all the way, as long as competition, efficiency and productivity don't become code words for cheaper labor. You don't mean that?
EVANS: No. You know, Lou, look, I think it's very, very important, as I did in China, continue to press the issue to the world that we love to compete, but it's going to be on a level playing field. We're all going to play by the same rules.
DOBBS: Commerce Secretary Don Evans, we appreciate your time.
EVANS: Sure, Lou. Good to be with you.
DOBBS: And we appreciate your getting tough. Thank you.
(END VIDEOTAPE)
PILGRIM: Coming up: a Chinese company that is stealing U.S. technology. All you have to do to prove it is check out a Web site. Peter Viles will have the report and the Web site.
Then, millions of American jobs already shipped offshore. Former Ambassador to China, James Sasser, talks about what that means for the American worker. Ambassador Sasser is our guest next.
And fighting back. The companies that are trying to keep Americans on the job right here at home. Casey Wian will report.
(COMMERCIAL BREAK)
ANNOUNCER: LOU DOBBS TONIGHT continues. Now, "Exporting America."
PILGRIM: While the United States trade deficit with China is building to record levels, China is stealing U.S. technology. Global piracy of technology is a problem that costs American companies an estimated $200 billion a year. An Oregon technology company is just one of China's victims. The Chinese company has stolen and counterfeited its entire product line right down to its Web site.
Peter Viles reports.
(BEGIN VIDEOTAPE)
PETER VILES, CNN CORRESPONDENT (voice-over): Pop quiz: which company is the American original and which is the Chinese...
Videx makes data collection systems. So does Vdiax. Its web site has an American flag and boasts, quote, "American technology." But look closely. The word "American" isn't even spelled correctly. Vdiax is the fake.
Somewhere in China it is counterfeiting the entire Videx line of hand-held data machines.
ANDY HILVERDA, VICE PRESIDENT, VIDEX: This is made by us here in Corvalis (ph), Oregon. This one here is made in China.
VILES: Videx is a growing company that employs 50 people in Oregon and has known about the counterfeiting for a year. Its sales in China have collapsed, falling more than 80 percent. And now those fake products are showing up elsewhere in Asia.
REP. PETER DEFAZIO (D), OREGON: This is unfortunately not a new problem with China. It's a recurrent problem.
VILES: On behalf of Videx, Defazio wrote to Commerce Secretary Don Evans and trade representative Robert Zellick, asking them to do something, anything to stop the counterfeiting.
One option, to file a complaint with the World Trade Organization. But a spokesman for Zellick says the administration prefers to deal directly with China on the issue.
From time to time, the Chinese government does stage a symbolic destruction of pirated goods. But counterfeiting is still rampant, despite agreements with Washington to protect intellectual property in 1992 and again in '95, the USTR said this year, quote, "China remains one of the last countries in the world that fails to use its criminal law to go after commercial copyright pirates and trademark counterfeiters."
Peter Viles, CNN, New York. (END VIDEOTAPE)
PILGRIM: Our next guest says the White House has accused China of unfair trade practices, including currency manipulation and blocking U.S. exports to China for its own political reasons, to use China as a scapegoat for economic problems in this country.
James Sasser is a former U.S. ambassador to China, also a former senator from the state of Tennessee. Lou Dobbs recently spoke with the ambassador and began by asking him about the growing trade dispute with China and what he would propose as a solution.
(BEGIN VIDEOTAPE)
JAMES SASSER, FORMER U.S. AMBASSADOR TO CHINA: We've got to make a decision about where we're going. I mean, the United States over a period of a number of years has been the chief advocate of free trade, has been the chief advocate of globalization and now, when it starts biting us, we start crying about it.
And that's just one of the effects of globalization.
LOU DOBBS, HOST: Well...
SASSER: The European countries are hit even harder than it's hit us.
DOBBS: I guess, when you're in pain, should you cry? Should you not, when there's a problem that is reaching crisis proportions, not deal with it, I guess is my question to you.
You mentioned $100 billion in purchases in U.S. securities, both debt and equity. Further purchases by Japan. They're not doing us any favors there, as you well know, ambassador. Those are claims on ownership of U.S. assets. That's not...
