Kasich on economic realities

In an Business Insider interview Ohio Governor Johh Kasich did something almost no politician does today. He clearly states that we can’t go back to a factory-driven economy. Business Insiders writes:

But the notion that states such as Ohio are dependent on manufacturing jobs returning is one with which he vehemently disagrees.

“Manufacturing is still very important to us, but we are much more diversified state,” he said. “And furthermore, anybody that says the steel mills are coming back to Youngstown is not telling the truth. They’re not coming back. You could have some aspects of advanced manufacturing appear. But if you look even at Pittsburgh, where I grew up, you’ve now replaced steel jobs with technology jobs, and they pay better.”

“So, I know that, you know, leaders have to lead,” Kasich continued. “I don’t read polls to decide what I’m going to do. But for the best interest of the people of our state, having a big mix of technology, healthcare, IT, financial services, and manufacturing is the ticket. To put all of your eggs in one basket is silly. We did that for a long time and I don’t think it’s very smart.”

Exactly! Yes it would be better for lots of workers if we could recreate the high paid factory-based economy of decades ago. But we can’t. In part because of globalization, but increasingly due to smart machines doing the work that workers used to. And smarter and smarter machines are going to continuously do more and more of the work required to make products.

So as Kasich states the middle class jobs of today, and even more so tomorrow, are going to be in knowledge-based industries. One can add education and professional services to his list of technology, healthcare, IT, and financial services.

The lesson we need to  learn, and align with, is that what made us prosperous in the past, won’t in the future. But learning and acting on that lesson is made harder when politicians, of both parties, campaign on bringing back the old factory-based economy. No matter what they promise and no matter what their agenda is manufacturing as a proportion of the American workforce will continue to structurally decline as it has for a half century.

Michigan needs politicians from both parties to have the courage to deliver a message similar to Kasich. Clearly denying the reality that lots of high-paid factory jobs that anchored Michigan’s 20th Century prosperity are not coming back is what many want to hear. But its what we need to hear. So that Michiganders and the state can get on with the difficult transition to a knowledge-driven economy. Its the only path back to a high-prosperity Michigan.


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