changes in U.S. manufacturing over the last half century

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1 Management Student’s name Institution affiliation Professor’s name Course name Date

2 Management Part One Recently, the United States has seen a drastic decline in manufacturing jobs. Several factors have fanned this. This includes technological advances, automation outsourcing, and globalization. For instance, technological advancements have made manufacturers produce more with less labor input. This has led to a declining rate of job loss due to replacing human labor with speech. Moreover, automation has also replaced a significant amount of manual labor, resulting in fewer jobs. Manufacturers have increasingly been outsourcing labor to countries with lower wages, resulting in fewer U.S. jobs. Lastly, globalization has enabled manufacturers to access a global market, leading to competition that has driven down wages and put further downward pressure on U.S. jobs. The result of these changes has been that the U.S. has lost millions of manufacturing jobs. In the last forty years alone, the U.S. has seen a decline of more than six million manufacturing jobs. (How many manufacturing jobs can the U.S. realistically maintain? 2012,) This decline has been exacerbated by the 2007-2009 recession, which saw U.S. manufacturing employment hit its lowest level since 1941. Additionally, many jobs created in the manufacturing sector are in lower-wage countries such as Mexico and China, resulting in further job losses in the U.S. Compared to China, Mexico has become an increasingly attractive option for U.S. manufacturers due to its lower labor costs and proximity to the U.S. Mexico also has lower labor laws, which have enabled manufacturers to access a cheaper labor pool (Mexico vs. China manufacturing comparison breakdown, 2020). This has resulted in a shift in manufacturing jobs away from the U.S. and towards Mexico. Generally, the U.S. has seen a dramatic decline in manufacturing jobs over the last half century due to technological advances, automation,

3 outsourcing, and globalization. This has resulted in the U.S. losing millions of manufacturing jobs, largely replaced by jobs in lower-wage countries like Mexico and China (Mexico vs. China manufacturing comparison breakdown, 2020). Part Two The loss of jobs had several impacts on the economies of countries like China and Mexico. This decline resulted in the loss of jobs for these individuals. At long last, it also led to recession. This loss cut largely across many employees working in the U.S. Approximately two million people were affected by this recession and the loss of manufacturing jobs. Additionally, this affected the working people in terms of hours. They were reduced by two hours every workweek. The many companies affected by this economic hit included manufacturers of durable goods. Employment in this sector declined greatly. This is because this industry was the greatest stakeholder in total manufacturing. Therefore, a shaking in this sector had to have the greatest felt effect. Moreover, the areas affected in this sector included transportation, fabricated metal products, machinery, wood products, and furniture (Barker, 2011). It is important to note that these products are largely consumed in countries like China and Mexico. However, the unemployment rate has continued to rise in these economies due to the decline of the U.S. economy. This has been because of cross-regional migration closure in the countries. According to Hernadez (2018), a country like China needs more exposure from different countries and regions. This has lowered their skills of creativity. Eventually, this has resulted in reduced labor opportunities. There also needs to be a great gap in the level of skills. This has made it hard for employers to seek employees because they need help finding the appropriate one for their description.

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4 Therefore, they turn into machine options introducing robots and A.I. help. This has seen a rise in the rate of unemployment. Furthermore, this brought an unbalanced economic development in these countries. This is due to the different living standards—the different working strategies and payment methods in these countries. Additionally, the different working policies in these countries changed, leading to social stratification. For example, the "excellent working conditions in the U.S. led to the U.S. ascending as a world superpower as compared to the dull states in China and Mexico. Part Three Porter’s Diamond of competitive advantage can be applied in explaining U.S. manufacturing today as follows. According to Bruin (2018), this model aims to explain the factors and traits of an organization that is more developed than other organizations in a certain area or region. Therefore, this model highlights the U.S. manufacturing industry as a gigantic step that has positively affected the entire state. Additionally, this model states that the U.S. continues to benefit from its growth and investments in infrastructure. This has made the country appear very well regarding the advancement and development of infrastructure. This implies that the U.S. enjoys maximum advantages from its developed infrastructural investment. Consequently, this makes the U.S. a distinguished country in terms of development. Moreover, the U.S. enjoys competitive chances because of its ability to support upcoming and local infant industries. Unlike other countries like Mexico, which do not adequately support its industries, America issues tax holidays, incentives and such interventions to support the local infant industries. Therefore, the U.S. will enjoy and remain at the top of industrial excellence due to how it handles industries. Furthermore, America remains at the top because of its involvement in chance or luck events. These include investing in nuclear weaponry, wars, political situations

5 and other sensitive issues relating to other nations. However, some of these involvements have negatively affected the economies of the different countries; for example, the use of nuclear weapons has negatively affected other countries like Japan in the World Wars. Additionally, Porter's Diamond of Competitive Advantage can be used to predict how the U.S. manufacturing industry can be in the coming five to ten years. This can be explained as follows. This model illustrates the various ways in which U.S. manufacturing can borrow and implement to give the optimum outcomes for industrial excellence. By applying this model, in the next five to ten years, U.S. manufacturing can use it to empower manufacturing companies. This might include introducing up-to-date technological equipment. This is because up-to-date equipment will ensure that the companies will be more accurate and more ready to compete and overcome their rivals in the market. Moreover, the frequent use of national importance firms will help in knowing the influence every party play in ensuring that economic growth is positive. This will help the manufacturing companies in the U.S. appreciate and accept every stakeholder's role in the country. This will help the country take the next step in growth and achieve greater heights in the next five to ten years (Erboz, 2020). Additionally, using this model, the U.S. will learn to invest more in innovation and technological goals. This is because, if they want to rank high for the next five to ten years, they have to ensure that they can remain innovative and creative. This will help the country in outshining its neighbors and rivals. Furthermore, the government plays a crucial role in ensuring that the country will succeed in this journey. They have to ensure that they offer favorable policies to support these companies. This is because, by so doing, they will grant upcoming companies a conducive and good environment to thrive on for the next five years. Therefore, the government holds the lives

6 and future of the U. S's manufacturing for the next five years. A slight mistake can lead to a great loss in this industry and the entire economy. Similarly, if the policies and interventions are favorable, small and local infant companies will continue to exist. This, in return, will mean that in the next five to ten years, there will be no traceable activities of the U. S’s manufacturing.

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7 References Barker, M. M. (2011, April). U.S. Bureau of Labor Statistics. https://www.bls.gov/opub/mlr/2011/04/art5full.pdf Bruin, L. D. (2020, January 19). Porter's diamond model is explained with examples. B2U - Business-to-you.com. https://www.business-to-you.com/porter-diamond-model/ Erboz, G. (2020). A qualitative study on industry 4.0 competitiveness in Turkey using the Porter diamond model. Journal of Industrial Engineering and Management (JIEM) , 13(2), 266– 265. Hernadez, R. (2018, August). U.S. Bureau of Labor Statistics. https://www.bls.gov/opub/mlr/2018/beyond-bls/pdf/the-fall-of-employment-in-the- manufacturing-sector.pdf How many manufacturing jobs can the U.S. realistically maintain? (2012, January 26). PBS NewsHour . https://www.pbs.org/newshour/show/how-many-manufacturing-jobs-can-u-s- realistically-maintain Mexico vs. China manufacturing comparison breakdown. (2020, May 13). NAPS . https://napsintl.com/manufacturing-in-mexico/mexico-vs-china-manufacturing- comparison/

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