Triz problem solving

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The manufacturing sector has assumed a vital role in the United States economic recovery phase. The manufacturing sector managed to create an additional 505,000 jobs between the year 2010 and 2012, when employment had dipped to its lowest form. The figure of 505,000 mentioned above constituted to 11.2 % of the 4.6 million jobs created during that phase. However, this slight inclination in the number of jobs created through the manufacturing industry commences on the mends of an awful long period of a high level of unemployment. Almost 5.8 million jobs were lost during the period between the year 1998 and 2012. These losses of jobs are to be attributed to the nation’s escalating trade deficit. When the trends are merged they highlight the manufacturing industry’s prominence to the state’s economy and recovery. In addition to the aforementioned fact the amalgamation of the trends also reveals the role of trade deficit in eradicating America’s manufacturing jobs. The paper shall argue that in order to revive the nation’s manufacturing sector there is the formal requirement of eradicating all jobs that interfere with the country’s trade deficit through ending currency manipulation by implementing suitable policies. In other words the contradiction matrix shall focus on improving on manufacturing-based concerns while not worsening the policies implemented by the Federal government (Kawamura, 2011).

The generic core of the United States high level of unemployment, slow economic growth and trade deficits is the global currency manipulation. The application of global currency manipulation in the international market distorts the flow of trade by exaggeratedly levitating the cost of America’s export while dropping the cost of its imports. The aforementioned fact leads to huge trade deficits that displace jobs in the American manufacturing industry. it is suggested that trade deficit within United Sates can be plummet from $200 and $300 billion in a period of three years if global currency manipulation is arrested by the Federal government. The benefits realized from the above statement can be increased immensely if the state does not increase federal taxing. Some of the benefits realized may be cutting down on the rate of unemployment by 2%, increasing the nation’s GDP by up to 3%, creating 4.7 million jobs which is equivalent to 3.1% and finally reduce the federal budget deficit between $80 billion and $160 billion (this simply means that any kind of development in productivity increases tax receipts thus reducing safety net payments).

Global currency manipulation poses to be only one of the many concerns that impact the increase on manufacturing job growth within the United States. The other concerns include insufficient investment by the state on its infrastructure, other nations’ noncompliant dumping practices among others. It is worth noting that supply-side constraints also adversely affect United States manufacturing industry. Due to the fact the nation has to compete with other countries (Korea) in terms of manufacturing products there is creation of strict competition in the international market. America’s competitors implement comprehensive labor and manufacturing programs in their supply-side management which the U.S. does not have thus having a head to shoulder advantage.

Therefore, the eradication of global currency manipulation would not serve as the ultimate resolution to dealing with the country’s trade deficit. in order for the country to realize complete eradication of goods trade deficit, the contradiction matrix identified that certain policies had to be implemented that will aid in the restoration of demand for the country’s commodities and boost supply-side supports to scale to greater heights as the one exhibited by Korea (McNichol et al, 2012). The policies identified by the contradiction matrix mentioned above include the provision of public financial aid to medium and small sized manufacturing firms, investing highly in manufacturing technology dissemination programs and R&D, commencing job training systems from school to work in the case of workers who do not have college education, more like the apprenticeship programs adopted in the German system and finally making massive public and private investments in green and renewable energy resources. If the United States successfully adopts the principles highlighted above then surely the country would have succeeded in eliminating its goods trade deficit. This would further permit the recovery of most of the employment and market shares lost in the early 90s.

The surging levels of goods trade deficit in America over the past decade has managed to eradicate millions of jobs in the manufacturing industry. A good example which illustrates the above point is the fatal increase in the states trade deficit with China between the year 2000 and 2010. This increase was marked by the elimination of well above 2.6 million Americans jobs and 76.9% of the jobs lost was linked to the manufacturing sector. The largest single cause to the United States goods trade deficit is currency manipulation by other countries such as Singapore, China and Japan. Through the process of currency manipulation there occurs simulated reduction of currency values which subsidizes all the exports of the concerned country. Furthermore the currency manipulation acts as a tax on the United States exports, which is detrimental to the country since they are taxed more. Currently, China acts as the most vital competitor for the United States export and there is no coincidence that the same country is the globe’s chief currency manipulator (Gagnon & Hinterschweiger, 2011).

