Danny Newton

Don't Count American Manufacturing Out Just Yet

If I plagerized this artical and sent any segment of it to the local newspaper, it would not be printed because it violates everything that justifies industrial policy in my state for the last 30 years. It also violates all of the NAFTA CAFTA etc. excuses. Everyone knows that the jobs went to Mexico and this theory has no place for the jobs to go that can be resented. It would indicate that manufacturing needs no subsidies, especially subsidies for capital expenses. If you want to help manufacturing, work on people related costs and quality of life issues within cities.

Industrial productivity in the US is high and it creates a problem because it tends to get rid of jobs in manufacturing. The productivity rate is doubling the dollar amount of stuff produced about every 32 years while the population is doubling about every 66 years. This is no big problem as long as the real GDP expands with it.

Another problem with industrial policy is that there is no recognition of good manufacturing versus better manufacturing activities. The best manufacturing activities concentrates on making the machines that other industries need to become more efficient. The current data collection does not take this into account. A person making pies at home for sale is considered a manufacturer since 2001.

States like Tennessee are retreats to cheaper labor and also have chronic job loss in manufacturing because they tend to employ those who will shortly be replaced by a machine. At the current rate, half of the manufacturing jobs in Tennessee will be gone in 15 years. Also, the average paycheck in manufacturing is rising but below the background inflation rate.