New Manufacturing Jobs Won’t Fix the Economy

In a new article entitled, The Manufacturing Jobs Delusion, The Economist argues that creating new manufacturing jobs in America – one of the tenets of Donald Trump’s campaign – will ultimately be a lost cause.

While Trump’s self-proclaimed influence on job retention and creation has garnered praise from his fans, the jobs he’s credited himself with saving represent an almost nominal percentage in a country with thousands of companies where jobs are created and destroyed everyday. What’s more, manufacturing jobs – the only variety he seems to have set his sites on – account for a mere 10% of American employment.

Similar declines in other developed countries indicate that the loss of manufacturing jobs isn’t particular to America or its policies, but rather due to the nature of the industry itself. In competitive markets with fluctuating sales cycles, such as the automotive industry, companies have found they need to invest in new features while also keeping prices down in order to stay lucrative. This has led many to automate their assembly lines, and then invest those saved dollars into software development – “jobs that tend to go to college graduates or are not found in rustbelt states.”

The article also points out that punishing manufacturers who export jobs makes little sense in a world of global supply chains. For example, every dollar worth of Mexican goods exported to America contains 40 cents worth of American goods embedded within it. Ultimately, the article argues, the disruption to trade, and subsequent increase in consumer prices, in order to keep just a few extra jobs in America simply doesn’t add up.

You can read the full article at The Economist.

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  • Carter Wright

    I think that most discussions about the gain or loss of manufacturing jobs miss the point.

    It’s not that people in the US or Britain miss the day to day experience of working in a factory work environment. They miss the quality of those jobs: secure work that people could sustain a family on.

    Factory jobs didn’t always pay very well, but manufacturing workers made them better jobs by forming strong and effective unions. So, now that unions have been largely dismantled in the US and Britain, the quality of manufacturing jobs is steadily going down as well.

    The sectors that are adding the most jobs in the US are in places like service and care work, but vast numbers of those jobs pay very little and provide pretty much no healthcare or retirement coverage.

    The answer, I believe, is to rewrite the rules so working people — even in service jobs — have more bargaining power so they can raise the wage floor overall, boost their families, and foster broadly inclusive prosperity.