SASSER: No, no.
DOBBS: That's not particularly great.
SASSER: Well, no. These -- they're parking a lot of the money that's going from the U.S. to China and to Japan is being parked in the federal treasury. The federal treasury uses those bonds to finance the deficit, which keeps interest rates low here.
DOBBS: This is where -- now what do you do with a poor fellow like me, ambassador? I don't like high deficits. I don't like exporting jobs. And I think we ought to have a responsible, fair trade policy that does not result in such an inequity in the relationship.
And I sure don't like our overseas competitors in this world trade system holding, as they do, $2.5 trillion worth of claims on American assets.
SASSER: Well, Lou, that's just -- that's just the way the cookie crumbles these days. And the truth is that American corporations operating in China make larger profits in China than they do any other foreign country in this world.
DOBBS: That's just -- that's just awful, but what about the people who are losing their jobs? At what point do -- well, I mean, we don't just simply say the cookie crumbles here. We've got to go a little farther than that, Ambassador.
SASSER: I agree with that. But we are the author of our own misfortunes here.
DOBBS: I take full responsibility. You can blame me personally. What I'm crying out for here, Ambassador, is a solution because it cannot, can it, go on?
SASSER: Well, I'm not the wisest man in the world. I don't know what the solution is. But the economists tell us that over time, globalization will level out. It's going to be a very, very painful process, I think, to absorb these vast labor markets in China and India and Mexico.
DOBBS: Well, as I look around...
SASSER: But that's the direction we're headed.
DOBBS: Well, it may be the one we're headed but I kind of react when people tell me that we don't have control of our own destiny in this country.
As one that's been responsible for shaping that destiny, I'd just like to get from you a sense of what in the world is so spectacular about having Wal-mart as the fifth largest importer of Chinese goods? What is so spectacular about the outsourcing of American jobs?
What is so spectacular about raising all of these barriers to U.S. exports, at the same time pushing down wage levels in this country?
This doesn't sound to me like it has a happy ending when it levels out.
SASSER: Well, now Lou, you're making a very passionate and strong argument there. I would question some of your facts.
DOBBS: Let's go.
SASSER: China, for example, has joined the World Trade Organization. They are busy now, lowering tariffs, which is causing vast unemployment in the Chinese-state-owned industries. They have 200 million people in their country unemployed, and they have to create 20 million jobs every year.
So I feel badly about our workers, but there are workers in other countries that have severe problems as well.
DOBBS: Not to put too fine of a point on it... SASSER: If you think our problems are bad, wait till you see the Europeans'. I mean, they've been running these double digit unemployment rates now for years.
DOBBS: Ambassador, not to put too fine a point on it, the fact is I care about those American jobs before I care about the Chinese. I care about American capital before I worry about European capital.
And I can't for the life of me understand why American lawmakers and policy makers wouldn't have that set of priorities to begin with.
SASSER: Well, Lou, it has been the American multinational corporations who have pushed globalization.
It's American multinational corporations that wanted the trade pact with Mexico. It's American multinational corporations that wanted to force open the China market with WTO.
When I say we've done it to ourselves to a certain extent, we have. But this is the way the world works now.
DOBBS: The way the world works...
SASSER: We cannot wall ourselves off.
DOBBS: Ambassador, I wouldn't have us wall ourselves off for anything. We're the farthest thing from being walled off.
But when we start tearing up the working -- hard working men and women of this country where their jobs, the jobs, the average pay is declining, where those jobs are fewer, where we are giving up on the issue of tariffs. The president, this administration, as you know, a huge decision to make on whether or not to lift those tariffs on steel or face retaliation from the European Union.
At what point do you say, the pain is too great for Americans...
SASSER: I think...
DOBBS: ... and put that as a priority?
SASSER: I think that's a statement for Americans to make for themselves and to make it through their lawmakers.
DOBBS: Don't you think this should be at the forefront amongst the top issues for our Democratic candidates and this president to deal with in this election year?
SASSER: Oh, I most assuredly do.
