August 29, 2013
blue-staters view the Deep South the way a 1992 Saturday Night Live sketch described Arkansas -- as “something out of Li’l Abner,
with buxom underage girls in their cutoff denims prancing around in front of
Jethro and Billy Bob, while corncob-pipe-smoking, shotgun-toting grannies fire
indiscriminately at runaway hogs.”
but the stereotype’s
accuracy is rapidly withering. It doesn’t get more Dixie than Alabama,
and foreign corporations flock to the state. They’re not in search of yokels to
deep-fry roadkill. They seek competent, reliable workers to manufacture synthetic
fibers, elevators, weapon systems, surgical devices, automobiles, oil-drilling
equipment, ships, and soon, commercial jets.
A recent Business
Roundtable analysis found that companies based in Japan,
Germany, the United Kingdom, Canada,
and France support 49,200
jobs in Alabama.
The all-countries figure, according
to the Organization for
International Investment, is 81,200 positions. In 2012, firms
such as Shandong Swan, EADS, JX Nippon Oil & Energy
Lubricants, Austal, and
Sandvik Medical Solutions
announced plans for 6,000 new hires.
It’s a side of
globalization rarely covered in mainstream-media accounts of international
trade. Reporters and pundits are quick to seize on a U.S.-based company closing
a plant or transferring work to Asia. Far less
attention is devoted to the fact that 5.6 million Americans
owe their livelihoods to foreign investment.
explosion is a myth-busting double threat: It exposes protectionists’ facile
theory that wage rates alone determine site-selection decisions for multinational
corporations, and torpedoes the moonbat mantra that Big Government states will experience
strong economic development.
Pay in Huntsville, Birmingham, and
Mobile doesn’t (yet) match compensation in Nob Hill, Chevy Chase, and Fairfield
County. But China, Cambodia, Mexico,
Brazil, Poland, and Romania
have cheaper labor costs than Alabama.
Clearly, the state offers a myriad of attractions. Land is inexpensive. Politicians
impose a light tax
burden -- levies on property are particularly low -- and junk-science-based “environmental” regulations are rare. Alabama has a right-to-work
law, so compulsory tribute to union bosses is banned. (“Organized labor” may hobble
the private sector and run the government in Bluetown, U.S.A.,
but no coerced funding source means it is moribund in the South.) With
competition brutal and shareholders vigilant, foreign corporations constantly
examine the options, and in Alabama,
they like what they see.
investment from abroad, the Alabama
economy is flourishing -- well, at least it’s doing as well as possible, in the Bush-Obama era.
Unemployment, at 6.3 percent, is more than a percentage point below the
national figure. Equally impressive is the state’s progress in median household
income (MHI). The typical American domicile grew its earnings, in
inflation-adjusted terms, by a mere 0.6 percent between 1991 and 2011. Alabama’s improvement
was better by a factor of ten.
Meanwhile, many of the states that spend lavishly on “public investments” --
e.g., California, Illinois, New Jersey, New York, Connecticut, Rhode Island -- saw
MHI fall. Who’s “backward” now?
The past is
encouraging; the future looks stellar. There is no longer any doubt that an automobile
cluster has taken hold. In January, The
Birmingham News bragged that the “quality
and loyalty” of the local workforce helped Honda, Mercedes-Benz, and Hyundai “produce
… more than 880,000 vehicles last year, a 17 percent increase over 2011 and a
record high level for the industry in Alabama.” It’s not farfetched to expect
the state to one day usurp Michigan’s
status as top automaker. In May, Mercedes-Benz broke ground on the latest
addition to its Alabama
infrastructure, a logistics hub expected to create 600 jobs. May also saw Honda
launch production of its redesigned Acura MDX SUV. Car factories need parts
suppliers, and dozens have sprung up to serve in-state customers as well as demand
from plants (Volkswagen in Tennessee, Kia in Georgia, Nissan in Mississippi) throughout the South.
ground, next the skies. Last
summer, Airbus selected Alabama to establish its first U.S.-based assembly line
for commercial jetliners. The $600 million facility is expected, at full
production, to employ 1,000 workers. Airbus is hiring mangers now, and the
(Mobile) Press-Register reports
that “the first blue-collar postings [are] expected as early as October.” The
company’s arrival, its CEO believes, is “the most significant, game-changing
event in U.S.
aerospace in decades.”
of America” lobby has a tough time selling its message in Alabama. The state’s increasingly
diversified economy is surging, and foreign companies are leading the way. It’s
time to stop the cracks about moonshine, extra-chromosome offspring, snake
handling, and mint juleps, and recognize that Alabama, and its neighbors, are on to
D. Dowd Muska (www.dowdmuska.com) writes about government, economics, and technology. Follow him on Twitter @dowdmuska.
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