American manufacturing — is it on the rise or decline?
By Patti Garland
Do you think American manufacturing is making a comeback or suffering from offshore competition?
Many claim one of the industries hit hardest by the economic downturn and ever-growing competition from offshore competition is American manufacturing.
Interestingly the National Association of Manufacturers (NAM) claims the United States is the world’s largest manufacturing economy, producing 21 percent of global manufactured products. Japan is second at 13 percent, and China is third at 12 percent.
NAM maintains that not only is the manufacturing industry growing, but U.S. public opinion of its importance remains high.
Some reports claim American manufacturing is actually expanding.
For example, according to a 2015 MarketWatch article, they state “made in the USA” is hot again. The article goes on to say that one big catalyst behind the trend is escalating wages in traditionally lower-cost countries, including China. Additionally, they claim that among the world’s top 10 export economies, the U.S. last year ranked No. 2.
On the other hand, according to an article by The OffShore Group, U.S. manufacturing jobs are on the decline because companies are expanding to Mexico to increase their profit margins. The reason is simple. Not only is the overall cost of doing business significantly lower than in the U.S., but the cost of hiring workers is notably less than the U.S.
Let’s take the situation with Carrier Corporation, a division of United Technologies. Carrier plans to shift 1,400 jobs from Indianapolis and 700 from another plant in Huntington, Indiana to Monterrey, Mexico starting in 2017.
The plant’s owner expects to pay Mexican workers $3 an hour compared to an average of more than $20 an hour for the U.S. workers. Quoting the United Steelworkers union local, Chuck Jones, “we haven’t given up the fight yet but Carrier pretty well indicated that the wage differential is too great and there’s not much we can do.”
Some economists argue that shipping low-value jobs overseas or to Mexico doesn’t matter because high-tech manufacturing focusing on lean assembly lines still remains in the United States.
But do we want a society that consists of a small population of highly skilled workers and masses of unemployed?
According to a 2015 Fortune article, they claim America’s manufacturing sector never went away. Instead, they assert it’s the share of workers employed in manufacturing that has declined.
Though the dark, dismal factories of days gone by no longer exist, for some, those images still prevail. Could that perception be holding back recruiting and forcing companies to move?
While perceptions of manufacturing jobs are improving, would you encourage your children to pursue a manufacturing career?
So what is happening with U.S. manufacturing? Do you think American manufacturers still have hurdles to clear on the way to sustainable growth? Is it possible for U.S. manufacturing to ever again reach the levels of the 1980s and 1990s?