Letter from the Editor

Thursday, July 12, 2007

Stop immoral emigration

Oh, you can't turn on a TV without hearing the doom-mongers whine about illegal immigration. But you don't hear much about immoral emigration, U.S. companies jumping the borders to build plants where they can escape paying the going rate in labor and taxes and benefits.

Out in the Storm Lake industrial park, there's a nice spec building that's did nothing but collect dust since it was built some years ago, despite strong and consistent efforts by the Storm Lake Area Development Group to attract good new companies to the area.

It is said that pay and benefits at a plant in Mexico can be less than a third of the labor cost for the same plant in Iowa. If a company does not hire Americans, it can avoid paying Social Security.

During the period after that spec building went up and as it stood empty, about 10 entire new industrial parks and hundreds of industries exploded just across the border in Reynosa, Mexico, including Maytag and all those other all-American nameplates - GM, GE, Nike and on and on.

And yet, while our companies were fleeing to Mexico, needy expats from Mexico were flocking to Storm Lake in search of better jobs, better futures and better schooling.

Perhaps that doesn't make good sense, but it isn't so hard to figure out when you begin to look at the numbers.

Workers in the Mexican plants operated by U.S. companies got paid about $18 per day on average in 2006, according to one Mexico City newspaper - an industry in northwest Iowa might pay that an hour to keep a job filled, not to mention the benefits, insurance, retirement programs, government withholdings and so on.

And now Mexico is worries about losing those same companies, since they can go to China and pay $2 a day.

It certainly isn't a great love for its workers that makes companies flee from Iowa and the U.S.

The product isn't better, and those old axioms about companies looking for places with great schools, nice streets and well-cared-for natural resources is thoroughly a load of crap.

Iowa-born Maytag has already moved plants to Reynosa. The company, a classic American nameplate, has, according to one union spokesperson and former Maytag worker, "sold the soul of their name to the lowest bidder."

Such companies will benefit from labor costs that in this country would be considered slavery. I wonder, however, if consumers see any of the savings. If wage costs are cut to a fifth with Mexico workers, will a $2,000 fridge now cost us under 400 bucks? Don't hold your breath...

In Reynosa alone, well over 200 companies quickly made their exodus from the U.S. to grab up poverty-stricken available workers. Whirlpool, Black and Decker and many other "All-American"names now go by another name, "maquiladoras"- the Spanish term for companies from outside Mexico that are taking advantage of special government programs offering cheap taxes, comparatively little business regulation, and low-cost labor.

Iowa Workforce Development officials figured Iowa lost 1,500 or more jobs from 1999-2003 to factory foreign relocations.

Storm Lake has its fair share or better of economic development arrows in its municipal quiver. It does have strong infrastructure, good schools and higher education, a high quality of living, available sites, progressive local governments willing to do their share to help new companies get settled, the ability to attract workforce with a strong work ethic from a considerable area.

Not so long ago, our biggest problem was a shortcoming in four-lane transportation for industry. Now, with the outlook finally, FINALLY, perhaps is looking up for Highway 20 completion sometime before the sun implodes, the competitive challenge changes for Iowa cities.

We can compete with other communities anywhere. But how do we compete against a seemingly unlimited supply of people who will work for a couple of bucks an hour with almost no benefits? And at the same time, afford to serve and educate thousands of newcomers leaving that country and coming to ours?

Yes, their labor is important to our economy. But it would be nice to have a chance to attrack American industry as well.

Perhaps consumers will eventually come to recognize and demand products made in our own country. Perhaps the government will get wise to the exodus and adopt regulation making it less attractive for factories to jump the border. Or perhaps the other countries will realize the companies are using them and will eventually start to demand more taxes and comparative minimum wages for their workers as well.

In the meantime, places like Storm Lake have realized that mining for big factories isn't the way to do business anymore. We have to incubate new business, look to assist expansion of our existing local companies, aim at entrepreneurial development.

That isn't all bad, folks. Our employment is strong and steady, averages wages pretty good. We don't need the smokestacks. And for more than a few immigrants from south of the border who should know, life looks better in Storm Lake than in Mexico, no matter how many American firms jump the borders.

* Dana Larsen is the editor of the Pilot. Reach him at dlarsen@stormlakepilottribune.com