When Ross Perot coined that phrase in 1992, we were just getting started with NAFTA (North American Free Trade Agreement), and the presidential candidates (Clinton and Bush Sr.) had to contend with the remarkably entertaining and popular Mr. Perot. The “giant sucking sound” comment was his way of dramatizing the huge numbers of jobs that were going to be sucked into Mexico because of the new free trade agreement.
Today, the media are reporting that the Chinese economy is wiping out millions of American factory jobs with its 50-cent-an-hour workers and its far cheaper exports to our shores. Reports indicate 2 million or more American factory jobs lost in the past seven years.
What’s really going on? The American people must be more confused than ever about manufacturing and its future in this country and the world.
For example, millions of industrial jobs in the continental US are now with Japanese, German and other countries’ companies. Consider the machine tool industry or automotive supplier and production industries. Nearly all the new machine tool plants in the US are Japanese. Chrysler is now German. Mercedes is the newest major employer in Alabama. Meanwhile, much of the profitability of larger American companies (and employment) comes from plants in other countries. In all of their plants, however, the trend is the same — more and more output per worker, so there are fewer and fewer jobs.
The point is that manufacturing has been and is ever more an international advanced technology enterprise. Some of the giant sucking sounds we worry about may be normal sounds made by modern industry as it automates. They are heard all over the world. Indeed the sound of jobs disappearing has disturbed the People’s Republic itself as it modernizes its own industries; jobs there, just as here, are lost to modern technology.
Researchers at Alliance Capital Management say the 20 largest economies lost a total of 22 million manufacturing jobs from 1995 to 2002. Yet, surprisingly, the sucking sounds were proportionally higher in Japan, Brazil and, yes, the People’s Republic of China. Their workforces in industry shrank from 98 million to 83 million in that period — a 15 percent decline. Ours has been an 11 percent drop.
With this decline in jobs, however, there has been a terrific increase in output: 30 percent over the period. How so? You know the answer — automation and its remarkable increase in productivity and quality. Manufacturing is being transformed into the 21st Century version of the industrial revolution; increasingly high-tech, increasingly automated and increasingly void of direct labor.
There are questions here that should be dealt with by a Secretary of Manufacturing. Numerous folks have praised the President for creating an undersecretary for manufacturing in the Commerce Department, and I guess they think we should feel happy with this half a loaf. I’m not happy with that. I hope you’re not.
America was, until very recently, the leading exporter in the world. We had that title for generations. Believe it or not, it now belongs to — no, not China or Japan, but Germany. That’s a sucking sound most Americans don’t hear at all — until they start their Mercedes or BMWs or VWs in the morning. We remain the leading manufacturing economy in the world and the largest overall. Will we remain so? Can we regain our position as leading exporter?
A Secretary of Manufacturing is needed now more than ever — if only to keep us educated as a people about the terrific transformations now occurring within and around the most important part of the economy. Let’s keep pushing for this new cabinet level job — for the sake of all the industrial jobs we still have and those to come with tomorrow’s technology and trade.
George Weimer, contributing editor
