Editorial: Turning the Midwest from “Industrial Furnace” to “Industrial Brain”
MILWAUKEE, WI (The MPJ) — Growing up and living here in the farthest corner of America’s Rust Belt, as the son of an industrial engineer, I’ve had plenty of time to think about what it’s going to take to make the Midwest a go-to destination for the economy again. It’s not going to be easy, but I believe I have a plan that will bring us back and make us better than we have been for a generation.
I recently got to thinking about this again after President Obama came here to Milwaukee to speak about the “trend” of insourcing at the Master Lock plant. If you didn’t catch the speech on Wednesday, you at least likely heard it mentioned during the President’s State of the Union speech to Congress. Companies bringing jobs that they’d previously outsourced to China back home to the States. Sounds great, doesn’t it? It’s happening. But it’s not happening at any rate that a person could call significant…and it won’t. Ever.
Why?
Because most of those jobs that have gone overseas are being done by people paid so little that it’s cheaper to have them do the work than even robots. Americans, for decades, have decried the lack of quality, hand-made goods on the market. Well, they have nothing to complain about if that’s their focus. That iPhone in your hand? That iPad in your lap? That inexpensive electronic gadget in your pocket? They’re all hand-made. That’s was part of the point of The New York Times‘ groundbreaking article last month on labor practices at China’s Foxconn. All your trinkets are being made in massive, one-building cities in China that employ hundreds of thousands of people at pennies per hour attaching and cleaning Gorilla Glass screens to your iPhone by hand.
The reason that those jobs aren’t going to come back here is twofold.
One, the days of American factories, like Ford’s famous River Rouge plant, employing the equivalent of a mid-size city under one roof to have each person perform a small task over-and-over are gone. If that entire Foxconn plant shut down, canned all 700,000+ workers, and moved back to America, it would maybe employ 30-40,000 (to be fair, that’s a top-of-the-head estimate and should not be cited for any actual numerical purpose). Why? Because those jobs would be mechanically automated.
Two, the reason Chinese manufacturers like Foxconn work as well as they do is because China has invested deeply in industrial clusters. As this blog post from Nobel-winning Princeton economist Paul Krugman points out (correctly), these industrial clusters make China’s manufacturing power far more nimble than our own. If Foxconn needs to change a single screw in its iPhone assembly, and needs a few million of them right away, they can almost literally walk across the street to the screw factory and place an order. Heck, they may even be able to walk back to the Foxconn plant with the first part of the shipment on a hand truck.
So there’s our problem, fellow Midwesterners. We’re competing against a nation with endless supplies of (brutally) cheap labor that doesn’t require any real education, that has invested in infrastructure (both public and industrial) to make it all work as close to seamlessly as an international manufacturing operation can.
So what can we do?
1. Completely re-imagine our public education system.
It seems ridiculous to me that a person should need a college degree to operate a CNC machining center in a factory, or perform a similar skilled-yet-industrial job. College isn’t for everyone, and making them invest tens of thousands of dollars into an education they should already have once they graduate high school is ridiculous. This is going to take some serious education spending, but it will be worth it. And I don’t just mean “throwing more money at schools.”
I actually wrote on this in greater length as part of our “How to Fix America” series, but the boiled-down version is this:
- Make the school year longer: We need to cover more material in each school year so by the time students make it to their junior and senior year of high school, they can really focus on their next step in life. They can take courses to better prepare themselves either for college or for the working world. And if they decide to go directly to the working world, they should be able to get a job they can raise a family and live independently on.
- Make individual breaks shorter: Our students, these days (and in the past, too) forget almost half of what they learned during the year over the extra-long summer break. Let’s face it, we’re not an agrarian society anymore that needs kids at home during the summer to plow the fields. Shorten breaks to 3-4 week spans, space them out semi-evenly, and eventually INSTALL AIR CONDITIONING IN SCHOOLS! We’re going to need it, kids are going to be in class in July…covering new material instead of reviewing last year’s stuff they forgot.
