The manufacturing sector in the United States has been struggling for many years, with many manufacturing jobs being relocated overseas to countries such as China. In June 2014, President Obama suggested a change that would improve figures for the manufacturing industry, but unions say it won't do anything to increase the number of manufacturing jobs available.
The proposed change, which is expected to take effect in 2017, would reclassify firms that make "factoryless goods" as manufacturers. In practice, this means that businesses, such as Apple, that designs electronic goods in the United States but outsource production to China would be reclassified as domestic manufacturers.
Although this change would increase the number of manufacturing jobs on paper, bumping up the figure by 431,000 in 2007, labor unions argue that it would not improve the situation in practice, and could even make things worse. According to union leaders, the reclassification of goods produced offshore as American goods would undermine the Buy American Act, which forces government agencies to buy American-made goods where possible.
Lori Wallach, director of the Global Trade Watch division of the advocacy group Public Citizen, denounced the proposed changes as "Orwellian." According to Wallach, the reclassification would obscure the real state of manufacturing in the United States, making it easier for politicians to go ahead with trade pacts that could destroy even more American manufacturing jobs.
However, not everyone agrees that the proposal is an attempt to obscure the decline of American manufacturing. Economists from Dartmouth Business School, which published a 2013 study on the potential impact of the proposed changes, argue that the reclassification makes sense in today's high-tech global economy. According to these economists, "factoryless goods" are an important component of the modern manufacturing industry.
Despite the economists' support for the proposed changes, labor unions are pushing ahead with their protest against the proposal. They have gathered more than 26,000 public comments opposing the proposal, which they claim will artificially inflate job statistics in the manufacturing sector.
Manufacturing in the United States has been in steady decline over the past decade, with a few notable exceptions. The state of Michigan, which produces nearly 16.5 percent of the entire nation's manufacturing output, created 88,000 new manufacturing jobs between 2009 and 2013. That is more jobs than any other state managed to create. The second best performance in manufacturing came from Texas, which created 57,000 manufacturing jobs during the same period.
The sectors responsible for the growth in manufacturing in Michigan and Texas are motor vehicle bodies and parts, medical device production, metal machinery and parts, high-tech electronics and semiconductor technologies. The aerospace industry has also been experiencing a resurgence during the last five years, leading to a strong increase in the number of manufacturing jobs in Washington.
Unions warn that the recovery of United States manufacturing could be put at risk by Obama's planned reclassification, which they say would facilitate the creation of trade pacts that put manufacturing jobs at risk. With strong arguments both for and against the proposal, the controversy is likely to continue.
Photo courtesy of Vichaya Kiatying-Angsulee at FreeDigitalPhotos.net
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