Long-term manufacturing decline hard to reverse
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Long-term manufacturing decline hard to reverse
Jeremy Hobson: Now to the State of the Union address.
Barack Obama: Think about the America within our reach: A country that leads the world in educating its people; an America that attracts a new generation of high-tech manufacturing and high paying jobs.
Well that is exactly what we’re going to talk about now with our regular Wednesday guest, Josh Brown of Fusion Analytics. He’s with us live from New York as always. Good morning, Josh.
Josh Brown: Good morning.
Hobson: So what kind of challenges does the president face in reviving the manufacturing industry in this country?
Brown: You know it really depends on what we’re going to make, but some of the things that are being manufactured these days — for example, iPhones — are just never going to be made here. So I think the challenge is to find new industries that are going to build products that people want, and find a way that Americans can do that cost effectively.
Hobson: So it’s just that those iPhones can be made more cheaply elsewhere?
Brown: Components are being made elsewhere; they get put together elsewhere. It’s just something that we dropped the ball on years ago, and it’s very tough to get back in that game. So we probably won’t even try.
Hobson: Well what do you think the manufacturing jobs can make up in terms of a percentage of our labor force going forward?
Brown: You know, that’s a great question. If you look back at the history of this, it’s not like the recession cost us all these manufacturing jobs. The long-term trend has been down. In 1943, 40 percent of the U.S. labor force was in manufacturing. As of 2009 — just when the recession was starting — we were already down around 9 percent.
So this is something that’s a very long-term, secular shift. And I don’t know that it means we’re completely out of the manufacturing game, but it would be tough to say that we’re ever headed back to that 40 percent number anytime soon.
Hobson: Josh Brown of Fusion Analytics, thanks as always.
Brown: Thank you.
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