From the 06 February 2006 Lockport Union Sun and Journal (Lockport, NY)
 

This is the third in a five-part series on the global economy

 

“MADE IN THE USA” WILL SURVIVE
By Bob Confer

One of the greatest misconceptions in the assessment of the Global Economy is the belief that nearly all manufacturing now occurring in the United States will one day take place in foreign lands. People assume that the current trend of moving existing jobs to, and creating new jobs in, overseas locales will continue for the long-term and ultimately become all-encompassing with all manufacturers following the lead of the giant corporations. Such predictions are reactive in nature, based upon gut instinct and founded in pessimism. Conducting a closer, more-thorough analysis of our economy and the vitality of industry within it will prove this: manufacturing is doing well in America and it is here to stay.

The continued economic growth that our nation is fortunate to have would not be possible were it not for the manufacturing sector. Manufacturing does something that the service sector cannot: it creates economic wealth. By impacting so many varied businesses and their employees through every stage of transforming resources into products and ultimately selling within the service sector, manufacturing is the engine that drives our economy. This being said, no economist, no politician, no businessman would ever allow manufacturing to completely escape our borders.

This affinity to create goods with the sweat and blood of Americans is proved in the Gross Domestic Product, a measure of goods and services made in a country. Our GDP has been consistently growing at a very healthy 3 to 4 percent annualized rate, which it is expected to maintain for the coming year. This robust expansion is occurring despite Hurricane Katrina and escalating energy and material costs which, theoretically, should have stalled growth. This speaks volumes about the health and potential of manufacturing of America.

Further ensuring an American-made flair is the fact that a great many durable goods are process-intensive, quite space-consumptive and lack the ability to be marked-up on the open market. This creates a somewhat regional nature in the manufacture of durables. The physical and fiscal impracticality of transporting bulky items to be sold at mid-range consumer prices ensures that the myriad parts used to make these items are manufactured in the immediate vicinity of a company (that being a 500-mile radius that many custom manufacturers cite as the most cost-effective logistical range) and shipped within our own borders rather than being brought to our economy via the seas. Our economy’s need for affordable durable goods ensures a good many of these bulky and/or impressively-engineered items will continue to be built in America.

Fortunately, for the future of our country, “Made in the USA” means something. It’s not just a label. American manufacturing has always set the standard for quality, service, and, above all, ingenuity. No other developed or developing nation can match us in these factors and there’s a great chance that they never will. Their societies are quite oppressive by our standards and by intent stifle creativity and individualism, two factors that we promote in earnest. These factors inspire real capitalism, which in turn drives the desire to want to dominate a given market. Capitalistic endeavors require this be done through continuous improvement of goods and the operations that make them. The developing nations many of us fear are only working harder and not smarter. That is a huge weakness for them and a major strength for us.

The idle minds of these oppressive nations bode well for an even greater future of manufacturing in America once their well runs dry. The outsourcing nations are just skating by on the temporary benefit of low wages. Thanks to our outsourcing needs empowering their pocketbooks and these same nations now discovering a hunger for the same goods they are manufacturing for us, middle classes in China and India are growing at absolutely incredible rates and sooner or later - perhaps sooner than expected – these nations will lose their only competitive edge. This will ultimately come back to haunt the nations of outsourcing as the loss of their only benefit will create not only more equalized wages around the world, but the need for each country to become more self-sufficient by manufacturing to its own ever-growing needs.

The past, present, and future of our economy are completely dependant on the  manufacturing sector. We can’t survive without it. This need for its lifeblood, coupled with the ingenuity of the American Mind and the capitalism of the American Way guarantees its future in America. Manufacturing is a crucial component of our national identity and will be till the end of time.

 

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