Is manufacturing the answer to fixing the US economy? Should we concentrate our efforts on building more and better goods and then supplying the world with those great products? Or should we drop manufacturing all together?
In past decades the USA was a great consumer and producer. The products manufactured in the USA were desired all over the world. Should we be concentrating our efforts in finding the next big product that we can produce and export? No, we should not! In fact, we should start shipping our manufacturing jobs to Mexico and Latin-America, China, India and other Asian Countries.
For many years the USA, like many first world countries, had an agricultural economy. After the industrial revolution it embraced and thrived as a manufacturing economy, while Third World countries were moving into agriculture. Third World countries were considered agriculturists or farmers, it was in the core definition of a Third World country.
Today we have a shift; these same Third World countries are manufacturing powerhouses. They have cheap labor, good engineers and great equipment. The new Third World country definition is a "Manufacturing Economy." Does the US want to stay, compete and hang on to a manufacturing economy and compete with them on their terms? No, it does not.
We can take a look at the suffering US car industry as a perfect example. Can the USA make the best and most inexpensive cars in the world? The US can't compete in quality and it certainly can't compete in price. The US government has to impose tariffs and special taxes on cheaper and better built imports to even give Ford, GM and Chevrolet a fighting chance.
The USA can't beat German, Japanese, Korean and the up and coming Chinese cars. Our labor pool gets paid $30 to $40 per hour for an industrial worker (even more with union costs and benefits) and competes with countries like Mexico that spend $2 to $3 per hour for a worker complete with tax, insurance and social security. US labor costs are 10 times higher and our cars are not better. Other fixed costs like rent, electricity, phone or water are also less expensive in other countries like Mexico and China.