The Economy & You #47: The Manufacturing Paradox
For all of the importance that we say as a nation that we place on manufacturing, there are data that suggests that the U.S. may not truly view manufacturing as a vital part of our economy.
I recently read a report from Deloitte titled “Manufacturing Opportunity” that examines the challenges that face American manufacturing and offers recommendations to help return the United States toward global manufacturing competitiveness.
According to Deloitte, the U.S. has lost 6 million manufacturing jobs since 2002, 2 million since 2008 alone. Yet today, there are 600,000 jobs that cannot be filled because manufacturers can’t find the workers with the necessary skills. When asked how to create a 1,000 new jobs in their community, Americans point to manufacturing as the best route. Yet when 18 to 24 year olds are asked which industry they would choose in which to start a career, manufacturing is last. So if manufacturing is so important, why is it held in such low regard?
Manufacturing is facing an uncertain future as people recognize the importance of manufacturing with regard to our economic prosperity, our standard of living, and even our national security.
Manufacturing has been a significant contributor to our nation’s economy for nearly 150 years and people recognize its importance. Deloitte conducted a survey with the Manufacturing Institute to assess the public’s opinion on manufacturing. The survey confirmed that Americans have remained committed to a strong manufacturing sector. Of those surveyed, 85% agreed that manufacturing is directly linked to our standard of living, 86% tie manufacturing to our economic prosperity, and 77% believe manufacturing is important for our national security.
And while the public supports manufacturing and its importance, Americans believe little is being done to support it. 83% of the public believe the U.S. should follow a more strategic course with regards to manufacturing, and 79% believe that a strong manufacturing sector should be a national priority.
The pessimism of continued job losses over the last decade and the lack of national focus have led many Americans to believe that the U.S. has already lost the manufacturing race. According to the survey, only 7% believe American manufacturing will get stronger while 55% believe it will become weaker and 27% think it will stay the same.
If we are to reverse the trends in public perception, we as a state and a nation need to identify those factors that will lend support to the resurgence of our manufacturing sector. Deloitte in cooperation the Competitiveness Council developed a Competitiveness Index examines five factors that affect U.S. competitiveness: education and workforce preparation; innovation; economic, trade, financial and tax issues; infrastructure; and energy policy. While manufacturing competitiveness has in the past been judged by labor, materials and energy costs, these additional factors play an important role.
Our government must determine what role it should play in each of these areas as government policies will play a significant role in supporting or undercutting our nation’s competitiveness.
Future articles will talk about what steps we can take to try and bolster our manufacturing industry and how these recommendations can bring the U.S. back to its position as the world’s manufacturing leader.
- Manufacturing dip reflects weakness in U.S. economic growth (jsonline.com)
- U.S. voters see manufacturing as economic priority (jsonline.com)
- U.S. manufacturing contracts again (money.cnn.com)