According to the latest research from the United Nations, China has further outpaced its competitors in world manufacturing, generating $2.9 trillion in output annually versus $2.43 trillion from the U.S., the world’s second-largest manufacturing economy. For more details see ThomasNet News
The monthly Leading Indicators of National Employment (LINE) report from SHRM says that 50.3 percent of manufacturers plan to increase their hiring in April, which is the exact same rate as one year ago. At the same time, time there are 12.5 percent of manufacturers planning to decrease employment, up from 7.0 percent last year. As a result, the net percentage of new hiring in the manufacturing sector dropped from 43.3 in April 2012 to 37.8 today, or 5.5 percentage points lower. For details see Shopfloor.com
Marine Link – As Royal Caribbean Cruises confidently orders its third Finnish-government-financed Oasis-class ship, the Obama Administration slams the door on American competition in this $40 billion-a-year industry supported almost entirely by US passenger revenues. The American Flagship project claims Obama bulldozed its long-planned, private sector funded, job-creating initiative – perhaps to spur already prolific foreign-flag campaign contributions. Read more at MarineLink.com
Washington, D.C. –(ENEWSPF)–August 23, 2012. More than 2.7 million American jobs—2.1 million of them in manufacturing—have been lost or eliminated since 2001, due to the United States’ mushrooming trade deficit with China since that country joined the World Trade Organization (WTO) a decade ago, according to a report released today by the Economic Policy Institute (EPI).
The total losses include 662,100 jobs from 2008 to 2011 alone—even though imports from China and the rest of the world plunged in 2009 before recovering and surpassing the previous peak reached in 2008. The trade deficit in the computer and electronic parts industry grew the most, displacing more than 1 million jobs in high-tech industries. In fact, rapidly growing imports of computer and electronic parts, including computers, semiconductors and audio-video equipment, accounted for nearly 55 percent of the $217.5 billion increase in the U.S. trade deficit with China between 2001 and 2011. Read more at: http://www.enewspf.com/opinion/analysis/35883-new-economic-policy-institute-report-on-job-losses.html
Irvine, CA – J. Gibson
Wealth is created through two types of producers:
1) Those that produce using natural resources such as agriculture, lumber, oil and mining
2) Those that produce tangible products (this includes software) – generally called manufacturing..
Non-wealth creating activities are services that support the producers (retail sales, banking, insurance, restaurants, etc).
To be healthy an economy must have certain level of wealth creating producers. The percentage of wealth producers to non-wealth employment varies according to the country. In the U.S. we are at 10% and it should be closer to 20%.
In the U.S. this minimum level of wealth creating producers is not being maintained. This is the reason
that our economy is faltering and we are borrowing money from other wealth producers in the world.
We must choose certain critical areas of manufacturing to protect and grow. The objective here is not to promote free trade or provide the lowest price to consumers but to maintain a healthy economy by keeping a minimum level of wealth producers employed. If properly done U.S. manufacturers will be competitive and the prices will be the lowest.
Because of the multiplying effect there will be from three to ten support jobs created for each manufacturing employee. This will help create a healthy economy.
There are several options for protecting and growing the selected manufacturing areas. These are:
- Provide incentives to manufacturing companies for increasing employment in the U.S. (i.e. reduced taxes, subsidies)
- Place tariffs on imported manufactured goods
- Encourage U.S. citizens to purchase products Made in the USA even if the price is higher
Some say that the U.S. is producing more than ever before because of productivity improvements. This may be true – although it is difficult to find any products made in U.S.A. in the stores. The amount of current production is nothing what it could be if we had 20% of the workforce employed in wealth producing occupations. We need to stop thinking of buying products at the lowest price and start thinking about having a healthy economy for our children.
Mike Michaud, a Maine congressional representative, released a report on a survey of Maine’s manufacturing companies. The results of the report confirmed that Maine’s manufacturing employment has declined 40% since 1994. Some of the reasons for the decline, mentioned in the report, included:
Closed Factories – Over 13% of Maine’s factories have closed since 2001.
Foreign Competition – From China and other countries
Lack of Trained Employees – There is a shortage of workers with the right skills
Limited Exports – Foreign competition and lack of the right kind of export help from the federal government
Government Red Tape – Companies did not do business with the federal government because of excessive costs and problems dealing with regulations
Businesses indicated, in the survey, that they were concerned with government regulations, taxes, and health care costs.
You can find the complete report here.
Eike Batista, founder and president of EBX group, offers solutions to U.S. economic problems. He understands that it is not always about the lowest price. It is important for an economy to protect itself by requiring that a large percentage of products must be produced in the domestic economy to support jobs for the citizens. China, Germany, Japan, India, Brazil and other countries are doing this, why can not the United States?
Watch the video of Eike Batista presenting his ideas on YouTube at http://youtu.be/SyUamYZd610
We recently learned about Harry Moser founder of the Reshoring Initiative. Harry developed his organization to reverse the flow of manufacturing jobs from the United States to foreign countries. He has been honored with Industry Week’s Hall of Fame listing in 2010 and is touring the country giving presentations about the ‘total cost of ownership’ for products made in China and sold in the USA.
His work educates manufacturers about the realities of manufacturing offshore and the benefits of bringing manufacturing back to the United States. His Total Cost of Ownership approach clearly shows the benefits of manufacturing in the US.
Our hats are off to Harry and his excellent efforts to bring back manufacturing to the United States. His web site is www.reshoringnow.org
The people of the United States need to focus on the wealth generating areas of their economy. Only land and manufacturing generate wealth in an economy. The durable goods sector of the economy is a wealth generation sector that includes manufacturing, construction, and mining and logging. In 2000 there were eleven million jobs in the durable goods producing sector of the U.S. economy. Now there are only 7.2 million jobs in this sector. (See Forecasting Global Economy) This is a loss of over 3.8 million good paying middle class jobs. Those jobs would have had a multiplying effect because they require support industries. The multiplying effect produces 10 support jobs for each durable goods job. Since this did not happen, we lost over 38 million high quality jobs. Sure, we have had some job gains in the retail, government and financial areas but these jobs do not generate wealth or have the same multiplying effect. No wonder our economy is declining – we have lost the heart that pumps wealth into the economy. We need to bring back our manufacturing. We need to impose import tariffs, lower taxes for businesses, eliminate unnecessary regulations, and buy U.S. made goods.
We believe in supporting companies that manufacture products made in the U.S.A. We are not opposed to fair and balanced trade but we want to help U.S. workers keep their jobs.
