Trump Should Make American Manufacturing Great Again, and More Innovative Too

“By outsourcing manufacturing to the lowest bidder abroad not only have we destroyed the working middle class in America, but also we are also increasingly turning over our last economic advantage – our intellectual property.”

made-in-americaOver the last decade it has gotten harder and harder to obtain a worthwhile patent in the United States. Thanks to the Supreme Court’s decision in eBay v. MercExchange a victorious patent owner is no longer entitled to a permanent injunction that orders the infringing defendant to cease infringing in the future. Thanks to the America Invents Act (AIA) and the creation of the Patent Trial and Appeal Board (PTAB) commercially valuable patents are challenged in administrative proceedings before administrative law judges who ignore the presumption of validity a patent is statutorily promised (see 35 U.S.C. 282) and apply rules that move the proceedings along so quickly that due process is seriously compromised. Thanks to a tetralogy of misguided patent eligibility cases from the Supreme Court over the last five years software and biotechnology industries have had their innovations largely deemed unpatentable.

Yes, the last decade has been rough for patent owners and innovators in the United States. But as bad as the Supreme Court, Congress and the PTAB have been for the U.S. patent landscape, a far larger problem continues to loom.

By and large the United States continues to export our intellectual property so foreign companies and subsidiaries around the world can engage in manufacturing instead of making things in America.  Unfortunately, when manufacturing exits a country research and development funding dwindles in direct response, thereby creating an enormous problem for subsequent generations of innovation.

The manufacturing vacuum has been and will continue to be an acute problem for the United States moving forward unless a concerted effort is made to do something about it. During the recently concluded Presidential contest then candidate Donald Trump ran a largely populist campaign that promised to bring jobs back to America. Those on the left, as well as many on the right, panned Trump for a lack of detail in his plan to bring back jobs, but to be perfectly fair a lack of detail is hardly unusual in a modern political campaign. For better or for worse, the 140-character sound byte world we live in doesn’t have time for details. Trump did not win the election last week because people knew exactly what he would do to deliver on his promises, they voted for Trump because they hoped he might deliver on his promises.

Now President-Elect Donald Trump needs to go about building his Administration and preparing to govern. Now is the time for details, and one of the planks in the Trump plan absolutely should be a real, dedicated and concerted effort to bring manufacturing jobs back to America, which would absolutely reward the faith placed in him by the many men and women in the Rust-Belt States that voted for him last Tuesday.

With countless manufacturing jobs already gone what the American economy thrives on is intellectual property, particularly in the form of innovation. It is mistakenly believed that as long as America is innovating we have no problems and will continue to have a robust and even dominant economy. But since the housing collapse the U.S. economy has been anything but robust and dominant economy. Indeed, stagnant growth and the feeling by many that the recession never ended seems to explain appeal of candidates like Senator Bernie Sanders (D-VT) and Donald Trump. After all, if the economy were growing at 4% per year over the last 8 years would either party have been clamoring for outsider candidates promising to deliver change?

The American story of lost manufacturing jobs dates back for decades. Bruce Springsteen’s song My Hometown, immortalized the tale of a textile mill closing down, jobs leaving and never coming back, which leads to vacant stores throughout the town. The line – “Foreman says these jobs are going boys and they ain’t coming back” – has proved to be eerily prophetic, repeated in once thriving manufacturing and industrial communities all across America.

It doesn’t need to be this way! There is something that can be done, but turning the economy around requires our leaders to consciously focus on facts and reality rather than politics, myths and fear mongering. Perhaps a Trump Administration will provide a unique opportunity to think outside the box on these issues, and deliver a win for America and America’s under employed and out of work manufacturing communities.

Rather than engage in a trade war, why not embrace smarter manufacturing policies?

While there is nothing wrong with negotiating better, smarter trade deals, what America really needs is smarter manufacturing policies. After all, what exactly are better, smarter negotiators going to do if the United States remains an inhospitable climate for business, with extraordinarily high tax rates, unreasonable environmental regulations and loopholes that only the richest corporations can take advantage of? How could we ever reclaim widespread manufacturing in the United States if the deck is stacked against the industry?

Would it surprise you to learn that China has but a 3.5% cost advantage for manufacturing compared with the United States? Regulations, taxes and an environment that makes it practically impossible to start a new business creates the overwhelming bulk of the U.S. disadvantage, and thoughtful policies to revitalize American manufacturing would produce dividends, lead to a broader middle class, provide an economic boon to the entire country and lead to greater national security because we wouldn’t be relying on foreign producers for everything, like we are today.

