The Dems' myth of manufacturing decline

Washington Post:

Until the late 1950s, the low-slung brick building in the center of this minuscule town was home to the Kayser-Roth hosiery mill. Some 400 workers tended to clattering looms, churning out pantyhose.

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The hosiery mill is gone now, along with much of the Carolina textile industry -- a casualty of the global reordering that has concentrated production in Asia and Latin America. But the old brick building is still here and still making products -- albeit modern varieties that could scarcely have been imagined a half-century ago: Today, the site is occupied by a biotechnology company, Biolex Therapeutics.

Inside, 90 workers harness expensive laboratory equipment and a plant called duckweed, a bane to local ponds, to develop a drug for a serious liver ailment. Even the lowest-paid lab technician takes home far more than the seamstresses earned. If the start-up succeeds, its product will be substantially more lucrative than pantyhose.

As lawmakers pursue legislation aimed at softening the blow from factory closures, and as the downside of trade emerges as a talking point in the 2008 presidential campaign, it might seem that manufacturing is a dying part of the U.S. economy. But the retooling of this old brick building on Credle Street underscores how, despite its oft-pronounced demise, American manufacturing is in many regards stronger than ever.

The United States makes more manufactured goods today than at any time in history, as measured by the dollar value of production adjusted for inflation -- three times as much as in the mid-1950s, the supposed heyday of American industry. Between 1977 and 2005, the value of American manufacturing swelled from $1.3 trillion to an all-time record $4.5 trillion, according to the Bureau of Economic Analysis.

With less than 5 percent of the world's population, the United States is responsible for almost one-fourth of global manufacturing, a share that has changed little in decades. The United States is the largest manufacturing economy by far. Japan, the only serious rival for that title, has been losing ground. China has been growing but represents only about one-tenth of world manufacturing.

But if the big picture is brighter than many realize, American manufacturing is nevertheless undergoing fundamental change that is exerting enormous pressure on workers.

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Exports are rising faster than imports. However, manufacturers are becoming more efficient meaning fewer workers are needed to produce more goods. The new jobs favor employees with more education and skills.

The manufacturers who upgraded the quality of their products and went to specialized goods have done best. One textile company is exporting goods to China to be used in outdoor products that will be shipped back to the US when assembled.

Democrats have having a tough time adapting to this new reality and the new manufacturing jobs are going to better educated smarter workers which probably means they are less likely to be Democrats. What should be clear is that there has not been a decline in manufacturing in the US.

Elaine Chao points out that the US economy is increasingly knowledge based. In the long term, I think that is a problem for Democrats. They may have their professors trying to mold the minds full of mush while they are in college, but once they get in the real world, they turn into Republicans who understand the power of markets and freedom.