Multiple proposals have been made with regard to the legal and regulatory tools that can be adopted to eliminate currency manipulation. However, global currency manipulation may be eradicated by the president of the United States by a mere stroke of the pen. What this means is that the president can simply declare that the United States is no longer willing to treasury bills or other government assets to China or any other country that denies the United States the right to their government assets. The rationale behind the aforementioned move is that the currency manipulation nations close their capital markets by denying the United States the right to purchase their assets and such a move would be effective in curbing currency manipulation. Countries such as the United States may legally decline to sell their government assets to currency manipulating nations since the International Monetary Fund and the World Trade Organization do not need the United States keep unrestricted markets in capital flow. Any form of legal declination to sell assets to countries that uphold currency manipulation tends to eliminate the prime tool adopted by foreign central banks to manipulate their currencies (Eichengreen et al, 2010).

Trade in the United States is dominated with manufactured goods. According to the United States International Trade Commission, during the year 2011, approximately 87% of U.S. exports and 76% of its imports were manufactured commodities. Thus in a situation where the number of imports surpasses that of exports it is considered that the share of imports is growing. In simple terms if the goods trading deficit is increasing the local manufactured merchandises and manufacturing jobs are displaced. Besides this, currency manipulation has acted as a catalyst to the United States imports and concurrently repressed its exports to currency manipulating nations and all other nations that the U.S. competes with currency manipulating nations.

Studies conducted revealed that the United States goods trade deficit was on the rise from $198 billion in 1998 to $738 billion in 2011. This exponential increase in goods trade deficit translated to the massive displacement of manufacturing jobs. a good example would be when the United States trade deficit with China grew to $217 billion between the period of 2001 and 2011, there were over 2.7 million jobs lost (77% of which were in the manufacturing industry). For that reason it comes as no surprise that the nation of the United States was losing a high number of manufacturing jobs as a result of the expected growth of goods trade deficit. With every job lost due to the goods trade deficit majority of them were correlated to the manufacturing industry. Although it is evident that the manufacturing sector employs only 9% of the total workforce in the United States it is worth noting that the eventual upgrading of the trade balance by the state will inexplicably increase the level of American manufacturing sector as well as its basis of employment.

The manufacturing industry in the U.S assumes a decisive role in the struggle against the Great Recession thus accentuating the determination of addressing the decline in the manufacturing employment. The period between 2010 and 2012 was characterized by the lowest level of employment in the U.S. during this period the country managed to create only 505,000 manufacturing jobs which accounted to a mere 11.2% of the total 4.6 million jobs. The latest deceleration in the process of manufacturing employment development was anticipated since the federal spending under the American Recovery and Reinvestment Act of 2009 was in its final phase. The slowing of the manufacturing employment development signified that for further growth to be experienced the state must adopt supplementary demand impetus.

A complete reassessment of the Chinese currency and four further underrated currencies would help reduce the United States goods trade deficit by $200 billion. According to a report conducted by Gagnon, it is projected that United States current net goods exports is $400 billion subordinate to how it would be devoid of currency manipulation practiced by the countries that appear in his research. In simple terms Gagnon suggest that the elimination of currency manipulation cuts down on the U.S. goods trade deficit by $400 billion. In addition to this the Economic Policy Institute briefing provides an estimate of the probable effects of eradicating currency manipulation over a period of three years as from 2011. The EPI paper applies the IMPLAN system in its evaluation of the effects on the U.S. through the paper a reference point projection was generated for the American exports and imports in each of the 108 industries highlighted as beneath the North American Industry Classification System four-numbers cryptogram. The predictions in the trade inferred trade flows through presumption. It assumed that the rate of development in imports and exports at the industry level in the period between 2010 and 2011 would remain stagnant from 2012 to 2014. The paper gave a low impact scenario of an estimate of about $190.5 billion in the reduction of the country’s goods trade deficit and a high impact situation of close to $399.5 billion decreases. The paper was able to conjure this number by creating impartial variations in the rates of development imports and exports while assuming that the full impacts of eliminating currency manipulation would not be experienced for three years (Gagnon & Hinterschweiger, 2011).

