Saturday, December 5, 2009

Manufacturing areas show growth in economy

Amidst all of the other negative effects of the recession, it seems that areas with high reliance on manufacturing income are showing improvement: enough improvement to show huge employment gains, meaning jobs in the manufacturing sector are available. This is the complete opposite effect that some economists predicted when they thought that widespread layoffs in manufacturing labor would prevent any growth in this area of the economy. Despite their predictions, counties with high reliance on manufacturing income have been shown to outperform the average United States county (based on economic state). Economists now point to the "cash for clunkers" program, a weak American dollar to boost exports, the use of temporary workers, and other factors to explain this trend in manufacturing counties. However, economists are unsure whether or not this trend will last.

Though the overall unemployment rate is still on the rise and there are a bajillion other problems with our country right now, I feel that this is at least some relief from the otherwise pessimistic and negative media. However, I say that we should take this relief with a grain of salt. The catch is that a lot of these factory workers may only be hired temporarily. As an economist in the article stated, "in five years... those same workers [that were hired] may be out the door". This means that all the gains in the manufacturing areas may only be temporary; once demand decreases, so will the work force. I think that a main problem is encouraging demand- enough demand to keep jobs in place. With the "cash for clunkers" program, there are only so many more cars people need to buy to replace their "clunkers". Once those people have met their quota and all have new cars, where is the demand for new cars then? But anyways yeah, this article was a good relief, but I hope we can solve this problem if indeed this is only a temporary bandage.

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