The Changing Face of U.S. Manufacturing

An article by Adam Davidson in the January/February 2012 Atlantic Magazine discussed the changes in U.S. manufacturing during the past few decades of globalization. The author cited China’s opening up of its borders and the signing of NAFTA as the two major events that resulted in fierce competition to U.S. manufacturers from their counterparts in China, Mexico, and other countries.

Davidson explains that innovations in machine manufacturing technology have strongly shaped the assembly process. Older factories had several machines, each performing a single step and operated by a newcomer without much training. Nowadays, several machines are overseen by a single worker who must be skilled in more complicated tasks that may involve operating the machine through a specific computer language, as well as troubleshooting, “on-the-spot quality checks and making appropriate adjustments as needed.”

The author noted that “the combination of skilled labor and complex machines gives American factories a big advantage in manufacturing not only precision products, but also those that are made in small batches.” The same production lines may build a number of different parts. Chinese manufacturers, on the other hand, generally make “long runs of single products.” Even though unskilled labor is cheaper in countries such as China or Mexico, firms need to take into account two major factors in deciding whether to outsource: quality control and relocation costs, including shipping, time, and new machinery. Unskilled workers also face the danger of being replaced by robotic machines if the machine becomes cheaper than the workers it replaces.

The author considers possible policy solutions for the plight of unskilled workers. Economic policy solutions are not likely to solve the root of the issue, since the increasing productivity is beneficial to the overall welfare of the nation. Focusing on improving education opportunities – in order to boost unskilled workers into the ‘skilled’ category – though not without drawbacks, seems to be a promising option.


Posted by: Pokyee Yu

Sources: The Atlantic

Photo Credit: DSC03601 courtesy of flickr user chuckoutrearseats


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