DOBBS: Ambassador, you and I have just reached absolute agreement on an issue. Ambassador James Sasser, it's always good to talk with you. Thank you for being here.
SASSER: Lou, good to talk to you.
(END VIDEOTAPE)
PILGRIM: Coming up next in our special report "Exporting America," Americans fighting back against visa programs that allow one million foreigners to work in this country, in many cases taking jobs from higher paid American workers. Bill Tucker will report.
And "Face Off," a controversial trade proposal that could cost a lot more Americans their jobs. Congressman Adam Smith says more free trade will open markets for American countries in this hemisphere, and Congresswoman Marcy Kaptur says it will come at the price of American jobs.
They "Face Off" next.
(COMMERCIAL BREAK)
PILGRIM: Few immigration programs are more controversial then our foreign worker visas. An estimated one million foreigners working in this country entered on H1B and L1 visas.
Many of them hold technology jobs once held by higher paid Americans who are now unemployed. Those workers are angry. They're angry, but they're not acting like victims. They're fighting back.
Bill Tucker reports.
(BEGIN VIDEOTAPE)
BILL TUCKER, CNN CORRESPONDENT (voice-over): America's high-tech workers are not going quietly onto the unemployment lines. Among other things, they're actively lobbying Congress to stop what they see as an impending disaster.
SONA SHAH, SOFTWARE PROGRAMMER: It's now or never. I really don't think America can afford to lose the tech industry. And I really think that's what's happening.
TUCKER: Sona is a computer programmer who lost her job to a lower paid H1B visa worker.
These are historically the top five companies using H1B visa employees. They're all tech companies but these visa programs are not just a threat to high-tech workers. H1Bs are issued for accounting, architects and design, managerial and administrative positions and yes, even television positions.
Sources within CNN admit that a little less than two percent of its workforce are H1B visa workers. CNN will not officially confirm that number, nor is it legally required to.
MICHAEL GILDEA, AFL-CIO: As this issue stays out in front, I think there will be growing public resentment about how these programs function and more and more pressure to reform them.
TUCKER: And pressure's being applied. Representative Rosa Delauro has introduced legislation to reform the L1 visa program, which allows companies to transfer employees within a company from overseas and to limit for the first time the number issued.
REP. ROSA DELAURO (D), CONNECTICUT: These are high level jobs which people have a degree for. We cannot use the L1 visa program as a back door to displacing American workers, to paying people lower wages.
TUCKER: the sense of urgency couldn't be stronger in the eyes of those who've lost their jobs, particularly for Natasha Humphries, who was fired by her employer Palm, after she trained the employees that replaced her.
NATASHA HUMPHRIES, SOFTWARE ENGINEER: It's a race to the bottom. They're looking for the cheapest dollar, and it's for the best price, for the most talent that they can find.
And so it's really important to me to demonstrate to other individuals that you do have recourse. You know, if we organize, if we mobilize, and gather our resources, you know, maybe we can effect legislative change.
TUCKER (on camera): The H1B visa was created back in 1990 to allow companies to bring in foreign labor to ease a labor shortage. They last five years, they can be renewed and no one is certain how many workers are under the H1B visa program in the United States.
Bill Tucker, CNN, New York.
(END VIDEOTAPE)
PILGRIM: As many as 14 million American jobs are at risk of being exported. That is, according to an alarming new study from the University of California at Berkeley. The study is a sobering warning for just about any American worker whose job involves sitting at a desk, talking on the phone or working on a computer.
Peter Viles reports.
(BEGIN VIDEOTAPE)
VILES (voice-over): They call it the new wave in the outsourcing revolution: high-paying white collar jobs that can be moved overseas easier and faster than factory jobs were. Jobs in insurance, legal research, data analysis, call centers, payroll and other back office activities.
ASHOK DEO BARDHAM, UNIVERSITY OF CALIFORNIA, BERKELEY: I think we are right in the beginning, this trend has just started.
VILES: That from the co-author of a new University of California study that says as many as 14 million jobs are at risk. That's 11 percent of the U.S. workforce. Average annual salary in those jobs, a shade under $40,000. Biggest group of jobs at risk, 8.6 million in office support.
