Manufacturing has been a foundation of the US economy for decades, because it:
- Grows the economy: Dollars demanded in manufacturing generates more new income than dollars demanded in all other American sectors.
- Spurs Innovation: Almost 2/3 of all research and development occurs in manufacturing.
- Provides better employment opportunities: Manufacturing salaries average $54,000, which is higher than the average salary for all other sectors.
Despite these advantages, the US is rapidly losing its ability to manufacture competitively in the global market, because of:
- Recession: Manufacturing has been slower to recover from the latest recession than another sector in the United States. Unfair trade policies and the subsequent trade deficit are to blame. One immediate impact has been on jobs: manufacturing has lost 2.3 million jobs since July 2000.
- Investment Directed Elsewhere: Research and development spending in manufacturing between 2000 and 2002 grew 50 percent less than the pace of the previous decade.
- Rising Operating Costs: Costs related to health care, litigation, and regulation are becoming prohibitively expensive for domestic manufacturing. The result often is moving operations overseas, thereby cutting jobs in this country. Additionally, US manufacturing firms increasingly are selling out to foreign buyers, thereby lowering American wealth both in income and tax revenues.
Source: Securing America's Future: The Case for a Strong Manufacturing Base - A Study by Joel Popkin and Company, Washington, D.C. June 2003 Prepared for the NAM Council of Manufacturing Associations.
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