Today there are fewer manufacturing employees than in 1955, and over the past 20 years 6.4 million manufacturing jobs have been lost. These figures are a grim reminder that America can no longer manufacture competitively.
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Tag Archives: Manufacturing
Lessons From the German Economy
While the U.S. struggles to get its economy back on track, numerous pundits have been calling for the U.S. to look to Germany as an example, and it’s no surprise why. Germany’s unemployment rate was 3.1 percent lower than that of the U.S. in December, at 5.5 percent. Germany’s income is more evenly distributed than the vast disparity that exists in the U.S., and in 2010, Germany’s economy grew by 3.6 percent versus America’s 2.8 percent.
The WTO is Stifling American Prosperity
The United States joined the World Trade Organization (WTO) in the mid-1990s with the promise of increased prosperity, but the result has been quite the opposite. Our membership in the WTO has stripped us of jobs, as well as our ability to choose the best policies for our country. The WTO is the embodiment of the free trade principles that have failed our country again and again. We must rid ourselves of our obligation to this job-killing organization if we ever want to restore America’s economic greatness.
Our membership in the WTO has opened up American businesses to cheap competition from all over the world. This has cost the United States millions of jobs at a time when those jobs are needed more than ever. Trade with China alone cost the United States 2.3 million jobs between 2001 and 2007. These jobs were not eliminated by improvements in technology or efficiency; rather, they were lost because America’s manufacturing base has been destroyed in favor of cheap overseas labor. The United State lost an average of 15 factories per day between 2001 and 2010. These factories are the kinds of businesses that create real, sustainable wealth when given the support they need to compete, but our membership in the WTO has pulled the rug right out from under them.
When these factories were the center of the American economy, we had strong communities. When workers earn a living wage, they use that money to pay their taxes, invest in homes, support local businesses, and give to local charities. With factory jobs gone, American workers have been forced to compete for low-paying service sector jobs, and the lower wages earned in these jobs are not enough to support the kind of communities we once had. When the money earned is spent, much of it is spent on goods made overseas. This means that the money being spent is leaving our country and is being used to build strong communities overseas instead of here in the United States.
Beyond opening our borders to cheap imported goods, the WTO keeps us from taking action to protect our citizenry. The WTO routinely rules against public interest legislation in the U.S., such as that providing for “dolphin-safe” labels on tuna or country of origin labeling on meat and fish. Overall, the WTO agreement has had a negative effect on the lives of everyday Americans, and we should get out of it as soon as possible.
Heavy Press Program Represents Government-Driven Success
America’s manufacturing sector is in decline. Unfortunately, some individuals believe that if we open our borders and allow the free market to create efficiency through competition, the American economy will recover. Elements of the free market are certainly beneficial, but believing in the infallible nature of the market ignores the lessons of history. Free trade and unregulated markets have led to our current subpar economic conditions, whereas there are numerous success stories of the government playing a role in jump starting innovation and prosperity. A clear example of this success was the U.S. heavy press program in the 1950s, which enabled decades of unmatched achievement in the aviation industry.
Heavy forging and extrusion presses allow for complex parts to be forged from lightweight materials. Without these machines, the high-tech, lightweight aircraft we now take for granted would not be possible. In the 1950s, the United States undertook a plan to build 17 heavy presses across the country. This program was created in response to the Soviet Union’s possession of what was then the world’s largest heavy press. Fearing that this would give the Soviet air force a great advantage, the American government financed the creation of bigger and better presses than those possessed by the Soviets. Although the program was eventually scaled back to ten presses, this still allowed for America to become a leader in producing both civilian and military aircraft. Eight of the 10 presses are still in operation today.
The heavy press program met Cold War military needs, but today we face economic threats rather than military. In the 1950s, our government recognized a major weakness in our manufacturing sector and took direct action to address it. The dire state of our manufacturing sector demands government intervention, but critics voice opposition using tired arguments, saying that the government should not be in the business of picking winners and losers. Indeed, the government should not be playing favorites based on political favors and backroom deals, but the government is more than capable of identifying needs and addressing them. One can only speculate on how far behind the U.S. aviation industry would have fallen without government assistance.
The United States no longer has the world’s largest heavy forging press; that honor belongs to Russia, who will soon be surpassed by China. Perhaps we do not need to be the leader in this one particular area, but our manufacturing sector does need a boost. We fell behind Russia in the 1950s, but our government stepped in to close the gap. Now we are falling behind China in green energy production, but we continue to let ourselves be outproduced. America’s manufacturing sector is crucial for our economy, our jobs and our national security, but we are neglecting it in the name of free markets. If we can move past ideology and embrace pragmatism, we can have the kind of well-structured government intervention that once made our economy great.
The Numbers Do Not Lie – America is Failing
Free trade is killing our economy. It is tearing the nation apart. We must get out of the World Trade Organization and run the country for the good of the nation again. We must reverse the Citizens United ruling and stop letting these top earners control American politics. We have become a plutocracy—a nation run by the rich for the rich. We must restore our government to a democratic republic so that our leaders work for the American people again.