If you don’t believe that a thoughtful national manufacturing policy is the answer then you need to read Great Again: Revitalizing America’s Entrepreneurial LeadershipA central and often repeated theme of Great Again is that America’s decision to give up on manufacturing has not only caused the obvious problems associated with the loss of high paying blue collar jobs, but it has and is causing an enormous loss of intellectual property assets as well. The author, Hank Nothhaft, who was an extremely successful start-up CEO in Silicon Valley with many years of experience, quotes what Harvard Business School Professors Willy Shih and Gary Pisano told him: “decades of outsourcing manufacturing has left U.S. industry without the means to invent the next generation of high-tech products that are key to rebuilding its economy.”

Nothhaft explained it this way in a speech in January 2011 in Washington, DC, at the Innovation Alliance Conference:

For 30 years now we have all been fed the carefully cultivated myth, that so long as America did the creative work, the inventing, then we can let other nations like China do the so called grunt work, the manufacturing. Simply, we would think; they would sweat. So we let manufacturing go and in so doing we lost the greatest economic force multiplier in history. For manufacturing not only supplies middle class incomes to the three-quarters of all Americans without a college degree, it also creates up to 15 additional jobs outside of manufacturing for every position on the factory floor.

Worse yet, every engineer in the world knows that innovations don’t always (if ever) ramp up from the micro level to the macro level as one might predict.  So when we outsource manufacturing we are handing over the follow-on innovation that will take place on the factory floor. By outsourcing manufacturing to the lowest bidder abroad not only have we destroyed the working middle class in America, but also we are also increasingly turning over our last economic advantage – our intellectual property.

How long will the United States be able to remain one of the world’s leading economies if we continue to outsource that follow-on innovation that takes place through the manufacturing processes? Perhaps right now the U.S. remains in the lead with respect to first generation innovation, and perhaps second and subsequent generations of innovation made on the factory floor are not a current threat to the U.S. innovation economy. But how much longer will that be the case? How much longer before the countries doing the manufacturing become more sophisticated in terms of first generation innovation?

This problem is far more concerning than most are willing to admit. In 2010, China spent about as much on research as did France, but by 2016 was investing as much as the entire European Union. See China by the Numbers. China awards more doctorate degrees in the sciences than does the United States – 27,000 vs. 24,000. See China may soon eclipse the U.S. In China scientists are paid more than medical doctors and lawyers, while in America scientists earn less. See Is China a Science Powerhouse? And China is become an increasingly friendly jurisdiction for innovators and patent owners. See China increasingly a preferred venue. What all this means is the U.S. is falling behind, and those familiar with the systematic dismantling of the U.S. patent system and the intentional outsourcing of manufacturing know exactly why – myopic American leaders (both in D.C. and in Silicon Valley) have forfeited our advantage.

Shortsighted decisions by CEOs and the lack of any leadership, let alone meaningful leadership, in Washington, DC, has placed America on the path of economic ruin. The lack of manufacturing in America coupled with the increasing loss of associated intellectual property and innovation explains the “new normal,” which is represented by stagnant growth and an abundance of low paying new jobs that require displaced workers and those entering the workforce to work two or three jobs just to survive. Working yourself to death to make ends meet isn’t the American Dream.

Unfortunately, the collective narrative supports the erroneous conclusion that there is nothing that the United States can do to turn things around on the manufacturing front. While simply untrue, our political leaders have so far not wanted to offer a business friendly environment calculated to make America a strong manufacturing nation once again. According to Nothhaft, “It’s the U.S. government’s myopic policy, not China’s lower payroll costs, that make our nation uncompetitive in the all-important solar and other high-tech manufacturing sectors.”

In Great Again Louis Vintro, vice president and general manager of the semiconductor product division at equipment maker ESI explains: “What we see from our data is that China has a roughly 50 percent advantage in labor costs. But since labor represents an average of only 7 percent of operating costs across all of the semiconductor sectors, that means China has a 3.5 percent overall cost advantage.”

But with that 3.5 percent Chinese cost advantage comes uncertainty.  The United States still offers a solid rule of law and there is not the political unrest here that could (and likely will) emerge in China as the rising middle class wants more and demands freedom.  But even this 3.5 percent advantage can be closed, as Nothhaft explains: “If you take as a guide the roughly 30 percent tax that Intel has paid in recent years on 10 percent operating profit, that would mean a 3 percent lower cost of operating a plant here. Add in an enhanced, permanent 20 percent R&D tax credit equal to what other nations offer… and China’s advantage drops to 1 to 2 percent.”  At 1 to 2 percent advantage is it worth the headaches of doing business in China?

