The importance of manufacturing jobs in the U.S. economy
The U.S. economy is in the midst of a rebound, according to some economists, and this climb out of a recession may need to be supported by certain industries. One of these vital sectors is manufacturing, as the jobs that are created and the benefits that American companies are essential to further growth.
Business Insider reported that manufacturing remains as one of the highest-paying sectors, especially for people who do not hold college degrees. However, the future of the industry, and the potential for creating new jobs as a result of a shift in business strategy, is reliant on several outside factors.
According to the news source, trade plays an important role in U.S. manufacturing, and this is heavily influenced by the value of the dollar.
The greenback, as the American currency is colloquially known, both supports U.S. manufacturing and shifts growth to other countries. When the dollar is valued at a high rate, this leads to economic progress, but companies that export goods can sometimes be negatively affected.
According to Business Insider, if the dollar drops, at a rate of about 10 to 15 percent from its current levels, this could help to bring the trade back into balance. This decline could lead to the generation of 5 million new manufacturing jobs in the U.S., and could have an enormous impact on the labor market domestically.
However, the value of the dollar is not the only factor, as manufacturing failure and success abroad also impacts the American sector. While a drop in output in Europe can create a short-term boost for the industry in the U.S., a long term recession in the EU could negatively impact domestic manufacturers.
The Associated Press reported that a recent manufacturing report from the U.S. highlighted significant growth in the sector – while similar Chinese and EU indices showed contraction- but the gains that were made could be affected by potential actions by the Federal Reserve and its chairman Ben Bernanke.
According to the news outlet, investors appear to believe that the Fed could pump more money into the economy, which could drive down the dollar.
"You don't want to hold on to dollars while they're devaluing and everything else is increasing," Matthew Schilling, a commodities broker at RJO Futures, told the AP.