22 “Buyers who overdrive” Wolfgang Schmitt, interview excerpt from Frontline, “Is Wal-Mart Good for America?”
23 “It’s very one-sided” Excerpt of interview of Jon Lehman for the Frontline program “Is Wal-Mart Good for America?,” October 7, 2004, http://www.pbs.org/frontline.
24 Its “opening price point” Bob Ortega, In Sam We Trust: The Untold Story of Sam Walton and Wal-Mart, the World’s Most Powerful Retailer (New York: Random House, 1998), 54–59.
25 “The heart of Wal-Mart’s pricing strategy” Lehman, interview, “Is Wal-Mart Good for America?”
26 “China, practically speaking, is it” Excerpt of interview of Bill Nichol for the Frontline program “Is Wal-Mart Good for America?,” September 16, 2004, http://www.pbs.org/frontline.
27 “We will open those facilities” Ibid.
28 “They were selling at prices” Excerpt of interview of Ray Strutz for the Frontline program “Is Wal-Mart Good for America?,” June 6, 2004, http://www.pbs.org/frontline.
29 That put a crunch on the Thomson plant Excerpt of interview of Roy Wunsch for the Frontline program “Is Wal-Mart Good for America?,” June 14, 2004, http://www.pbs.org/frontline.
30 Shenzhen shot up Orville Schell, Mandate of Heaven: The Legacy of Tiananmen Square and the Next Generation of China’s Leaders (New York: Simon & Schuster, 1994), 331–57.
31 “A joint venture” Gary Gereffi, interview excerpt from Frontline, “Is Wal-Mart Good for America?”
32 “Wal-Mart … are very shrewd people” Excerpt of interview of Kenneth Chan for the Frontline program “Is Wal-Mart Good for America?,” July 26, 2004, http://www.pbs.org/frontline.
33 “There’s always going to be” Ibid.
34 “I saw this as a store manager” Jon Lehman, interview excerpt from Frontline, “Is Wal-Mart Good for America?”
35 “Wal-Mart sources a huge” Kenneth K. T. Tse, general manager, Yantian Port Terminal, Shenzhen, interview, May 14, 2004.
36 “Wal-Mart is providing a gateway” Gary Gereffi, interview excerpt from Frontline, “Is Wal-Mart Good for America?”
37 More than $30 billion Excerpt of interview of Ray Bracy for the Frontline program “Is Wal-Mart Good for America?,” November 16, 2004, http://www.pbs.org/frontline.
38 “They’re all carrying Chinese cargo” Excerpt of interview of Yvonne Smith for the Frontline program “Is Wal-Mart Good for America?,” June 8, 2004, http://www.pbs.org/frontline.
39 Apple’s longtime CEO, Steve Jobs Governor Mitch Daniels, “Republican Address to the Nation,” January 24, 2012; press release, Office of House Speaker John Boehner, http://www.speaker.gov.
40 Apple overlooked sweatshop conditions Charles Duhigg and Keith Bradsher, “How the U.S. Lost Out on iPhone Work,” The New York Times, January 22, 2012; Charles Duhigg and David Barboza, “In China, Human Costs Are Built into an iPad,” The New York Times, January 26, 2012; Paul Krugman, “Jobs, Jobs and Cars,” The New York Times, January 25, 2012.
41 Illegal labor practices, confirmed Jessica E. Vascellaro, “Audit Faults Apple Supplier,” The Wall Street Journal, March 30, 2012. Auditors from the Fair Labor Association found that Foxcomm, or Hon Hai Precision Industry Company, as it is formally known, has been working its employes an average of more than sixty hours a week, in violation not only of Apple’s stated standards, but of China’s legal limit of forty hours per week with a maximum of thirty-six hours. Apple pledged to shorten working hours and raise pay inside Chinese plants making its products, as reported by Charles Duhigg and Steven Greenhouse, “Electronic Giant Vowing Reforms in China Plants,” The New York Times, March 30, 2012.
42 “The speed and flexibility” Charles Duhigg and Keith Bradsher, “How the U.S. Lost Out on iPhone Work,” The New York Times, January 22, 2012; Charles Duhigg and David Barboza, “In China, Human Costs Are Built into an iPad,” The New York Times, January 26, 2012; Paul Krugman, “Jobs, Jobs and Cars,” The New York Times, January 25, 2012.
43 America’s record $273 billion trade deficit U.S. Census Bureau, “U.S. Trade in Goods with China,” June 6, 2011, http://www.census.gov.
44 Bought $1.928 trillion more in goods Scott, interview, January 21, 2011.
45 Topping $3.2 trillion Trade imbalance: Prestowitz, Betrayal of American Prosperity, 142. Financial reserves: “China Says It’s Unable to Easily Aid Europe,” The New York Times, December 5, 2011.
