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Paying for Covid 19…Are YOU ready?

Paying for Covid 19…Are YOU ready?

By Greg Kozera- Learned Leadership LLC–

My physical therapists have done an incredible job taking me from a wheelchair to running again. I’m running a virtual 5K with my daughter in May. The focus for me is going the distance for the first time since October, not speed. At my PT session on Wednesday, I overheard the remarks one of the other patients made to his therapist. “We shouldn’t be buying gloves, masks and ventilators from China. We should be making them here in the USA and providing American jobs.” It sounded like me talking. I wonder if he heard one of my radio shows? (There was only one other patient since elective surgeries have been stopped for over a month as part of Covid 19 restrictions.) I smiled and said, “You are spot on.”

Our economy is starting to open up again slowly. We have already seen a $6 Trillion stimulus package and more is on the way. In the last 6 weeks, over 30 million people have lost their jobs. They are no longer paying taxes and have filed for unemployment. Thousands of small businesses have had to shut down many may not reopen. Loss of value to publicly traded companies and privately-owned companies has been estimated at $10- $12 Trillion. These losses are bigger than money. Behind them are real people. When we leave home confinement we don’t have to go very far to see the faces of those impacted.

Unless you are one of those rare individuals that carried the virus here from China, you had no control over Covid 19 coming to the United States. We can blame Chinese leaders of any number of other people for our current situation. As leaders, we know blaming others doesn’t help us. Leaders take responsibility for their situation and then take control of those things they can control. What can we control? We can control our attitude, our actions and our thinking. Here are some facts that may help.

Shale Crescent USA did a little research. We learned the US Government has data on imports. In the last twenty-five years, we have imported over $7 Trillion in manufactured goods from China. WE purchased those products. Many of those products were made by American companies who moved to China because of perceived cheaper manufacturing costs.

Let’s assume we purchased our Chinese products 25% cheaper than US products. (that is a high estimate) Based on $7 Trillion in imports we saved $2.25 Trillion over 25 years. These savings came at a cost of thousands of US high wage manufacturing jobs, products and services those workers would have been able to purchase with those high wages and the taxes they would have paid. Now we are looking at an $18 Trillion bill for the virus we will all be paying.

Where are we going to get that kind of money? How can we bring our economy back? The best way I can think of is from new high wage manufacturing jobs created by making products here that we are currently buying overseas from places like China, starting with masks, gloves, gowns, medical equipment and medications (currently 80% come from China). High wage manufacturing jobs create jobs in many sectors from restaurants, housing, auto and other products people purchase.

We lost our energy advantage starting in the 1970s to OPEC. Until 2010 we were dependent OPEC for our oil and were preparing to purchase natural gas from them. Asia had cheap labor and we were both getting our energy from the same place (OPEC). Manufacturing jobs began leaving the USA for Asia creating the “Rust Belt”.

The World has changed again. We now have economic abundant energy. Asian nations must get their energy from OPEC, Russia or the USA. Labor is still cheaper in Asia but now the USA has advanced manufacturing (Robotics, remote control, AI) automating many processes and reducing our labor cost. Manufacturing jobs today are now high-tech jobs. The Boston Consulting Group said in 2018, “China, the world’s biggest exporter, has also seen significant change. A once –enormous cost advantage over the US has been eroding for years, largely because of double-digit annual increases in wages that far outpaced productivity growth, a strengthening currency, and relatively high energy costs.”

It is now cheaper to manufacture here in the Shale Crescent USA, especially for products that will be sold here. Our advanced manufacturing off sets countries like China’s labor advantage. We have cheaper energy and feed stock costs. We are located in the middle of the largest economy in the world, the eastern United States and eastern Canada. Asian countries already recognize this advantage and are starting to move manufacturing here to make products that will be sold in the USA and will create high wage jobs in the Shale Crescent USA. We are currently working with Asian companies who want to locate and manufacture here. Will US companies figure this out? The US companies with the greatest advantage are those already here. They can expand and adapt to make products that are currently being made in places like China.

We need to do our part. I’m now looking at where my medications come from and asking for products made in the USA. I own two Subaru Outbacks from a Japanese company made in the USA. Retailers are sensitive to their customers especially now. We need to make our preferences for US made products known. At the grocery store I look for produce grown in the USA. I feel safer with the US Department of Agriculture. I know the products for my vitamins are grown here and they are manufactured here. Manufacturers are now looking at Regional instead of Global supply chains.

We can’t control what has already happened. As leaders, we can control what we do about it. Now is our time. We can change the future. Thoughts to ponder.

© 2020 Learned Leadership LLC

Opinions expressed are those of the author and not necessarily those of Northeast ONG