Just three days after the Obama administration recently announced a commitment to reenergize the United States' manufacturing base, Intel co-founder Andy Grove released a compelling and widely-discussed piece, "How to Make An American Job Before It's Too Late," on the nation's need to move away from dependence on overseas production and toward rebooting the domestic manufacturing sector in an effort to rebuild our economy. But as discussions about the toll that offshoring is taking on innovation and jobs continue, changes among China's labor force are altering the economic landscape of the future. This leads me to wonder: How are these shifts going to affect the U.S.? Ethically speaking, what kind of industrial nation do we want to be?
Grove hints at similar questions when he challenges the pervasive common wisdom that "as long as 'knowledge work' stays in the U.S., it doesn't matter what happens to factory jobs." He recognizes how that assumption undervalues manufacturing's role in the economy, and asks: "What kind of a society are we going to have if it consists of highly paid people doing high-value-added work -- and masses of unemployed?"
The numbers Grove cites speak volumes. The fact that the U.S. has fewer people employed in computer manufacturing today (166,000) than before 1975, when the first personal computer was assembled, paints a grim portrait of domestic production in this critical growth area. In Asia, meanwhile, computer manufacturing employs 1.5 million factory workers, engineers and managers. By allowing high-tech factory work to move overseas, U.S. businesses' efforts to protect shareholders at the expense of workers has cut American labor -- and the economy -- off at the knees.
And what about workers in China? Dire labor conditions there have drawn increased scrutiny, especially following the recent spate of suicides (and attempts) at Foxconn Technology, the world's biggest contract electronics supplier. Meanwhile, labor strikes at Honda and Toyota Motor reveal that Chinese workers are not only recognizing their collective bargaining power, but being taken more seriously by their employers. As C. Cindy Fan, author of China on the Move explains: "Today's youths, including those from the countryside, are much more savvy and aware of their leverage than their parents." What makes these recent strikes different from earlier strikes is that employers have given in to labor's demands, responding with wage increases, which in turn have encouraged more strikes.
As a result, the cost of Chinese labor is beginning to rise. And as this trend continues, it remains to be seen which country will next fill China's shoes, offering up its workers to the world -- for cheap. Meanwhile, American consumers have big questions to ask ourselves about our culpability in supporting, through purchases, the poor labor conditions that the U.S. would never abide (well, I should say, never admit to abiding) on native soil.
According to Grove, "for every Apple worker in the U.S. there are 10 people in China working on iMacs, iPods and iPhones," and a similar 10-to-1 relationship holds for Dell and other U.S. tech companies. While I love my iPhone and lust after the iPad, I find myself needled by a growing discomfort about the costs that workers (both the workers overseas who produced the goods, and the jobless Americans who never had the chance) have paid for my gadgets of convenience. Efforts to move the production of our daily goods back to this country can not only create jobs, but can -- through worker protections and effective labor organizing -- ensure fair working conditions for the people who make the products we consume.
As one step toward a solution, I like Grove's controversial idea of an "industrial commons" system, which has been described as a "tax on products made overseas, with the proceeds used to fund American firms' ability to grow and build things right here." Such a system, Grove explains, "would be a daily reminder that while pursuing our company goals, all of us in business have a responsibility to maintain the industrial base on which we depend and the society whose adaptability -- and stability -- we may have taken for granted."
Not only will revitalizing our domestic manufacturing base create jobs and kick-start economic recovery, but by doing it right we can shift the very ethics of the nation and how we participate in the global economy. By integrating our high-tech knowledge with our skills for making things -- and by demanding fair treatment for the people on every shore who make the world's goods -- we can move toward being a nation of greater independence, integrity, and innovation.