Comprehensive Manufacturing Program
|Manufacturing requires a comprehensive effort to strengthen its role in the American Economy and protect its future amid a global economy.
To most Americans and the majority of our politicians, manufacturing in our country is never associated with the fork and knife that sit beside our dinner plate. Yet, without manufacturing, America would be a an extremely poorer and vastly different country than what we know today.
Manufacturing employment had seen a steady decline through the past decades, but still employs almost one tenth of American workers. More importantly, it can be said that manufacturing has more impact on non-manufacturing workers which make up almost 75% of the American economy. Combined, that mean 85% of US workers are affected by the rise and fall of manufacturing industries. So, if eight out of every ten households is affected by something going on in the manufacturing world – then why is a comprehensive plan to ensure its stability needed?
NOT YOUR FATHER’S MANUFACTURER
The answer to that question is that manufacturing is mainly ignored by almost everyone. Manufacturing conjures up the iconic image of workers slavishly toiling over assembly lines while a Sally Fields-like SUPERVISOR named Norma Rae monitors every slip in inefficiency. That is not manufacturing in the 21st century. Today, manufacturers think of themselves as more of a “systems manager.” This is due to the globalization of the world marketplace. With more and more countries able to compete because of technological innovations and faster methods of shipping, price becomes dependent upon two major categories: #1 – the cost of the labor to produce the product and #2- a better value in the quality of the goods themselves. Therefore, if an American company can handle the various aspects of manufacturing (design, finance, production, sales and marketing to after-sales service) through a “virtual network” of sources outside their own facility – then so be it. This is a far cry from the manufacturing assembly lines of old.
Consequently, in a global marketplace, manufacturers deal with an entirely new set of variables that affect price and quality. In America, innovation and efficiency are the two engines that drive American dominance. However, cheap labor and parts from out-sourced companies (those outside the United States) must be factored in. Americans want a rising standard of living and that is dependent upon good wages and salaries. But if cheap labor overseas becomes the dominant force for manufacturing – Americans will lose in both wages and available jobs. Neither is good when 85% of the population depends on what happens with American manufacturing.
TARIFFS and TAXES and TRADE, Oh My!
There is no Yellow Brick Road to success when it comes to Manufacturing. It is a world fraught with gyrations in global markets and global governments. Americans want their goods sold around the world as much as the next country. But every nation has an inherent desire to protect its own. Therefore, when countries decide to trade, they must figure out a way to compete with the world without artificial advantages that spark retaliations or even more aggressive trade policies to the detriment of their goods and workers. If you’ve ever bartered over the price of anything – imagine that practice on a world scale. This is where artificial methods come in.
One tactic that comes and goes is the use of a tariff; commonly called a levy or tax in America. For example, if America sells widgets for $10 apiece, but Lithuania sells their widgets for $6 each, the lower price has the advantage and would seem to have the upper hand in a competitive market. So, in order to encourage Americans to buy American products and protect the American worker’s standard of living, a tariff is put on the Lithuanian goods of $4.50. Now American widgets sold in America go for $10 and Lithuanian widgets sell for $10.50. Americans have a choice in the free market – and the price advantage goes to American goods. It’s not a totally free market because of the tariff – but if Americans are okay with their wages dropping to compete, then a free market can be an option. Human nature says this will never happen.
Oh, My Aching Healthcare
To further complicate matters, American workers are faced with the nagging consequences of rising health care costs. As this website as explained in several areas, health insurance affects a tremendously large amount of worker compensation packages, as well as the number of job opportunities available. High prices stunt growth, productivity, sometimes the very existence of small businesses. This site has called for reform of health insurance in various forms – but imagine the difference it could make in manufacturing. For example – a workers compensation plan for an office worker may run an employer $800 a year. But the same plan for a carpenter could run $30,000 a year. If you have shop full of carpenters – your costs are astronomical. Manufacturing and its service providers could be turning away that 70% of the American population they employ. If insurance is not dealt with – it will seriously change the nature of this country,
I’m From the Government – I’m Here to Help You
And then there is the “government factor.” As the leader among industrialized countries, the federal government applies enormous restrictions on American companies regarding their manufacturing practices and workplace environment. Pollution, use of energy and occupational safety are worthy areas of compliance, but they become political pawns in campaign efforts. Regardless of how many regulations a company abides by in the course of their work, all it takes is one bureaucrat to legislate the change of one stipulation by a fraction of a percent – whether it be air quality or water quality – and the enormity of the federal bureaucracy comes crashing down in redtape, paperwork, and blue ribbon commissions to make entire industries spend enormous amounts of time and money – which in the end only benefitted the political campaign effort of a single candidate who wanted “clean air or clean water.” This may be the biggest contributing factor to the tension between what is called “big business” and Washington D.C. Deregulation in manufacturing has to become a priority.
One unexpected consequence of all this turmoil is the lack of a qualified workforce to enter the manufacturing industry. Employers are faced with the challenge of hiring people with the proper sort of problem-solving skills that manufacturing requires. There is no conclusive evidence as to why this has materialized – but automation and the ability to relocate at will has decimated many traditional manufacturing centers of America. These are not easily replenished if young people have neither the training or motivation to enter such fields. Of course, this is only exacerbated the longer manufacturing flounders waiting for national attention. Some government involvement in aiding our schools is necessary to overcome this hurdle.
Answers to these complex problems of protecting manufacturing while also protecting workers and the environment may be elusive today. But if the world economy continues to favor those outside of the United States, then decisions will be forced upon us by future worldwide governing bodies, grown out of well-intentioned groups such as the World Trade Organization (WTO). It may be a global marketplace – but where is it written Americans have to cede their national interests to others? Just because America has been the provider to much of the rest of the world since World War II, doesn’t mean she should be relegated to the back of the line so as to let others have a chance at dominance. Dominance was not the country’s motivating factor – survivability was. In the 21st century, it still remains a priority for Americans if we want to continue to move forward in progress, technology and quality of life.
What we do know is that a comprehensive plan must involve at least three efforts:
These three efforts cut across national, state and local levels of involvement. It is neither a Democrat or Republican policy decision – it is a survivability question. TheEncumbered.com understands that a solid manufacturing base in America will make a solid middle class in our population. If this is the heart of the country – then everyone needs to get on board and protect the future of this industry.
Solutions are ideas that evolve. We are not an expert in any facet of government. Your ideas, comments, questions and experiences us develop these solutions. Please continue to submit your insights.