In my house, we take a deep breath before calling or answering a call from Detroit. My spouse’s family live in the suburbs of Detroit, and all work in the auto-industry. The headlines we read every day are one thing, but the real day-to-day impact of the news reported literally hits home.
This morning, America is getting a call from Detroit. We should all take a deep breath, and think about what this means.
One of the questions I’ve been asking for the past few months, every time I talk to someone about the auto industry bailout, and what now seems to be the all-but-certain outcome: What does America look like — what happens to the economy, workers, and the day-to-day lives of Americans —; without a strong industrial sector?
I’ve never been able to come up with an answer, but I never asked Robert Reich directly. Still, his answer is a sobering one.
What’s the Administration’s specific aim in bailing out GM? I’ll give you my theory later.
For now, though, some background. First and most broadly, it doesn’t make sense for America to try to maintain or enlarge manufacturing as a portion of the economy. Even if the U.S. were to seal its borders and bar any manufactured goods from coming in from abroad–something I don’t recommend–we’d still be losing manufacturing jobs. That’s mainly because of technology.
…We should stop pining after the days when millions of Americans stood along assembly lines and continuously bolted, fit, soldered or clamped what went by. Those days are over. And stop blaming poor nations whose workers get very low wages. Of course their wages are low; these nations are poor. They can become more prosperous only by exporting to rich nations. When America blocks their exports by erecting tariffs and subsidizing our domestic industries, we prevent them from doing better. Helping poorer nations become more prosperous is not only in the interest of humanity but also wise because it lessens global instability.
The next question, obviously, is what to do about filling the void left by what used to be a strong manufacturing sector? If the blue collar jobs of the past — the “good jobs,” with good wages and benefits — helped lift so many into the middle class, how do we increase upward mobility in service-oriented economy, in which many jobs offer neither good wages nor benefits, and don’t necessarily promise upward mobility?
Reich idenfities the same challenge.
The biggest challenge we face over the long term — beyond the current depression — isn’t how to bring manufacturing back. It’s how to improve the earnings of America’s expanding army of low-wage workers who are doing personal service jobs in hotels, hospitals, big-box retail stores, restaurant chains, and all the other businesses that need bodies but not high skills. More on that to come.
He promises more to come, and I eagerly await an answer.
While I’m waiting Reich’s answer, anyone else want to offer one?