I was reading a fairly upbeat article in the New York Times about increased hiring in the manufacturing sector in this country. The author, Eduardo Porter, noted that nationwide, 400,000 manufacturing jobs have been added in the last two years. But we need to keep in mind that we lost five times that number since the beginning of the great recession. Mr. Porter then touches on the reshoring phenomenon I have been writing about for a while. But Mr. Porter then takes a big bucket of cold water and throws it on the idea of creating jobs in manufacturing in this country.
According to Mr. Porter, “a revolution in manufacturing employment seems far-fetched. Most of the factory jobs lost over the last three decades in this country are gone for good. In truth, they are not even very good jobs.” Now, I am not sure that the 8 million Americans who lost their manufacturing jobs during that period would agree with Mr. Porter. Those jobs allowed them to provide for their families, save for a house and help their kids pay for college. But I know where Mr. Porter is coming from. I mean if I had a degree in physics and an M.Sc. in quantum fields and fundamental forces from the Imperial College of Science and Technology in London, most jobs other than blathering on for the New York Times would look pretty shitty to me too.
Mr. Porter’s article sets forth the standard economist line regarding the precipitous drop in manufacturing employment in this country over the last fifteen years. According to Mr. Porter and mainstream economists, manufacturing jobs were lost because American manufacturing firms replaced workers with machines and also shipped lots of jobs overseas to the Middle Kingdom and elsewhere. Not being an economist myself, the first argument has always confused me. If I was an American widget manufacturer and I have two workers and they together make six widgets an hour, and then I added machinery that allowed one worker to now make six widgets an hour by himself, why would I necessarily fire the other worker? Wouldn’t I keep the two workers and the machine and just allow the use of the machine to make both my existing workers more productive?
Mr. Porter, channeling Thomas Friedman and others, delivers the party line on cue: “Most of the jobs lost to China and other poor countries cannot ‘come back.’ They don’t pay anywhere near enough. And they don’t exist here anymore anyway. The factory jobs we really want will be fewer and will require more education. But they will pay more.” This statement is simply packed with assumptions. Why won’t the jobs come back? If they moved to China and elsewhere due to wage differentials, as those wage diffentials become less stark, those manufacturing jobs could come home and in fact are coming home. The fact that they don’t exist here now doesn’t mean they couldn’t in the future.
But the bigger issue is Mr. Porter’s argument that America should be seeking a manufacturing sector that has fewer jobs that require more education and that pay more. Don’t get me wrong, I am all for well-paying manufacturing jobs. And I believe that as the manufacturing sector matures, workers will need to have more than a high school education to work in many manufacturing firms. The question that Mr. Porter and his ilk never answer to my satisfaction is what the 8 million displaced manufacturing workers will do for work going forward instead of working in manufacturing. And what will students currently in high school who are not able to attend college do for work in the future?
In a way, Mr. Porter does answer that question in his article. He argues that we should focus on innovative companies, be they in manufacturing or the service industry. “Many of the most innovative firms are not manufacturers but service companies. Apple is very competitive. But so are the companies that design applications running on its iPhones and iPads. Hollywood studios and marketing companies are big exporters. These firms need highly trained workers and pay high wages.” Mr. Porter quotes an economist who says that each job in an “innovation” industry, broadly understood, creates five other local jobs, about three times the number for an average job in manufacturing. Two of them are highly paid professional positions and three are low-paid jobs as waiters or clerks.
The vision of people like Mr. Porter seems to be that in the future we will have a much smaller manufacturing sector with workers who need lots of education, a professional innovator sector with employees who need at least a BA if not an MA or PhD and a service sector for everyone else. Why I think manufacturing is special and has made a unique contribution to this country in the past is that it allowed people who couldn’t attend college to have a job with wages sufficient to earn a place in America’s great middle class. Service jobs as a nanny, an assistant manager at an auto parts shop or a barista at a Starbucks will never provide that same opportunity. That is why I believe we should do all we can to sustain and promote our domestic manufacturing sector and the employment it provides. You can help in this effort. Buy American. Plain and simple. Buy American made shirts, pants, socks, ties, shoes, you name it. Buy American furniture. Buy American kitchen goods. Buy American appliances and American cars. I may be naive, but I think people like Mr. Porter are wrong. We can have a robust American manufacturing sector that provides jobs for members of our extended American family. We just have to do our part.