46 “Open China’s markets” President Clinton, remarks, “House Passage of Permanent Normal Trade Relations with China,” May 24, 2000, http://Clinton6.nara.gov.
47 “Help export American values” Eric Schmitt, “Opening to China: Overview: Senate Votes to Lift Curbs on U.S. Trade with China; Strong Bipartisan Support,” The New York Times, September 20, 2000.
48 “The potential is explosive” “Final Passage of Bill to Normalize U.S. Ties Is Approved, 83 to 15,” The New York Times, September 20, 2000; “Rallying Round the China Bill, Hungrily,” The New York Times, May 21, 2000.
49 “The most dynamic international market” “Opening to China: Overview,” The New York Times, September 20, 2000.
50 Trade deficit with China was already $83 billion U.S. Census Bureau, “Trade in Goods with China,” accessed April 11, 2012, http://www.census.gov/foreign-trade/balance/c5700.html.
51 “They looked at China like a super-Mexico” Alan Tonelson, interview, January 12, 2011.
52 Adding to the U.S. trade deficits Alan Tonelson, “Wake Up Call: What a Tangled Web,” U.S. Business and Industry Council Educational Foundation, December 3, 2009, http://www.americaneconomicalert.org.
53 $172 billion Alan Tonelson, email, January 11, 2011. The data showed $596 billion in exports, $768 billion in imports.
54 “Argument is that trade deficits don’t matter” Tonelson, interview, January 12, 2011.
55 In the last twenty years Scott, interview, January 21, 2011.
56 Think Scott has understated Mike Wessel, interview, January 19, 2011.
57 Dispute the notion David Ricardo, On the Principles of Political Economy and Taxation (London: John Murray, 1817).
58 “Putting these jobs overseas is” Jagdish Bhagwati, “Why Your Job Isn’t Moving to Bangalore,” The New York Times, February 15, 2004.
59 “Trade policy or trade flows” Excerpt of interview of Brink Lindsey for the Frontline program “Is Wal-Mart Good for America?,” October 7, 2004, http://www.pbs.org/frontline.
60 Dispute the old orthodox argument Prestowitz, Betrayal of American Prosperity, 2.
61 “A shift in productive capability” Ralph Gomory, testimony, House Committee on Science and Technology, June 12, 2007, http://science.house.gov.
62 He challenged the contention “An Elder Challenges Outsourcing’s Orthodoxy,” The New York Times, September 9, 2004.
63 “It is dead wrong” Paul A. Samuelson, “Where Ricardo and Mill Rebut and Confirm Arguments of Mainstream Economists Supporting Globalization,” Journal of Economic Perspectives 18, no. 3 (Summer 2004); “An Elder Challenges Outsourcing’s Orthodoxy.”
64 Ignoring the “drastic change” Samuelson, “Ricardo and Mill.”
65 “Most people have been losers from trade” Excerpt of interview of Larry Mishel for the Frontline program “Is Wal-Mart Good for America?,” September 9, 2004, http://www.pbs.org/frontline.
66 On track for a reasonable retirement Mike Kendall, interview, June 19, 2010; Ron Wright, interview, June 24, 2010.
67 “They brought us groceries, paid our electric” Sylvian Greene, interview, June 27, 2010.
68 “It’s the unpredictability that gets to you” Don and Ginny Lingle, interview, July 4, 2010.
69 “After I lost my Rubbermaid job” Pam Constantino, interview, July 11, 2010.
70 Most were making less than before “Working Displacement: 2007–2009,” Bureau o
f Labor Statistics, August 26, 2010, http://www.bls.gov, table 7.
71 Added 2.4 million employees to their overseas workforces U.S. Bureau of Economic Analysis, “Summary Estimates for Multinational Companies: Employment, Sales, and Capital Expenditures for 2009,” April 18, 2011, table 1 shows that overseas employment by U.S. multinationals rose from 7.9 million to 10.3 million and their domestic employment fell from 24.0 million to 21.1 million from 1999 to 2009, http://www.commerce.gov.
72 Very different track records since 1990 Michael Spence and Sandile Hlatshwayo, “The Evolving Structure of the American Economy and the Employment Challenge,” working paper, Council on Foreign Relations, March 2011, http://www.cfr.org.
73 “You could say, as many do” Andy Grove, “How America Can Create Jobs,” Bloomberg BusinessWeek, July 1, 2010, http://www.businesweek.com.
CHAPTER 16: HOLLOWING OUT HIGH-END JOBS
1 “Merchants have no country” Thomas Jefferson to Horatio G. Spafford, March 17, 1814, in The Writings of Thomas Jefferson (Washington, DC: Taylor & Maury, 1854), 334.
