Anyone who knows anything about economics knows that more money is generated by selling something rather than buying something. This is how the British empire was able to effectively dominate world trade for centuries, by importing raw goods from its’ colonized trade partners and exporting to them finished goods creating a healthy Return On Investment (ROI) for British Companies.
For much of the 20th Century, the United States rose to a world trade power by emerging as the foremost exporter of goods to foreign nations. The ingenuity of American entrepreneurs, and the opportunistic exploitation of consumers, both domestic and foreign, is what made America the wealthiest nation in the world and allowed American’s to enjoy the highest standard of living and comfort of realizing growth in economic stature through hard work.
Addressing the work ethic of America’s millennials is something we will leave for another day, however I will tackle the trend that America continues to import more than we export. In 2012, total U.S. trade with foreign countries was $4.9 trillion. This consisted of $2.194 trillion in exports and $2.734 trillion in imports of both goods and services.
This makes the U.S. is the world’s third largest exporter, after theEuropean Union(EU) and China, and the world’s second largest importer, after the EU. Almost all global transactions are completed by using the US Dollar as the form of currency, a situation the United States has taken advantage of and leveraged for years. However, the continued devaluation of the US Dollar has led many foreign nations to explore independent trade agreements to stop using the US Dollar in their transactions.
Following WWII through the mid-late 1970s, the United States routinely exported more than it imported. In the 1980s, our nation began the trend of importing more than we were exporting and continued to do so even through today. This is the direct result of such popular business techniques such as outsourcing, where American companies would send manufacturing jobs oversees in return for cheaper labor and higher ROIs.
Nearly 95% of all consumers live outside the United States. Not only should domestic companies throughout the United States consider expanding their foreign exports, but California needs to create incentives for California based businesses to manufacture their goods here and incentivize the foreign export of them. Currently, California is the biggest culprit of domestic outsourcing. This is the practice of exporting our jobs to other states, mainly Texas who is the number one exporting state, and keeping the company headquarters in another.
California is home to the nation’s two largest ports. We have the nation’s highest population, and one of the highest rates of unemployment. If estimates show that for every $1billion in goods and services exported 5,000 jobs are created, wages are 1-2% higher, and companies involved in exporting goods and services grow two times faster than those who exclusively do business in the domestic market doesn’t it make more sense to export more goods instead of continuing to create jobs that make California companies export our jobs to states like Nevada, Texas, and South Carolina?
If California wants to reduce the unemployment numbers and become the economic engine it was throughout the 1980 and 90s we the answer is simple. Create job programs that entice companies to manufacture in California and export from California ports. As a country and a state, we need to start selling American goods to global consumers to start paying down our national and state debts.
Support our journalism.
Hyperlocal news is an essential force in our democracy, but it costs money to keep an organization like this one alive, and we can’t rely on advertiser support alone. That’s why we’re asking readers like you to support our independent, fact-based journalism. We know you like it—that’s why you’re here. Help us keep hyperlocal news alive in Long Beach.