Observers say the US needs a paradigm shift in its economic direction. This involves a re-strengthened manufacturing base. A return to what once worked best – what a radical thought!
Appropriately, during the last Labor Day weekend, we were provided harsh messages about the US job situation. The strongest didn’t come from our president or his large field of challengers (these people should be engaged in more urgent activities than premature campaigning).
Rather, the direst came from Washington Post columnist Harold Meyerson and Gary Ater, a former marketing executive for high-tech companies who now writes about national and world business and political affairs. They reminded us that the so-called “post-industrial America” didn’t turn out quite as envisioned. There’s not going to be a new “golden age” of America unless things drastically change – and while they’re not confident it will happen, they remain hopeful.
Both Meyerson and Ater take us back 40 years ago, when sociologist Daniel Bell envisioned a U.S. post-industrial landscape. In his influential book, “The Coming of Post-Industrial Society” (1973), Bell predicted a future economy/society of service jobs, rising consumption levels, compensatory entitlements and tax wars, as Ater reminds.
A post-industrial economy, or society, refers to a new turn in an industrialized nation, where manufacturing decreases in importance while services, information and research increases. The industrial element (i.e., the manufacturing) would be sent to less developed nations, where production could be accomplished at lower costs. We were all supposed to love this new “golden age.” But things didn’t quite work out that way.
As Meyerson puts it, “Of all the lies that the American people have been told in the past four decades, the biggest one may be this: We’ll all come out ahead in the shift from an industrial to post-industry society.”
Well, “lie” may be a harsh word. Perhaps “lack of prescience” would be a better way to put it. Bell defined well how a post-industrial society/economy should operate in theory. And it proved attractive.
But reality – that’s a different matter.
Meyerson describes the real-world US economy that emerged from the post-industrial shift. The “offshoring” of millions of factory jobs was counterbalanced by low-paying service and retail sector jobs. Meanwhile, consumers were encouraged to keep consuming, despite the fact that their incomes not only stagnated but decreased.
Meyerson further describes the post-industrial landscape: The US has lost jobs that once created a “broadly shared prosperity.” Ater underscores with strong phrases: abandoned Americans and tens of thousands of factories that have left the US for lower-cost labor nations. “These will never come back,” he emphasizes.
Only now, Meyerson says, have we begun to understand the toll on American workers, particularly men. Referencing a study published by the Hamilton Project (and published in the Milken Institute Review), he points out that the median earnings of men ages 25 to 64 declined 28 percent between 1969 and 2009. Also interesting, within that age group, the earnings of male college graduates declined along with those who only completed high school (12 and 47 percent, respectively).
If any jobs were created, they “generated neither prosperity nor security,” he says.
So, where’s that “broadly shared prosperity”?
New jobs, it seems, are only available at places like the local Wal-Mart, where the highly educated out-of-work can serve as a customer greeters.
Welcome to the new “American Dream.”
Meyerson suggests that we missed a chance when, 30 years ago, proponents of American manufacturing indicated that the United States embrace a “domestic content standard” (a concept that relates to the goods that US consumers purchased – and, in turn, would promote American manufacturing). But as both Meyerson and Ater reveal, this concept was widely denounced by economists and editorial writers. Facing such strong opposition, this reasonable approach died in the natal intensive care unit.
Dissatisfaction with the new economy isn’t just a politically partisan issue. Meyerson points out that recognition of the need for a new paradigm shift in economic vision goes across the board (he names such disparate thinkers as the centrist Democratic organizations—e.g., Progressive Policy Institute and Third Way—the Hoover Institute economists, and corporate chief executive officers.)
But there’s redemption around the corner, if we only don’t be shy and choose to flirt with this pretty flamingo. As Ater relates, “There is beginning to be some realism that we not only need ‘jobs’ in America. This nation needs to once again focus on bringing back a manufacturing economy.”
Indeed, what can be said of a nation that has lost more than 50,000 factories in the past 20 years – factories that employed 500 or more employees, according to Ater’s extensive research.
Indeed, as Meyerson observes, the post-industrial society/economy concept, as applied in the United States, has been a “bust” – a loser’s game. It is starting to be understood, says Ater, that if a nation doesn’t produce things that people want and need, a nation cannot survive.
Hard to believe that we’re talking about America in such terms, but it’s a harsh fact. “The reality,” says Ater, “is that ‘post industrial America’ has turned out to be a total disaster.”
Revitalized manufacturing appears to be the key to a revitalized economy.
The time for a new industrial America is at hand. Meyerson advocates that we move beyond post-industrial America and into “neo-industrial” America. Sure, there’s an inherent paradox: We’d take two steps forward by taking at least one step back.
Ian Fletcher (author of “Free Trade Doesn’t Work: What Should Replace It and Why”) succinctly explains why this makes sense: “Manufacturing is essential to America’s economic recovery.”
But Fletcher—an adjunct fellow at the San Francisco office of the US Business and Industry Council—provides a warning: “Unfortunately, the longer we dally about getting back to real industries as the basis of real wealth, the more our industries get hollowed out, so the harder it gets. There is probably still enough time to turn it around, but not much.”
Ater underscores his point: “We don’t have much time to waste.”
Dan Harvey is editor for Positive Publications’ periodicals. He also frequently contributes articles to both Industry Today and Food & Drink Quarterly. A winner of six journalism awards, he has contributed to medical, business and consumer publications for 30 years.