2 “What we are trying to do” Prestowitz, Betrayal of American Prosperity, (NY: Free Press, 2010) 213.
3 “In this new era of globalization” Gomory, testimony, House Committee on Science and Technology.
4 Masses of high-skill, high-wage, high-tech jobs President Bill Clinton, “Technology for America’s Economic Growth,” press release, White House Briefing Room, February 22, 1993; Clinton in campaign debate, “Transcript of First TV Debate Among Bush, Clinton and Perot: The 1992 Campaign,” The New York Times, October 12, 1992.
5 “Going digital” William A. Niskanen and Robert E. Litan, Going Digital! A Guide to Policy in the Digital Age (Washington, DC: Brookings Institution Press, 1998).
6 Americans’ increasing dependence Bhagwati, “Why Your Job Isn’t Moving to Bangalore.”
7 “You could think of it” “Know What? Knowledge Will Power Nations in the New World Order,” Associated Press, July 23, 1989.
8 This category was set up Clyde Prestowitz, email, December 10, 2011.
9 America’s deficit in advanced technology trade U.S. Census Bureau, Bureau of Economic Analysis, “U.S. International Trade in Goods and Services, December 2011,” Exhibit 16 and Exhibit 16a, February 10, January 13, 2012, http://www.census.gov/foreigntrade/Press-Release/current_press_release/ft900.pdf.
10 $94.2 billion high-tech trade deficit Ibid.
11 China’s steep upward leap Alan Tonelson, interview excerpt from Frontline, “Is Wal-Mart Good for America?”
12 “It is a fallacy” Prestowitz, Betrayal of American Prosperity, 11.
13 The Chinese had shown their mastery Tonelson, interview excerpt from Frontline, “Is Wal-Mart Good for America?”
14 Hardest-hit sector was computers Robert Scott, “Unfair China Trade Costs Local Jobs,” EPI Briefing Paper, March 23, 2010, Economic Policy Institute, http://www.epi.org; TechAmerica, “Cyberstates 2010,” http://www.techamericafoundation.org.
15 “We’re now calling it Skeletal Valley” Scott, interview, January 21, 2011.
16 Even the service sector Scott, “Unfair China Trade Costs Local Jobs.”
17 Roughly 2.8 million jobs in finance, IT, HR “Offshoring of Back Office Jobs Is Accelerating,” Hackett Group, January 6, 2009, http://www.thehackettgroup.com; and “How Offshoring Could Prolong the Jobless Recovery,” Hackett Group, ThomasNet News, January 18, 2011, http://www.news.thomasnet.
18 “Millions of skilled workers” Alan Blinder, testimony, House Committee on Science and Technology, June 12, 2007, http://science.house.gov.
19 “U.S. high-tech industry is coming unglued” Prestowitz, Betrayal of American Prosperity, 30–31; Richard McCormack, “The Plight of Manufacturing,” in Manufacturing a Better Future for America, ed. Richard McCormack (Washington, DC: Alliance for American Manufacturing, 2009); President’s Council of Advisors on Science and Technology, “Sustaining the Nation’s Innovation Ecosystems, Information Technology Manufacturing and Competitiveness,” January 16, 2004, http://www.whitehouse.gov.
20 At least 1,160 high-end research installations Prestowitz, Betrayal of American Prosperity, 36.
21 “China was much more clever” Steve Lohr, “Maybe Japan Was Just a Warm-Up,” The New York Times, January 23, 2011.
22 By 2005, GE had twenty-seven labs in China Jeffrey Garten, “The High-Tech Threat from China-America Inc. Is Rushing Beijing Ahead by Sharing R&D Treasures,” BusinessWeek, January 31, 2005.
23 GE disclosed a joint venture General Electric, “GE to Invest More than $2 Billion in R&D, Technology and Financial Services Partnerships in China,” Business Wire, November 9, 2010, http://www.businesswire/com; “GE Venture Will Share Jet Technology with China,” The New York Times, January 17, 2011.
24 General Motors broke ground General Motors, “GM Breaks Ground on Advanced Technical Center in Shanghai,” July 7, 2010, http://media.gm.com.
25 Microsoft, already spending $300 million “Microsoft to Spend $1 Bn on R&D in China,” Reuters, November 13, 2008; Microsoft, “Microsoft Opens World-Class Innovation and Technology Service Park in Shanghai,” March 31, 2010, http://www.microsoft.com.
26 Applied Materials of Silicon Valley Keith Bradsher, “China Drawing High-Tech Research from U.S.,” The New York Times, March 17, 2010.
27 “China has a carrot and stick strategy” Clyde Prestowitz, email, December 10, 2011.
