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This one is so easy that it feels like piling on to write it. But if you need any further evidence that President Obama’s approach to economic policy has dissolved into complete incoherence, look no further than the Wall Street Journal‘s new article on Los Angeles’ garment industry. And it offers some vital lessons for many of his fellow Democrats, too.

As the Journal has reported, Los Angeles will be raising its minimum wage to $15 per hour in phases over five years. In response, the city’s still considerable garment manufacturing industry, which employs huge numbers of the working poor, including many legal and illegal immigrants, is threatening to leave.

It’s certainly reasonable to counter that business owners will always squawk about any cost increases, and that Los Angeles’ proximity to a fashion market that requires lots of very quick order filling will remain a big competitive advantage for a sector that needs to keep up with rapidly changing fads. It’s also reasonable to challenge Los Angeles garment makers to preserve their profitability by increasing productivity – though if they achieve this goal with more automation, employment levels could suffer at least in the short run.

But let’s look at how Obama-nomics is affecting the situation. The president has been a leading champion for those minimum wage hikes. (Most other Democrats agree.) At the same time, he’s seeking a Trans-Pacific Partnership (TPP) trade agreement that will open the American apparel market even wider to exports from Vietnam in particular, where average hourly wages in the industry as of 2013 reportedly were 53 cents per hour, and where employers – including the government – don’t have to worry about workers’ rights. Mr. Obama also favors trade deals that will boost apparel imports from other very low-wage, regulation-free regions like sub-Saharan Africa. And even though most Congressional Democrats oppose the TPP, they’ve strongly supported the Africa deal.

From the broader standpoint of Los Angeles’ entire economy and its prospects, virtually the entire Democratic party favors enormously increased immigration (and eventual citizenship for most of the current illegal population). So the city faces the prospect of a big new influx of new low-wage, low-skill foreign arrivals on top of the influx it’s already experienced, and a big exodus of the best kinds of jobs such newcomers can reasonably hope to hold.  Further, given the president’s support for this import-the-workers-export-the-jobs combination, plus the strong possibility that Democrats will retain the White House in 2016, the same fate appears in store for much of the rest of the country, too.   

And here’s the icing on this cake – as Democrats seek to focus America’s attention on wide and rising income inequality, Los Angeles already stands as one of the most unequal cities in the country, and California as the most unequal state (indicating that it’s more than a Los Angeles issue).

Not that Republicans are significantly better on trade and immigration issues – especially their Washington and Congressional leaders. But at least they’re not also peddling the false hope of big minimum wage hikes on top of their offshoring-and cheap labor-friendly immigration stances.  BTW, back in the late-1990s, I put out a short item on this very problem emerging in California (but can’t find it anywhere on line).  Plus ca change, as they say. 

 

 

 

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