The Fate of ‘Made in the USA’

The specter of declining industry has loomed over the USA in recent years. As the imperatives of free trade and globalization send jobs and factories across borders and beyond oceans, the American worker and the American CEO both recognize they’re in a bind. American manufacturing, once the hallmark of the nation’s booming business, now faces a tenuous future. Robert J. Samuelson, writing for the Washington Post, points to a deeper crisis in American industry following the bankruptcy of Delphi Corp., the largest US auto part company. He claims the “entire industry is caught in a cost-price squeeze,” burdened by the “above-average” contracts and pension plans settled with workers’ unions and battered by decreasing automobile prices in a competitive world market. The solution, Samuelson says, still “lies largely in American hands.” But it must involve extensive cost-cutting and layoffs, which may be “devastating to individuals.” Yet the greater threat – one which few in America can come to grips with – is China. The Asian giant’s “combination of low wages, a huge market and an artificially low currency confers staggering competitive advantages,” and, as it continues its modernization, may eat into American industrial sectors that were before somewhat safe. In that scenario, American manufacturing won’t only be devastated, but may be destroyed. – YaleGlobal