The Offshore Easter Parade

It's drizzling here in the San Francisco Bay area. The sky's a pale grey sheet. The Polito family's first Easter without our beloved Dad. I just checked my iPhone and--of course--it's not raining in Southern California, where my Mom and most of my nine siblings live. Dad, a devout Catholic, always used to say "It's Easter. It can't rain on Easter." And as far as I can remember, it never did.

As kids, my siblings and I would squeeze into the family's station wagon with Mom and Dad most Sundays to make the half-hour drive "over the hill" from the San Fernando Valley to my grandparents' home in the Hollywood Hills. And on Easter Sunday, we all dressed up. My brothers wore pressed shirts (tucked in) and slacks. My four sisters and I wore {Made in the U.S.A.} pastel floral printed or dotted Swiss dresses (billowy, with layers and layers of stiff, itch-inducing netting underneath), new white socks and black patent leather Mary Jane shoes.

I mention this because yesterday, browsing my local Target, I checked out labels on the Easter dresses in the girls' department. Affordable, frilly, adorable, with soft, itch-free billows. Not a single one made in the U.S.A. They came from Indonesia, Philippines, Vietnam, and--drum roll--China. Socks: imported. Shoes: imported. An Offshore Easter Parade.

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If Dad were here, we could talk--over Easter dinner (roasted spring leg of lamb with garlic and rosemary, roasted red potatoes sprinkled with fresh chopped parsley, a few glasses of Rutherford merlot)-- about the headline in last week's (April 19, 2011) Wall Street Journal. "Big U.S. Firms Shift Hiring Abroad: Data Show Work Forces Shrinking at Home, Sharpening Debate on the Impact of Globalization." I know what his response would be: Guess your old man was right. Rots o' ruck, kids.

Back in the late 1960s to early '70s, Dad ranted--from his morning spot at the kitchen's tiled peninsula counter, his cigarette already lit, his Los Angeles Times open in front of him--about offshore manufacturing. As a Hollywood cinematographer he'd lost out on feature film jobs thanks to cheaper foreign directors of photography. Meanwhile, his close friend and golf buddy, Chuck, CEO of a national apparel brand, was under increasing pressure to move manufacturing operations to Taiwan in order to cut costs. Chuck vehemently opposed the idea. Dad agreed. "Ya can't make clothes there and sell them here," he'd say. "It ain't right. Period."

In 1973, Dad's rant became the first rough draft for a 20-page paper called "Import Backlash and the Unemployment Crunch." At the time, recession held this country in its grip. For six months in 1974, inflation exceeded 12 percent. Unemployment stood at 8.5 percent. American companies had begun to embrace low cost manufacturing overseas. "The American worker (blue collar and white collar alike) is caught in the crossfire of 'import backlash'," Dad wrote, "a strange new phenomenon wherein U.S.-based companies are operating in concert with foreign manufacturers in what amounts to a massive assault on the domestic purchasing power of the American citizenry."

Cheaper products made no difference, Dad reasoned, if you didn't have a job in the first place. Show me the capital, was basically his refrain. "Who will be affected by 'import backlash'?" Dad wrote. "Sooner or later it will touch all people in all walks of life in the United States." This ripple effect couldn't be avoided, whether you were a plumber or a dentist or a salesman. If another segment of society--say Detroit's auto industry workers--lost its jobs and its capital, you felt the pinch, too. Higher taxes, lower wages, stagnation: no one could escape them.

Fast forward to 2011: 97% of American clothing--the very industry Chuck and my Dad worried about in 1970--is now manufactured anywhere but here. Unemployment is pegged at 8.8 percent. That's over 14 million people actively looking for jobs. Where have those jobs gone? How many have job seekers have simply given up? In the past three years, taxpayers have funded $319 billion in jobless benefits. As many of the company owners I've spoken with over the past few months ask: what's the true cost of a cheap pair of made in China jeans?

And that's just the apparel industry. As anyone who's looked for electronics knows, that entire industry has flown to China. Remember my search at Target for an American-made microwave for college-daughter Michelle? Silly me. But it's more than clothes, electronics, toys. Yesterday, after Target, I looked at Costco for patio furniture: made in China. Gardening gloves? China. A simple birdhouse: China. Gas BBQ's: China. As I've said before, I half expect to see a Chinese flag waving in the breeze in front of every big box and department store in America. Wouldn't that be more honest?

Thing is, Dad didn't oppose free trade. And he didn't believe in protective tariffs. He firmly believed American corporations should maintain their manufacturing operations here in this country. "If we concentrate on tracking down the 'missing capital,'" he wrote, "perhaps we will have found the key to our chronic unemployment conundrum." Ya think?

As if to prove Dad correct, the Wall Street Journal piece ties lost jobs in this country to globalization:

"U.S. multinational corporations, the big name brands that employ a fifth of all American workers, have been hiring abroad while cutting back at home…The companies cut their work forces in the U.S. by 2.9 million during the 2000s while increasing employment overseas by 2.4 million, new data from the Commerce department show…'It's definitely something to worry about,' says economist Matthew Slaughter…[The] U.S. is losing its appeal as a place for companies to invest and hire. "

The piece goes on to say that between 2005 and 2010, GE cut 1,000 workers overseas and 28,000 workers in the U.S. A report by think-tank McKinsey Global Institute cited the U.S. tax code as part of the problem. I'm just learning about all this, but from what I've read thus far, our country's corporate tax--at 35 percent--is the highest in the world. Repatriation taxes (the tax assessed if / when U.S. multinationals bring their profits home) can be as high as 35 percent. At some point, you drive businesses away. Seems we've long past reached that point. There must be a better way.

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But no worries, fellow Americans. On this blessed Easter day, let us be thankful. This freedom-loving country is still the best place on earth to live. And please remember that we'll always have Peeps. Yes, the neon yellow marshmallow treats are still made in Bethlehem, Pennsylvania. In 1953, Russian immigrant Sam Born acquired Rodda Candy Company. Mr. Born's company--founded in 1923, called Just Born--continued making the Rodda-invented yellow marshmallow chicks, adding other colors and shapes to the line. The Born family still owns and operates the candy company (which also makes Hot Tamales and Mike and Ikes). Good to know America's Peeps are safe and sound.

And one last thought: as I noticed young families scooping up foreign booty at Target, I couldn't blame them. It's what I'd done myself over the years. It's tough to make dollars stretch. Whether an Easter dress is made here or in Timbuktu, when you're on a budget and pressed for time and want something new and pretty for your little girls, stores like Target and Walmart provide that option. This isn't about blame. It's about trying to find our way back to made in the U.S.A. Trying to turn the ship around. It's gonna take time.

Happy Easter!