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Transition 2012

A guide to foreign policy and the 2012 U.S. presidential transition.

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Renewing America Watch: Eyeing Manufacturing Jobs

by Toni Johnson
March 7, 2012

A high school senior talks about his class's assembly line project in Milwaukee, Wisconsin January 26, 2012. (Darren Hauck/Courtesy Reuters)


The economy is the biggest issue voters care about, as evidenced by Super Tuesday exit polls with an eye toward job creation as unemployment remains high.  So this week’s revisit of good stuff from our sister project Renewing America, which looks at six domestic issues that impede U.S. power abroad, starts with a blog post from Senior Fellow Edward Alden, who notes the disappearance of manufacturing jobs in the United States has created a skills shortage:

The United States has been in a vicious circle in which companies shed workers and shut down training programs, and the educational system responds by not preparing young people for jobs that no longer exist. And now as companies are again looking to expand, they cannot find the workers they need. Creating a virtuous circle will require a longer term view. A clearer commitment by the big manufacturing companies to expand production in the United States (even as they may also be expanding abroad) would have positive ripple effects. Rising demand for skilled workers will encourage young people to pursue manufacturing careers, in turn encouraging community colleges and other educational institutions to step up training.

Alden then looks again at why companies leave the United States and go elsewhere. A perennial issue is corporate taxes, made much of on campaign trail in the past couple of weeks. Alden notes that “intriguingly the complaints were primarily about the complexity of the U.S. tax code rather than the level of corporate taxation.” He finds another reason is lower wages:

This is not a competition that the United States can, or should want to, win. Wages have already been falling for most U.S. workers over the past decade, but they would have to fall a lot farther to offset the advantages of a China or Mexico. As Michael Porter put it to the New York audience: “Having companies succeed while wages fall…is not competitiveness.”

And yet another is education:

Astonishingly, 31 percent of executives cited “better access to skilled labor” as a rationale for moving overseas, versus just 29 percent who cited it as a reason for staying. That is a serious indictment of U.S. education and immigration policies.



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