Manufacturing a Crisis

If there is one thing that Democrats and Republicans always seem to agree on, it’s this: Manufacturing jobs are the key to economic success in this country. We’ve got to “revitalize” the manufacturing sector if the economy is to generate strong job growth and economic expansion.

That’s just such total hogwash, because it’s not true and it’s not reflective of reality.

To begin with, it’s always been difficult to understand why “manufacturing jobs” are so sacrosanct in many peoples’ minds.  What is it about sitting in front of an assembly line for hours on end, repeating the same task of putting gizmo A into whatchamacallit B 240 times per day that defines “economic prosperity” to some people? We don’t hold retail jobs or service-sector jobs up as similar yardsticks of the health of our economy.

However, manufacturing is a great stereotypical image, a great cliché: The thought of millions of Americans happily going off to work each morning to perform manual assembly labor in various industries, making American goods to sell to an eagerly-awaiting American buying public is an appealing vision indeed. They arrive at 8:30 a.m. They toil earnestly and skillfully until the lunchtime whistle blows, then they take their metal lunch pails out to the picnic benches that surround the parking lot and exchange stories about last night’s Brooklyn Dodgers game. “Duke really clobbered one, didn’t he?” The whistle blows again and they finish their shift, driving home to a nice pot roast dinner, prepared with the utmost skill and care by Harriet.

Ah, if only we could get back to that America -- the factory job, secure for a lifetime, providing two nice used cars and a 6-room ranch on Maple Street.

Only it doesn’t work that way. Nor should we want it to. We no longer make 19” and 23” RCA and Motorola televisions here. They’re made better and cheaper overseas, just the way we like it.

$600 buys you one heckuva nice TV these days. If that TV were made here, you’d probably have to pay $1000 for it instead of $600. Would you do that? If you paid $400 more, that’s $400 less you’d have to spend on everything else -- dinners out, sneakers for the kids, a new phone, etc. The same $1000 is being spent by you right now, but it’s being spent in more directions, creating more economic activity, engaging more people. To borrow a military term, that extra $400 is a force multiplier. It’s good for our economy and our employment that TVs are now made overseas, because it enables American consumers to spread their money around in more areas and it frees up American workers to pursue other -- better-paying and more sophisticated -- things.

What we manufacture here in the U.S. is a function of the market-determined technological/cost/quality quotient. If only we have the technology to make it, or if the quality or national security advantage of making it here is worth the added cost, then we’ll make it in America. If not, we don’t. But we shouldn’t -- and don’t -- try to arbitrarily “force” a category of goods to be made here just for emotional or nostalgic reasons.

In the 1700s, virtually the entire population was involved with agriculture. Today, the percentage of the population directly involved in the actual raising of crops is somewhere around 2%, yet we produce incomparably more food than ever before. It’s the natural progression of the workforce as technology and tasks evolve. The other 98% of the workforce didn’t stop working when they were no longer needed in agriculture. The economy created new jobs that needed to be filled (did we need IT managers or web designers in 1925?), and those workers went there. Our population is larger than ever: around 320 million. The total workforce is somewhere in excess of 180 million. Yet agriculture doesn’t provide employment for most of them. Instead, they’ve found other jobs in new areas that didn’t exist before.

But according to some economic troglodytes, we’re only in the economic sweet spot if we’re manufacturing cheap Bic pens and Keds. Actually, the value of our manufacturing sector’s output is at record levels, even if the absolute number of workers employed in manufacturing is less than the peak. It’s directly analogous to our agricultural output being the highest ever, even though none of you farm.

There is lots of proof of this. Here’s just one example.

Next time you hear an ill-informed politician talk about how we need to “bring our manufacturing jobs back,” you’ll know better. We manufacture exactly what we should in this country. There’s always a plus/minus to how much we make here depending on the specific conditions of the moment, but you should hope you never see a U.S.-made Bic pen again.

If there is one thing that Democrats and Republicans always seem to agree on, it’s this: Manufacturing jobs are the key to economic success in this country. We’ve got to “revitalize” the manufacturing sector if the economy is to generate strong job growth and economic expansion.

That’s just such total hogwash, because it’s not true and it’s not reflective of reality.

To begin with, it’s always been difficult to understand why “manufacturing jobs” are so sacrosanct in many peoples’ minds.  What is it about sitting in front of an assembly line for hours on end, repeating the same task of putting gizmo A into whatchamacallit B 240 times per day that defines “economic prosperity” to some people? We don’t hold retail jobs or service-sector jobs up as similar yardsticks of the health of our economy.

However, manufacturing is a great stereotypical image, a great cliché: The thought of millions of Americans happily going off to work each morning to perform manual assembly labor in various industries, making American goods to sell to an eagerly-awaiting American buying public is an appealing vision indeed. They arrive at 8:30 a.m. They toil earnestly and skillfully until the lunchtime whistle blows, then they take their metal lunch pails out to the picnic benches that surround the parking lot and exchange stories about last night’s Brooklyn Dodgers game. “Duke really clobbered one, didn’t he?” The whistle blows again and they finish their shift, driving home to a nice pot roast dinner, prepared with the utmost skill and care by Harriet.

Ah, if only we could get back to that America -- the factory job, secure for a lifetime, providing two nice used cars and a 6-room ranch on Maple Street.

Only it doesn’t work that way. Nor should we want it to. We no longer make 19” and 23” RCA and Motorola televisions here. They’re made better and cheaper overseas, just the way we like it.

$600 buys you one heckuva nice TV these days. If that TV were made here, you’d probably have to pay $1000 for it instead of $600. Would you do that? If you paid $400 more, that’s $400 less you’d have to spend on everything else -- dinners out, sneakers for the kids, a new phone, etc. The same $1000 is being spent by you right now, but it’s being spent in more directions, creating more economic activity, engaging more people. To borrow a military term, that extra $400 is a force multiplier. It’s good for our economy and our employment that TVs are now made overseas, because it enables American consumers to spread their money around in more areas and it frees up American workers to pursue other -- better-paying and more sophisticated -- things.

What we manufacture here in the U.S. is a function of the market-determined technological/cost/quality quotient. If only we have the technology to make it, or if the quality or national security advantage of making it here is worth the added cost, then we’ll make it in America. If not, we don’t. But we shouldn’t -- and don’t -- try to arbitrarily “force” a category of goods to be made here just for emotional or nostalgic reasons.

In the 1700s, virtually the entire population was involved with agriculture. Today, the percentage of the population directly involved in the actual raising of crops is somewhere around 2%, yet we produce incomparably more food than ever before. It’s the natural progression of the workforce as technology and tasks evolve. The other 98% of the workforce didn’t stop working when they were no longer needed in agriculture. The economy created new jobs that needed to be filled (did we need IT managers or web designers in 1925?), and those workers went there. Our population is larger than ever: around 320 million. The total workforce is somewhere in excess of 180 million. Yet agriculture doesn’t provide employment for most of them. Instead, they’ve found other jobs in new areas that didn’t exist before.

But according to some economic troglodytes, we’re only in the economic sweet spot if we’re manufacturing cheap Bic pens and Keds. Actually, the value of our manufacturing sector’s output is at record levels, even if the absolute number of workers employed in manufacturing is less than the peak. It’s directly analogous to our agricultural output being the highest ever, even though none of you farm.

There is lots of proof of this. Here’s just one example.

Next time you hear an ill-informed politician talk about how we need to “bring our manufacturing jobs back,” you’ll know better. We manufacture exactly what we should in this country. There’s always a plus/minus to how much we make here depending on the specific conditions of the moment, but you should hope you never see a U.S.-made Bic pen again.