The threat's strongest in cities built on high-paying service jobs, cities like Boston, New York, San Francisco and San Jose. And where are the jobs going? India, which will have 17 million workers available in information technology by 2008 and is already becoming America's tech support office.
REP. BRAD SHERMAN (D), CALIFORNIA: Let's say you call an 800 number to get information about your computer. You're calling Bombay. As a matter of fact, they've trained people there to say that you've reached Houston, Texas. But they're in Bombay.
VILES: It really doesn't matter how hard Americans work or how productive they become. These are the average salaries for programmers, $60,000 to $80,000 in the U.S., $23,000 to $34,000 in Ireland, just under $9,000 in China, even cheaper in India and watch out, India, cheaper yet in Poland and Hungary.
(on camera) Now, whether these jobs are actually sent out of the United States or not, the mere threat of outsourcing can have negative consequences. Chief among them: that threat tends to drive down wages here in the United States.
Peter Viles, CNN, New York.
(COMMERCIAL BREAK)
PILGRIM: Coming up, "Face Off," two very different views on a controversial proposal to expand the free trade area well beyond our borders. Congressman Adam Smith is for the proposal and Congresswoman Marcy Kaptur is against. They will "Face Off" here next.
(COMMERCIAL BREAK)
PILGRIM: The massive shipment of U.S. manufacturing jobs overseas has changed the lives of millions of Americans. This summer one community in North Carolina was especially hard hit when textile maker Pillotex was driven out of business by cheap foreign labor and cheap imports.
Despite efforts to retrain laid-off manufacturing workers for other jobs, the problem in places like Canopolis (ph), North Carolina is that better jobs are hard to find.
For thousands of people now struggling to find new jobs, free trade carries a very steep cost.
Peter Viles has the report.
(BEGIN VIDEOTAPE0
UNIDENTIFIED MALE: Look at this new statement, which is the Internet is the next level.
VILES (voice-over): After 15 years in a factory, Brenda Miller is retraining for a new job in a county where unemployment stands at 11 percent.
BRENDA MILLER, LAID-OFF PILLOTEX WORKER: The workers are not doing good. There are no jobs to replace the jobs that they have lost.
VILES: Pillotex, a maker of sheets and towels, shut down in July, driven out of business by cheap imports. Nearly 5,000 workers lost their jobs.
DONALD MALLO, HUMAN RESOURCES, PILLOTEX: Our people adapted; they were loyal. They would do anything to make this company survive, and we tried different ways to let that happen, just we're not successful.
VILES: The federal government responded with $20 million in emergency aid to extend unemployment benefits, offer free tuition at community colleges, and pay 65 percent of the cost of health insurance.
KRISTY CARTEE, LAID-OFF PILLOTEX WORKER: I know a lot of people were still paying $1,000 a month just for healthcare.
VILES: Still, laid off workers are swamping community colleges. This expects 2,000 students from Pillotex alone.
RICHARD BROWNELL, ROWAN-CABARRUS COMMUNITY COLLEGE: We're chock- a-block full in every direction on both campuses, day and night. We've spilled over into other public spaces. We're using high schools at night.
VILES: Among the most popular career paths at this community college, nursing, automotive repair, truck driving, heating and cooling systems maintenance.
Brenda Miller hopes for a job in marketing.
MILLER: We hope that by the time we get our degrees that during this two-year period there will be some kind of economic turnaround in the state to where when we graduate, there will be jobs to go to.
VILES: Peter Viles, CNN, New York.
(END VIDEOTAPE)
PILGRIM: Coming up, fighting back, American companies that are doing everything they can to keep American jobs on American soil and finding that it's also good for business.
Casey Wian will report from Pamona, California.
(COMMERCIAL BREAK)
PILGRIM: The ongoing exporting of American jobs to cheap overseas labor markets has simply devastated manufacturing and high- tech workers in this country.
However, we also have some good news tonight. There are some American companies trying to hard to be responsible corporate citizens, trying to hard to keep Americans on the job. And they're finding that keeping those jobs at home is also good for business. Casey Wian reports from Pamona, California.
