Saturday, January 17, 2009
Manufacturing Is Still the Key to the Economy
For many years American corporations have been chasing short-term profits by having more and more products manufactured outside of the country where unit costs are substantially lower. Taken out of context, this is a logical thing to do in order to be competitive in worldwide markets. This approach does, however, give the U.S. major problems that may not be immediately obvious to the individual corporation. First, when we start having our products made internationally, we give away our technological techniques and capabilities. Not only do we teach others how to make our products, but we later tend to let them work out the hands-on local production techniques for subsequent orders rather than controlling them ourselves. The second problem with having products made elsewhere is that we remove large numbers of jobs from our available employment pool. The product may be more cheaply made elsewhere, but if our companies aren't paying our manufacturing workers, then our taxpayers end up paying them through unemployment compensation, retraining costs, and inefficiencies when well-trained workers in one sector are forced to take jobs for which they are improperly matched in another sector. The third problem is that each manufacturing job creates several other support and service jobs. There was a time when people claimed that the economy could thrive on service jobs alone. This works out in a boom period, but in a bust period we discover that many of the service jobs are not really necessary, and the amount of unemployment is enhanced when people stop making consumption expenditures. One of the better ways to turn the economy around is to return more products to high-quality domestic production and to convince our consumers that they have a large economic stake in keeping American manufacturers healthy by buying their products. Further, increases in domestic manufacturing and technology are increases in national security in time of war. Self-sufficiency enhances control of your destiny.