irreverent, thought-provoking analysis of the industry.
Rising Health Costs, Fewer Jobs
The problems compound each other.
by Mike Hartnett (May,
There are two issues that I think are of overriding importance to
the country, and therefore our industry. If they're that critical,
then I should write about them, right? I would have belabored you
with my rants on the subjects before this, because I can't think of
anything definitive to say. I have no answers.
The subjects? Health costs and overseas jobs.
Politicians argue about buying drugs from Canada and who should
pay for them, but that skirts the basic issue: rising medical costs.
Got a back ache? The medical profession gives you an MRI, a bill for
about $1,200, and another bill for hundreds of dollars for someone
to read the MRI. Your back still hurts, and now your wallet does,
How many businesses in our industry can no longer afford to
provide full medical insurance for employees because the costs have
skyrocketed? Or have had to cut back the insurance to the point
where employees' increased contributions are more than their raises?
The way costs are rising, soon nobody, neither employees nor
individuals, will be able to afford it. For example, recently a well
known industry designer was searching for insurance for her family.
Her husband has had some health problems but is fine now, and they
have a couple of school-age kids. The best insurance she could find
would cost $40,000 a year.
Does that mean ultimately we'll have socialized medicine and the
government will pay for it? Don't count on it. The federal deficit
is going to be more than $600 billion next year – and we have all
those Baby Boomers about to become part of Medicare and Social
(This just in: You may wonder why Thomas Hamill, the civilian
contractor who was held hostage by the Iraqis and eventually
escaped, took a job driving a truck in Iraq in the first place.
According to press reports, he was a failed dairy farmer who signed
up for the high-paying but dangerous job because his wife needed
heart surgery – and he didn't have insurance.)
Here's the theory on free trade: If every country is allowed to
do what it does best, then everything will be made more efficiently
and cost less. If everything costs less, then citizens of each
country will be able to buy more. The more the world's consumers
buy, the better the economy for everyone.
I agree completely with that theory. The problem is, reality is
often quite different. If world commerce is "free," then
shouldn't China float its currency, just like the dollar, the yen,
the mark, and all of the other worlds currencies? If that were the
case, Chinese goods wouldn't be quite as inexpensive. The current
system places U.S. manufacturers at an unfair disadvantage that has
nothing to do with wages.
If free trade is "free," shouldn't senior citizens and
the rest of us be able to buy prescription drugs from Canada? I can
buy a shirt from China but can't buy a pill from Canada?
If the free-trade theory is correct, then it imposes a certain
obligation on us, too. For example, the workers at the Maytag plant
in Galesburg, Illinois are losing their jobs primarily because of
NAFTA; Maytag's moving to Mexico. If free trade is best in the long
run, and the government signed the NAFTA treaty, then doesn't the
government have an obligation to offer these folks job retraining
programs? Oh, but overall the federal budget for retraining programs
is being cut; hard to argue with that, given our $600 billion
Free trade ultimately means manufacturing going to countries with
lower wages and standards of living: But how strong can a country be
if it doesn't make anything? Can the nation survive when all
its citizens are salespeople and newsletter publishers?
Tom Ware of Bagworks may have the best analysis: "Loss of
jobs to foreign firms kind of falls under the same scenario as the
old recession/depression quote: 'A recession is when your neighbor
loses his job; a depression is when you lose yours.' When your
neighbor’s job is outsourced to China or India, then it’s a darn
shame but it's happening all over.' But when your job is outsourced,
'it's time for the government to get involved and stop the
blood-sucking corporations from shipping everyone’s job
So what's the answer? "Hell if I know," Tom says,
"But we as a nation keep coming up with answers."
I sure hope Tom is right. Maybe I just don't have enough
imagination to see what the U.S. would be like with a society of
A perplexing example.
The steel industry is a classic example of the problems facing
Fact: The Allies destroyed Japan's and Germany's steel mills in
World War II. We then helped them rebuild, which all agree was a
good idea. Today Japan and Germany are peaceful and buy billions of
dollars worth of U.S.-made goods.
Fact: The new Japanese and German steel mills, being more modern,
could produce steel more efficiently and cheaply than U.S. mills
which hadn't been modernized. Apparently the execs and workers at
U.S. mills pocketed too much of profits, rather than modernizing the
mills, when they had so little competition in the post-war era.
Maybe the U.S. steel companies paid the workers too much, but how
much would they have to pay you to work in a steel mill?
Fact. Eventually U.S. steel mills tried to catch up, but last
year the steel companies pressured the Bush administration to slap
steep tariffs on foreign steel. The mills argued the competition was
unfair, and what would happen to America's defenses if we no longer
make steel for guns, tanks, and planes?
The Bush administration slapped on the tariffs, and the U.S.
mills immediately raised prices.
Fact. The World Trade Organization screamed bloody murder and
some countries prepared to raise tariffs on other U.S. goods. It
soon became apparent that if those tariffs were imposed, the U.S.
would lose more jobs than it saved from the duties on steel. The
Bush administration rescinded the steel tariffs.
Fact. The widowed mother of a well known craft industry figure,
whose husband had worked in an Ohio steel mill for 35 years,
recently learned that the steel company will no longer be able pay
her survivor's pension and health insurance.
Why? The steel mill has declining sales and can no longer afford
to pay her insurance premiums.
Note: Do you have any answers or even partial solutions or
just want to vent? Email your thoughts to firstname.lastname@example.org.
Comments on "Crafts."
In the last Business-Wise, Sandra Kay of MagTime Frames and Mike
Hartnett debated Sandra's idea of using "Creative" as a
noun to replace "crafter," which Sandra thought had too
many negative connotations. (You can still read the column by
The debate prompted the following letter from Tom Ware of
I believe Winston Churchill once said something like: "A
good ambassador is someone who is crafty enough to tell someone else
to go to hell and he will thank him for the advice."
Well, I’m not much of an ambassador and I think that telling
someone, "Oh, yes, you are definitely a Creative!" is
about the dumbest thing that I’ve ever heard. If calling someone a
crafter somehow makes them feel less than brilliant, then telling
her that she is "a Creative" certainly would make the
commentator appear outright ignorant.
There would doubtless be several seconds of awkward silence while
waiting for the person to finish the sentence. Then comes the
obvious question: "I’m a creative what?" And to
capitalize it (Creative), thereby giving it spiritual reverence, is
"Crafts. Discover Life’s Little Pleasures" was
developed several years ago by some very creative people (the word
works very well as an adjective) after considerable research and
debate. I think that they did an admirable job, but then I’m an
old fogey who would rather have a stewardess than a flight attendant
and is content to employ a janitor rather than an environmental
"Crafts" is an umbrella word that can include a wide
array of processes, like the word "manufacturer." When I
tell someone that I am a manufacturer (or a crafter), they want to
know what I make. So I tell them the details – with pride and
enthusiasm. And thereby, maybe, I raise their opinion of my products
So call me a crafter, a hobbyist, a craftsman (oops, apologies to
Sandra, a "craftsperson"), or even a creative guy, but
please don’t call me "a Creative." Our society has
bastardized enough of our language without our industry adding to
the collection of malapropisms. Let's be creative within our craft
and hobby industry and leave language to professional linguists.
Ahhhh…I feel better now.
Note: To read previous Business-Wise articles, click on the
titles in the right-hand column.