Manufacturing the American Dream
Few things are as foundational to American identity as manufacturing. We’ve revolutionized travel, showed the world it need not live in the dark, and provided a vital source of income for millions of people around the globe. It enabled us to defeat the Axis powers in WWII, stifle the rise of Communism shortly thereafter, and even landed us on the moon. Even though America continues to innovate, our industrial power is vanishing in the wake of rampant market liberalization and industrial globalization. In a naive attempt to create more “white collar” employment opportunities and increase American GDP, over one million jobs have been lost through trade deals like NAFTA and others. For years, American policymakers have been offshoring and outsourcing solid jobs to foreign nations, sometimes at the cost of our small town communities at home.
In 1953, roughly a third of all American workers held manufacturing jobs; in 2015, that number was below 10%. Generally, the number of people employed by America’s manufacturers decreases year-after-year. 2015 saw just over 12 million Americans employed in manufacturing, and 2018 just under with 11.6 million. Manufacturing at one time, making up one-quarter of the American economy, today contributes less than 15% of real GDP. For decades, American companies have gone abroad, proverbially chasing gold while uprooting whole communities in the process.
Symptoms of job displacement ravage entire communities in America’s Rust Belt. Across the nation, Americans are worse off from the strip mining of domestic industry. The promised jobs to offset unemployment never materialized, and the only comfort given to these communities was that they should “learn to code“. That said, there is some reason for hope; if American manufacturing is revitalized, post-industrial communities can begin to reclaim their regional solvency.
The economic disruption from the COVID-19 pandemic opened our eyes to why re-shoring American manufacturing is critical. At the beginning of the pandemic, when Americans desperately needed PPE, we could not access our own supplies stored in China because its government opted to hoard it. China also makes an alarming amount of pharmaceutical products that Americans rely on for common medical remedies. At least half of the chemical components for most drugs and 97% of the antibiotics taken by Americans are made in China. Re-shoring pharmaceutical manufacturing is a matter of national sovereignty, and it would also serve as a way to generate good-paying jobs. There is no reason why products made for Americans cannot be made by Americans. Spending more money on goods made by Americans that could save lives on a second’s notice outweighs the immediate concern for thrifty consumer convenience.
But, what does this entail? Bringing American companies back from abroad — specifically from places like China here the government has total control, production costs are cheap, and labor is not always ethically employed — seems like an almost Herculean feat. The vanguards of globalism in American politics have publicly scoffed at the very concept. The United States government ought to take a note from the book of Japan’s Prime Minister Shinzo Abe. To cut reliance on Chinese manufacturing in the Summer of 2020, the Japanese government offered massive subsidies to Japanese-owned companies that opted to return home. This is an approach the United States should consider.
Towards the end of President Trump’s tenure in the White House, manufacturing employment grew more in 2019 than any of the last 30 years. Thanks mainly to an administration that bucked conventional wisdom by synthesizing federal deregulation and aggressive trade policy, the United States economy reached unprecedented levels of wage growth and market expansion. In December of 2019, there were 12.84 million Americans employed in manufacturing. And it seems like Biden is on the same page as Trump when it comes to American workers. Joe Biden signed an executive order executive order that calls on the various apparatuses within the federal government to increase their purchasing support of American-produced products; this directive is good, but it is not enough.
Every single manufacturing job outsourced due to market liberalization and industrial flight cannot be reclaimed. Other nations will offer American-owned companies incredible incentives to emigrate their enterprise abroad if the United States attempts state capture of assets and forced repatriation. However, it is plausible to assist communities where manufacturing is slow. Our governments on the state and federal level may offer incentives rewarding community-oriented entrepreneurialism (e.g., tax abatements).
We must work to prevent further industrial flight in the vein of Ford Motors moving a nearly $1 billion commitment to invest in manufacturing from Ohio to Mexico.
Rustbelt communities are polka-dotted with the remnants of what once was: vacant factories and steel mills are a testament to an industrial-Rome sacked by ill-conceived trade agreements. Where you might stop now only to refuel your car once was an ideal town for you to settle down in and start a family. It is unacceptable that so many people throughout this country have had their livelihoods and their communities taken away from them and given so little substantive change for the better.
The people making decisions about our country’s future must take bold action to offset the economic displacement in post-industrial communities now exasperated by COVID-19. Telling the IRS to buy more staplers will not be enough.