The following was published in the Costco Connection, a magazine that, according the editor, "is mailed to over 8 million businesses and their employees and family members across the country and is read by close to 20 million people."
We use manufactured goods for almost everything we do. Factories, in turn, need the workers who use their skill to operate the machinery that creates the goods. If we want economic growth, we need more manufacturing jobs.
Why can’t we just import manufactured goods from abroad and keep the service jobs in the United States?
First, 80 percent of global trade is in goods, not services, according to the World Trade Organization. An economy with a weak manufacturing base - and consequently, a large trade deficit – ends up with a very weak currency, which then leads to reduced capability to import goods, a declining economy and a large-scale loss of jobs. The only reason why the U.S. trade deficit has not severely devalued our currency is because the American dollar is used for transactions around the world. But even U.S. Federal Reserve Chairman Ben Bernanke called this situation “unsustainable”. In other words, we need to grow our manufacturing base to ensure our economy’s well-being.
Second, manufacturing jobs provide workers with middle class incomes. That is because manufacturing, unlike any other sector, receives the same percentage of income as it contributes to employment . The reason factory jobs are well paid is that they are, increasingly, high skill jobs. The days of the low skill assembly line dominating manufacturing are over.
Third, according to the Economic Policy Institute, for every manufacturing job created, almost three other jobs are created in the wider economy. This is the best performance for any sector. And, more manufacturing jobs lead to more engineering jobs. Recent research published in the Harvard Business Review shows that when engineers can easily visit their factories or in other factories, talk with workers and with other engineers, the pace of technological progress picks up considerably. As American factories have left the country, so have engineering research and development. As factories close in the so-called Rust Belt, we see the economic devastation.
Throughout history manufacturing has been the foundation for a powerful, wealthy society. Nowadays, the richest countries have larger manufacturing sectors than the United States. In 2010 manufacturing constituted 20.7% of the German economy, and only 12.7% for the U.S. If the U.S. had the same scale of manufacturing as Germany, we could balance our trade in manufacturing, which could create 10 million more jobs.