Improvements in US Manufactured Goods
January 1, 2014 marks the 20-year anniversary of the NAFTA’s implementation and there is strong evidence of the pact’s positive impact on manufacturing in the United States. U.S. manufactured goods to Canada and Mexico more than tripled since 1993, growing some $173 billion through 2012 and accounting for over 18 percent of the total growth in U.S. manufactured exports over that period. Some of these resulting studies are overlooking the effect of the further development and interconnection of supply chains. Most of which have been credited to NAFTA. Manufacturing companies in the three primary countries, especially U.S. auto manufacturers – as well as North American makers of appliances, electronics and machinery reap the advantages of expanding production lines across countries to drop more costs while becoming far more globally competitive. This is an approach that would be far more challenging without the tariff reductions provided by NAFTA. Leading economists have calculated that at least 40 percent of the contents of U.S. imports from Mexico as well as 25 percent of the content of U.S. imports out of Canada are of U.S. origin [PDF]. When you look at U.S. imports coming out of China, by comparison, they include a mere 4 percent of U.S. content. The Congressional Service Research report suggests; “Ignoring these input-output linkages could underestimate potential trade gains.” The U.S. Labor Market on NAFTA Broad speculation and even disagreement continues relating to how and to what amount does NAFTA account for the shifts within net employment from the corrections inside the labor market. Promoters of NAFTA, as well as significant numbers of economists, view the positive impact on U.S. employment. They also point to new export-related jobs inside the United States that offer 15 to 20 percent more on average than those focused on domestic production. However – the unintended side-effects of this treaty shouldn’t be ignored. Edward Alden is a highly-respected senior fellow on the Council of Foreign Relations. He is quick to note that wages failed to keep pace with labor productivity. This problem led to a wage inequality within the United States and average incomes haven’t risen in recent years. This is partly because of the pressures placed on the U.S. manufacturing base. To a degree, according to Alden, our trade deals have only quickened this fast-changing pace in that they have “reinforced the globalization of the American economy.” Mostly, though, economists report that it’s quite a stretch to try blaming these shifts on NAFTA. When manufacturing inside the United States was placed under this kind of pressure decades before the treaty, job losses in this market section were viewed as connected to a structural shift within the U.S. economy. This shift was seen as being more toward the light manufacturing and other high-end services. Alden has also been noted as having said that larger economic trends that have the power to affect U.S. employment – like China’s rise of economy – would not be nearly as affected by U.S. policy changes where NAFTA is concerned. Predetermined Time Systems – PTS Predetermined time systems have been in use for almost 80 years. They are proactive systems that serve the common purpose of improving any organizations productivity and calculating reliable production standards. In this regard – I contend the drive toward greater profitability and the need to maintain a competitive edge, e.g. maintain our standard of living, within this global labor and manufacturing market – the proven work measurement system MODular Arrangement of Pre-Determined Time Standards, MODAPTS, is an indispensable tool integral to the re-shoring renaissance of manufacturing underway in the US. When it comes to applying best-use practices for the manufacturing labor force all of the tools exist. Anything less than the expectation of world class excellence can be viewed as incompetence. When markets have to battle to keep the flow of labor available, as well as competitively trained, every reasonable method that has been proven is what managers and administrators will apply. Are you interested in learning more about how predetermined systems can be used to train and teach your employees? If so, contact us for more information. We have helped other, maybe we can help you too.