For centuries, the U.S. manufacturing industry has served as a vital driver of economic growth. To this day, businesses that manufacture their products in the U.S. directly support and sustain the American economy.
Here are three ways that manufacturing in the U.S. helps the American economy
1. U.S. Manufacturing Creates American Jobs
Manufacturing in the U.S., and buying from companies that do so, creates American jobs. Nearly 13 million American factory workers comprise the manufacturing industry’s largest workforce since the 2008 recession. And manufacturing workers earn more than those in other industries at all wage levels, across gender, race, ethnicity, and many other demographics.
It isn’t just manufacturing jobs that are created, either. Businesses that manufacture in the U.S. create additional jobs including business administration (from management to front desk workers), customer service, factory support workers, and external jobs that use U.S. manufactured goods in other technologies.
2. U.S. Manufacturers Pay American Taxes
While offshoring can potentially help businesses save on taxes, there is an argument to be made for keeping tax liabilities local. Keeping manufacturing in the U.S. means that the business and the people it employs pay taxes to their state and local communities as well as the federal government. This tax revenue helps support the local community and the nation at large in the form of infrastructure, social programs, and other benefits that help sustain and stimulate the U.S. economy.
3. U.S. Manufacturing Drives American Innovation
Manufacturing and innovation are interconnected. Companies that manufacture in the U.S. drive American innovation, which helps businesses improve, sustain themselves, remain competitive, and maintain U.S. economic strength.
The manufacturing industry is more likely to introduce new products and business processes than other industries. Manufacturing accounts for most of the research and development spending in the private industry sector, and manufacturers employ a sizeable percentage of the nation’s engineers. These innovations can help American businesses create more patents, more skilled jobs, and more business improvements to help establish an edge over international competitors.
On the flipside, offshoring manufacturing processes can slow innovation and lead to a loss of research and development capabilities. Engineers in the U.S. are exposed to the real-world problems and capabilities of manufacturing technology – AND if that process is outsourced, they lose that exposure.
In Closing
Manufacturing in the U.S. directly benefits American workers and the economy. American workers are able to obtain competitive jobs that often pay higher wages. Increased tax revenue can drive local and national infrastructure and social programs. Businesses that manufacture in the U.S. have a greater opportunity to innovate, sustaining American competitiveness and future economic growth.
Sources:
https://www.brookings.edu/wp-content/uploads/2016/06/0222_manufacturing_helper_krueger_wial.pdf