Future U.S. Manufacturing Jobs Will Require More Brain Than Brawn

Transcript

STEVE INSKEEP, HOST:

In recent weeks, we've been focusing on unemployment in the manufacturing sector. We've been exploring the changing face of American manufacturing. And our colleague David Greene spoke with Planet Money's Adam Davidson about the future of American made.

DAVID GREENE, HOST:

The stamp Made In The USA means more than just those simple words. It's a dream, really, of a large middle class with jobs that pay enough to have a family, own a home, take a vacation when you want to. It's really a stamp of quality and ingenuity.

But over the decades the face of manufacturing in the United States has changed. And as we've been exploring the future of what American made means over the past few weeks, we've talked about changing demographics, the skills gap and also overseas competition for the jobs that were once a big part of this country's economy. Now we're going to take a moment to peer into to the crystal ball as best we can with NPR's Adam Davidson - he's co-founder of NPR's Planet Money - to see what the future might really look like. Adam, thanks for coming on.

ADAM DAVIDSON, BYLINE: Thanks so much, David. Great to be here.

GREENE: Well, what is now some sort of bar of success? We have now found sort of a new way of manufacturing. We're happy with this. We've done it right. How does the community know that?

DAVIDSON: I'd say if you go to Greenville, South Carolina - in fact, the I-85 goes right through Greenville. And the whole I-85 corridor, all the way to Montgomery, Alabama, what you see is a new high-technology platform, where it's not so much about the one big company. It's more about this ecosystem where you have lots and lots of different types of high-tech manufacturing. You see that a lot in the southern U.S. states. You see it, of course, in states that are less likely to be unionized, where wages are lower. But I think that's what the smart economic developers want. They want that variety and not one big factory.

GREENE: And it sounds like one of the keys there in that part of the country you're describing is that you have sort of these high-tech companies, and you have the training for those sorts of jobs in kind of one place.

DAVIDSON: Yeah, although there's a problem there. If you want to succeed for the coming decades, you don't just need to be trained and then a few years later retrained. You need a continuous improvement in your education. The main skill you need is the skill to learn more skills. The one certainty we have is manufacturing is going to look more and more like computer programming and engineering. It's going to involve a lot more brainwork and a lot less brawn work. And that means probably a smaller number of people can benefit, but those who can benefit will probably benefit quite a bit.

GREENE: What you're describing sounds so different that it makes me wonder if we should even still be using the term manufacturing. Let's admit that this is sort of a whole different thing that we're dealing with and that's the way this country will be competitive. But you have to kind of acknowledge that.

DAVIDSON: I think you are absolutely right. The way we talk about manufacturing versus the service sector is that there was a time when economists thought manufacturing was the only way value was added in an economy. And services were just sort of a side thing that happened to happen as well. But we are now a service economy country. Now, services doesn't just mean, you know, retail or fast food. You and I provide a service of journalism; doctors provide a service. It's just a term for anything that isn't physically making goods.

But the way you make money in manufacturing in America today is no longer by just simply, like, taking metal and bending it into a new shape and selling it at a higher premium because you've added value. So Apple makes a fortune. I mean, it's the biggest in the world making iPhones, but they don't actually manufacture iPhones. They manufacture the ideas that become iPhones. The companies that do manufacture iPhones make, you know, a fraction of what Apple does on each unit. The real profit in American manufacturing is in the idea, not in the physical thing.

GREENE: Well, Adam, talking about all these differences, one of the stories from this series - our colleague Linda Wertheimer visited a factory in West Virginia, Fiesta, where they make ceramic dinnerware - family-owned company, using really old machines with workers who had generations of family members working there. I mean, is that a total anomaly?

DAVIDSON: No, there's actually - that's a huge part of American manufacturing. I live in New York City, and I love going to factories in Brooklyn, Queens, the Bronx. And they're almost always that - a smallish, family-owned business that's using machinery. I mean, there's this pencil manufacturer right across the Hudson in Jersey City, New Jersey, that is still benefiting from the big upgrade in 1904 to their, like, 1889 machinery called General Pencil. But that is a different - I have to say that's a different model. It's more like the corner store. It's more like a mom-and-pop business where, you know, the building's paid off, the machinery is paid off. The company might not in a technical way really be profitable. There's probably a much more profitable use selling off that stuff and, you know, certainly in the New York City area turning it into housing or something. But you have a family that just wants to stick to their knitting.

That is not - it's a wonderful thing. I'm glad it exists. It provides stability, I would guess, for hundreds of thousands, if not millions of Americans. But it's not where we're going to grow or create lots of new opportunities. It's based on the idea that if your grandpa bought a bunch of machinery and paid it off 50 years ago, you can kind of keep floating along. But that's a different thing from, hey, I'm going to get investors to give me $100 million so I can start a new factory and really make a go of some huge profits. That's a totally different animal.

GREENE: Our series is called American Made. We've been looking at the future of American manufacturing and chatting with the co-founder of NPR's Planet Money, Adam Davidson. And, Adam, thanks a lot.

DAVIDSON: Thank you, David.

INSKEEP: You can find Linda Wertheimer's story from the Fiesta factory in West Virginia or any of our stories on the future of manufacturing in America at npr.org. Transcript provided by NPR, Copyright NPR.