The China Connection

William A. Ward, director of the Center for International Trade at Clemson University, examined the trends in factory jobs across the globe and concluded that American communities shouldn’t focus on keeping as many manufacturing jobs as they can. Rather, cities and regions should be clear-eyed about which components of the manufacturing chain they should shed in order to stay competitive and which components they should try to retain. In other words, when it comes to manufacturing, America should learn how to manage decline.

Underlying Ward’s conclusions is statistical information that turns our popular understanding of manufacturing trends on its head. We in America usually assume that our industrial heritage is slipping away from us because other countries - principally China - are stealing our manufacturing jobs. But the reality is different: Everybody is losing manufacturing jobs, because of both productivity increases and global shifts in demand from goods to services.

Although worldwide data must be cobbled together, Ward’s best guess is that a decade ago approximately 172 million manufacturing jobs existed worldwide. Almost 60 percent of them were in China. Ten percent of them - 17.2 million - were in the United States. So in 1995, China had six manufacturing jobs for every one job in the United States.

By 2002, Ward concludes that globally, manufacturing jobs had declined by 12 percent to about 150 million.  China had actually experienced a bigger decline than the rest of the world, losing 15 million to 20 million jobs. The U.S. experienced a proportional decline, from 17 million to 15 million.

The United States lost around 40 percent of its manufacturing jobs due to productivity increases and 60 percent to foreign competition.  China, on the other hand, should have added 5 million jobs; instead it was a huge loser.  China lost as many manufacturing jobs in those years as the U.S. possessed.

The reality is far different from our perception. Half of our manufacturing jobs are being lost because our economy is not growing as fast as our productivity increases.  China isn’t trying to steal our jobs. Rather, it is engaged in an effort to keep the manufacturing base it already has - because, despite China’s stupendous economic expansion, this expansion is being outstripped by more stupendous increases in productivity.

What this means, from our point of view, is that a decline in manufacturing employment is inevitable, at least in the short run. We will never be able to keep up with China - not because China’s workers are so cheap but because China is engaged in a desperate effort to expand the economy faster than productivity increases. We can and should hang on to a manufacturing base, but it has to be the right manufacturing base, one that creates high-value-added products that can support U.S. wages and also takes advantage of clusters of suppliers, markets, labor force and so forth. In other words, we must accept decline and manage it strategically.

Governing, 6/06

From the Ground Up

There’s one aspect of Lake County that can’t be ignored, and that’s the revenue generated from the county’s agricultural sector. Thanks to the fertile soil and the right blend of climate and topography, nurseries and wineries play an important role in how Lake County contributes to the regional economy.

In 2004, $95 million in revenue was generated from nurseries and grape growers, according to the Lake County Soil and Water Conservation District’s Dan Donaldson.

"We only have about 19,000 acres in agricultural production, but we’re consistently in the top 10, usually in the top five, as far as agricultural revenues (in Ohio)," he says. "We’ve got the highest per farm income in the state, at around $326,000 a farm, compared to the state average of $56,000."

There are more than 115 nurseries in the county as well as eight commercial grape producers, most of which are under contract with Welch’s for jelly and juice production.

The five wineries in Lake County create a veritable tourism region, attracting thousands of visitors every year. These are also complemented by the neighboring wineries just across Ashtabula County’s border in Geneva and Harpersfield Township.

While many regions cling to one major industry or have just one claim to fame, Lake County possesses a unique combination of strengths that allow it to contribute in numerous ways to Northeast Ohio’s economy. The region has plenty of viable employment and all the qualities to continue to attract more.

      Anne-Margaret Sofota

Manufacturing Upbeat

The 2007 Harris Ohio Industrial Directory indicates the state of Ohio experienced a 9.7 percent increase in manufacturing firms between June, 2005 and June, 2006. By comparison, the number of manufacturing firms in the region (Cuyahoga, Geauga, Lake, Lorain and Medina counties) increased by 7.3 percent.  Lake County experienced a 3.5 percent increase (31 companies) in the number of manufacturing firms, while Mentor experienced an increase of 10 firms (5.5 percent). Harris also provides data relative to manufacturing employment. The state of Ohio experienced an increase of 7.7 percent (78,400 jobs) while the region increased 9.6 percent in manufacturing employment.  Lake County experienced a 6.8 percent increase in manufacturing employment, while the city of Mentor’s increase was 8 percent or 665 jobs.