Tryston Taylor - Information Effect Project
Manufacturing Information
To define a problem we must first acknowledge that there is a problem to begin with, manufacturing has been seen as a major problem for some time now and defining the problem in manufacturing is much more complex than saying there is one.
Manufacturing in the United States has undergone drastic changes in the last 15 years, beginning with a free trade agreement. This is highly attributed as the cause for outsourcing jobs from the United States, then expanding to be a much greater issue because of the recession and economic conditions globally, resulting in deteriorating conditions for American manufacturing. The issue of manufacturing is not a simple one; the United States has a very successful manufacturing output for exports. This success reached an all time high for the fifth year in 2014 with 1.403 trillion dollars in revenue (nam.org). Even though our output is high our employment is very low. This can be seen in the Manufacturing Output vs. Employment Graph (Figure A). It is doubtful that there is a direct correlation to employment versus output; in fact the graph shows the opposite.
To define a problem we must first acknowledge that there is a problem to begin with, manufacturing has been seen as a major problem for some time now and defining the problem in manufacturing is much more complex than saying there is one.
Manufacturing in the United States has undergone drastic changes in the last 15 years, beginning with a free trade agreement. This is highly attributed as the cause for outsourcing jobs from the United States, then expanding to be a much greater issue because of the recession and economic conditions globally, resulting in deteriorating conditions for American manufacturing. The issue of manufacturing is not a simple one; the United States has a very successful manufacturing output for exports. This success reached an all time high for the fifth year in 2014 with 1.403 trillion dollars in revenue (nam.org). Even though our output is high our employment is very low. This can be seen in the Manufacturing Output vs. Employment Graph (Figure A). It is doubtful that there is a direct correlation to employment versus output; in fact the graph shows the opposite.
Skill Gap
The manufacturing industry is now too efficient; it requires such skilled workers that it creates a skill gap. This skill gap can’t be filled because we outsource jobs that are not skill based. Manufacturing lacks a pipeline of progression from least skilled to most skilled workers; the least skilled workers are then outsourced for company convenience. Outsourcing is a major problem for manufacturing as it destroys the pipeline used to create skilled workers by training unskilled workers for the job. Because of cost reduction for companies, roughly 300,000 positions are outsourced annually. Cost of manufacturing account for 87% of outsourcing decisions (Rebecca Lake). Outsourcing is the primary cause for the lack of jobs and accounts for the creation of the skill gap that plagues the manufacturing industry today.
The manufacturing industry is now too efficient; it requires such skilled workers that it creates a skill gap. This skill gap can’t be filled because we outsource jobs that are not skill based. Manufacturing lacks a pipeline of progression from least skilled to most skilled workers; the least skilled workers are then outsourced for company convenience. Outsourcing is a major problem for manufacturing as it destroys the pipeline used to create skilled workers by training unskilled workers for the job. Because of cost reduction for companies, roughly 300,000 positions are outsourced annually. Cost of manufacturing account for 87% of outsourcing decisions (Rebecca Lake). Outsourcing is the primary cause for the lack of jobs and accounts for the creation of the skill gap that plagues the manufacturing industry today.
NAFTA
The North American Free Trade Agreement (NAFTA) started the trend of outsourcing and company control over workers. NAFTA allowed big business to bypass protective labor unions and hire workers for the cheapest price. NAFTA has been attributed to 20 years of stagnant wages and the redistribution of wealth and political power in an upwards fashion towards the top of the populations economic totem pole (Jeff Faux). The introduction of NAFTA, and other free trade agreements, caused the job market to suffer. It also caused a massive wage gap. The real issues that affected the everyday American came with NAFTA’s impact on job loss, the economy and the job market. For every 1.00 dollar spent in manufacturing 1.81 dollars is added to the economy. This is the highest multiplier of any economic sector. The effect on the job market is even better, for every one worker in manufacturing, four employees are hired elsewhere (nam.org). This evidence begs the question; why did we outsource our jobs when all it would do is cause our economy to suffer and our job market to be nearly impossible to work in. The United States currently does very well in the manufacturing business, in terms of revenue and total output but, our employment rate has plummeted in response creating a problem that isn’t easily solved.
