Manufacturing Jobs: What Will It Really Take to Bring Them Back?
Mitt Romney wants to bring manufacturing jobs back by cutting taxes and getting tough with China. The Obama Administration points to the jobs saved through the auto industry bailout, favors investment in clean energy and other advanced technologies, and looks toward the nation's community colleges to produce the highly skilled technicians for our advanced manufacturing needs. Neither plan will work unless the United States finds a way to greatly improve the performance of our elementary and secondary schools.
Manufacturing is returning in part because manufacturers need many fewer human workers. Onrushing automation is relentlessly replacing workers who do low-skill, routine work with machines that will work more accurately, rapidly, reliably and much more cheaply. They don't demand raises, need vacations or weekends off or health insurance, and can be retooled in minutes.
These companies still need humans, of course, and our humans still cost more than many workers with the same skills over seas. But, in many cases, the higher cost of American labor is offset by the advantage of locating manufacturing close to a customer or close to the research and development labs or making sure that foreign countries don't rip off an American company's intellectual property.
Wages might be higher here, but, because labor accounts for so much less of the total production cost, paying higher American wages doesn't make as big dent in the total cost picture as it used to. But the jobs that are left after the machines take over the routine work are jobs requiring much more complex skills than the jobs workers in the same industries used to need. The people who need them need to be far better educated.
This is the key issue. Our competitors, including countries like China that are among our low wage competitors, are doing a better job than we are of educating manufacturing workers to high standards. So, even as the wage gap is closing between their workers and our workers, they are opening a skills gap that favors them, not us. We are rapidly approaching a point at which global firms will choose to manufacture in those countries not because they offer lower-skilled workers but because they offer more highly-skilled workers at comparable wages.
Mr. Romney has yet to tell American voters what he plans to do about the dire state of American education. Mr. Obama is right in thinking that our community colleges have an important role to play in solving these problems, but they will not be able to play that role unless the quality of American high school graduates improves radically. Americans have yet to come to grips with the reality that the average student in Shanghai, a city of 23 million people, greatly outperforms the average student in the United States of America. That is a stunning fact. We are facing a competitor that is offering workers who are better educated and who will work for less than their American counterparts. That is a formidable competitor. Maybe it is time that we heard a little more from our presidential candidates about their strategies for dealing with this challenge.