The state can enact policies which serve to meritoriously fuel demand, as well as eliminating currency manipulation, upgrading its present infrastructure, massive investment in clean and renewable technology, and eradicating unfair trade activities like unauthorized dumping which interferes with the ecological equilibrium. All the things mentioned above serve as the key elements behind the rebuilding of the United States manufacturing sector. The adoption and strict compliance of new trade policies serve to react to a vibrant and gradually antagonistic global trading model so as to uphold the rules of fairness and viable trade. On the other hand the massive public investment required to rebuild the infrastructure in the United States and develop new clean energy technologies serves to establish foreign and domestic demands for novel products which will boost the American manufacturing industry. In addition to this it will generally assist to improve the healthy effectiveness of the American economy. The last reform to be implemented by the Federal government is reforms to tax systems and health care so as to increase the efficiency and reevaluate the public expenditure and revenues within the United States.

Although the policies which highlight on the demand side of the equation prove to be critical, the supply-side aid proves to be equally crucial. It is evident that the American manufacturing sector agonizes from reduced capacity resulting from both absolute and relative terms with regard to our trade partners. The United States and its local manufacturers are subjected to an environment with greater levels of operations than they possess since its partners conduct comprehensive operations with regard to supply-side programs. The United States has to satisfy the quench of the need for creating a world-class environment which would serve to assist the local manufacturing sector. The aforementioned endeavor should be coupled up with investing in technology improvement and manufacturing extension programs like the Manufacturing Extension Partnership which is considered an underfunded program (when compared to Canadian manufacturing capacity-building programs) of the National Institute of Standards and Technology when compared.

There is the need of an intermediary institution in the United States which would be charged with the responsibility of providing working and investment capital to medium and small-sized manufacturing firms. Such firms frequently lack access to banks in the United States since the banks gives preference to large multinational companies, thus providing them with bank loans and commercial bonds. Furthermore, the state and federal governments should work together with unions, manufacturers and learning institutions to develop improved school-to-work teaching programs intended for worker who lack college degrees. This program has been successfully implemented in the German labor force laws.

Lastly, Japan possesses an authoritative agency (Ministry of Economy, Trade and Industry) that operates to certify that all the foreign trade policies complement the various efforts made to fortify the local manufacturing interests. Another country which demonstrates the effective implementation of policies that seek to strengthen its domestic manufacturing interest is China. The country has adopted a five-year plan which acts to provide critical strategic assistance to the local manufacturing efforts. The U.S. government needs to follow suit and implement strategic policies to compete with the two aforementioned countries.

Conclusively, the elimination of global currency manipulation serves as the most effective tool accessible to create jobs in the manufacturing sector in the United States. It would prove to be extremely beneficial to manufacturing businesses and its employees. The elimination of currency manipulation can be achieved through prohibiting all the currency manipulating countries from purchasing the United States assets and Treasury bills. Additionally, elimination of currency manipulation serves to be the best tool for the creation of millions of jobs in the United States. Through the elimination of currency manipulating the country achieves to increase tax revenues and he eventual reduction of expenditure at the national and state levels. Currently, the U.S. businesses are lying on billions of dollars in the form of fallow capital which can be injected into business projects. The elimination of currency manipulation can aid to harness the fallow capital and assist in the development of the country’s economy. It is high time that the United States and other nations make an effort to terminate the subverting impact of currency manipulation thus helping the world economy recover from prior setbacks.

References

Eichengreen, B. J., Gupta, P., Kumar, R., & Conference on “India and China’s Role in International Trade and Finance and Global Economic Governance”. (2010). Emerging giants: China and India in the world economy. New York: Oxford University Press.

Gagnon, J. E., & Hinterschweiger, M. (2011). Flexible exchange rates for a stable world economy. Washington, DC: Peterson Institute for International Economics.

Gagnon, J. E., & Hinterschweiger, M. (2011). The global outlook for government debt over the next 25 years: Implications for the economy and public policy. Washington, DC: Peterson Institute for International Economics.

Kawamura, T. (2011). Hybrid factories in the United States: The Japanese-style management and production system under the global economy. New York: Oxford University Press.

McNichol, E. C., Hall, D., Cooper, D., Palacios, V., Center on Budget and Policy Priorities (Washington, D.C.), & Economic Policy Institute. (2012). Pulling apart: A state-by-state analysis of income trends. Washington, D.C: Center on Budget and Policy Priorities.