Editorial
Manufacturing
Among
the many ideas that came out of last month’s textile summit
hosted by Gov. Mike Easley with the governors of South Carolina and
Georgia was the decision to urge President Bush to do something about
what the Wall Street Journal recently called the “rampaging
dollar.” The dollar is at a 16-year high against most major
currencies and has risen by 10 percent against the yen in just the
past few months.
“The principal reason for the decline in manufacturing is that the
dollar has risen 30 percent against other currencies since 1997. That
is just like slapping a 30 percent tariff on U.S. exports,” the
National Association of Manufacturers, NCCBI’s Washington affiliate,
said in a recent white paper. The overvalued dollar may have cost
400,000 American factory workers their jobs over the past 18 months,
the NAM study found.
Faced with such a lopsided financial playing field, many U.S.
companies have found it increasingly difficult to compete overseas, a
major factor behind the $115 billion plunge in manufactured goods
exports from their most recent peak.
Just as the three governors did at their summit, the NAM insists that
it’s time to recognize that the value of the dollar has enormous
effects on the real economy — particularly on the manufacturing
sector and its workforce. That
impact is particularly acute in industries such as paper, textiles and
automobiles. These export-sensitive industries comprise only seven
percent of the U.S. workforce but have accounted for two-thirds of all
the increase in unemployment in the current recession.
Of the 1.5 million American jobs lost over the past year, the
manufacturing sector — which comprises less than 15 percent of the
American workforce — has accounted for 1.2 million, or four out of
every five. Some of these losses will be permanent because the only
viable option for some manufacturers is to circumvent the 30 percent
price penalty by moving production overseas.
Many of these same issues were aired in Congress during the recent
debate on Trade Promotion Authority. Some members of North
Carolina’s congressional delegation were harshly criticized for
voting for the trade pact. Critics in particular have singled out
Cong. Cass Ballenger of Hickory for his role in passage of the TPA
bill. He asked for an opportunity to fully explain his position on
foreign trade and its impact on manufacturers, and we urge you to
evaluate his views, as expressed in the Executive Voices column on
page 45.
Manufacturers already face long odds in competing against low-wage,
low-regulation overseas competitors. Washington could make that task
much easier by talking down the dollar. -- Steve Tuttle
Return to magazine index
|
|