What America needs to do is clear. We need to work together to reduce taxes on manufacturing in the United States. Approval processes for everything at every level need to be streamlined. R&D tax credits should be increased. Job killing laws and regulations, as well as laws and regulations that give incentive for companies to decrease hours, must be repealed. And, it shouldn’t have to be said, but making electricity cost more by killing coal fired power plants without any viable alternative technical solution is just idiotic.

A proactive manufacturing policy is what the United States needs, but will it be what the United States gets? If President-Elect Trump truly wants to bring jobs back to America and rebuild the middle class a proactive, smart manufacturing policy will be one of the pillars of his economic plan.

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25 comments so far.

  • [Avatar for Gene Quinn]
    Gene Quinn
    November 19, 2016 03:15 pm

    David Olynick-

    I do write a patent blog. LOL. And in addition to writing about patents I write about patent policy and innovation policy too!

    I do thank you for your comment though. It shows just how small minded you are. This is an article that I initially wrote about 5 years ago. I’ve republished it after updating it a few times over the years. Funny how it was never offensive or cause for you (or others presumably) to stop reading IPWatchdog.com until President Elect Trump is mentioned in the article. To call that astonishing hypocritical doesn’t begin to scratch the surface. So if you want to stop reading because of this article I say good riddance.

    -Gene

  • [Avatar for david olynick]
    david olynick
    November 19, 2016 01:02 pm

    Dear Gene,
    you want to write a patent blog, write a patent blog and stick to it. You want to write a political blog, write a political blog and stick to it. You want to mix the two-be prepared to lose a significant part of readership.

    Will not be following your blog any longer-what a pity. You can be the patent blog for drudgereport and breitbart news. I am sure those highly educated readers will flock to your site.
    Best,
    dave

  • [Avatar for Adrian Pelkus]
    Adrian Pelkus
    November 19, 2016 09:26 am

    I recommend reading Michele Nash-Hoff’s book “Can American Manufacturing be Saved” http://www.savingusmanufacturing.com/index.php
    Michele is currently a director on the national board of the American Jobs Alliance and Chair of the California chapter of the Coalition for a Prosperous America and a BOD member of the San Diego Inventors Forum.

  • [Avatar for Wayne Johnson]
    Wayne Johnson
    November 17, 2016 01:56 pm

    Where do you think the NNMI program fits here? AKA Smart Fabrics, Flexible Electronics, Photonics?

  • [Avatar for Mark T.]
    Mark T.
    November 17, 2016 12:43 pm

    Curious, you make several excellent points.

    Recently Elon Musk has proposed an alternative for roofing shingles that look good, generate copious electricity, and may be cost-effective. In combination with batteries and electric vehicles, we have the beginnings of personal energy independence. While the technology may not be fully ready or cost-effective in 2016, all indications are that it will be someday. That would be great for the individual and our nation, but poses a threat to the oil and coal industries. Unsurprisingly, I now see Elon Musk being demonized in comment threads by anonymous trolls.

  • [Avatar for Curious]
    Curious
    November 17, 2016 12:03 pm

    That you don’t understand the science and national security implications speaks volumes about just how clueless you really are
    The national security implication of alternative fuels is that the quicker we get into them, the better off we’ll be. Even if the US produces 100% of the fuel (natural gas and oil) needed to supply the US, the prices of the fuel are still impacted by what happens in areas like the Middle East. The US is involved in the Middle East to protect not only our supply of fuel but also the pricing of that fuel.

    The sooner the US transitions to renewable sources (and I’ll throw in expanding our reliance on nuclear power), the sooner the US can disengage from a region that has proven to be a national security nightmare for decades and decades.

    Ultimately, if the rest of the word still depends upon the Middle East for fuel, we’ll have to have some engagement because what happens in the rest of the world impacts the US, we can still take a greater hands off approach.

    Moreover, leading the world in transitioning to renewable fuels can only help our home industry because that transitioning will require an incredible amount of technology be developed and infrastructure be built. I would rather have the US companies be the ones that develop that technology and build that infrastructure than have companies from other countries do it because those countries were more forward thinking that the US. Transitioning the US into an alternative-fuel driven society will drive a considerably amount of economic growth in this country.

    Survivalists talk about “getting of the grid” to insulate themselves from what happens if a catastrophe happens. The United States needs to get off the energy grid of the rest of the world to do the same.

