5 myths about man­u­fac­tur­ing jobs.

The Washington Post Sunday - - OUTLOOK - BY RO KHANNA rokhanna1@gmail.com Ro Khanna, a deputy as­sis­tant sec­re­tary of com­merce from 2009 to 2011, is the au­thor of “En­tre­pre­neur­ial Na­tion: Why Man­u­fac­tur­ing Is Still Key to Amer­ica’s Fu­ture.” He has cre­ated an ex­ploratory com­mit­tee for a pos­si­ble

In his State of the Union ad­dress Tues­day, Pres­i­dent Obama said that cre­at­ing man­u­fac­tur­ing jobs is the na­tion’s “first pri­or­ity.” To some, this may sound like a throw­back to a long-lost era; af­ter all, such jobs are be­ing elim­i­nated, out­sourced or au­to­mated, right? Not really. The United States re­mains a world leader in man­u­fac­tur­ing, and that sec­tor re­mains es­sen­tial to our eco­nomic and tech­no­log­i­cal fu­ture. Here are the five big­gest mis­con­cep­tions about U.S. man­u­fac­tur­ing — and why the sec­tor still mat­ters.

1 A man­u­fac­tur­ing job is no longer a ticket to the mid­dle class.

There is no doubt that Amer­ica’s man­u­fac­tur­ing base has de­clined, peak­ing at 19.6 mil­lion jobs in 1979 and now at just over 11 mil­lion jobs. De­spite this eco­nomic tran­si­tion, how­ever, U.S. man­u­fac­tur­ing jobs are still worth hav­ing. On av­er­age, full­time man­u­fac­tur­ing work pays 20 per­cent more than full-time ser­vice-sec­tor jobs. In my re­cent trav­els across the coun­try, I met elec­tronic tech­ni­cians with only a high school di­ploma who had risen through the ranks of man­u­fac­tur­ing com­pa­nies to earn more than $100,000 a year. High school grads in re­tail or ser­vice-sec­tor jobs rarely reach six fig­ures.

Of course, man­u­fac­tur­ing alone can­not solve our un­em­ploy­ment prob­lem. For the fore­see­able fu­ture, the lion’s share of Amer­ica’s job growth will be in the ser­vice sec­tor. By 2014, em­ploy­ment in ser­vices is ex­pected to reach 129 mil­lion jobs, with ed­u­ca­tion and health care grow­ing most quickly. Still, there are lu­cra­tive ca­reers avail­able in man­u­fac­tur­ing. And Obama’s State of the Union pro­posal to cre­ate man­u­fac­tur­ing hubs across the coun­try — “to turn re­gions left be­hind by glob­al­iza­tion into global cen­ters of high-tech jobs” — will gen­er­ate op­por­tu­ni­ties for young Amer­i­cans with an ap­ti­tude for mak­ing things.

2 We can out­source man­u­fac­tur­ing as long as prod­uct de­sign stays here.

Andy Grove, the former chief ex­ec­u­tive of In­tel, has fa­mously ar­gued that the best in­no­va­tion takes place when de­sign teams are in­te­grated with pro­duc­tion teams. Prod­uct de­sign­ers can get feed­back about the prac­ti­cal con­straints in­volved in man­u­fac­tur­ing and can fine-tune their de­signs ac­cord­ingly.

Ap­ple has said that it is in­vest­ing $100 mil­lion in new U.S. plants — a move hailed as bring­ing man­u­fac­tur­ing back to our shores. How­ever, Ap­ple has al­ways done most of its pro­to­type man­u­fac­tur­ing in the United States. The com­pany may mass-pro­duce iPhones in China, but it has main­tained U.S. fac­to­ries as lab­o­ra­to­ries to per­fect its prod­ucts be­fore launch. Now, ris­ing wages in China and trans­porta­tion costs have en­cour­aged Ap­ple to man­u­fac­ture some of its Mac lines here.

It is naive to think we can keep de­sign in Amer­ica with­out re­tain­ing some man­u­fac­tur­ing ca­pac­ity. Har­vard Busi­ness School pro­fes­sors Willy Shih and Gary Pisano have shown that the off­shoring of semi­con­duc­tor man­u­fac­tur­ing that shifted sil­i­con pro­cess­ing to Asia, for ex­am­ple, gave com­pa­nies there an ad­van­tage in de­sign­ing so­lar pan­els and en­ergy-ef­fi­cient light­ing.

