There's no saving industrial dinosaurs

Editorials

December 18, 2008

Anonymous The Laurel Leader-Call Thu Dec 18, 2008, 09:10 AM CST

With the recent loss of manufacturing jobs in Greenwood and in other parts of Mississippi, economic development and political leaders are weighing what the response should be.

There are generally two schools of thought.

One is to accept the world is changing and adapt to it by revamping your work force. The other is to try to resist the tide by shoring up declining industries with tax dollars.

Angela Curry, executive director of the Greenwood-Leflore Industrial Board, is of the former school. She said that while her group will continue to chase employers of all types, the community should understand that low-end, lower-skilled manufacturing is a dinosaur in this country. That type of work has been steadily moving to nations in Central America and the Far East, where labor costs are a fraction of those in the United States.

The manufacturing that this nation can hold onto, she said, are of the high-tech, high-skill variety. If Greenwood is going to be competitive in that arena, it has to raise the skills of its work force to meet the needs of these kinds of employers.

Meanwhile, an influential state lawmaker has other ideas, at least for his area of the state. Senate Appropriations Chairman Alan Nunnelee wants to divert money from a proposed cigarette tax increase to subsidize jobs in the furniture industry by $2,000 a worker.

The Tupelo lawmaker’s proposal is flawed on several fronts.

First, with all the suggestions that have been floated for how to spend a cigarette tax hike that has yet to be enacted, its potential revenue has already been exhausted many times over. The cigarette tax should be raised significantly, but it is foolish for policy makers to act as if it can be the panacea for all of this state’s ills.

Second, it is absurd to suggest that a tax imposed on the entire state should be earmarked to boost one particular region — northeast Mississippi — where the furniture industry is based. Mississippi needs to avoid imitating the pork-barrel ways of Washington, where money is spent not based on good sense but on an individual lawmaker’s clout.

The biggest flaw, though, with Nunnelee’s proposal is that it ignores reality. The furniture-making industry is dying in this country, and there’s no reviving it. Everyone in the business knows it. The 1,100 furniture-making jobs that have been lost in northeast Mississippi since the first of the year are simply a continuation of a clearly established trend.

Foreign producers, particularly the Asians, can match Americans in quality and beat us to the drum on cost when it comes to cut-and-sew work. They’ve done it on clothing, and they’re doing it on furniture.

Nunnelee is seeking to delay the inevitable by asking taxpayers to subsidize the Mississippi manufacturers’ labor costs. He appears to be taking a page out of the Washington play book, where banks, insurance companies and automakers have had their hands out for billions in bailouts.

The difference, though, is that not all government intervention is equal. Automobiles are going to be made in this country by U.S. workers. It’s a question of who will be their employer, the Big Three or their foreign competitors. The economics are such that it doesn’t make financial sense to manufacture cars overseas and ship them to the United States in any great quantity.

That’s not the case with furniture. Sofas and recliners can be produced out of the country, transported here by the container and sold at a profit. That’s already been amply demonstrated.

Mississippi can artificially prop up the furniture industry with taxpayers’ money, but it’s a strategy that is doomed to failure. It makes more sense to invest our time and resources on jobs with a future.

— Greenwood Commonwealth

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