  • [Avatar for Mark T.]
    Mark T.
    November 17, 2016 12:01 pm

    Gene, you would be surprised to know I agree with the vast majority of your articles on intellectual property issues, but you are simply repeating ideology here when a more careful analysis is called for. Just think about it, please. If you were sitting on tens of trillions of dollars in oil and coal, wouldn’t you do everything you could to protect those assets and sell as much as you could? Capitalism’s focus on profits demands this to be true. Ask yourself if it is more likely the oil and coal industries are simply trying to protect their enormous investments, or the vast majority of the world’s scientists and weather observers are stupid and wrong. Why would 193 nations sign the Paris Accord to reduce carbon emissions if there weren’t an honest to goodness reason to do so? As an enlightened person, you need to make the best arguments for BOTH sides before deciding which is more likely to be correct. As an advocate, I challenge you to make the best argument for the other side.

    Check the facts. As one might expect, the oil and coal industries have spent untold sums to support friendly politicians and spread disinformation to prevent anything from affecting consumption of their products. There is precedence for this, e.g., the tobacco industry used many of the same tactics. The Republican Party has received the lion’s share of that largess, but anyone with political power is a potential recipient, so long as ultimately nothing is done to affect our consumption of oil and coal.

    In my opinion, this whole liberal v. conservative debate is a smokescreen when it comes to Global Warming. Nobody with any sense wants to mess up our only home, liberal or conservative. Furthermore, we don’t have to destroy our economy to begin to address this problem. LED lights, vehicles the run more efficiently, nuclear, solar and wind all can help us on our way. Yes, I am for the careful, but widespread application of nuclear power until we find something better, perhaps fusion, because we need something that actually works 24/7 on a massive scale. As you appreciate, many other technologies are in various stages of development, but we need to continue to foster innovation in this area to the maximum extent practicable.

  • [Avatar for Curious]
    Curious
    November 17, 2016 11:49 am

    the great outdoors that so many liberals mock as they pass through fly over country
    Gene — don’t fall into the trap of over-generalizing. I know LOTS of liberals, and I don’t recall any that “mock” the great outdoors. Caring about the environment is all about loving the great outdoors. Environmental regulations are necessary for a clean environment because basic corporate governance (i.e., maximize shareholder wealth) all but mandates that corporations do everything possible to reduce costs. If dumping untreated waste products into the environment (whether into the air, soil, or water) saves money, then that is what a corporation should do if they are looking to maximize shareholder wealth.

    Certainly, many corporations are good citizens because they want to be. However, most are good citizens because they can afford to be. If times are tough and a corporation needs to save money and a corporation isn’t forced to be a good citizen, then odds are that they will not. This is just basic corporate governance.

    Albeit in a different context, the same thing happens with the tech companies and the patent system. It is cheaper for the tech companies to dismantle/neuter the patent system than to license patents. It is all about the bottom line, and I completely understand why they are doing it. It just doesn’t matter to them that the dismantling of the patent system is bad for the country, as a whole.

    The moral of the story — corporations look out for themselves — not the country. While there are always exceptions, one should almost always expect a corporation to do what is best for the corporation.

  • [Avatar for step back]
    step back
    November 17, 2016 10:43 am

    And yet it melts.

    (That’s what Galileo would have said if subjected to the modern alt-right inquisition on climate change 🙂 )

  • [Avatar for Gene Quinn]
    Gene Quinn
    November 16, 2016 11:21 pm

    Pat N. Trole-

    I talk about “unreasonable environmental regulations” in the article, of which there are many. So why don’t we start with what I suggest in the article, which is getting rid of the unreasonable environmental regulations that get in the way. Once we do that if you want to try and put words in my mouth I’d be happy to have a substantive discussion with you.

    You say: “nearly every single credible scientist on the planet recognizes [climate change]…” You say that as if I’ve ever denied climate change, or Republicans deny climate change. The climate has been changing for approximately 4.6 billion years, so it is hardly shocking that the climate is changing. If you are trying to say that every scientist agrees man is responsible, well you would be wrong. Those who believe in so-called man-made global warming can’t predict the past with their models, which ipso facto mean they at best have a hypothesis — not even a theory. If you cannot predict the past, and every prediction that is made turns out to be wrong, something is wrong with the model. That is Science 101.

    You say: “However, to say that we must choose between enforcing regulations which “cripple the economy for virtually no benefit or we can continue to pursue alternative solutions and slowly transition” is complete garbage.”

    You are entitled to be wrong. It is a free country.

