I was baffled. Compared to me, the guy was older, weaker, and smaller. And his swing wasn’t that hot. Yet his drive had just flown at least 10 yards beyond one of my very best shots. This had happened on four of the last five holes. I had to ask, “How do you do it?”
He responded by handing me his club and simply saying, “It has a special kick for old guys like us.” At his suggestion, I tried his feather-light magic stick on the next hole, and my drive sailed an extra 20 yards. I was sold. It was an eye-opening thrill for a guy who always believed that it’s the warrior not the weapon that makes the difference in golf.
Within 48 hours I was exiting a golf specialty shop with my own new weapon, having retired my old, beloved driver. Loyalty has its limits. And as I did so, I marveled at the power of technology and how it has impacted so many Americans – for better or worse.
We hear daily that America’s manufacturing sector is in the tank, forever getting its proverbial butt kicked by a ruthless, unbeatable China. Donald Trump loves to boldly proclaim from his tall tower that “we no longer make things,” as presidential candidates nod in agreement. Media commentators and TV specials forever hype how all of our CPC (“cheap plastic crap”) is made in China or in other far off lands. The popular notion is that America is no longer a nation of makers.
It’s all hogwash. By any objective standard, America has been, and still is, the dominate manufacturing force in the world, beating by a substantial margin the next seven powerhouses – China, Japan, Germany, United Kingdom, Italy, France, and Korea. The U.S. manufacturing sector, on its own, would rank as the sixth largest economy in the world. It accounts for one-fifth of the world’s manufacturing output in real terms, and has grown by more than two and one-half times since 1970. Those who perpetuate the myth that America doesn’t manufacture are dead wrong.
So why are there fewer U.S. manufacturing jobs? It’s the same reason that I now get more distance from my old-man swing – technology. It has catapulted the productivity of America’s factory workers, who on average now produce more than three times what their counterparts produced in 1972. So, while manufacturing has steadily grown, keeping America at the top of the pack, manufacturing employment has shrunk nearly 30 percent. The power of technology has been felt across the entire manufacturing spectrum. In agriculture, for example, 2.6 percent of our workforce today produces more than that generated by the 40 percent of American workers who labored in agriculture 100 years ago. It is the modern, high-speed version of a phenomenon described long ago by our Supreme Court in the famous antitrust case of United States v. Trans-Missouri Freight Association, 166 U.S. 290 (1897):
A change from stage coaches and canal boats to railroads threw at once a large number of men out of employment. These are the misfortunes which seem to be a necessary accompaniment of all great industrial changes… It is a misfortune, but yet in such cases it seems to be the inevitable accompaniment of change and improvement.
And, of course, it’s technology that has made it easier for companies of all sizes to shop the world for their manufacturing needs. So America, like all others, must compete on a world stage. Certain manufacturing sectors (CPC and the like) will always be drawn to the markets with the lowest labor costs. But all the leading manufacturing countries have experienced a constant decline in the percentage of their employment force that is engaged in manufacturing as technology has worked its magic.
What does this mean for American manufacturing jobs in the future? Although many fear that productivity gains will continue to shrink the number of manufacturing jobs (albeit at a slower pace), there are five potential positive signs.
First, the retirement of Baby-Boom workers will open up many jobs (estimated at about 2 million by 2018).
Second, there is a growing hope that our political leaders will wise up and get much tougher in protecting American manufacturers from the trade and currency games that others have regularly played to create and leverage an unfair advantage. On this point, Trump is dead right; we are getting our pockets picked daily.
Third, it’s likely that within a few years (some predict as early as 2015), progressively higher labor costs in China, along with transportation costs, duties and supply chain risks, will prompt many U.S. companies to shift production to the U.S. (or plan new production in the U.S.) because the potential advantages of offshore production will have become minimal. The Boston Consulting Group projects that this shift could result in 600,000 to 800,000 additional U.S. manufacturing jobs, which would generate 1.7 to 2.4 million new jobs in other businesses.
Fourth, progressively higher income levels in China and other Asian countries will continue to trigger increases in demand that will suck up more Asian output and create new opportunities for U.S. manufacturers.
And finally, there is the potential of major leadership changes in Washington that could reverse the impacts of tax, regulatory and energy policies that discourage business growth and shackle our economy.
What is clear is that improved technologies and the increasing competitiveness of the world stage will continue to obsolete assembly-line slots that are protected by unions that seek to squeeze insane amounts from employers. And America’s competitive manufacturing sector will not be a viable default option for the hordes who now drop out of or finish school with a no work ethic, tons of attitude, and a deep-seated belief that the world owes them a living. They will have no more chance of getting in the game than my dear old driver that now idly resides in a clubhouse locker.
December 2, 2011