Back to Manufacturing Basics
While strolling the aisles at Forge Fair 2017 a couple of months ago, I happened on the booth of the Alliance for American Manufacturing (AAM), a nonprofit, nonpartisan partnership formed in 2007 by some of America’s leading manufacturers and the United Steelworkers. Its mission is “to strengthen American manufacturing and create new private-sector jobs through smart public policies.”
While visiting AAM’s booth I was handed a booklet called “The Little Blue Collar Fact Book.” The booklet highlights some basic facts and debunks some myths about American manufacturing that our elected officials and those of us who vote for them need to know. Lawmakers would be wise to consider these facts to ensure that good policy decisions on domestic manufacturing become the norm, and not the exception, as our economic policy moves forward under a new administration in Washington.
To those of us who have spent decades in business-to-business media hawking the benefits of a strong domestic manufacturing base, there is nothing all that new here. Nevertheless, we are not opposed to reviewing some of the basics about manufacturing and what it means to the American economy and our standards of living.
Here are a few of the manufacturing myths mentioned by AAM (in bold type) followed by commentary loosely based on the AAM booklet.
• Manufacturing doesn’t matter anymore. Nothing could be farther from the truth. In recent decades we have lost millions of good-paying manufacturing jobs, but manufacturing still accounts for 12% of U.S. GDP and still employs 12 million workers. Getting at least some of those jobs back should be a bulwark of any economic policy.
• China’s no longer a trade problem. In the past few decades, while the world was making China its manufacturer of choice, that country quietly became the world’s largest producer of steel. Basic steel may be considered a commodity, but it is a strategic one that we would do well to manufacture domestically rather than let an oversupply of subsidized imports undermine our own steelmakers. The production of some other metals has been similarly affected.
• Big trade deficits aren’t that big of a deal. Wrong. They are a big deal. In recent years we have bought four times more Chinese goods than we have supplied to them, amounting to annual trade deficits in excess of $300 billion. This money goes into Chinese coffers. What goes into Chinese coffers doesn’t go into ours and is, in fact, lent back to us at interest. China is the largest holder of U.S. debt. This all came about from exporting our manufacturing base. There is an ongoing trade war, and we are losing it. With time and the right policies, this is reversible.
• Currency manipulation isn’t a big deal. Make no mistake about it, currency manipulation may be the ultimate price-fixing tool. Those who practice it are protectionists in clear violation of fair international trade doctrine.
• America lacks the skilled workforce to support manufacturing. It is true that the composition of the American workforce has changed in response to fewer manufacturing jobs. The shift has been to train workers in industries that can’t be exported, such as health care, hospitality or retail. However, workforces are dynamic in nature and will respond to a new factory seeking workers and paying a fair wage with benefits.
These are some of the points covered in the booklet. If you want to learn more or get involved, visit www.americanmanufacturing.org.