    -Gene

  • [Avatar for Gene Quinn]
    Gene Quinn
    November 16, 2016 11:13 pm

    Wayne-

    That would be great. I know several inventors who are manufacturing in the US and use it to their advantage. Not only are they good corporate citizens but it turns out that businesses and consumers like to purchase products made in America too. Best of luck to you!

    -Gene

  • [Avatar for Edward Heller]
    Edward Heller
    November 16, 2016 04:47 pm

    Pat N. Trole, another way to approach the issue is the way the Euro’s do it: Impose certification requirements regarding compliance with US environmental codes or else the product cannot be imported into the US or imported only with countervailing tariffs. That way, how we regulate the environment here is independent of any decision of where to locate a factor to produce goods for the US.

  • [Avatar for Pat N. Trole]
    Pat N. Trole
    November 16, 2016 04:06 pm

    “We can either cripple the U.S. economy for virtually no benefit or we can continue to pursue alternative solutions and slowly transition.” First, this statement is a complete oversimplification that makes you sound like Trump or HRC – or any other person that doesn’t consider the nuances. You know that the devil is in the details. It’s true that some of these environmental regulations are nearly impossible for businesses to comply with and also forces them to quickly make major capital investments which surely hurts the businesses. However, some environmental regulations do contribute to economic growth by forcing industries to create cleaner technologies which benefit us in the long-term. For example, preventing particles from smoke stacks and reducing carbon emissions yields cleaner air which aids in keeping people healthy, so that they don’t have to spend millions of (their own or the gov’ts) dollars on health care and they can spend money elsewhere.
    Should we get rid of these regulations? – ask the half of a million Chinese citizens who die every single day about their air quality. These regulations also curb climate change – nearly every single credible scientist on the planet recognizes this. Climate change causes chaotic weather patterns like extreme heat, cold, and natural disasters – all of which hurt the economy. We can’t just “slowly transition” because of the rapid pace at which we’re ruining the planet. I agree that with SOME of these regulations, at this point, the costs outweigh the benefits. However, to say that we must choose between enforcing regulations which “cripple the economy for virtually no benefit or we can continue to pursue alternative solutions and slowly transition” is complete garbage.

  • [Avatar for Wayne Carpenter]
    Wayne Carpenter
    November 16, 2016 03:14 pm

    Gene,

    If I am able to patent a device that I am in the process of trying to get a patent for and have control over its manufacture, its going to be made in the USA. We need more manufacturing jobs here!

  • [Avatar for Edward Heller]
    Edward Heller
    November 16, 2016 03:11 pm

    Gene, we ought to view this like a CEO with a spreadsheet. Provide cells for labor costs, labor regulations, safety regulations, environmental regulations, etc. Add these up and subtract income. In the end, if there is a profit, but then there are corporate taxes. What we try to maximize is after-tax profit.

    One can see instantly that one of the greatest factors in moving jobs offshore is the last item, corporate taxes on profits. Simply getting rid of these would make all those high labor rates, etc., much more affordable. But if the goal is to keep jobs in the US and to even bring them back, the goal is to make manufacturing in the US vs. outside the US more profitable after tax.

    I also agree with you once you move manufacturing offshore, you will eventually move R&D too. Engineers do better closer to the line, and manufacturing engineers make good design engineers.

  • [Avatar for Benny]
    Benny
    November 16, 2016 02:51 pm

    Heading off topic at bit here, but in response to Step and Gene I think innovation in alternative energy is less likely to happen in the US where fossil fuels are cheap as chips, and more likely t happen in those industrial nations whee energy is taxed to the hilt, creating a genuine economic incentive. Unless, of course, there are government mandates on energy use. (As in California’s compliance cas, for example)
    As an aside, although I agree with the content of Gene’s response to Mark, I do think a more civil tone of conversation could be maintained, sans personal attacks.

  • [Avatar for step back]
    step back
    November 16, 2016 02:38 pm

    Gene @7,

    With due respect I think you were a little harsh on Mark T upstairs.

    History tells us that unregulated, unbridled raw capitalism leads to child labor, slave labor, toxic products, pollution, etc. A truly dystopian Brave Old World.

    It is not a solution to say we won’t change our ways until they (i.e. the Chinese) first change their ways. (BTW, have you seen that new movie “Arrival”?)

