For more than 60 years my family had a small paint factory in Long Island City, Queens, in the shadow of the Neon Pepsi-Cola board on the eastern river from Manhattan. That factory and the Pepsi-Cola-Bottel plant have long since disappeared from the hundreds of industrial facilities that once existed in the city.
What some of them has replaced are shiny towers of condominiums, many with seven -digit price tags. Trendy restaurants have replaced blue borders dinners. In a few decades, the industrial basis of New York was extinguished, but today the city has never been so closer or more prosperous, a winner in the process that the economist Joseph Schumpeter called ‘creative destruction’.
President Trump – who persists with his incoherent efforts to increase American production – shows few signs of grabbing this key concept. Just as New York flourished like a post -industrial economy, the United States can also flourish without rebuilding a wholesaler of lost industrial bravery.
I understand that the relaxation of commercial barriers, especially since China was admitted to the World Trade Organization in 2001, contributed to accelerating the disappearance of the production paths. In retrospect, we should have been less inadequate about the loss of an estimated one million production paths to China in the 2000s. We should have done at least more to help displaced people.
But that does not mean that we should try to bring those jobs back. In the heyday of American production, such employees enjoyed much higher wages than those in services. Not anymore. That advantage has been shriveled for decades and has completely disappeared due to some measures.
And production work is often unpleasant. IPhones Maapen iPhones is the definition of Tedium – long hours that repetitive tasks perform, such as the introduction of the same small component time and time again, for payment far below our minimum wage. No wonder that many Americans – especially younger – consider classical factory work as unattractive. Today, There are almost 500,000 non -filled production paths.
The United States remain a world leader in certain areas of precision production, such as planes and medical instruments. All in all, we produce more of everything than Japan, Germany and South Korea combined. And measured by the quantity we produce, our output is alone 5.5 percent below are High 2007.
That is because our production became very efficient, which emphasizes an important tension in the search to improve American industry. Because American wages remain relatively high, improving the competitiveness of American production would require increasingly efficient factories, which means that fewer and fewer jobs produce the same output.
As the head of the car Task Force of President Barack Obama, I saw first -hand the challenges that our automotive sector is confronted in the global market.
For several decades, for example, Mexico has increasingly become capable of producing cars against wages, a fraction of those who are paid in the United States. Even General Motors and Ford Mount now Large numbers of cars there. And the most resilient part of our domestic car industry has been to the south, where foreign companies Mercedes Unpleasant Hyundai have expanded their presence with less expensive, non -union work.
We get enormous benefits from importing goods at much less costs than we can make here. Part of the reason why from 2009, after the financial crisis, we had such low inflation, until the pandemic was struck in 2020, was the increase in imports from lower countries.
In that context, what is the use of 37 percent rates for input from Bangladesh, purchases that largely consist of clothing and footwear? The minimum wage for clothing workers in Bangladesh is around $ 113 per month. It is difficult to imagine that American employees want to sew Nike sneakers together against such very modest wages.
Firstly, Mr Trump should undo the rates on aluminum and steel, a special counterproductive set of levies that he simply doubled inexplicably, to 50 percent. Since steel and aluminum are used to produce finished goods made here, ranging from cars to canned goods, simply raise the costs of those articles and make less competitive versus that abroad. In fact, a study of the steel rates that Mr Trump imposed in 2018 found That they had saved 1,000 jobs in steels a year later and cost 75,000 others.
He must also stop attacking, and instead the two-part chips and science act, which provides loans and subsidies to chip-making companies. We have legitimate economic security reasons that argue for creating or protecting certain domestic capacities. Half -conductors are perhaps the best example of this, given that 92 percent of the world’s most advanced chips are currently being made in Taiwan. Without those chips, our economy would be considerably affected, almost as if our oil supply would be cut off.
And when countries enter into considerably demonstrable unfair commercial practices, a form of retaliation is justified. But not a rate of 50 percent on Lesotho, a poor African nation is hardly able to be an important buyer of American goods.
If there is a concern about production about our payment balance (the relationship between how much we import and how much we export), we must acknowledge that services can form an export. Mr Trump’s attacks on elite universities do not recognize that when foreign students come to America to participate (24 percent at Yale), the money they spend on tuition fees and other costs, counts as an export. Ditto when a resident of another country comes here to be treated in one of our elite hospitals. And the same for foreign tourists.
Here is another historical analogy. From the end of the 19th century, Americans began to leave farms for cities because of a combination of raised mechanization on farms, which lowered the number of jobs and the attractiveness of jobs in factories built in cities. Trying to drag them back to the farm would have been just as counterproductive as trying to restore our textile or furniture companies.
We have led the industrial revolution and we can again be leaders in new sectors. With our substantial benefit in technology in general, and in artificial intelligence in particular, we are well positioned to stay the most dynamic economy in the world. Our challenge is to ensure that Americans are trained, trained and positioned to take advantage of the jobs of our future.
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