Monday, 5 January 2009

America's Unparalleled Decline.

America’s manufacturing capacities are on the verge of being totally decimated. The U.S. auto industry is on the brink of failure, outsourcing is becoming more and more prevalent and we continue to negotiate “free trade” deals with absolutely no safeguards to protect American workers. Wholesale changes to America’s economic policy are severely needed, otherwise America may have no manufacturing base left in the coming decades.

The decline of America’s manufacturing industry has been rapid and unprecedented. According to the Bureau of Labor Statistics, since 2000 America has lost 4,034,000 manufacturing jobs, or 23 percent of the total manufacturing workforce in the U.S. Since Dec. 2007, the U.S. has shed 604,000 manufacturing jobs, or roughly 4.5 percent of that industry’s workforce.

Manufacturing is getting hit from every direction,” Joshua Shapiro, chief U.S. economist at Maria Fiorini Ramirez Inc. in New York said. “Exports are starting to decline on top of domestic demand having blown up the last couple of months.”

Although the loss of manufacturing jobs can be felt nationwide, nowhere are the effects of “free trade” and manufacturing job loss more obvious than in the Midwest. According to BizJournal, from Aug. 2007 to Aug. 2008 Michigan lost 5 percent of its manufacturing jobs, Indiana 2.2 percent, West Virginia 1.3 percent, Pennsylvania 1.2 percent and Ohio 2.7 percent.

"The Midwest has been having more trouble with jobs, that's where manufacturing industries are concentrated, " said Bob Brusca, an economist at Fact and Opinion Economics in New York. Michigan, a state that’s economic health is linked to the auto industry, is perhaps the most affected state. While unemployment is currently running at 6.7 percent nationally, Michigan is dealing with a nearly double-digit unemployment rate of 9.6 percent. The state has lost 38,000 manufacturing jobs in the past 12 months and one in three factory jobs have been shuttered since 2000, according to the Detroit Free Press. Overall the state has lost 400,000 manufacturing jobs in the past eight years.

"Michigan has been in a seven-straight year recession," says Patrick Anderson, chief executive of Anderson Economic Group, an East Lansing, Mich., consulting firm, according to Bloomberg News. If the auto industry were to fail, the state would lose another 225,000 jobs over the next year. That would add another five percent to the state’s unemployment rolls, a commitment the state could hardly handle as it is already borrowing from the federal government to meet its obligations.

"The endurance of the citizens of the state is going to be sorely tested," Dana Johnson, Comerica Bank's chief economist warned in his latest report on the state's economy. "But as the above numbers on potential job loss so clearly indicate, it will be a far more daunting test if the Detroit Three fail to win a government rescue package."

The losses are certainly not isolated to the auto industry either, although it did lose 13,000 jobs in Nov. In that same month, 15,000 jobs were shed in the fabricated metals industry, 11,000 in the machinery industry, 9,000 in wood products and 12,000 in rubber products. Total manufacturing output for the month was down 5.5 percent from Nov. 2007, according to the Wall Street Journal.

America must stem the tide of job losses in the manufacturing sector if it wishes to ever revive its struggling economy. Without good, wealth producing jobs in this country, Americans of all stripes will suffer eventually.

The manufacturing sector is the backbone of the American economy and its engine of research and development. In 2003, 60 percent $123 billion of all research and development spending in the U.S. came from the manufacturing sector. Without American manufacturing, there is no such thing as American innovation.

Information source.

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