Although the American economy has grown by about 2 million jobs this year, none of them are in the manufacturing sector. This is alarming news–not just for manufacturing workers, but for the economy at large.
Why is this such bad news? After all, consumer spending has leveled out, and unemployment continues to fall. Even gas prices are relatively low. Aren’t these signs that the economy is strong enough to weather any possible economic “storms” on the horizon? Well, not exactly.
Despite these indicators, people’s faith in the economy is pretty low. Fears about job security are high, reflecting a generally pessimistic attitude among the nation. Why the long faces? People are steadily finding themselves further in debt, for one thing.
The decline in factory work
Although placing artificial caps on Chinese imports might staunch the economic bleeding for a short time, it’s hardly enough to rectify America’s manufacturing problem in and of itself. The lack of manufacturing jobs symbolize an overall decline in factory work. This owes partially to a weak demand for steel and coal mining, as well as an ever-increasing amount of imports from our foreign competitors.
China has notably upped their production of commodities like steel–they’re now producing much more than they buy. This has lead to a devaluation worldwide of “artificially inexpensive steel”.
Americans should be most worried about the general slowdown of manufacturing jobs. Since 1998, we’ve lost more than a third of these jobs. Although this might not seem drastic, keep in mind that a decrease in manufacturing jobs has a negative effect on many other industries, include trucking, warehouses, and more.
This also presents a problem when it comes to wages; manufacturing jobs traditionally pay much better than jobs in the service sector, and are among the highest-paying jobs that individuals can find without obtaining a traditional four-year college degree (including the debt that almost invariably follows that decision).
Weak manufacturing = slow economic recoveries
Manufacturing is one of the most important factors in a strong economy. The weaker the American manufacturing industry gets, the slower our economic recoveries will be as the years go on. Without a strong manufacturing base, the economy, and even our infrastructure will start to lag behind more each year.
Without the strong support of the manufacturing industry, the Federal Reserve is practically by itself when it comes to stimulating the economy. Interest rates have been almost conspicuously low for the last several years–essentially, there’s little more that the Fed can do.
Despite the poor job growth numbers there are still many successful manufacturing companies built on hard work and a little bit of sweat equity. Just ask Chris Bell, owner of WesBell Electonics, Inc. With steady growth in our company “We’re currently creating plans to set up a second location, possibly in the southern California area to not only decrease our transit time to CA, but to also build strong relationships with the customers in that area”. But most manufacturing companies are not fairing as well as Chris.
How did this potentially disastrous economic situation spring up right under our noses? Notably, the heated political climate has a large percentage of the population distracted from the overall upturn in the economy. However, without a leap of faith from our manufacturing sector (in the form of job creation, specifically), we may witness this situation turn from bad into much, much worse.
High-minded political rhetoric aside, America isn’t going to be able to shake off our economic troubles until we’re willing to take our manufacturing industry seriously.