Decline or Rise of a New Prosperity?

Manufacturing is dying in America, and the middle class that was built on post-WWII GI bill education and manufacturing is going with it. Jobs move overseas to cheap labor markets thanks to trade deals that favor a powerful elite. Millions around the world are rising from extreme poverty at the price of the Western World’s middle class – which might look like a good tradeoff to aliens watching from space, but isn’t so good if you happen to be losing. We should all be sad and angry.

I’ve heard that a lot and I guess I believe it. Just look at the tags in my tee shirts – all manufactured overseas.

I also tend to think of the Christian Science Monitor as a reputable news source, so I read their recent article carefully.

The surprising truth about American manufacturing

“United States manufacturing output is at an all-time high, worth $2.2 trillion in 2015, up from $1.7 trillion in 2009. And while total employment has fallen by nearly a third since 1970, the jobs that remain are increasingly skilled.

“Across the country, factory owners are now grappling with a new challenge: Instead of having too many workers, as they did during the Great Recession, they may end up with too few…

“In western Michigan… unemployment here is low (around 3 percent)… For factory owners, it all adds up to stiff competition for workers – and upward pressure on wages.” CSM

The situation isn’t all rosy: “Employment in manufacturing has fallen from 17 million in 1970 to 12 million in 2015. The steepest declines came after 2001, when China gained entry to the World Trade Organization and ramped up exports… In areas exposed to foreign trade [like my tee shirts], every additional $1,000 of imports per worker meant a $550 annual drop in household income per working-age adult.” CSM

Despite job openings, lots of young workers don’t want to work in manufacturing. They watched their parents shoulder large amounts of overtime only to get laid off in the Great Recession, see the overall downward trend, and are being pushed into college instead of trades by parents, schools, and the government.

I checked Wikipedia, which seems like a decent place to get an overview.

“In 1990, services surpassed manufacturing as the largest contributor to overall private industry production, and then the finance, insurance and real estate sector surpassed manufacturing in 1991. Since the beginning of the current economic downturn in 2007, only computer and electronic products, aerospace, and transportation have seen increasing production levels…

“A total of 3.2 million – one in six U.S. factory jobs – have disappeared since the start of 2000. The manufacturing sector of the U.S. economy has experienced substantial job losses over the past several years.” Wikipedia

On the other hand, I found this from December, 2014:

“Losing bad jobs in favor of better, higher-paying jobs is not decline… The U.S. manufacturing sector produces more stuff almost every year than it did the year before. Prior to the 2008 recession, we manufactured more stuff in the United States than had ever been manufactured by any country, ever, in the history of the world. Is that decline?

“After a slight dip from the recent recession, the United States is once again at an all-time high.

“It is true that the number of jobs in manufacturing has gone down. Producing more stuff with less work is not decline. The jobs lost to China are mostly low-skilled, low-paying jobs. We should be glad those jobs are moving overseas as long as we keep creating higher-paying jobs here at home.” USA Today

Even Consumer Reports weighed in: Whirlpool, KitchenAid, GE, and Electrolux are returning to the US to make appliances. Element Electronics makes TVs in Detroit. Housewares, tools, and some apparel are produced in the US. Even China-based Lenovo has started manufacturing some computers in the US.

So – to borrow a trendy piece of slang – Whiskey Tango Foxtrot? Are we simply adjusting to inevitable evolution in the economy? Is modern protectionism as doomed an attempt as throwing wooden shoes into machinery of the Industrial Revolution? Will the next generation look back on our fears and laugh?

Clearly, today there are winners and losers, and clearly it’s better to win. Years ago I read a book that celebrated freedom, but also noted that when you create new rules you may lose what was good when you played under the old rules.

I’d be happier about going bravely into the new world if I worried less that the rich and powerful are rigging the system against me. In today’s political climate, I don’t know how to get over my cynicism, and that can’t be a good thing.

http://www.csmonitor.com/USA/2016/0629/The-surprising-truth-about-American-manufacturing?cmpid=editorpicks&google_editors_picks=true

https://en.wikipedia.org/wiki/Manufacturing_in_the_United_States

http://www.usatoday.com/story/opinion/2014/12/24/american-manufacturing-industry-not-in-decline-column/18925077/

http://www.consumerreports.org/cro/magazine/2013/02/made-in-america/index.htm

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