The real source of American prosperity
Comments (...)The following editorial appeared in the Chicago Tribune on Monday, Feb. 6:
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(MCT) — The U.S. needs all the jobs it can get, and we’re all for employers bringing factory work back here from China and other foreign locales. We support American manufacturing — period.
But the nation is not going to see the return of loads of jobs that have been lost to outsourcing. The U.S. will prosper by creating jobs, as reflected in Friday’s upbeat national employment report. The economy added 243,000 jobs in January across most sectors of the economy, far more than experts had predicted. To keep the momentum going, the U.S. needs to encourage cutting-edge sectors where this nation holds a competitive advantage.
We know that is a lesson from Econ 101. But we think a reminder is necessary because politicians of all stripes are joining in the clamor to “bring back” American jobs. That includes conservatives such as U.S. Rep. Don Manzullo, R-Ill., who told the Chicago Tribune editorial board last week that he’s “very optimistic about a lot of jobs coming back.” President Barack Obama sounded the same note in his State of the Union address, calling on employers to “ask yourselves what you can do to bring jobs back to your country.”
The honest answer: Not much.
Rising costs in China and new tax incentives at home will help to “re-shore” jobs at the margin. But those factors will not change the economic facts that make China a haven for low- and medium-skilled manufacturing: cheap labor, a fixed currency and government financial incentives. If China becomes too costly, Vietnam or Indonesia are more likely to lure the low-tech assembly line than Rockford or Peoria.
For the U.S. to thrive, policymakers must target real opportunity. Technological advances have enabled factories to produce more goods with fewer people. American manufacturing is about brains, not brawn. Workers need the education and training to operate computerized robots or lasers. Higher-skilled, knowledge-based jobs are the future.
Nowhere is this lesson more obvious than in one of the most sophisticated industries of all: technology. It has become fashionable to question the domestic economic value of companies such as Apple Inc. that employ many more people offshore than in the United States. Apple, in particular, has come under pressure amid reports of sweatshop conditions at its factories overseas.
The tech giant must ensure that its iPhones, iPods and iPads are made under safe, humane conditions wherever they are made. But it is useless to criticize Apple for assembling those products abroad. It has plenty of company in that regard. The costs of production are impossibly low, and the U.S. is not willing to emulate Chinese labor practices, such as herding thousands of workers into dorms so they’re readily available to crank up the production line.
But Apple, Intel, Groupon and the latest darling of tech investors, Facebook, employ tens of thousands of Americans in skilled jobs that can’t be done better anywhere else but here.
And they’re hiring.
Those jobs go beyond digital engineering to include sales, distribution and marketing, among other critical business functions. The bright minds that dream up a gotta-have-it gadget add much more value, and reap far greater rewards, than those who assemble it. The outsourcing that should worry U.S. policymakers is for research and development. That trend, as of now, remains limited.
The Economist recently observed that America had done “very well in the past by looking forward to unseen opportunities ahead rather than the obvious opportunities currently being exploited.” Apple has connected millions of people through powerful handheld computers, the British business magazine noted, and the potential for new business models flowing from Apple’s success is “almost unimaginable.”
The same could be said for a raft of fast-moving industries, from energy and transportation to health care. U.S. manufacturing, for that matter, could get a new lease on life as ever-less-costly computing power gets put to work exploring the latest breakthroughs in material science.
Bring back assembly line jobs from China? Fine by us, but it’s largely wishful thinking. The U.S. will prosper as educators and policymakers focus on the jobs related to innovation that can grow here and bring higher wages and real prosperity.
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