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Continuing Education Key To Trade Insecurities

January 27, 2017

The Trump Administration  has taken harmful positions on trade this week which will harm the long-term economic ability of our nation to compete on the world market while also at the same time undermining the gains made by some other nations to create stable upward mobility–such as with the middle-class in Mexico.

Micahael Hicks is the Director of Ball State’s Center for Business and Economic Research and spoke about the facts in which the trade issue needs to be viewed if we are going to have insight of what might need fixing.

Hicks: No, I think a more nuanced approach to it is necessary. Absolutely, trade and competition with other firms, be they in Illinois or Mexico, or Maine, or China, can cause firms to close down. Those tend to be very concentrated. If you’re in Wisconsin, Illinois, Indiana, Michigan, or Ohio, we’ve seen now four or five decades of job losses in manufacturing in concentrated places. And so that looks a lot like trade, but the fact is that the United States today is producing more goods, more manufactured goods, than at any other time in its history.

In Wisconsin, the peak-manufacturing year is 2015, and we know for sure it was 2015 or 2016 in Indiana, probably 2016 when the data comes in, so free trade is not causing a reduction in U.S. manufacturing production. If we actually had less production, maybe that would be a major cause of worry, but we’re actually making more today than we ever have before, so it surely cannot be trade.

Thomas Friedman has written extensively over the  years about matters such as trade and argues most convincingly that continuing education is going to be the new norm in ways we have not yet considered.  It is clear that Hicks much agrees.

In many states in the Midwest, the turnover in manufacturing employment might equal the entire age cohort each year of kids graduating from high school. So there should be abundant manufacturing jobs. The problem is that out of every 100 kids who graduate from high school, 50 go to college, and 10 don’t graduate. So there are about 60 kids there who might be prime targets for manufacturing employment, but they are going to have to get job skills and certificates post secondary, post high school, to really make them competitive in the short run. Then they are going to have to keep learning, to have an enthusiastic ability to adapt over the next 40 to 50 years. That was the hallmark of American manufacturing a century ago, but we’ve probably lost track of that in recent decades. Maybe we’re not as focused on the continuous learning amongst manufacturing employees, but that’s really what we’re going to have to do.

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