Optimism for America’s Export Industry

This year’s May/June issue of The American Interest featured an article by Tyler Cowen arguing that we can expect the growth rate of American exports to continue increasing for the next decade. Even though American manufacturing jobs have been hurt by outsourcing, there are three main reasons to believe that the U.S. export industry is undergoing a revitalization – enough to make America “an export powerhouse.”

First is the ongoing revolution in high end technologies driven by American innovation. Advances in computing power and capabilities will make production more efficient. As firms rely more and more on these “smart machines,” wage rates become relatively less important, bringing manufacturing jobs back from China.

Second is the development of natural resources through the discovery of new fossil fuel deposits and new technologies that will “boost domestic production of oil.” The U.S. will be able to supply an increasingly energy-hungry world market with exports of oil and natural gas.

Third is the growing demand by developing countries’ for goods that the U.S. has an advantage in producing, such as machinery, equipment, pharmaceuticals, and entertainment. The growing middle classes of developing nations are accompanied by a shift in demand from primary sector goods to secondary sector goods.

Cowen believes that a boom in the export industry will mean higher wages for skilled laborers and lower pay for the low-skilled. However, the working class will still benefit from more affordable health care and education, and hopefully a more “dependable and stable” salary structure.

 

Posted by: Pokyee Yu

Sources: The American Interest

Photo Credit: Made in…courtesy of flickr user alistairas.

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