Losing American Jobs Isn’t Fun And Games by Alan Tonelson (NAPSA)—Oncee a poster firm for today’s trade and globalization policies, Toys “R” Us is now becoming its latest victim. In the process, it’s reminding Americans that neither our businesses nor our consumers can simply am import their way to lasting national prosperity. Toys “R” Us long profited by produc5 ing toys in China at E Chinese wages and Tonelson selling them in the —— United States for American prices. Indeed, the company evidently thought that the entire economy could run by supplying wealthy American consumers with the labor of impoverished foreigners. Thus, it helped spearhead the ceaseless corporate lobbying to expand trade with China and other penny-wage countries. What Toys “R” Us and many other multinational companies forgot, however, is that if too many businesses follow this strategy and send too many good manufacturing jobs abroad, too few Americans will be able to afford the multinationals’ foreign-made products. And poorly paid third world workers can’t possibly substitute for American > -_ consumers. Toys “R” Us’ import-centered strategy is finally backfiring. In 1998, much bigger fish and import superpower Wal-Mart supplanted Toys “R” Usas the nation’s biggest toy seller. This October, Wal-Mart launched a new price war, selling some imported toys below cost. One month later, Toys “R” Us announced a big third quarter loss, cut its earnings guidance, and beganto close its Kids “R” Us clothing stores. Explained Toys “R” Us CEO John Eyler, “We are not seeing the kind of spending you would associate with a recovery.” But after a decade-plus of job and wagedestroying Toys “R” Us-style trade policies, what else could he expect? Toys “R” Us hopesto turn itself around with changes like store remodeling. But its own recent price-cutting shows that the company has helped give its customer base no choice but to keep pinching pennies. Few companies and even fewer consumers ultimately can win that game. Will Toys “R” Us and the rest of American business wake upbeforeit’s too late? Alan Tonelson is a Research Fellow at the U.S. Business and Industry Council Educational Foundation, a Washington research organization, and the author of The Race to the Bottom: Why a Worldwide Worker Surplus and Uncontrolled Free Trade are Sinking American Living Standards.
