What it Will Take to Reverse the Decline of US Manufacturing

Over the last 40 years, the manufacturing industry in the United States has suffered a serious decline. Global competition, high taxes, tariffs and a lack of suitable talent have created serious problems for American manufacturers, leading to a decline in the manufacturing industry's contribution to national GDP and a reduction in manufacturing jobs.

In 1973, almost a quarter of laborers in the United States worked in the manufacturing industry. Today, just 8 percent of people have manufacturing jobs. Many people have moved out of the manufacturing industry to work low-wage service jobs, leading to a growth in the proportion of people who are classed as having low incomes.

Politicians in the United States are discussing ways to reverse the decline in the manufacturing industry. However, there are many challenges to overcome. One problem is a shortage of people who have the right skills to take on careers in manufacturing. The manufacturing industry needs qualified engineers, but very few Americans are taking engineering courses in college. Over the last decade, there has been a strong growth in the number of foreign engineering students, but many of them return home after gaining their qualifications, leaving the United States starved of engineering skills. Reversing the decline in the manufacturing industry must involve encouraging more young people to study the right subjects for a career in manufacturing.

Some simple changes in the tax system could also help to reverse the decline. Allowing manufacturing companies to pay taxes on a cash basis, rather than on the basis of accrual, would encourage companies to grow and take on more employees. Tax cuts would also provide an obvious incentive for manufacturers to expand their businesses.

Some politicians want to use protectionist policies to support the American manufacturing industry. Although placing high duties on imported goods might encourages people in the United States to buy American, it could have severe negative consequences. For example, countries with whom the U.S. currently trades freely might decide to apply import tariffs to American goods, leading to huge losses for American companies that sell their goods abroad. Many experts agree that protectionism is not the answer.

Technology could be another answer to the crisis facing the American manufacturing industry. By investing in technologies such as 3-D printing and robotics, manufacturers could increase their productivity. Meanwhile, energy-efficient technologies could help manufacturers cut production costs by running their factories more efficiently.

Although the manufacturing industry in the United States has experienced a significant period of decline, there is hope that this disappointing trend could reverse. By supporting skills training and technology, as well as creating a tax situation that works efficiently for manufacturers, the U.S. government can help the manufacturing industry to grow and thrive.

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