We could slay recession in South
I grew up in the little mill town of River View, Ala. For many generations, River View was a mirror image of cotton mill communities all across the Southeast — the mill provided the jobs and a collection of downtown businesses provided goods and services for the workers.
But free trade destroyed the U.S. textile industry and transformed River View and villages like it into economic ghost towns. The ripple effect of all those mills going down pulled small businesses down with them, which in turn created their own wakes to collectively drown hundreds of thousands of regional jobs.
Washington examined the flotsam from this disaster, misinterpreted it and continues to dispatch rescue boats to small businesses. They bring Mom and Pop bucket after bucket to bail their leaky craft, but they still flounder because nothing is being done to salvage the shiploads of middle-class factory workers that kept them afloat.
Proponents of free trade proclaimed it would lift all boats by giving underdeveloped nations the opportunity to industrialize and compete in the global market, thus creating good-paying jobs for their citizens.
In textiles, it didn’t work out that way. Textile manufacturing is a relatively uncomplicated industry to get into, which made it very inviting to Third World entrepreneurs. The machinery is generic, and it comes pre-built so it can be installed anywhere. And start ’em up they did, from Central America to Asia. What they didn’t do is pay their workers a life-changing wage like the free traders envisioned, but more like 50-60 cents an hour. Also, the new plants adhere to little or no environmental regulations.
The federal government then allowed those new enterprises to flood the U.S. with unfairly priced textile products. American textile manufacturers couldn’t compete with such ridiculously low wages and no costly government regulations, so they pleaded with Washington to put a stop the dumping. Their pleas fell on deaf ears.
WestPoint Stevens, which operated the River View mill and many others like it across the southeastern U.S., was once the world’s largest producer of bed and bath products. It employed thousands of devoted workers who supported hundreds of small businesses across the region. Regardless, Washington’s refusal to shadow this great company from dumping sent it and its entourage spiraling to the bottom.
Since the government is responsible for this tragedy, it should fix it. WestPoint Stevens – or a company just like it – could resurface for about $2 billion of the remaining $600 billion in stimulus funds; mere chickenfeed compared to the $700 billion to bail out the auto and banking industries, which served only to save existing jobs. By stark contrast, this measly $2 billion will create thousands of new middle-class careers and reconstitute all the associated small businesses.
Tax revenue will repay the $2 billion in a few short years and ownership of the company will go to the employees.
Further, on the strength of the anti-dumping provisions in free trade, Congress will pass the Textiles Fair Trade Act, which will require foreign producers to pay their workers a living wage, plus benefits, equivalent to that of the new American company if they wish to compete in the U.S. market duty free. Also, the competitors must adhere to similar environmental protections.
With all that in place, the new company will flourish and thereby encourage private investors to start up their own textile operations in the empty mills across the region. This is the silver bullet that will strike through the heart of the recession. Washington needs only to pull the trigger.
Roy Hines is retired after a long career in textile management. He submitted this article to a number of newspapers across the South in an effort to start a grassroots movement.