Don’t undervalue American manufacturers
April 22, 2012
Ursula Carlson’s recent editorial “America’s Future: Service Industries” (Nevada Appeal, April 18) espouses an inaccurate view of our economy, in particular the manufacturing sector. She promotes a perspective that is outdated, demonstrating limited knowledge of the major economic trends and the reality of modern U.S. manufacturing.
Her statement, “We do not really rely on manufacturing (on cheaper labor) to pump up our economy” is just not true. Manufacturing is the largest driver of economic growth in the nation and accounts for the lion’s share of private sector research and development. The U.S. is the world’s largest manufacturing economy, producing 21 percent of the world’s manufactured products (China is second at 15 percent, and Japan third at 12 percent). U.S. manufacturing employs more than 12 million people directly (9 percent of the U.S. workforce) and contributes more than $1.6 trillion to the U.S. economy annually, supporting roughly one in six private sector jobs in the United States.
Dr. Carlson also states, “Today … 70 percent of Americans work in service industries. This is an acknowledgment that the U.S. has an educated workforce.” Again, the data says something else. A recent study from Deloitte shows that 82 percent of manufacturers are reporting moderate to severe skills shortages in their overall workforce, accounting for over 600,000 open manufacturing jobs in the United States today. And these aren’t “cheap labor” jobs, as Dr. Carlson indicates. On the contrary, employees in the manufacturing sector earn on average 18 percent more in pay and benefits than employees in other sectors.
The fact is that 78 percent of Americans believe manufacturing is very important to U.S. prosperity. They are right, and it is returning to the United States because we have the most productive workforce in the world and a rule-of-law system that protects intellectual property. Also, with fuel costs and labor rates rising sharply in developing countries, it’s more economical to locate manufacturing operations closer to the U.S. customers. If manufacturing is not important to you, try living a few weeks or even days with no manufactured products in your life.
Everything is not perfect. We face challenges with high unemployment and a shortage of skilled workers. U.S. factories operate at a 20 percent cost disadvantage compared with competitors in developed economies overseas.
Our regulatory and tax environment challenges every business to plan and put people to work. The manufacturing community is stepping up to ensure people understand the exciting career opportunities that exist right here in Nevada and have the skills to take advantage of them.
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Manufacturing isn’t smokestacks and dirty jobs. Our factories are clean and safe, and we provide higher pay and benefits on average than other sectors. Dr. Carlson says, “Even here in Carson City, we can’t forget we’re part of the larger world.”
She’s right, and as part of that call, she should visit local factories before propagating a false, outdated, and out-of-touch view of one of our strongest and most promising industries for the 21st century.
• Ray Bacon is executive director of the Nevada Manufacturers Association, based in Carson City.