H istorical data shows manufacturing was strong in the 1960’s and 70’s. The middle class of America received around 53% of the nations income, had a social and economic status ranking between the poor and wealthy, and was defined as those who could increase their economic status through work and investment.
In today’s America, more manufacturing jobs are outsourced than any time in history; in 2016 “manufacturing accounted for a mere 9 percent of US employment”. Today due to the appetite of the American consumer for foreign products and the lack of manufacturing jobs here in the USA, the relative share of GDP for labor has declined since 1970. In 2013 the labor class received less than 43% of the nations income and now finds it harder than ever to find a good paying job and reap high to moderate returns on investments and pension plans. Fair compensation for labor, jobs, and income growth for the middle and lower classes has flat-lined, the middle class along with the poor are struggling financially.

In the 2012 State of the Union Address the President said “we will not go back to an economy weakened by outsourcing, bad debt, and phony financial profits”, he spoke of “doubling U.S. exports over five years” and “With the bipartisan trade agreements we signed into law, we’re on track to meet that goal ahead of schedule. (Applause.)” See text of speech

Bipartisan politics and trade agreements have increased the outsourcing that creates domestic to foreign “Income Redistribution”. Trade treaties encourage US corporations to invest in foreign markets. The Creation of foreign jobs by outsourcing work has lowered US worker wages and more than tripled the middle class of Asian countries. Fact is, according to the US Department of Commerce “the Asia-Pacific region is home to 570 million middle-class consumers; by 2030, that number is expected to reach 3.2 billion.”

Meanwhile, there is rising income inequality in America, and the US middle class is shrinking. In the USA only 35% of Americans born in the 80s and 90s own a home but, in China “an HSBC study found that 70% of Chinese millennials have achieved the milestone”. Bipartisan trade agreements and American consumer spending have increased foreign profits, enabling foreign companies to purchase USA companies and US taxpayer owned bridges, and roads. Foreign trade contributes to the American citizens lower rate of pay.

The NAFTA free trade agreement has contributed to growth in the Mexican middle class also; their home ownership is above that of the USA and France. NAFTA has moved US jobs and factories across the border to Mexico and contributed to cutbacks in local Mexican food production and reduced drinkable water supplies.

Trade Agreements have created a massive governmental bureaucracy; these non-elected officials have established inefficient rules and regulations that effect our liberties without representation. The first trade agreements were domestic laws; a mere 114 words in Article I, Section 9 & 10, of the US Constitution, that pertained only to the United States. Today, the global rules agreed to by the 150 member Word Trade Organization (WTO) encompasses a database that “contains over 100,000 documents”. [1]

“Research shows that the employment multiplier is higher in manufacturing than in other sectors: each manufacturing job supports an additional 1.6 jobs, and each high tech sector advanced manufacturing job supports as many as 4.9 other jobs.” [2]

Today with the Chinese COVID Virus wreaking havoc on USA jobs and industry supplies consumers are starting to see effects of globalization and US wealth distribution to the rest of the world. The Trump and Biden administrations have reversed the course of foreign outsourcing with tariffs on imported products. Also, American economists that have called free trade “silly” and said it “will have only minor impact on your prosperity” are admitting their mistake.

Hopefully someday the American consumer will too see the pitfalls of buying foreign products. Maybe if, Congress lowered taxes on the companies and businesses that contribute to US manufacturing, and encouraged the consumer to “Search America 1st”, we could curtail the importation of foreign made textiles, furniture, electronics, product parts, and other consumer goods into the USA and lower our trade deficit and create more secure jobs.

As in the past, middle class economics is best served by the manufacturing sector of our nation; we need to “fulfill our own engagements” (see words of George Washington below) and reduce barriers to economic freedom.

~George Washington~

George Washington to Gouverneur Morris, December 22, 1795
Click here for link to letter.

Middle Class Economics, Trade Agreements, Manufacturing, Middle Class