- Make preschool mandatory: Comparative studies have shown that kids who go to preschool, even in at-risk areas, achieve more scholastically, get in less trouble, and are more productive adults than kids who don’t go to preschool. It’s in those formative years that kids “learn how to learn.” By the time kindergarten rolls around…it’s literally too late.
2. Don’t just fix our infrastructure, create a new, modern system!
As a recent editorial published by Politico pointed out, just fixing our roads and bridges, and stringing up new electrical lines on old poles isn’t going to cut it anymore. We need to invest in infrastructure with a purpose.
President Obama’s plans for High Speed Rail were a good starting point, but they were fundamentally flawed. The regional focus of Obama’s plans was smart, but that was about it. He wanted to start building on the most useless lines (because they were the cheapest), instead of starting on the most-useful lines. Instead of building high-speed rail between Tampa and Orlando, he should have started with Miami to Atlanta.
The Midwest would benefit the most from HSR building. And I mean true HSR, not the half-assed faster-than-normal trains that make the already weak Acela look great. Want to ease congestion at Chicago O’Hare? Then get people, by rail, to Milwaukee’s General Mitchell in under an hour’s time. As a matter of fact, we should be building HSR between the Midwest’s metropolises (Chicago, Detroit, Milwaukee, St. Louis, Minneapolis-St. Paul, Indianapolis, Louisville, Cleveland, Cincinnati) so that people can get from place to place in no more than half the time it would take to drive, and for less money and hassle than flying.
But it’s not just transportation. It’s electrical, water, sewer, internet, everything. Most of our infrastructure dates back to the 1950s, and due to neglect, don’t even handle the capacity these systems should be. We shouldn’t just fix these systems, but upgrade them in order to have everything still running strong and reliably in the year 2100. We can do it…so why shouldn’t we? And I know one reason we should.
You know who loves reliable energy, good transportation, ease of access to markets, and good, high-speed internet? Businesses.
3. Universal. Health. Care.
This can’t be promoted enough. And it’s so simple (conceptually, if not politically) to do. Give Medicare to everyone, and let the private insurance industry fill in the gaps. When companies like GM and Ford are spending more per vehicle on health care for the workers that build it, than they are on steel to make it, something needs fixing. One of the biggest inhibitors to business growth in the entire nation, not just in the Midwest, is companies providing health care to their employees.
It inhibits companies from building here instead of another country (like Canada) where they don’t have to fool with it. And it inhibits the true innovators of our economy from striking out on their own, rolling the dice, and trying to develop their own ideas and create their own opportunities. I’ll go into more detail on this in the next installment of “How to Fix America,” which will be coming up…at some point in time or another (I promise!).
4. Promote the re-imagining of our labor unions, and relations with management.
Here’s where my own background comes in. I’ve personally seen the point of view of both “management” and “labor,” and see they both have legitimate gripes with each other.
Labor unions have, in a way, become somewhat anachronistic. Yes, they brought us the eight-hour work day, and overtime pay, and all those other great things. But they aren’t providing as much tangible value to their members, and the companies they work with/against, as they used to. Just threatening to strike when the contract comes up doesn’t do it for anyone anymore.
Unions need to focus more on making sure their members are fully trained to perform at the highest level of performance possible. America’s trade unions are a good example here (the IBEW, and other carpentry/plumbing unions). Yes, unions fight for higher wages (which companies are never a fan of), but they should get something for that higher wage. More productive workers, workers that build better products, workers that take the company’s interests seriously. If companies and unions can get together and work with an understanding that what’s good for one is good for the other, we’d all be better off.
But this is something government can’t do. This is something that unions and businesses must achieve on their own.
So, in conclusion, there’s a lot of work to be done here in the Midwest. We may not have the sunniest of weather like the south and southwest. We may not have mountains and glorious landscapes like parts of the east and west coasts. But we have great resources and great people. And when you put those two together, like we should be, and really invest in improving what we have, we can get back to growing again.
We’ll never be the “industrial furnace” we once were. But that’s not a bad thing. Industries don’t need furnaces like they used to. Instead, let’s focus on being the “industrial brain” of the world.
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