Manufacturing: a crisis alert.

America is losing the capacity to manufacture the goods it consumes and the weapons it needs.

This decline is partially reflected in U.S. manufacturing employment, which dropped from 17.3 million jobs in July 2000 to 14.5 million in September 2003--a net loss of almost 2.7 million jobs.

This weakening is also mirrored in national trade data which reveals that the U.S. will import approximately $400 billion more manufactured goods in 2003 than it exports, up from $310 billion in 2001--an increase of 29 percent.

This deterioration pervades virtually all sectors of U.S. manufacturing, including trade in high-tech goods. In 2002 alone, the United States imported $54 billion more high-tech goods than it exported, a sector where America long dominated global trade.

In recent months, many business and political leaders have attempted to alert their fellow Americans to the rapidly deteriorating position of U.S. manufacturing.

In November 2002, the Commission on the Future of the Aerospace Industry warned that although the aerospace industry had a major economic and employment impact in all 50 states, the U.S. aerospace industrial base is being rapidly hollowed out.

In June 2003, the National Association of Manufacturers issued a report "Securing America's Future" which warned,

   "If the U.S. manufacturing base continues
   to shrink at its present rate and the critical
   mass is lost, the manufacturing innovation
   process will shift to other global centers.
   Once that happens, a decline in U.S. living
   standards in the future is inevitable."

In July 2003, the American Textile Manufacturers Institute warned that once global quotas are removed on textile trade on January 1, 2005, Chinese producers will take two-thirds of the U.S. textile and apparel market within twenty-four months, resulting in the loss of 630,000 good-paying American jobs and the closure of 1,300 factories.

In October 2003, the Semiconductor Industry Association reported that while the United States represented 33 percent of the world demand for semiconductors in 1997, it was only 22 percent by 2003, and that portion of the global demand is projected to drop to 18 percent by 2005. Of the four major global markets--the United States, Europe, Japan, and the rest of Asia--the United States will soon be the smallest--a total reversal of position in only eight years.

Dozens of other manufacturing sectors are experiencing the same rapid decline as electronics, aerospace, and textiles. If these losses are not reversed quickly, U.S. incomes and living standards will fall correspondingly.

The accelerating decline of American manufacturing is largely the consequence of U.S. trade policies that encourage the shift of factories and jobs to other nations and pit U.S. workers against penny-wage foreign competitors, operating subsidized factories in highly protected markets.

Manufacturing in America really does matter.