    The energy/pollution/climate change crises are truly enigmatic ones. This is a time where we need all our great inventors working on solutions to these big world-threatening problems rather than inventing some new me-phone entertainment application. Talk about fiddling while the world burns!

    https://patentu.blogspot.com/2016/11/transitioning-to-brave-new-patent-free.html

  • [Avatar for Gene Quinn]
    Gene Quinn
    November 16, 2016 11:41 am

    Thanks Hank. If our leaders had taken your message seriously when “Great Again” came out we would already be well on the way to a better economic future. Hopefully new thinking from a business minded leader will open eyes and create change. Who knows, right? After all, the Cubs won the World Series so I suppose anything is possible!

    -Gene

  • [Avatar for Gene Quinn]
    Gene Quinn
    November 16, 2016 11:39 am

    Sorry Mark T, but you are of course wrong, and rather ignorant. Seriously, have you taken any time to think about the issue in any critical way whatsoever? Apparently not!

    The U.S. could completely dismantle economic activity and return to a completely agrarian society (which won’t happen) and that would do practically nothing given that China and India are polluting at such extraordinary levels. So why should the U.S. punish citizens and businesses for absolutely no benefit?

    Furthermore, the fact that liberals want there to be clean energy solutions is wonderful. As it turns out conservatives want clean energy solutions as well. In fact, many conservatives love the environment, the great outdoors that so many liberals mock as they pass through fly over country. The difference is liberals ignorantly think that a federal regulation can instantly force science to meet energy demands with some kind of magic wand. Clean energy solutions are not yet to the point where they can replace other energy solutions — that is just fact. Biofuels are being questioned as not environmentally friendly on the whole, and god forbid anyone suggest nuclear options. So until more can be done with respect to battery technologies, solar technologies, wind technologies and other forms of alternative energy we have a choice. We can either cripple the U.S. economy for virtually no benefit or we can continue to pursue alternative solutions and slowly transition.

    In the meantime, while we wait an all of the above solution is necessary for national security reasons. That you don’t understand the science and national security implications speaks volumes about just how clueless you really are.

    Cheers.

    -Gene

  • [Avatar for Henry R "Hank" Nothhaft]
    Henry R “Hank” Nothhaft
    November 16, 2016 10:09 am

    Gene Thanks for continuing to raise the issue of manufacturing as a necessary part of our economic road map. If you read my book “Great Again” I advocate creation of an environment that supports highly technical, value added manufacturing jobs where labor costs tend to be a very small element in the cost of goods. These jobs are high paying and require a STEM education which can be acquired at the Community College level. I met with many of today’s “leaders” in Washington DC to promote my ideas. A few have been enacted in the loosening of the accounting requirements for new IPO’s. Hank

  • [Avatar for Mark T.]
    Mark T.
    November 16, 2016 09:26 am

    “unreasonable environmental regulations”

    All those unreasonable liberals want their precious clean air and their precious clean water. Well too bad! Trump supporters are all thrilled Trump will make our environmental regulations are no more restrictive than China’s. Right Gene?

  • [Avatar for A Rational Person]
    A Rational Person
    November 16, 2016 08:39 am

    PG@2

    Even if manufacturing is more automated, doing manufacturing in the US would be expected to increase jobs in: managing the automated machines, doing maintenance on the automated machines, providing replacement parts for the automated machines, designing improvements for the automated machines, etc., providing services to the people who manage, maintain, provide replacement parts for, design improves for, etc. the automated machines, etc.

    One of the important things about manufacturing is not just the “jobs on the assembly line”, but all of the ancillary jobs produced by having a manufacturing plant nearby.

  • [Avatar for Anon2]
    Anon2
    November 16, 2016 07:14 am

    PG @ 2

    One need only eliminate minimum wage laws. People in the labor market will then determine whether a job/the pay is worth being more efficient than a machine or a person from a foreign country…. and if so the job will come back.

    They of course are always free to refuse those jobs and invest in themselves to exchange their services doing something more valuable.

  • [Avatar for Prizzi's Glory]
    Prizzi’s Glory
    November 16, 2016 06:25 am

    It’s not clear that doing more manufacturing in the USA would mean a tremendous increase in manufacturing jobs. Automation seems to preempt human workers.

  • [Avatar for Benny]
    Benny
    November 16, 2016 05:25 am

    Gene,
    Virtually everything you speak of in your article is equally applicable to Western European nations. It’s not just an American malaise.
    I’m not sure where the figure of 3.5% cost advantage for outsourcing manufacturing to low-labour cost countries comes from. I work in the manufacturing industry, we outsource manual (not automated !) assembly eastwards, and I can see the figures. After factoring in shipping and QA (having our QA engineers on-site) the numbers I see on the books are more like 20% – 30%. (Note this is true for EU where labour costs are presumably higher than the US)