The Dems' Misguided Rust Belt Stimulus

The Democrats new "pro-manufacturing" agenda might help the party rally their supporters in the labor movement, but it isn't a good idea for the economy.

The Democratic Party has pinned a lot of its hopes on a “pro-manufacturing” agenda. It’s a bad idea. Promoting manufacturing is an unachievable goal, an unnecessary task, and not likely to be popular. Democrats’ manufacturing agenda has to be seen as little more than a payoff to their ardent supporters in the labor movement.

First, manufacturing, as most people think of it, is declining just about everywhere.  All G-8 members have fewer factory jobs than they did 25 years ago.  So, surprisingly, does China where new private and quasi-private export-driven factories have replaced inefficient state-run plants. The few places that show relatively recent “manufacturing” job gains—Canada and Russia—have continued to shed assembly line jobs but covered those gains with big increases in energy-price-spike-fueled resource extraction jobs.

Second, most of the United States’ manufacturing base (and, indeed, most of the manufacturing base in all large countries) deals with food and consumer products. Over 60 percent of all manufacturing jobs in the United States involve these grocery store items.  These things are reasonably inexpensive to produce, often perishable, very costly to ship long distances, and quite subject to local preferences.  The jobs devoted to producing them will not leave the United States unless some breakthrough results in an enormous reduction in shipping costs. In any case, the U.S. is far more efficient than any other country in producing these things. If preventing “outsourcing” were a good public policy (it’s not), these food and consumer products manufacturing jobs would be among the hardest to outsource in any case.

Third, even if the strategy works, it’s unlikely to win many votes directly. Quite simply, people don’t really want manufacturing jobs. Richard Florida, the sometimes flakey but still brilliant scholar of the “Creative Class” is fond of pointing out that, by every measure, most people would prefer working in a hair salon than a machine shop even  if the machine shop paid more.  Jobs with a lot of similarities to manufacturing work—processing credit card payments, troubleshooting computer systems, running polymerase chain reaction cycles—are good places to move displaced manufacturing workers but will rarely if ever get counted as “industrial” jobs. Thus, Democrats are barking up the wrong tree.

The Democratic Party leadership isn’t stupid; most Democratic leaders know or should know all of the above. The package makes sense only when one considers the main source of warm bodies for the Democratic Party’s get-out-the-vote campaigns: unions.  Although a majority of all unionized workers are now in the public sector, most private sector union workers still work in old-line smokestack manufacturing industries. Saving their jobs and even creating more similar jobs (even if doing so leads to net job loss) could improve the Democratic Party’s fortunes.   Furthermore, the prospect of direct help may help rally union leadership at a time when the more informal Republican grassroots clearly have far more energy than the Democratic Party’s cadres. If the leadership of major private sector unions can be convinced that Democrats will sacrifice the rest of the economy to save their jobs, then perhaps they will encourage their members to help turn out the vote.

Trying to boost manufacturing may help Democrats in November. It could contribute to closing the enthusiasm gap.  But it’s not a good idea for the country.