28 “A blueprint for technology theft” James McGregor, “China’s Drive for ‘Indigenous Innovation,’ ” U.S. Chamber of Commerce, July 28, 2010, http://www.uschamber.com.
29 “Indigenous innovation” “Obama Pushes Hu on Rights, but Stresses Ties to China,” The New York Times, January 20, 2011.
30 “A technology powerhouse” McGregor, “China’s Drive for ‘Indigenous Innovation.’ ”
31 U.S. companies have become integrated U.S. International Trade Commission, “Certain Passenger Vehicle and Light Truck Tires from China,” Publication 4085, July 2009, http://www.usitc.gov.
32 “That kind of thing is” Prestowitz, interview, January 11, 2011.
33 “It costs $1 billion more per factory” “Intel Chief: Obama (Still) Driving US off Cliff,” The Register, August 25, 2010, http://www.theregister.co.uk.
34 “U.S. companies are understandably seeking” Garten, “The High-Tech Threat from China-America Inc.”
35 Described his firm as “agnostic” “EDS CEO Says No Problem,” ITBusiness, April 23, 2008, http://www.itbusiness.ca.
36 “Intel can be a totally successful company” Friedman, “Tuning In.”
37 “Strategy of becoming a Chinese company” Prestowitz, Betrayal of American Prosperity, 213.
38 “What’s good for our country” “Armed Forces: Engine Charlie,” Time, October 6, 1961.
39 “The interests of companies and countries have diverged” Gomory, testimony, House Committee on Science and Technology.
40 Summarizing the impact James Hagerty, “U.S. Loses High-Tech Jobs as R&D Shifts Toward Asia,” The Wall Street Journal, January 18, 2012.
41 IBM cut its American workforce by 30 percent Lee Conrad, Alliance@ IBM/CWA Local 2071, interview, January 25, 2011.
42 Close behind IBM “U.S. Tech Firms Continue to Grow in India,” Livemint.com, September 10, 2010, http://www.livemint.com.
43 Computer giant Hewlett-Packard Dan Rather Reports, “Help Wanted! (Not Here),” HDNet, January 18, 2011, http://www.hd.net/programs/danrather.
44 Accounting firm Deloitte “Deloitte to Treble Headcount in India,” Diligent Media Corp., November 28, 2009, http://www.dnaindia.com.
45 American IT outsourcing firms Ron Hira, interview, January 7, 2011.
46 Even Perot Systems “Perot Systems, Founded by an Offshoring Foe, Increases Off
shoring,” Computer World, February 12, 2009, http://www.computerworld.com.
47 India has burst upon “The Other Elephant,” The Economist, November 4, 2010, http://www.economist.com.
48 India has largely leapfrogged over manufacturing “Information Economy Report 2010,” United Nations Conference on Trade and Development, October 14, 2010, http://unctad.org, 49–40, figures III.4 and III.5. The report estimated global exports in IT services and business processing at $92 billion to $96 billion and India’s share at 35 percent, but it said these figures underestimate the overall global IT offshoring market. NASSCOM, India’s National Association of Software and Service Companies, put India’s exports in this field at $50 billion in the executive summary of its Strategic Review 2010, “Global Sourcing Trends,” http://epi.nasscom.in/upload/SR10/ExecutiveSummary.pdf.
49 “The Indian firms had a disruptive business model” Hira, interview, January 7, 2011.
50 “Cross border job shifting” IBM Directors’ Presentations on Offshoring, internal IBM document, March 13, 2003.
51 “Hiring over There” “Cutting Here, Hiring over There,” The New York Times, June 24, 2005.
52 Job reductions would save IBM $1.8 billion “Amid Layoffs, IBM Scours the Globe for IT Talent,” CRN TechWeb, September 23, 2005, http://www.crn.com.
53 The cuts were being rolled out in modest batches “IBM Quietly Cuts Thousands of Jobs,” CBS, January 27, 2009.
54 IBM had fired another five thousand employees Steve Lohr, “Piecemeal Layoffs Avoid Warning Laws,” The New York Times, March 6, 2009; Steve Lohr, “Tallying I.B.M.’s Layoff Numbers,” The New York Times, March 30, 2009; William Bulkeley, “IBM to Cut U.S. Jobs, Expand in India,” The Wall Street Journal, March 26, 2009.
55 “They used to bring the people” Tom Midgley, interview, January 30, 2011.
56 “I was responsible” Kristine Serrano, interview, January 29, 2011.
57 Serrano was offended Ibid.
58 Cutting-edge R&D “IBM and Globalisation: Hungry Tiger, Dancing Elephant—How India Is Changing IBM’s World,” The Economist, April 4, 2007, http://www.economist.com.
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