The same day the news came that a Chinese auto-maker was planning to export 250,000 cars to the United States in 2007, General Motors (gm) announced that it needed to lay off 25,000 American workers by 2008. Since every car-making job supports seven other jobs—from parts suppliers to related services—some experts say an additional 175,000 jobs are in jeopardy.
Americans don’t seem too worried about the dominance that foreign auto-makers have over the industry. But they are worried about the unemployment resulting from it.
gm’s announcement came shortly after a May poll by the Pew Research Center found that one of the top economic concerns for Americans is the availability of jobs. Six in 10 surveyed claimed that jobs are difficult to find—a sentiment shared by almost half of those earning $75,000 or more.
Americans have other major economic concerns, according to the study—high gasoline prices, the budget deficit, trade deficit, inflation fears, a lack of affordable housing, a stagnant stock market and worsening personal finances. The number who reported having good or excellent finances dropped from 51 percent in January to 44 percent in May.
Optimism about the future is rapidly declining. Last August, 36 percent felt the economy would improve, but only 18 percent feel that way today. Conversely, those who felt the economy would get worse (9 percent last August) has leaped to 24 percent.
Here is how globalization is hurting the U.S. First, Asian labor costs are very cheap compared to U.S. labor. Then, a s Asian producers become more industrialized and offer cheaper products, they gain market share. It becomes increasingly difficult for American companies to compete. What’s happening in the automobile industry is also playing out in several other industries.
The flow of jobs out of the U.S. is another sign that America’s position as the linchpin of the global economy is in jeopardy.