Background and Joe’s view of our manufacturing problems:
The U.S. imports goods amounting to $3.6 trillion per year but we only export $2.5 trillion per year. Since the pandemic, we have learned how devastating such a situation can be. The fact that we import too many products upon which we rely, rather than manufacturing them here at home, is a big factor in the supply chain issues we continue to experience.
Another problem with this trade deficit is that every $1 spent manufacturing here at home yields $2.68 in economic activity for the U.S. When you utilize these figures and consider the jobs that would otherwise be performed by U.S. citizens if more was manufactured at home, the lost opportunity symbolized by this trade deficit is devastating.
Joe’s company manufactures 95% of the product he needs to serve his customers, which means his company is always ready, willing, and able to meet demand. Although the other 5% is manufactured by trusted partners with whom Joe has long-term relationships; the point is that a business, just like a country, must be prepared to deliver to meet the need. The fact that our country has supply chain issues right now is indicative of the fact that we are not prepared to meet our own needs here at home.
President Trump had China on the defensive with some of his aggressive policies. Unfortunately, they are now sticking it to our country by raising prices on the goods they ship here. Why has this changed? President Trump had the right policy but in the wrong order—meaning that he did not expand our manufacturing base to account for China’s possible reaction to his policies. As long as Trump was in office, China had a healthy fear of how he may react to any move they may make to raise prices; however, they have no such fear of Biden and they have been aggressively recovering tariffs paid during the Trump administration.
According to the National Association of Manufacturers (NAM), the majority of manufacturers in the U.S. are small businesses with less than 500 employees. Despite this, “the cost of federal regulations falls disproportionately on manufacturers, particularly those that are smaller. Manufacturers pay $19,564 per employee on average to comply with federal regulations, or nearly double the $9,991 per employee costs borne by all firms as a whole. In addition, small manufacturers with fewer than 50 employees spend 2.5 times the amount of large manufacturers. Environmental regulations account for 90% of the difference in compliance costs between manufacturers and the average firm.”
As of May 2022, there were over 809,000 job openings in manufacturing in the U.S. According to NAM, this shortage is in an industry where the average worker earned $92,832 in 2020 and where 95% of those employed in this field were eligible for health insurance through their employer.
Joe’s Solutions:
We now have supply chain issues and cost problems in energy and many other areas because we don’t produce enough of the products we need here at home. We should begin by prioritizing food, medicines, and energy. We should then review additional products, product by product, and arrange them in order from critical needs to desire for convenience. We should then follow that up with a plan to become self-sufficient by producing the things for which we have a critical need here at home in the U.S.A.
We need to get tough with China, but we still depend on them for far too many goods. We should develop a targeted plan for moving the manufacturing processes of many of these goods back to the U.S. After we have made significant progress on this front, that would be the time to re-visit the tough policies. By addressing issues in this order, we take away China’s ability to hold us hostage, even during times of a weak administration such as the one we now have.
If we are to grow business here at home, we must also address the causes of the lawsuit crazy society in which we live, particularly in the area of product liability. While we should all agree that a person who is injured when properly using a product that is flawed in design should have a right to sue for damages, we have all seen examples of situations where people filed a lawsuit for unreasonable, some would even say crazy, reasons. They did this looking for an easy payday because it is so easy to sue in the U.S. These frivolous lawsuits have a real impact on our economy and a real cost that is ultimately passed on to consumers. We must enact common sense litigation reform that maintains the right for truly injured parties to sue while limiting the ability for people to file frivolous lawsuits that drive up prices.
We must look for innovative solutions to fill the job needs in manufacturing. When the goal is to make more items here at home and we already have a serious shortage of manufacturing workers, we must step up training efforts and promote manufacturing to young people as a noble career, a career that contributes to the security of our country.
We must also view immigration as an economic issue. However, before expanding on this point, it should be understood that our first priority must be to secure our border. You can’t have a secure country without having a secure border. Finishing the wall and putting other measures in place to secure the border should be a top priority. Also, we should seek to find real criminals who have committed crimes in this country or their country of origin. Those who are in this country without proper documentation should immediately deported.
That said, we have many undocumented people in this country who have been here for years without causing any problems. They keep their heads down and work hard while raising their families here - often doing jobs Americans don’t want to do. They don’t get in trouble, they contribute to our economy, and they pay into our tax system knowing that they will likely never benefit from what they pay in. They also live in constant fear of being discovered and deported. This situation is insane! We should design a path for these people to be allowed to work in this country without fear of deportation. This is not a proposal for citizenship, but something short of this- perhaps a green card that would allow undocumented people who (but for the fact that they are undocumented) would be considered assets to our country and be allowed to remain here, work here, and raise their families here without fear of being deported.
Besides people who are already here performing jobs that Americans generally don’t want to do, there are many other jobs for which foreign workers are needed. We should do a deep dive into our workforce and better define all of the skillsets for which we have a need for workers. We should then design visa programs to allow people from foreign countries who can fill these needs to come and work here once they have been properly vetted. This is just common sense. When you have a need, you seek to fill it but do so in a way that does not negatively impact your national security. The way we currently handle many things, including an unsecure border that allows a continuous flow of illegal drugs and undocumented people into our country who are not properly vetted, is a threat to our national security. Conversely, legal programs where we put people who want to work in this country through proper background checks, strengthens our national security.