Employment
America has lost 5 million manufacturing jobs since 2000 (Heather Long) and other sectors of the economy haven’t been able to replace them. The biggest difference between manufacturing jobs and other jobs is that manufacturing jobs almost always have higher wages, (higher than the minimum wage) and they were more readily available prior to the year 2000. Other jobs require a higher education but, can often pay less. Blue collar work is also dwindling in the job market. Bringing back jobs is paramount to fixing the economy and job market, but to do so requires a lot more than just bringing back jobs. Companies have to want to manufacture in local markets, or at least be required to. The most optimal solution requires the job market to increase, the economy to stabilize, and companies to be able to operate comfortably in the local markets. Several solutions have been proposed; the Re-shore Initiative, proposed changes to NAFTA and trade agreements, as well as proposed reworks of the entire system. Sadly, non thus far, create an optimal solution for everybody and the consequences can easily go to extreme cases. These solutions act as a testament to how complex this issue is in its entirety. Due to NAFTA, and our trade with china, we have lost jobs and we don’t have a solution to fix it as of yet. The graph shows how jobs have decreased since 1975 (Figure B) and shows the long term trend since then. Outsourcing is one of the biggest problems in manufacturing that needs a solution. Not only has it taken jobs, It removes the pipeline of skilled workers from the manufacturing sector.
The North American Free Trade Agreement (NAFTA) started the trend of outsourcing and company control over workers. NAFTA allowed big business to bypass protective labor unions and hire workers for the cheapest price. NAFTA has been attributed to 20 years of stagnant wages and the redistribution of wealth and political power in an upwards fashion towards the top of the populations economic totem pole (Jeff Faux). The introduction of NAFTA, and other free trade agreements, caused the job market to suffer. It also caused a massive wage gap. The real issues that affected the everyday American came with NAFTA’s impact on job loss, the economy and the job market. For every 1.00 dollar spent in manufacturing 1.81 dollars is added to the economy. This is the highest multiplier of any economic sector. The effect on the job market is even better, for every one worker in manufacturing, four employees are hired elsewhere (nam.org). This evidence begs the question; why did we outsource our jobs when all it would do is cause our economy to suffer and our job market to be nearly impossible to work in. The United States currently does very well in the manufacturing business, in terms of revenue and total output but, our employment rate has plummeted in response creating a problem that isn’t easily solved.
Employment
America has lost 5 million manufacturing jobs since 2000 (Heather Long) and other sectors of the economy haven’t been able to replace them. The biggest difference between manufacturing jobs and other jobs is that manufacturing jobs almost always have higher wages, (higher than the minimum wage) and they were more readily available prior to the year 2000. Other jobs require a higher education but, can often pay less. Blue collar work is also dwindling in the job market. Bringing back jobs is paramount to fixing the economy and job market, but to do so requires a lot more than just bringing back jobs. Companies have to want to manufacture in local markets, or at least be required to. The most optimal solution requires the job market to increase, the economy to stabilize, and companies to be able to operate comfortably in the local markets. Several solutions have been proposed; the Re-shore Initiative, proposed changes to NAFTA and trade agreements, as well as proposed reworks of the entire system. Sadly, non thus far, create an optimal solution for everybody and the consequences can easily go to extreme cases. These solutions act as a testament to how complex this issue is in its entirety. Due to NAFTA, and our trade with china, we have lost jobs and we don’t have a solution to fix it as of yet. The graph shows how jobs have decreased since 1975 (Figure B) and shows the long term trend since then. Outsourcing is one of the biggest problems in manufacturing that needs a solution. Not only has it taken jobs, It removes the pipeline of skilled workers from the manufacturing sector.
