Steady and strong economic growth is central. https://www.thebalance.com/us-economic-outlook-3305669 It has been strong since the Great Recession under President Obama and now President Trump; however we are overdue for an economic slowdown. We don’t know when it will occur, how long it will last, or how deep it will be. It may occur in the next two to three years. If so, unemployment will rise; businesses will be hurt; tax revenues will fall, and programs most needed by the newly impoverished will be threatened. The next President needs a strong pro-growth economic program and a strong counter-cyclical economic plan to execute during a likely recession.
Manufacturing is strong but has been declining in the US. https://tradingeconomics.com/united-states/manufacturing-pmi. We are number two in manufacturing (and recently doing well if compared to Japan and Germany), but not well at all compared to China which is now a far larger manufacturer than we are.
Our economic problems have been in autos and the steel industries -- based in the industrial Midwest. https://fas.org/sgp/crs/misc/R42135.pdf Our success stories have been in airplanes and pharmaceuticals and electronics – the West Coast and New Jersey. We will need very different economic policies to revitalize the industrial Mid West as opposed to those needed to sustain and foster the economic growth on both Coasts.
Since 2002, our share of global manufacturing has fallen from a 28% share to an 18% share. Manufacturers in China, Germany, South Korea and Mexico have been the fastest growers during that time frame. https://fas.org/sgp/crs/misc/R42135.pdf We will need to invest in and grow our high value manufacturing.
US manufacturing wages are high and employee productivity is high, but the importance of manufacturing employment has been in steady decline, not only in the US but in most of the developed world other than South Korea, partly due to higher employee productivity. https://fas.org/sgp/crs/misc/R42135.pdf For the past decade however US productivity growth has slowed, this may be in part due to a failure to invest in robotics to the same extent as Korea, Germany and Japan.
US labor is paid on average $39 per hour for manufacturing compared to $4.26 in China, $3.91 in Mexico and $1.50 in India. https://fas.org/sgp/crs/misc/R42135.pdf However, manufacturing wages in Germany and France are comparable to the US. We should be able to compete with Western Europe in steel and aluminum production but India and China have far lower wage bases.
We spend less on Research and Development for manufacturing than does China, and our growth rates on R and D have been far smaller for the last decade as the Chinese, South Koreans and Taiwanese are far outpacing the US; so too are the Germans and even the UK. https://fas.org/sgp/crs/misc/R42135.pdf R and D spending varies by manufacturing sector; the US leads in pharmaceutical, computers, and electronic research while its R and D for cars and chemicals is quite low (the Germans and Japanese lead in R and D on automobiles).
We will need to invest in and grow the economies of tomorrow like cleaner energy and transport as opposed to the declining sectors of coal production.
Trade with China, Europe and Mexico is not our problem; investments in building the US economy of tomorrow are what is needed.
Tariff and other trade barriers are not the answer. They are impairing our own and global economic growth.
Withdrawing from TPP was a big mistake; we need to embrace our trading partners in Asia and South America. Cancelling our trade negotiations with the EU was another huge mistake as was withdrawing from the climate change treaty.
We need to stimulate investments in growing global sunrise industries to replace those that are sunsetting.
Prepared by: Lucien Wulsin