Post-Coronavirus: Why Manufacturing Sector Needs to Create More Jobs for Americans

2020 is indeed a year of realities for the United States, not just because of the pandemic. The year has successfully revealed all of the weaknesses of the American economy and the health sector. Due to rising labor costs and the overvaluing of the United States dollar, most of the well-paying manufacturing jobs have been outsourced overseas. Since 2000, America has lost over 5 million manufacturing jobs to China and the Asian Tigers. The result is that a large percentage of the manufacturing needs of the United States is done overseas, a scenario that did not augur well for the nation in the wake of the Coronavirus pandemic.

There were reports and assertions that American manufacturing jobs were not being outsourced, but lost to automation. The thoughts were that robots and fancy machines had replaced American jobs. However, the realities of the pandemic have made Americans realized that the country had become an import focused economy. Rather than being a manufacturing giant it was known for before the turn of the millennium; the nation is now a consumer that relies heavily on other economies for survival. What Coronavirus has made Americans realize is that the decline in the manufacturing sector was caused by foreign competition rather than automation.

In simple terms, the American manufacturing sector is in an irreparable shape. Worst than being touted by politicians, the media, and economists. Interestingly, not many share this opinion until the pandemic shut the doors of the United States and prevented the importation of manufactured goods. The understanding that without Chinese factories, Americans will be unable to buy manufactured goods. This has increased the call by Americans for Made in America goods rather than foreign-produced products.

Americans Want Made In America Goods
When it comes to China and its dominance on the American manufacturing sector, Americans are not at peace. According to a study by the Pew Research Centre, 66% of Americans share a negative view about China. The reason is traced to the job loss to China and the increasing trade deficit to China. The respondents to the study believe that the United States needs to maintain its place as the world leader power both economically and militarily. To achieve this, China has to stop being the manufacturer of America consumed goods. This will also return all of the jobs that have been lost to China due to the dwindling manufacturing activities in the United States.

Long before the pandemic, there has been a call for the revival of the manufacturing sector of the United States. Even though the pandemic has further amplified the yearnings of Americans for “Made in USA” goods. The consumer preference of Americans towards Made In USA goods is why 60% of Americans are ready to pay for 10% more if their products are manufactured anywhere in the United States. The preference for “Made in the USA” goods is not about patriotism or other nationalism sentiments, but the quality associated products manufactured in the United States.

Yearnings for “Made in USA” Should Boost Job Creation.
With importation at it’s lowest during the pandemic, American manufacturers were at their best in terms of providing for local consumption. Currently, the manufacturing sector employs about 12.5 million people; this represents about 8.5% of the total workforce. This is indeed low when compared with the 1980s when the manufacturing industry employed 20 million Americans. Due to the increasing interest of Americans in American goods, this is a pointer for manufacturers to return production back home even if it means there will be an increase in the price of manufactured goods to the end-users. According to the study, Americans are ready to pay more, and that should cover the increasing labor costs and the disruptive tariff regime.

It’s time to return the over 5 million well-paying manufacturing jobs that have been lost in the last two decades. There’s no better time to shift production back to the United States other than a time that consumer preference, taste, and sentiment are tilted towards the manufacturing sector. There’s a surge in the interest in made in America goods, and this should be a sign for manufacturers to heed to the clarion call.

Currently, manufacturers across the United States are increasing production as a response to the pandemic. With this show of interest, there should also be a corresponding policy change to support their business. The government has to ensure that supplies for Covid-19 are being bought from American manufacturers rather than seeking low prices, which favors China.