Amid prolonged, painfully high unemployment, ABC News Anchor Diane Sawyer for the past yearÂ tirelessly advocated a simple solutionâ€”buy American-made products. She clearly explained the reasoning: every American dollar spent on an American-made product helps create an American job.
Defying Sawyerâ€™s admonition to search for â€śMade in Americaâ€ť tags, California set a record for using government money to create jobs in China. The Golden State awarded a contract for the new Bay Bridge thatÂ created 3,000 jobs in China for five yearsâ€”a period during which the stateâ€™s unemployment rate persisted at two percentage points above the nationâ€™s already high average.
Now thereâ€™s an antidote for Californiaâ€™s stupidity. It is legislation called the Invest in American Jobs Act. Championed by U.S. Rep. Nick J. Rahall, (D-W.Va.) and Senators Sherrod Brown, (D-Ohio), Bob Casey, (D-Pa.), and Debbie Stabenow (D-Mich.), it would strengthen existing requirements for buying American products when federal tax dollars pay for construction of highway, bridge, public transit, rail, water systems and aviation infrastructure equipment.
To create 200,000 American jobs, Sawyer has challenged Americans to spend just $64 of their $700 in holiday purchases on American-made gifts. Imagine the American jobs that would be created if â€śMade in Americaâ€ť were stamped on every single part of all $59 billion in infrastructure projects the federal government funds in a typical year.
Thatâ€™s what Rahall, Brown, Casey and Stabenow want. Unless American-manufactured components arenâ€™t available or would be outrageously more expensive, these lawmakers believe American tax dollars should buy American jobs while financing American infrastructure. So they propose to expand the existing â€śBuy Americanâ€ť requirements and close loopholes that allow governors like Californiaâ€™s Arnold Schwarzenegger to circumvent the rules.
Schwarzenegger contended that California would save $400 million on the $5.1 billion Bay Bridge if it hired a Chinese firm to build steel decking and a 52-story tall support tower and ship them 6,500 miles to San Francisco.
This turned out to be a â€śyou get what you pay forâ€ť lesson for California. The state should have been forewarned by years of publicity about problems with Chinese-manufactured products. For example, toxic drywall imported from China sickened American homeowners, corroded pipesÂ and resulted in hundreds of millions in successful damage claims against the Chinese firms that fabricated it. Or there was the tainted blood thinner Heparin from China that killed at leastÂ 81 Americans.
In the case of the Bay Bridge, inspectors failed up to 65 percent of welds on the bridge parts manufactured at the Shanghai plant â€“ welds done workers paidÂ $12 a day for laboring from 7 a.m. to 11 p.m. As a result, the state of California and the two American companies it hired to arrange the work, including one ironically named American Bridge, had to sendÂ 250 engineers, inspectors and other experts to Chinato monitor the construction. That created American jobs, but imagine the extra cost.
In addition, the faulty construction delayed delivery by 15 months. Delays are costly. For example, when the California Department of Transportation (Caltrans) received only one bid to perform the work, the agency said advertising the job again couldÂ delay the project by 18 months and add $200 million to the cost. Using Caltransâ€™ calculation, the 15-month delay added $167 million in extra costs.
The price tag on the bridge has risen now to $7.2 billion. The problems in China donâ€™t explain all of that. But thereâ€™s no doubt that the $400 million that Schwarzenegger claimed would be saved by shipping the work and the jobs to China has long been overrun by hundreds of millions in extra costs. Organizations like theÂ Alliance for American Manufacturing and the National Steel Bridge Alliance warned of potential problems from circumventing â€śBuy Americanâ€ť regulations. California ignored them.
Also, Schwarzeneggerâ€™s estimate that $400 million would be saved failed to account for the wages American workers lost, the taxes they would have paid, or the multiplier effect on the economy when workers spend their wages in their hometowns. In addition, Schwarzeneggerâ€™s estimate failed to account for the downside of hiring Chinese workers with American tax dollars, or in this case, bridge toll receipts. That includes unemployment compensation, Medicare fees and other costs borne by governments for joblessness.
The Investigative Reporting Workshop at the American University School of Communication included a story about the Bay Bridge project by two-time Pulitzer Prize winning investigative reporters Donald L. Bartlett and James B. Steele in a series calledÂ What Went Wrong: the Betrayal of the American Dream.
In their report about California sending the bridge work to China, Bartlett and Steel quote Tom Hickman, vice president of Oregon Iron Works in Clackamas, Ore., one of the American companies that tried to form a consortium to perform the Bay Bridge work. Hereâ€™s what Hickman said about the jobs California denied American workers and the work California denied his America company:
â€śThese jobs are living-wage jobs and family-wage jobs. They provide health and welfare benefits, 401(k)s and pensions. Our facilities meet all of the environmental requirements, and it just is a very, very difficult thing to compete with the Chinese when you are really competing with the Chinese government (which subsidizes Chinese industry).â€ť
Caltrans argued that no American company had the facilities to perform the work. Hickman said the consortium could have done it. But if government agencies like Caltrans continue to ignore the real costs of shipping work to China, American factories will continue to close. America lost 55,000 manufacturers over the past decade. If that doesnâ€™t stop, at some point, America will forfeit the capacity to perform this kind of work.
That would be tragic. It would undermine American strength. Rahall, Brown, Casey and Stabenow are right. American tax dollars should buy American-made products and jobs.
And Diane Sawyer is right. Americans should buy American. Hereâ€™sÂ a link to her list of American-made gifts andÂ a link to a list by American Rights at Work.
This is the antidote for lost factories and jobs.
This blog originally appeared in Working in These Times on December 20, 2011. Reprinted with permission.
About the Author: Leo Gerard is a steelworker and a Canadian and American labor leader. He was elected president of the United Steelworkers in 2001, and is the second head of union. He is also vice president of AFL-CIO.