How a Competitiveness Audit Can Help Create Jobs
by Michael Mandel and Diana G. Carew
Progressive Policy Institute
State, local and federal policy makers don’t know which industries are internationally competitive, which ones aren’t, or whether the gaps are closing or widening. The data doesn’t exist. That lack, argue the authors of this Progressive Policy Institute paper, hinders the pursuit of effective strategies for boosting United States jobs. A Competitiveness Audit would compare the price of selected imports with that of comparable domestically produced goods and services. The size of the ‘price gap’ between imports and domestic production would provide valuable information to guide the allocation of economic development and training funds. “In general, industries that are ‘near-competitive’ will offer the biggest bang for the buck, since assistance might make a difference in regaining market share against comparable imports to the U.S. and in developing export markets overseas.”
Take the furniture industry, for example. “Each month the [Bureau of Labor Statistics] publishes data on the changes in the price of imported household furniture, and data on the changes in the price of domestically-produced furniture. But nowhere can we find data on whether a table from China costs less than a similar table made in North Carolina, and by how much. Knowing the size of the price gap in furniture would make an enormous difference to a state like North Carolina, which has lost 60 percent of its furniture-making jobs since 20001, many to China. If the price differential is only 10 percent, then some of those furniture-making jobs might come back as exchange rates adjust or as wages rise overseas. But if the price differential is 40 percent, those jobs are probably gone for good, and would unlikely be helped even by strategic investment.”
