What Donald Trump Gets Wrong About U.S. Manufacturing
Anne Kim
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There is quite a lot of spin and half-truths in this article. For example, she touts the rebound in manufacturing since 2010. Dig into her numbers, and we find a loss of 2 million jobs during the 08–10 recession, and in the next six years, only 0.9 million of them have come back. To Ms. Kim, that is “rebounding since 2010”. To me, it means half those jobs are gone for good.

She gives us happy talk about the US is still Number Two in manufacturing. How great! Her chart shows Number One was half again as large as the US in 2013, and growing fast. At that growth rate, they’ll be double the US by 2018. But not to worry, we’ll still be Number Two. Maybe that’ll earn us a trophy.

And read carefully and you’ll notice she quietly switches from “jobs” to “value”. That’s because the value is increasing, but not jobs. One third of manufacturing jobs have been lost in twenty years. The value of manufactured goods is being produced with half the jobs of 1988. You have to search hard at Walmart or Home Depot to find anything not made in China.

There are a few things Ms. Kim does not bring up. For example, when we ship manufacturing overseas and then import the goods, it increases our large, negative balance of trade. That is tens of billions of dollars leaving our country every year, which has to be made up by borrowing. Chinese made goods are certainly cheaper, but that only benefits those with incomes. Ms. Kim talks about the shift to service jobs, but our “exports” of services will decline as other countries compete effectively for service business.

China is a mercantile nation that actively steals all the technology it can from the US. Worse, any American company wishing to manufacture in China must hand over the trade secrets and technology as part of the deal, and most have done so. In the short term, the companies make profits and the executives get bonuses. In the long term, it is suicide, as Chinese knockoffs enter the market.

Ms. Kim offers no argument for how it is good for any country to send its companies and jobs to China and then import the products. All the capital investments, all the payrolls, all the taxes, all the material inventories, all of it benefits China instead of the US. When we buy the products, the lion’s share of that money goes back to China instead of staying in the US economy.

The other thing she quietly slides over is the fact that there are a lot of people in any diverse economy who are not capable of high-level tech jobs. It’s nice to say they will have to achieve that capacity, but the reality is that many are unable to do so. A just economy needs a place for those people as well, a place where they can earn their keep and earn their pride. The welfare safety net is not a place for anyone with self-respect. Increasingly, the blue collar is being left behind, and Kim’s “educate yourself” is kind of snarky.

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