Where Stimulus Package Dollars Go Is No Ancient Chinese Secret

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1849 was a great year in American history. Before, few pioneers quit their jobs in the east and pursued the American dream of owning their own land. Then, James Marshall uttered the word “gold,” and soon enough, everyone was moving west. Everyone was looking towards California to strike it rich, including Chinese immigrants. In fact, the Chinese immigrants were the only ones to become rich during the Gold Rush, and they did not even mine. The average miner usually found only enough gold to break even, and while they were mining, they paid the Chinese immigrants for food, groceries and other odd jobs. I admire their economic tactics, which can still be found in today’s economy.

In 2009, President Obama created the American Recovery and Reinvestment Act, informally known as the stimulus package, for the same reason my father wants me off his couch: work. Because the American government has an immense debt on their shoulders, they came up with a plan to rebuild our economy by — what Obama claims — “Putting America back to work.” Franklin Delano Roosevelt believed the previous idea as well. However, there is something Obama is doing differently than FDR. FDR employed American workers, whereas Obama is going against his word and employing the Chinese instead of Americans.

It is no great secret that China is taking a significant number of industrial jobs away from America. In this case, instead of crying foul against China, I congratulate China. China has made world competition a little more difficult for America. Firms look to reduce their costs. One key way of doing that is hiring cheap labor, and China has an abundance of cheap labor. This notion is a prime example of capitalism at its finest. The true problem comes later.

Obama stated that the stimulus package contained the largest investment towards infrastructure since Eisenhower’s investment of the Interstate Highway System. According to the Federal Highway Administration, the price tag on Eisenhower’s investment was $114.3 billion. Obama has invested a little over half that figure — $64 billion of the total $787 billion in the stimulus package. During the Eisenhower era, the government wrote paychecks to the American construction workers. Now, the government is writing paychecks to the Chinese construction workers. The China State Construction Engineering Corporation, or the CSCEC for short, beat out many American construction companies and took the prize of numerous federal construction contracts. So far, the CSCEC has built schools and apartment blocks located in New York and Washington, D.C. Soon, they will add renovations to the subway system, including a new metro platform, and fixing up the Alexander Hamilton Bridge to their list.

There are many other reasons, other than cheap labor, why the CSCEC won those federal contracts. For instance, China has modern production facilities with their own machinery.  Also, since the CSCEC is a government-owned enterprise, they have easy access to large funds for major projects. The CSCEC can also hire the world’s best designers, engineers and architects with the easy access to funds.

Why is it okay for American companies to hire overseas and not for the American government? Most of us do not own major shares in large companies; therefore, we have no say in what a company should or should not do. On the contrary, we pay taxes for a government that is set up for the people. Americans’ tax dollars fund the stimulus package, which in turn, pays the citizens of China. American dollars are leaving the American economy. To make matters worse, the current unemployment rate is 8.5 percent. America had a golden opportunity to give people jobs and lower the unemployment rate.

If these construction jobs were to stay inside America, the labor cost would have been a little more expensive in the short run. California Assemblyman Luis Alejo argued that in the long run, there would have been a money multiplier effect. He said, “It [construction projects] gives thousands of families those jobs, and then those paychecks and their subsequent spending ends up going back into our economy.” The more transactions money goes through, the higher the economic value of the money will increase, meaning, the more times a single dollar bill is spent, the more the economy will prosper.

This is a wakeup call for America. Americans will always be on the losing side of the battle if Chinese wages are too low. It is impossible to change their wages, and no American wants a pay cut. The only way to win this battle is education. American engineers have to be able to compete with China by designing more creative and structurally-sound infrastructure, which can only be achieved through better education. Construction workers who are out of work must go back to school and master a field of study so that they can get jobs as well. Of course, it will be a long and hard process, but more often than not, hard work strikes gold.