Reason Writers Around Town: Shikha Dalmia on Obama's Insourcing Follies


Writing in The Daily this morning, Reson Foundation Senior Analyst Shikha Dalmia notes that President Obama's pitch to bring lost manufacturing jobs back "home" in his State of the Union address is wrong both on patriotic and economic grounds. "Tonight, my message to business leaders is simple: Ask yourselves what you can do to bring jobs back to your country, and your country will do everything we can to help you succeed," he thundered.

But there is nothing patriotic, she notes, in selling out the interests of 300 million American consumers by forcing them to buy more expensive "Made in America" goods in order to protect the jobs of a few American workers.

Besides, American manufacturing jobs are disappearing not because of China's low-cost labor but automation.

She notes:

The fact of the matter is that even though manufacturing employment has declined — America has lost roughly 6 million manufacturing jobs since the sector's peak in the 1970s — manufacturing output has been going up. Indeed, total output today is 2½ times its 1972 level in adjusted dollars. In 2010, America produced $1.8 trillion in goods (in 2005 dollars) — about $100 billion more than China, but with only about a tenth as many workers, thanks to automation and technological advances that have vastly increased American productivity. Goods that took 1,000 American workers to produce in 1950 now take 177.

The choice for American companies, then, is not between American workers and Chinese workers, but between American machines and Chinese workers.

Read the whole thing here.