Americans Want Factory Jobs, But Shouldn’t We Focus on Reforming the Service Industry?

During the first half of the 20th century, farming captivated politicians as American society transformed from a rural agrarian economy to one based on manufacturing with abundant opportunities throughout rapidly growing urban areas.

During this election cycle, the narrative sounds similar: Today’s politicians are yearning for a renewal in manufacturing. President Barack Obama often touts the gains made in factory employment during his administration, insisting he presided over the largest growth in the manufacturing sector since the 1990s. And that's true if you discount the collapse of manufacturers early in his first term as the economy suffered from the 2008-2009 global financial meltdown.

Presidential hopefuls Donald Trump and Bernie Sanders repeated the mantra that the middle class is screwed, and only manufacturing can save workers from a lifetime of poverty. Hillary Clinton says she has a plan that can revive American manufacturing; a $10 billion “investment” in an $18 trillion economy, however, is akin to saving pocket change to make a downpayment on a home.

All of these promises, hand-wringing and belly-aching mask a couple of stubborn truths. First, manufacturing is already the largest sector in the U.S. economy, with the nation’s output near an all-time high and arguably the envy of much of the world. The problem, however, is that American factories are churning out far more sophisticated products, and doing so with far fewer workers. And all the tax cuts, tax credits, tariffs and private-sector “collaboration” will not bring those jobs back.

Binyamin Appelbaum, an economics reporter for the New York Times, points to the example of Uber testing autonomous cars in Pittsburgh to replace the city’s taxi and bus fleet as symbolic of the times in which we live. Much of the U.S. economy is undergoing a shift typical in the world’s former steel capitals: Higher-paying technology workers are creating more wealth, purchasing power and economic growth at the expense of jobs such as taxi and bus drivers. Furthermore, a 2014 Brookings Institute report argues that while the U.S. manufacturing sector is still going strong on paper, the vast majority of that growth is occurring within the computers and electronics industry.

The result is that the double-whammy of automation and the outsourcing of lower-value product manufacturing overseas will never reverse course. Let’s say Americans have a collective rethink, starting with their willingness to pay $100 for a shirt made in the U.S. instead of owning 30 shirts that cost $10 but are made in China or Bangladesh. Then, perhaps, we can dream of  manufacturing low-value items such as clothing, housewares and small appliances in the U.S. once again. But the dearth of parking spaces at stores such as Walmart, Target and Kohl’s present this scenario as more of a pipe dream than reality.

We live in a country dominated by the service sector, whether they are food service workers at fast food and fast casual restaurants; retail employees who struggle with irregular schedules and low wages; or, as Appelbaum discusses, the over 820,000 home health aides who provided critical care to an aging population.

The numbers speak for themselves: Manufacturing, as our grandparents knew it, is not coming back. Taxing American companies for not making goods in the U.S. will only punish those firms in the marketplace, while launching a recession that will make it even more difficult for employees who are already barely scraping by in the U.S. service sector.

So, instead of insisting on the revitalization of American manufacturing -- a process that would take years even with the most generous financial incentives, in addition to the building of literally and figuratively the highest of walls on the country’s borders and seaports -- why not focus on the real problem?

We must reform the system under which service workers toil hard while making little headway.

1099 employees (independent contractors) pay double Medicare and Social Security taxes while they are on the hook for their own health care and have zero benefits. Fast food workers have asked for a higher wage so they can get by. Child care and domestic workers manage others’ households and take care of wealthy children at the expense of their own families. Paramedics make a hideously low salary when you consider the important role they play in a bloated and overpriced health care system.

Improved worker protections would mean that we would probably never see a dollar menu at a fast food joint again. The cost of having someone clean our homes or watch our kids would grow if their “employers” had to contribute to their health care and Social Security costs, with no excuses and no exceptions.

The solutions for making the service industry a more equitable sector are not easy, and would need buy-in from most in society. But addressing the needs of service workers now, instead of rallying people around the flag for a reality that will never happen, would be far more beneficial for the millions of Americans who feel as if they have no other option but to work low-paying jobs with little current or future financial security.

Image credit: StudioTempura/Flickr