Manufacturing decimated, job growth, limited


Examiner.com

By: Jay Ambrose

Another month has passed with another massive layoff of manufacturing employees – 200,870 in April – and that’s awful, but here’s what’s not awful: the great abiding truth about American productive power or what the future likely holds if the federal government does not intervene with anti-trade, anti-outsourcing stupidity.

As long ago as 1890, a free, robust, inventive, energetic United States had become the foremost manufacturing nation in the world, and guess what? We still are.

It’s true that worrywarts of all kinds would have you think differently, but they can’t escape the facts reported by economist Donald Boudreaux, who compares the value of manufacturing output in 2007 to 2000 (8 percent higher), 1990 (69 percent higher) and 1980 (184 percent higher).

Then we come to an Associated Press story telling us the value of our output in 2007 was a record $1.6 trillion, which is almost twice as high as two decades earlier and two and a half times the value of Chinese manufactured goods for the same year.

None of this means that things haven’t changed in U.S. manufacturing over the decades or that the change has not been discomforting, even if, in the long-term, it is much more a blessing than retaining the status quo.

Thanks largely to technological advances, manufacturers have become extraordinarily efficient, capable of doing ever more work with ever fewer people and meaning that we now have only 8 percent of the workforce engaged in this work. Says the AP story, that number was 28 percent a half century ago.

The other big change is that manufacturers are producing less and less of relatively low-valued goods, including much of what consumers purchase in retail outlets, while moving ever more to high-valued goods, identified by AP as such things as farm equipment, computer chips, gas turbines for power plants and aircraft.

What this means is that more and more of the most labor-intensive, small-return manufacturing has moved overseas, where it is invigorated by U.S. imports and sometimes abetted by U.S. companies having some of their products made there.

And what all this has led to is political nonsense that rails against free trade, begs for protectionism, castigates Wal-Mart for its sale of cheap Chinese products and castigates outsourcing corporations as greedy traitors to America.

Answers?

Economies change; jobs in one area, such as agriculture, move to another area, such as factories, and then to another, such as the service sector. This is not bad. A stagnant economy collapses while a market-heeding, adjusting economy prospers.

Businesses really should put resources into what pays best and seek out ways to save so as to generate money for expansion and new investments.

Free trade creates jobs in all kinds of ways, not only through exports (and ours to China have increased by tens of billions just this decade) but through the jobs made possible by inexpensive imports. Cheap imports raise the standard of living of low-income Americans. And don’t forget foreign-owned corporations that hire people here.

President Obama once promised to crack down on outsourcing through corporate tax penalties. If he did, he would cost us jobs, not bring us jobs.

As a smart man, he can surely come to understand that the path of manufacturing has been a boon for us, that even if it is no longer the same job producer it used to be, it is a great, beneficent wealth producer, and that it can be an important part of what keeps us steady and moving toward better lives for millions after the recession lifts and the massive layoffs end.

Examiner Columnist Jay Ambrose is a former Washington opinion writer and editor of two dailies. He can be reached at: Speaktojay@aol.com.

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