As Obama and Romney debate offshoring, many commentators have pointed out that estimating the total job loss from offshoring is difficult.
However, we can answer a different but related question: How many manufacturing jobs could we bring back if we closed the trade deficit? A recent analysis by the Progressive Policy Institute, Manufacturing in the App Economy, showed that closing the trade deficit would add roughly 3.5-4 million direct and indirect manufacturing jobs,raising total manufacturing employment to about 15.5-16 million, or 2001 levels.
There would be a cost, equalling a one-time rise of 1.8-2% in overall economy-wide prices, but that seems manageable at a time of low inflation. What’s more, the U.S. will be borrowing a lot less.
Obama should adopt the goal of bringing back 4 million manufacturing jobs as one of the key goals of his campaign. It’s very achievable, and can only benefit Americans.
From the paper:
We as a country need to pay more attention to innovation and production across every sector of the economy, including manufacturing. Our goal should be to create a balanced economy. That means producing as much as we consume; sustaining our standard of living without taking on loads of debt; and excelling in both tangible industries, such as manufacturing,and intangible industries, such as healthcare and computer programming.