Don’t be fooled by so-called experts that claim the manufacturing sector is not only recovering, but that it is leading the economy out of the recession. The fact is, the industry is still ailing due to the nation’s failed trade policies.

The sector has expanded for 20 consecutive months now. The problem is, companies are doing more with less. That may be good for a company’s bottom line, but not for the worker that was replaced by a combination of low-cost, Third-World labor and robots.

Last year, productivity in the industry grew at a rate of 7.8 percent, while labor costs fell 4.4 percent as companies shipped jobs overseas or simply cut them without a replacement.

Some may view lower labor costs as a good thing, meaning lower-cost goods. However, lost manufacturing jobs have ripple effects throughout the entire economy. Related jobs are sometimes lost, tax revenues fall, wages stagnate and innovation and research typically follows the manufacturing jobs.

Wages are not the problem. America’s failed trade policies that open the borders to a flood of cheap imports and allow companies to seek out the lowest labor costs and most lax regulations possible are.

“Many are quick to blame America’s manufacturing woes on labor and regulation. The fact is, average compensation for an American manufacturing worker, including benefits, is $32/hour. In Germany, the figure is $48/hour,” Scott Paul, executive director of the Alliance for American Manufacturing, writes at CNBC.com.

“Yet Germany’s manufacturing base is thriving. Germany has a trade surplus. German unions sit on company boards and make joint decisions about investments and strategy.”

While Germany’s manufacturing sector is thriving because it has a national strategy to maximize the use of the important sector, America’s is declining because of a lack of a plan.

In the past decade, the industry has shed 5.5 million jobs while around 50,000 factories have shuttered. At the current rate of growth, it would take 24 years just to replace the jobs lost in the past decade.

“Why does being number one in manufacturing matter so much? First, manufacturing jobs are simply not replaceable. Workers who lose their manufacturing jobs end up in positions that pay far less. The tax base shrinks. Demand on government services grows,” Paul writes.

“By contrast, if states had held their share of manufacturing jobs over the past decade, there would be no state-level budget crises, even in California.”

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