Posted by: JanF | November 10, 2011

American Jobs, Part I – NOT Made in America

It sounded like a list of the dead and missing. The roll call of things we don’t make in America anymore. Not things that we don’t buy … things we used to make and don’t now.

• Etch-a-sketch – Last production date 2000
• Converse shoes – Last production date 2001
• Dress shirts – Last production date 2002
• Mattel toys – Last production date 2002
• Minivans – Last production date 2003
• Vending machines – Last production date 2003
• Levi jeans – Last production date 2003
• Radio Flyer’s Red Wagon – Last production date 2004
• Televisions – Last production date 2004
• Cell phones – Last production date 2007
• Railroads – Last production date 2008
• Dell Computers – Last production date Jan 2010
• Canned sardines – Last production date April 2010
• Forks, spoons, and knives – Last production date June 2010
• Incandescent light bulb – Last production date Sept 2010

(Source: businessinsider.com –19 iconic products no longer made in America)

That list does not even mention the entire industries that we lost in the years prior to 2000:

… manufacturing as a share of the economy has been plummeting. In 1965, manufacturing accounted for 53 percent of the economy. By 1988 it only accounted for 39 percent, and in 2004, it accounted for just 9 percent.

 

They will build it if we don’t
It is not as though Americans don’t want to buy these products anymore … we do. They are simply being made elsewhere and sold to us. For example, 1.2 billion cell phones were sold worldwide in 2008. Over 206 million TVs were sold in 2009.

Richard McCormack in The American Prospect notes that since 2001, we have lost 42,400 factories in the United States:

Long before the banking collapse of 2008, such important U.S. industries as machine tools, consumer electronics, auto parts, appliances, furniture, telecommunications equipment, and many others that had once dominated the global marketplace suffered their own economic collapse. Manufacturing employment dropped to 11.7 million in October 2009, a loss of 5.5 million or 32 percent of all manufacturing jobs since October 2000. The last time fewer than 12 million people worked in the manufacturing sector was in 1941. In October 2009, more people were officially unemployed (15.7 million) than were working in manufacturing. […]

The United States is not losing old, inefficient industries that produce “buggy whip” products for which there is no more demand. There is ample demand for televisions, sporting goods, bicycles, blenders, hearing aides, golf clubs, laptops, and desktops. The industries that have left the United States are still producing products that are in demand.

Indeed, the U.S. is losing the industries of the future. In 2004, it lost world dominance in high-tech exports, when China exported $180 billion worth of information- and communications–technology products and the U.S. exported just $149 billion.

 

First they came for the tool and die makers
The problem we are now facing is that we not only have the factories that make things closing but we have the factories that provide the means for building things closing and the factories that provide the components needed to build things shutting down.

The U.S. machine-tool industry — the industry that’s the backbone of an industrial economy and the means by which all products are manufactured — produced $4.2 billion in equipment in 2008, a paltry 5.1 percent of global output. […]

Without a printed circuit board (PCB) industry, for instance, a country cannot expect to have an industrial foundation for high-tech innovation. But the domestic PCB industry shrunk from $11 billion in 2000 to $4 billion in 2008, a period during which the industry was growing globally. U.S. PCB manufacturers accounted for only 8 percent of global production in 2008, down from 26 percent in 2000. China’s share of the global PCB market in 2008 was 31.4 percent or $16 billion, four times larger than the U.S. industry. Asia now controls 84 percent of the global production of printed circuit boards, which are used in tens of thousands of different products.

 

“Free” trade frees other countries from playing fair
The bottom line is that American companies can’t compete against foreign countries when those countries do the following:

– Undervalue their currencies
– Pay health care for their workers
– Provide subsidies for energy, land, buildings, and equipment
– Grant tax holidays and rebates and provide zero-interest financing
– Pay their workers poverty wages that would be illegal in the U.S
– Don’t enforce safety or environment regulations
(Source: Manufacturing & Technology News)

And we can’t compete it we ship our factories to those countries under the guise of “free trade”. If the countries we are trading with aren’t playing fair then maybe it is time to sit back and look at what we really want for our country. At what point does our “consumption economy” stop working because there aren’t enough consumers to keep it going? Factories don’t just build things … they provide jobs that pay people who will then buy things. Henry Ford had this “quaint” notion:

“Ford had another notion, rather original in its time: the workers were also potential consumers! In 1914, Ford workers’ wages were raised to $5 a day — an excellent wage — and they soon proved him right by buying their own Model Ts. Ford was called “a traitor to his class” by other industrialists and professionals, but he held firm in believing that well-paid workers would put up with dull work, be loyal, and buy his cars.”

American companies would do well to keep that in mind. If they are focusing on the short term profits they can earn by moving the factories overseas and selling their goods to what is left of the dwindling middle class, their fools paradise will eventually end. They are killing the goose that lays the golden eggs by killing the American middle class.

 
Jobless recovery or jobless future?
One of the most glaring things about the current recession and the “recovery” has been that it is a jobless recovery.

graphs generated at www.econreview.com

The question is whether we can have a real recovery without jobs and if we can have jobs when we don’t make stuff anymore.

I am not sure it this is a sad metaphor for where we are but this should shock everyone out of their complacency. Do you want to know what our biggest export is right now? Waste paper.

We ship our trash to the rest of the world and use the money to buy the things that we don’t build any more.

.

Tomorrow we look at the jobs we have and the jobs we need. On Saturday we will look at some ways to create jobs by rebuilding our industrial base and how to promote policies that encourage that.

(A version of this post first appeared on 11/10/2011 at bpicampus.com)

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