(BEGIN VIDEOTAPE)
CASEY WIAN, CNN CORRESPONDENT (voice-over): Hayward Pool Products considered moving some operations overseas.
PAUL ADELBERG, V.P. MANUFACTURING, HAYWARD POOL PRODUCTS: We can actually produce a product more cost effectively with better quality, more reliability and less risk than going offshore.
WIAN: Haywood transformed itself using the Kaisan manufacturing process, first popularized in Japan by Toyota. Simple changes, such as color coded tags for parts management and a resigned factory floor, increased productivity by 37 percent.
Almost nothing is wasted. Even tiny scraps of plastic trimmed from parts are recycled.
(on camera) It used to take Hayward workers about an hour and a half to switch out one of these giant ejection molds. Since adopting the Kaisan manufacturing techniques, the job can be done in less than 20 minutes.
UNIDENTIFIED MALE: Bring the setup parameters to the specifications and it will help us do a quicker start-up.
WIAN (voice-over): And Hayward is not stopping there. This week a group of Kaisan-trained executives from other companies are helping figure out how to cut that time to just ten minutes.
WILLIAM SCHWARTZ, IBM CONSULTING: We see a tremendous migration of production work to off-shore entities around the world, Mexico and especially in China. And companies are using these strategies to counter that flow, to be more productive, to be more cost effective and to keep jobs here in the U.S.
WIAN: Software developer Integnology is one tech company bucking the off-shoring trend. CEO Basheer Janjua, a U.S. citizen, says there's a large supply of displaced American I.T. workers with more skills than their overseas counterparts.
BASHEER JANJUA, CEO, INTEGNOLOGY: I would rather give them a chance, because if you are a master work, you know, you have a masterpiece. Yes, it's cheap but quality's cheap, it's late, it's not on schedule, you missed the market. So do the math. In total, you're losing.
WIAN: Web site designer M3I Works doesn't bother bidding for business that's extremely price sensitive but instead focuses on clients seeking local customer service.
LINDA GOLD, CEO, M3I WORKS: Programmers in Indian are making anywhere from $10 to $15 an hour. Our programmers here are making anywhere from $40 to $120 an hour. So if I have to compete on price, I don't enter the contest. WIAN: One way she levels the labor cost playing field is by using more college interns.
Casey Wian, CNN, Pamona, California.
(END VIDEOTAPE)
PILGRIM: Tonight's thought is on giving thanks. Quote, "We have been the recipients of the choicest bounties of heaven: we have been preserved these many years in peace and prosperity. We have grown in numbers, wealth and power as no other nation has ever grown," unquote. That from Abraham Lincoln.
Coming up, your thoughts on our special report, "Exporting America." including one interesting idea about how to motivate lawmakers in Washington. State with us.
(COMMERCIAL BREAK)
ANNOUNCER: "LOU DOBBS TONIGHT" continues.
PILGRIM: Finally tonight a look at some of your thoughts on "Exporting America."
From New York City, "Thank you for pointing out that there are positions other than free-trader or protectionist. Only fair trade, with basic environmental and wage agreements, will protect American manufacturing jobs." That from Drew Vandiver.
From Houston, Texas, "Many people claim that in attempting to level the playing field, we have become involved in a race to the bottom. Maybe the filthy rich multi-national corporations ought to put their money where their mouth is, rather than letting their executives continue to abscond with it by way of fraudulent investment practices, ridiculous salaries or packing it into their golden parachutes." That from Karl Schaeffer.
From Lancaster, Pennsylvania, "The answer for the joke called free and balanced trade is simple. Notify every member of Congress that a plane carrying Chinese replacements has just departed Shanghai for Washington, D.C. This would give a new meaning to 'recess appointments'." Timothy Trimble.
We love hearing from you. Send us your thoughts at LouDobbs@CNN.com.
That's our show for tonight. Thanks for being with us. Have a wonderful, safe and happy Thanksgiving. For all of us here, good night from New York.
END
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Continues To Lose Textile Jobs To Foreign Markets; China Agrees To Buy Large Quantities Of U.S. Made Auto Parts>
