This interesting article explores the possibly flawed connection between manufacturing and growth in the United States that is rooted in everyone's minds, including Barrack Obama's. The article suggests that this is flawed economics, and is evident if you peer into indicators from the past. In 1953, manufacturing represented 28% of GDP. In the 1980s it decreased to 20%, and by 2012, it had decreased to just 12%. However, during these 60 years, absolute manufacturing output tripled. This means that the over the years, manufacturers have worked on labor-saving technology and replaced lots of unskilled laborers with fewer skilled laborers. The manufacturing jobs we once had, have gone to other countries where they are cheaper to make and workers are paid next to nothing. The question is do we really want these jobs back? Even if we did, simply shutting down our borders to low-cost imports has shown to have adverse effects on our economy although many people fail to understand how that could be. Some economists suggest that subsidies to a few high tech manufacturing companies would help spur more companies to join because of a "cluster effect", but there is not sufficient evidence that this would occur in the manufacturing industry. The bottom line is that the problems with our economy are more complex than many people realize. They need different solutions and we need to let go of the idea that "China has taken all our manufacturing jobs and we need to get them back."
It is true that jobs in the manufacturing sector and certain low skilled jobs will continue to disappear in the US economy in the future. This is mainly due to globalization as certain countries engage in comparative advantage where many countries can produce a certain good with a smaller opportunity cost. However, to solve this issue, the US needs to encourage policies that will put Americans into jobs that require high level skills. These type of jobs that require higher level mathematical and technological skills will be safer in the future. According to an recent Oxford study, 47% of jobs in the future threatened by an increase in technology and more advanced computers replacing low level skilled jobs. To be economically competitive, it would make sense for Americans to pursue higher skilled jobs that produced more advanced technology and promoted higher wages for the average American.
ReplyDeleteI couldn't agree with you more Matt. Advancing technology and globalization will cause a decrease in demand for low skill level jobs within the United States. Our government needs to step up to this reality by emphasizing the importance of education more than it already does. I believe that the government should make education more affordable for the middle to low class American citizen by expanding their federal aid program. I also believe that the importance of education should be advertised more than it already is, whether it be TV commercials or bill board ads. It is essential for all Americans to know how important education is, given the current state of our economy. As Nelson Mandela once said, "Education is the most powerful weapon which you can use to change the world."
ReplyDeleteI would also have to agree with both Dylan and Matt. I think that factory jobs are a thing of the past at this point. New technologies and outsourcing have become increasingly cheaper as means to manufacture goods. It isn't practical for factory owners to employ a large group of workers when they have these cheaper options. Also with the push on advancing your education these types of jobs are not appealing to much of the American public. This move away from manufacturing jobs into other ventures is not necessarily a bad thing. I agree that education is important and that it should be made affordable for all. I think this is where we lack as a society. The decrease in low skill work needs to be offset with the increase in the avaliability to gain an education. This helps open new avenues for those who would other wise be stuck in these carrer fields.
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