Whether your party is red, blue, green, or purple, every party’s candidate for President of the United States wants to create jobs and improve the economy. While they may have drastically different ideas on how to accomplish this, job creation is a topic that universally resonates with voters. Job creation in the manufacturing sector, in particular, has become a popular topic. According to economists, there is sufficient evidence that indicates that the trade deficit is curbing the growth of American manufacturing jobs.
A trade deficit occurs when a country buys more goods from other countries than it sells to other countries. The last time the United States had a trade surplus was 1975. When American companies began to outsource jobs, Americans began to buy more products from other countries, causing the trade deficit to grow. Today, the trade deficit stands at about $45.7 billion.
While the topic may not be talked about often, the trade deficit does have real world implications. According to the Economic Policy Institute, “Growing trade deficits and the collapse of manufacturing output following the Great Recession are directly responsible for the loss of 5 million U.S. manufacturing jobs that occurred between 2000 and 2014.” To put that number in perspective, the manufacturing industry directly employs approximately 12 million Americans today. If the manufacturing jobs that were lost in the past 16 years are to be recreated, there must be a concerted effort to reduce the trade deficit.
There are several industries that substantially add to the deficit. About Money reports that “Consumer products and automobiles are the primary drivers of the trade deficit.” Despite the recent surge in sales, the American automotive industry accounts for roughly a third of the trade deficit. The trade deficit continues to grow in the automotive sector as manufacturers look to low-wage countries, such as Mexico, for labor instead of creating American jobs. If car buyers continue to look abroad for vehicles instead of domestically, the balance of trade will remain unchanged.
The growth of the trade deficit and the decline of American manufacturing jobs are clearly intertwined. By investing in American goods, the trade deficit will improve and American manufacturing jobs will be created in the process. Presidential politics can make everything seem complicated and divisive, but there is at least one topic on which all Americans can agree. Working to turn a deficit into a surplus through buying American products will put more Americans to work and be a win in every year, not just in those which hold elections.