Reality Check

Is this the end of U.S. manufacturing? Hardly.


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These are transformational times in a nation rooted for a century in a life of lunch buckets, calloused hands and belching smokestacks. That life is being upended and it’s on to new, more ephemeral things. America doesn’t build like it used to. Services R Us.”

So wrote Associated Press “analyst” Calvin Woodward in a widely published essay in mid-December.

I suppose his main points—that many sectors of U.S. manufacturing are currently experiencing tough times, and even that some of them may never return to their former glory—have some validity. But the central problem with Woodward’s “analysis” is this: Ideally, an analyst should know, or at least be willing to learn, a little something about whatever it is that he or she is analyzing. And, judging from the introduction from Woodward’s article quoted above, it’s clear he is quite ignorant as to both the current state of U.S. manufacturing and its importance to the U.S. economy.

Yes, many of our old-line industries—automotive being the biggest but by no means the only one—are taking a pounding right now. But for anyone to suggest that the current downturn means the end of American manufacturing is simply absurd. American industry will survive, and the manufacturers who weather the current storm will be stronger for it.
Equally absurd is Woodward’s assertion that manufacturing will be irrelevant in the American economy going forward. It’s simply not possible to base the entire U.S. economy on service industries, whether that means flipping burgers or working in the health care or information technology sectors. U.S. manufacturers will continue to make things; otherwise, we risk not only our economic future but our national security as well.

A more sensible and informed look at the current state of manufacturing and its place in the U.S. economy comes from author and futurist Joel Kotkin (www.joelkotkin.com), a fellow at multiple think tanks and universities.

According to Kotkin, the role of manufacturing in promoting job and income growth is often understated. He points out that, although overall industrial jobs have decreased by almost five million since the late ’70s, the losses have been largely concentrated in lower-skilled positions. The number of higher-skilled positions, with a median hourly wage of $24, increased by more than 36% between 1983 and 2002 to nearly 4.5 million. Kotkin says skilled workers, such as welders, machinists and tool-and-die makers, remain in demand even as manufacturers navigate the current downturn.

Even better, Kotkin’s assertions are backed up by actual facts—quite a contrast with Woodward’s rather vague feeling that American manufacturing’s time has past.

At one time, decades ago, smoke belching from the fires fueling industrial processes meant prosperity in Pittsburgh and other industrial cities. We’ve long since learned to produce steel and manufactured goods with a fraction of the environmental impact in terms of both air and water pollution.

People like Calvin Woodward—folks in media, education and elsewhere whose notion of how manufacturing works is far from current reality—have been predicting the demise of American industry for at least 25 years. They’ve been wrong before, and they’re wrong now.