3 U.S. man­u­fac­tur­ing can’t com­pete with China.

com­pared with nearly 40 per­cent of the Chi­nese econ­omy.

What keeps us in the race is our pro­duc­tiv­ity ad­van­tage. U.S. man­u­fac­tur­ing work­ers are al­most six times as pro­duc­tive as Chi­nese work­ers and 11/ times as pro­duc­tive as those in Ja­pan and Ger­many.

The best Amer­i­can man­u­fac­tur­ers cus­tom­ize prod­ucts to meet cus­tomer needs, re­duce the time re­quired to make them and con­stantly im­prove their de­sign. Vi­ta­mix in Cleve­land, for in­stance, makes spe­cial­ized blenders that are more ex­pen­sive than those pro­duced in Asia — but Star­bucks buys them be­cause they are quiet and leave few lin­ger­ing ice chips in Frap­puc­ci­nos. Over the past decade, the growth of Chi­nese man­u­fac­tur­ing has ex­ceeded Amer­ica’s, so for the first time, China has taken the lead in global man­u­fac­tur­ing. Yet, for all the hype about the BRIC economies — Brazil, Rus­sia, In­dia and China — the United States re­mains neck-and-neck with China in man­u­fac­tur­ing out­put, and we still far out­strip such tra­di­tional pow­er­houses as Ja­pan and Ger­many. China and the United States each pro­duce about one-fifth of the world’s man­u­fac­tur­ing, yet we do so with only about 10 per­cent of our econ­omy de­voted to that sec­tor,

4 Man­u­fac­tur­ing jobs are repet­i­tive and low-skilled.

If you think of man­u­fac­tur­ing as a te­dious job with no in­tel­lec­tual stim­u­la­tion, you haven’t vis­ited a U.S. fac­tory floor lately. Whether mak­ing steel bars or suits for fire­fight­ers, many of to­day’s man­u­fac­tur­ing jobs re­quire the abil­ity to op­er­ate com­plex machines, math skills and an un­der­stand­ing of how to max­i­mize ef­fi­ciency.

No doubt, ev­ery job has repet­i­tive as­pects. As a lawyer, I can as­sure you that a lot of doc­u­ment draft­ing is repet­i­tive, in­volv­ing cut­ting and past­ing from tem­plates. But the best lawyers bring a unique per­spec­tive to the process and an­tic­i­pate clients’ prob­lems. Sim­i­larly, the best man­u­fac­tur­ing work­ers are not just do­ing repet­i­tive tasks; they are think­ing about how to im­prove a prod­uct’s de­sign or pro­duc­tion.

5 Government is ter­ri­ble at sup­port­ing man­u­fac­tur­ing.

Amer­ica has long had a bi­par­ti­san con­sen­sus fa­vor­ing government sup­port for pri­vate man­u­fac­tur­ers. In 1791, Alexan­der Hamil­ton ar­gued that the na­tion should pro­vide in­cen­tives and as­sis­tance to man­u­fac­tur­ers to com­pete in the world econ­omy. Even Thomas Jef­fer­son came around to the view that government has a stake in build­ing domestic man­u­fac­tur­ing.

Th­ese prin­ci­ples in­flu­enced Her­bert Hoover, who be­fore he was pres­i­dent was re­garded as a great com­merce sec­re­tary and pro­vided fi­nan­cial sup­port for the avi­a­tion in­dus­try. Later, Pres­i­dent Ron­ald Rea­gan sup­ported Se­mat­ech to help our semi­con­duc­tor in­dus­try.

Of course, Amer­ica’s freeen­ter­prise sys­tem is what en­ables our man­u­fac­tur­ers to be the most in­no­va­tive. No one is sug­gest­ing that the government pick win­ners or losers. Some bets on new com­pa­nies, such as Solyn­dra, are bound to fail.

But such fail­ures should not de­ter the government from in­vest­ing in DARPA, a strate­gic agency at the De­fense De­part­ment, or ARPA-E, a strate­gic agency at the En­ergy De­part­ment, which can pro­pel in­no­va­tion, new tech­nolo­gies and new in­dus­tries. We also must help keep man­u­fac­tur­ers at home through tax in­cen­tives, at­tract im­mi­grants and bet­ter pre­pare a skilled work­force. And we must con­tinue the col­lab­o­ra­tion be­tween government and busi­ness that helped make Amer­ica an eco­nomic su­per­power.

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