The End of US Manufacturing Domination and Manufacturing Jobs

Previous blogs have dealt with the MBA wave that began in the 1960's and the corporate rush to outsource manufacturing to low cost labor countries. The end result of this profit driven mind set by MBA's running American corporations is now very apparent. Virtually all consumer products including household appliances, computers, cell phones of all types, radios, televisions,shoes, clothing, and virtually most of the non-consumable consumer products that we buy are made outside of the USA. In most cases the materials that are used to produce these products also originate in other countries. We have become a consumer country where all of us purchase products that are largely made from materials and processes implemented by people who live in other countries. This benefits those who live elsewhere and that is a good result for many poor people. The American blue and white collar workers who once had well paying manufacturing, technical, and support jobs are now unable to obtain even service jobs that pay considerably less than the were earning in the recent past. New entries to the job markets in our country face even more difficulties since even service jobs often paying the minimum wage of $7.75 per hour are scarce, as our population becomes progressively trapped in a ever extending web of poverty and homelessness.

The future is even bleaker for American workers as I view the prevalent circumstances and the near-term future. The mass departure of manufacturing plants and resultant product origin from our country has also caused a even more dramatic shift in the origin of ideas that are transformed into products as`well as manufacturing equipment to make the products. Whereas the USA was once the incubation hot spot of innovation, we are now following behind the emerging leaders in China, South Korea, Germany, Japan, Sweden, Denmark, India, and elsewhere. Product innovation is closely linked to manufacturing because ideas are often stimulated by all the steps of creation, particularly previous experience and serendipity that comes from the process of designing and making something.

We have witnessed this in our life times when Microsoft became a world leader by making computers come to life by creating packages of instructions (software), and developing methods of production that spurred further research and development. Apple is another contemporary company where an innovative individual combined product and process to generate a new wave of electronic communication products. The same pattern existed when Edison developed the electric light through laborious trial and error and observation. From his work, General Electric emerged during the early 1900's and until about 60 years ago developed, designed, and manufactured most of their products in the USA. These combined activities from R&D to manufacturing resulted in one of the most innovative corporations in the world. All of this began to disintegrate when manufacturing was outsourced to areas where labor cost appreciably less than in the USA. Product R&D was curtailed or discontinued in this country, and disconnected from the production locations. Innovation began to flow from countries where the products were made.

Many foreign sources of manufacture eventually developed their own companies and acquired the US developed technology and continued to innovate. The US originators were left behind as Japan, South Korea, China, and India, etc. spawned corporation after corporation where both innovation and manufacturing flourished. Eventually GE became mainly a financial and insurance service corporation , rather than the world's foremost consumer appliance and electronic innovator and manufacturer.The product that GE markets are almost all produced in foreign countries.

This patten exemplified by GE was replicated my many hundreds of major American corporations that were leaders in innovation and production and that collectively employed tens of millions of well paid American workers directly, and spawned demand for millions of more jobs that were needed as suppliers to the major corporations in the USA. This was the backbone of our countries middle class and white collar workers from the early 1950's till the late 1970's when the decline began coincident with the mass influx of the bottom line mentality of the new wave of MBA executives and managers. Of course willing politicians paid homage to the "Service Industry" mantra that was promised to provide equally good jobs, and passed legislation that further enabled off shore production to reduce corporate taxes and increase their profits as workers lost their jobs and faced steep pay reductions.

Today, the same type of politicians who acclaimed the service industry as our country's job savior now proclaim that manufacturing jobs are needed. Where were they when Corporate America decided otherwise? Both the Democratic Party and Republican Party were and are co-conspirators in our race to unemployment and the loss of decent paying jobs. The Republican party, however, now bolstered by the Tea party, has always supported corporate America and unregulated business practices. The hollow talk of restoring manufacturing jobs is but meaningless blabber. The die was cast about 60 years ago, and we cannot squeeze the Genie back into the bottle. Job prosperity cannot return until our country returns to its innovative manufacturing roots. Even then we will compete in a world where innovation is now leaping way ahead of us, and we will never retain the once dominant status from which our workers benefited. We will share in the overall escalation of living standards world wide, but our relative position will diminish and can never again reach our once reasonable expectations. Even the MBA's who initiated the mass exodus of jobs from the USA must realize this indisputable fact.Some day our politicians may, but do not hold your breath waiting.