With little more than three weeks to go in the race for U.S. Senate, a sudden question has popped up:
Is the topic of outsourcing, the movement of jobs out of the South and into low-wage foreign lands, relevant to a 2014 Georgia?
The answer is no. Absolutely. And yes. Absolutely.
At issue is the sudden appearance, missed by his GOP rivals in a hot primary, of a 2005 deposition of David Perdue in which the Republican Senate candidate and former business executive asserts that he “spent most of my career” establishing offshore supply lines for American companies. More specifically, supply lines employing people not in the United States.
The legal interrogation came as part of bankruptcy litigation against Pillowtex, a failed North Carolina textile company Perdue was hired to turn around in 2002.
In the deposition, Perdue – the CEO of Dollar General at the time — outlined how Pillowtex, which ultimately collapsed, was to send much of the textile company’s domestic production overseas. He also described his role in foreign-sourcing in prior jobs with Haggar, Reebok and Sarah Lee.
When questioned by reporters, Perdue said, “Defend it? I’m proud of it.”
But that answer perhaps did not strike the proper tone. He went on to blame Washington for domestic policies and agreements – including the North American Free Trade Agreement, now 20 years old — that virtually required companies to shift production across the U.S. border.
(Although, if memory serves, the U.S. Chamber – in the name of worldwide free enterprise — pushed awfully hard for NAFTA.)
At base, the issue of outsourcing has an anachronistic feel. Georgia’s mill-town manufacturing base had collapsed long before the turn of this century. Politically, the last time its lost economic power was a serious topic of conversation was in 2008, when John “Great Hair, Poor Morals” Edwards, the son of a South Carolina millworker, made his Democratic bid for the presidency.
“It just is not relevant today,” said Roy Bowen, president of the Georgia Associations of Manufacturers, an organization that long ago dropped “textile” from its name. “If we’re seeing anything in manufacturing, it’s jobs returning.”
There are many reasons for the turnaround. Cheaper U.S. energy, higher wages in China, the rise of “speed-to-market” or “just-in-time” business strategies that keep inventories to a bare minimum.
In any case, West Point, Ga., once a thriving textile center, is now Kia-town. Out-sourcing has given way to re-shoring.
Which would make the issue of lost jobs a moot point, except that the people left behind by the 20th Century collapse of Georgia’s manufacturing base are still with us. And they – or their children and grandchildren — do not match up well with the new jobs that are flowing in.
Under the old system, a high school degree could set up a loom operator or spooler for life. Not so today. “There are too many Georgians who don’t have the skill set to go into manufacturing today,” said Bowen, the GAM president.
This helps explain the 8.1 percent unemployment rate that September gave us.
In 2014, if you don’t have a degree from a technical college, university, or something like it, the odds are you are destined for a minimum-wage life. Or a jobless one.
Since the rise of Ronald Reagan, white low-skilled wage-earners have been a Republican property, especially in the South. But last month, a statewide poll conducted for The Atlanta Journal-Constitution showed a crack in that ownership.
The September survey showed Democrat Michelle Nunn, who has been hitting Perdue hard for his opposition to a minimum wage hike, with the support of 49 percent of those with household incomes under $50,000 a year. Perdue stood at 36 percent with low-wage households. (The percentages flipped in the next-higher, $50,000-to-$100,000 income bracket.)
Granted, much of that support for Nunn from low-income workers comes from African-Americans, who are reliably Democratic. But a near-majority percentage indicates she’s attracting low-wage, white earners as well. That alone makes out-sourcing – or its aftermath – a relevant topic for discussion.
Then there is the topic of Perdue himself, who has pitched himself as the ultimate Washington outsider with a sense for business that the U.S. Senate desperately needs. During the primary, his opponents whispered that a first-time candidate is an unvetted candidate.
Indeed, the 2005 deposition shows us a David Perdue who had no thought of a political career, a man who was unaware of and unconcerned with how the creative destruction of modern capitalism might look in a campaign ad nine years later.
In response to questions about out-sourcing, the Perdue campaign pointed to the 20,000 jobs he had created as CEO of Dollar General, and recycled a few quotes from the updated version of the candidate and his involvement in business rescues.
One was this: “My experience in business, good and bad, has prepared me to focus on the economic crisis and not the noise around it.”
Another was this: “My parents raised me to be the kind of leader that runs toward the burning building to try to help instead of running away from it and sitting on the curb and criticizing those that are trying to make a difference.”
But the 2005 version of Perdue requires voters to wonder who, in his world, is a mere noisemaker and who deserves to be plucked from the burning building. That’s why this discussion is relevant.
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