American industries have long been the stalwarts of global trade. American-made products have been known for their craftsmanship, durability, and innovativeness. At home, these industries provide jobs to millions of Americans, which in turn strengthen the national economy. With the advent of globalization, there has been a dramatic change in the international trading landscape, which threatens to eradicate the American industries. Trading policies, changes in technology, and cheaper wages from developing countries have made American-made products less competitive in the international market.
Although the United States remains an economic powerhouse, American industries are on a rapid decline and are in danger of being completely eliminated by foreign competition. Cheaper imports diminish the demand for US-made products and without demand, industries will inevitably fall.
The US Bureau of Labor Statistics estimates that several industries are headed for a massive decline in the next 10 years and the American workforce will continue to shrink as much as 50% across industries. Some industries decline faster than others depending on how vulnerable they are to changes in trade agreements and shifts in business trends.
Here are some of the American industries that have been destroyed by foreign competition as evidenced by the considerable decline in their growth, operations, and workforce.
Apparel and Textile Manufacturing
It’s significantly cheaper to outsource textile and apparel production to developing and emerging countries because of lower wages. Cheaper production costs means cheaper prices for consumers.
Leather and Hides
Weak domestic demand and the inability of US tanners and leather makers to export their products competitively contributed to the decline of the industry.
Communications Equipment Manufacturing
Although the conceptualization, design and innovation of equipment like televisions, radios, and smartphones are still being done on American soil, the actual production is done elsewhere where wages are much lower.
Computers and Peripherals Production
Although the high-end computer products are still being produced in the US, companies in this sector have moved manufacturing plants and jobs overseas where cheap mass-produced computer and peripherals are manufactured.
Spring and Wire Products
The industry was hit hard by the recession and was slow to recover. Factories and manufacturing plants were moved overseas where production costs are cheaper. It did not help that the overall demand shrank because of corresponding contractions in auto and homebuilding industries.
The fall of the hardware manufacturing industry is attributed to the influx of cheap imports. This made recovery from the recession very difficult.
One can argue that the easy access to foreign markets and cheap labor can increase corporate profitability, which is beneficial to the US economy in general. However, the results are less than favorable. Outsourcing has its advantages, but the current trend forces industries to rely heavily on it without regard to the long-term negative effects to the manufacturing sector. Shifting production overseas not only constitutes job loss, but also an outflow of American money and technology.
The decline of American industries is detrimental to the US economy in the long run. The eventual catastrophic effects will take the form of job losses, reduction in wealth, a lower standard of living, and possibly the collapse of the economy.
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