No Picture
Global News and Analysis

Manufacturing illusions

Source: Al Jazeera

Suddenly, manufacturing is back – at least on the election trail. But don’t be fooled. The real issue isn’t how to get manufacturing back. It’s how to get good jobs and good wages back. They aren’t at all the same thing.

Republicans have become born-again champions of US manufacturing. This may have something to do with crucial primaries occurring next week in Michigan and the following week in Ohio, both of them former arsenals of manufacturing.

Mitt Romney says he’ll “work to bring manufacturing back” to the US by being tough on China, which he describes as “stealing jobs” by keeping value of its currency artificially low and thereby making its exports cheaper.

Rick Santorum promises to “fight for American manufacturing” by eliminating corporate income taxes on manufacturers and allowing corporations to bring their foreign profits back to the US tax-free – as long as they use the money to build new factories.

President Obama has also been pushing a manufacturing agenda. Last month the president unveiled a six-point plan to eliminate tax incentives for companies to move offshore and create new lures for them to bring jobs home. “Our goal,” he said, is to “create opportunities for hard-working Americans to start making stuff again”.

Meanwhile, consumers’ pent-up demand for appliances, cars, and trucks have created a small boomlet in US manufacturing – setting off a wave of hope, mixed with nostalgic patriotism, that US manufacturing could be coming back. Clint Eastwood’s Super Bowl “Halftime in America” hit the mood exactly.

But US manufacturing won’t be coming back. Although 404,000 manufacturing jobs have been added since January 2010, that still leaves us with 5.5 million fewer factory jobs today than in July 2000 – and 12 million fewer than in 1990. The long-term trend is fewer and fewer factory jobs.

Even if we didn’t have to compete with lower-wage workers overseas, we’d still have fewer factory jobs – because the old assembly line has been replaced by numerically controlled machine tools and robotics. Manufacturing is going high-tech.
read more