Outsourcing
Outsourcing jobs was the United States biggest mistake; it is at the heart of the manufacturing problem in America. We not only took away from our economy but we also reduced the job market. Because the problem of outsourcing is affected by so many factors, (trade agreements, global economies, market stability, and others), it’s very difficult to solve it without hurting economies. Some of the things that could suffer with attempted solutions could be job markets and in extreme cases there could be a recession. Outsourcing has caused a large problem to become apparent, in the current job market. Manufacturing requires skilled workers, the problem is we aren’t getting those skilled workers, because we don’t have a natural progression through a company that invests in its employees. This causes the jobs at the top or the most skill oriented jobs to be vacant. Solving it sounds easy enough; a company just needs to create a pipeline of low skill workers and turn them into skilled workers for the jobs that need skilled workers. But first, they need to re-shore jobs or no pipeline is possible. Re-shoring jobs also means that companies would need to be able to survive in the local market. This means U.S. policy needs to change to make it beneficial for companies and communities. The dynamic between the problems in manufacturing, politics, economics and many others, makes solving this problem very difficult (not impossible), but, it runs the risk of major failure, which will not benefit anyone.
Outsourcing jobs was the United States biggest mistake; it is at the heart of the manufacturing problem in America. We not only took away from our economy but we also reduced the job market. Because the problem of outsourcing is affected by so many factors, (trade agreements, global economies, market stability, and others), it’s very difficult to solve it without hurting economies. Some of the things that could suffer with attempted solutions could be job markets and in extreme cases there could be a recession. Outsourcing has caused a large problem to become apparent, in the current job market. Manufacturing requires skilled workers, the problem is we aren’t getting those skilled workers, because we don’t have a natural progression through a company that invests in its employees. This causes the jobs at the top or the most skill oriented jobs to be vacant. Solving it sounds easy enough; a company just needs to create a pipeline of low skill workers and turn them into skilled workers for the jobs that need skilled workers. But first, they need to re-shore jobs or no pipeline is possible. Re-shoring jobs also means that companies would need to be able to survive in the local market. This means U.S. policy needs to change to make it beneficial for companies and communities. The dynamic between the problems in manufacturing, politics, economics and many others, makes solving this problem very difficult (not impossible), but, it runs the risk of major failure, which will not benefit anyone.
Conclusion
The complex nature of the predicament that the manufacturing industry finds itself in was caused by politicians, business men, economists and more. Creating a solution that serves everyone is very difficult. We probably won’t get any solution right the first time. However, if we can solve this issue, we will revive a part of our economy and fix some major issues that plague the people within the United States today. First off, we need to fix our trade agreements. If we can’t entice businesses to want to have jobs here we will not be able to succeed. Second, we need to fix employment. We need to bring jobs back to America and develop a pipeline of workers that can eventually fill the more skill based jobs. Lastly, we need to get rid of outsourcing by manufacturing in local markets. By doing this we can develop the economy and stabilize it which will give everyone relief. Of course we can’t let companies swindle employees and take all of the wealth. We need policy in place to protect employees. Fixing this issue is not an easy path forward, but if it isn’t done, life for the American family and middle class will only get worse. One of the worst parts about fixing this mess is that we have to rely on politicians, business men, and all of the people who got us in this mess to begin with. In my opinion the best way to go about finding a solution is to develop communication between companies, government, and workers while restricting corruption. The solution must benefit everyone or it will fail eventually.
The complex nature of the predicament that the manufacturing industry finds itself in was caused by politicians, business men, economists and more. Creating a solution that serves everyone is very difficult. We probably won’t get any solution right the first time. However, if we can solve this issue, we will revive a part of our economy and fix some major issues that plague the people within the United States today. First off, we need to fix our trade agreements. If we can’t entice businesses to want to have jobs here we will not be able to succeed. Second, we need to fix employment. We need to bring jobs back to America and develop a pipeline of workers that can eventually fill the more skill based jobs. Lastly, we need to get rid of outsourcing by manufacturing in local markets. By doing this we can develop the economy and stabilize it which will give everyone relief. Of course we can’t let companies swindle employees and take all of the wealth. We need policy in place to protect employees. Fixing this issue is not an easy path forward, but if it isn’t done, life for the American family and middle class will only get worse. One of the worst parts about fixing this mess is that we have to rely on politicians, business men, and all of the people who got us in this mess to begin with. In my opinion the best way to go about finding a solution is to develop communication between companies, government, and workers while restricting corruption. The solution must benefit everyone or it will fail eventually.