Mollie's job and career development

Mollie's job moved from New Jersey to Mississippi and Arkansas and eventually to a Maquiladora in Matamoros, Mexico.

In 1955, Mollie James began her three-decade stint on the assembly line at Universal Manufacturing. The firm was founded in 1947 by Archie Sergy, an entrepreneur with a questionable past. The firm eventually opened another plant in Simpson County, Mississippi, in the early 1960s. Building on a longstanding commitment to increase industrialization, the state lured Universal by offering to transfer the cost of building a new plant to the taxpayer. The move south was a preview of what was to happen in the 1980s when a leveraged buyout put the firm in new, more cost-conscious, hands.

As locations were continuously competing to attract new firms, the Mexican government made plant relocation attractive by offering tax-free zones, cheap labor, and a willingness to clamp down on union organizers. Mexican manufacturing paid their workers so little that they were forced to provide food to their employees in some cases because they could not feed themselves with their compensation alone. The flow of capital had allowed companies to move across boarders freely. Some factories were even being moved within Mexico, as companies followed the lowest wages and labor resources to their lowest possible point.

Discussion

This was not inevitable, or at least wouldn't have been inevitable, if proper "rules of the game" had been set up. The move was probably harmful overall, because it only ended up destroying jobs in the U.S. while exploiting workers like Balbina Duque in Mexico. Economic orthodoxy would have us believe that economic globalization and free trade have no downside. Yet journalist and author Adler (Land of Opportunity) reminds us that these sweeping economic changes do have a human cost and his book recounts the rise and fall of an electrical manufacturing company through the eyes of its founders, workers, and the politicians, union organizers, and corporate raiders who shape its fate (Stewart, N.d.).

There are obviously opposing views on such an issue; however there must be some mechanisms that level the playing field in regards to many factors of production in which labor is only a portion of the total equation. For example, regulations that deal with issues such as collective bargaining may be present in one country but not in another. Therefore, although there may be financial advantages for an individual firm to produce in a country without any meaningful regulations, it increases the externalities that the entire society must pay for. Thus there should be interventionist policies should be implemented to reduce such externalities.

Many people argue that free trade policies can foster innovations through greater levels of competition through specialization and international trade. However, many of the factors that go into production are not necessarily equal throughout the world; especially in regard to externalities. For example, firms operating in the United States must abide by many regulations from organizations such as labor unions, minimum wage laws, the EPA, or many others. However, similar companies in China or India may not have to operate with virtually any regulations whatsoever. These companies can squash collective bargaining through force and coercion. Therefore protectionism can be one way to level the playing field to ensure that the terms of competition are fact and equitable.