 Hi everyone. Thanks for coming to this year's undergraduate economics club debate. The topic this year is Is it in the best interest of the United States for manufacturing jobs to return? So the format of this is going to be that The each team is going to get 15 minutes to present With three members each presenting for five minutes There will then be a brief deliberation The teams will then get nine minutes each for rebuttals with with three members for each presenting for three minutes There will be a brief Q&A for the judges At which point there will be final statements five minutes from each team at which point the judges will Deliberate and announce winners I'll be keeping time. I'm Tom Peek by the way class of 2013. I'm going to be the moderator Judges are Michael Ash, Jerry Friedman, and I'm sorry. I just met you Yeah, okay and For the affirmative Great, okay. Well, let's get started. Oh, one of the teams needs to go first. Oh Okay, so I'm gonna talk about the concerns of off-shoring Which there are many one is that off-shoring can lead to a higher semi-permanent unemployment Jobs that move offshore generally don't come back This is because it's less costly For firms to operate outside the US as they can pay off-shore workers lower wages and operating costs are also more economical outside the US Unemployment rises when jobs move offshore and new jobs aren't being created in America This leads to a higher base unemployment rate becoming the norm for the US As this graph depicts US manufacturing output has been increasing while US manufacturing employment has been decreasing Manufacturing jobs tend to employ members of the lower class Which means that this increase in unemployment is affecting the lower class more than the upper class This leads to an even wider gap between the rich and the poor thus increasing America's already outrageous wealth inequality Another issue with off-shoring is the loss of intellectual capital The off-shoring movement originally intended to only offshore low-skilled jobs So that the US could retain the more highly skilled jobs as an important asset for the advancement of our economy However, many emerging economies have been working hard to build up their own intellectual capital This has led US firms to outsource jobs for Accountants engineers and IT specialists because it costs them less than it would in the US Once a skill has mostly moved offshore it can be difficult for a country to regain it Over time there will be fewer people in the US who have that skill and thus fewer businesses that can perform that job Less job opportunities mean fewer students in the US will study that field And with less people studying the field we lose out on our ability to innovate in that field as a country Another issue with off-shoring is the loss of manufacturing capacity to our country When firms set send manufacturing jobs overseas the US loses those opportunities at home This results in a decrease in the overall manufacturing capacity of the United States This decrease causes the government to defund research and development spending in the manufacturing sector In turn this causes us to lose education opportunities and progress as a country Another concern with off-shoring is the inefficiencies with the supply chains that firms will run into When firms employ workers overseas to manufacture their products They risk running into these inefficiencies with production and the delivery process in 2011 the consulting firm Accenture surveyed 287 major companies and found nearly half to be suffering from Cycle or delivery time problems and quality issues due to off-shoring Firms that offshore their manufacturing often end up having to wait weeks or even months for products to arrive by container ships For example, a couch from China could take up to six weeks to arrive to the US While one from Mississippi would take seven to twelve days to ship a prime example of The destruction that off-shoring can cause to the US is the city of Detroit This is what happens when cities that were built on manufacturing jobs have those jobs taken away On the left is a photo of Detroit in its prime full of people and jobs and with a thriving Manufacturing sector that flourished the economy On the right is Detroit after manufacturing jobs moved offshore. It's clearly in shambles desolate and broken down The unemployment rate for Detroit in February 2017 was estimated to be at 12 percent These reasons are why off-shoring is bad for the US So I'm going to talk about some of the benefits that the US would experience if we were to reshor our manufacturing jobs The first is increased employment economic growth and tax revenue Reshoring will create millions of US jobs, especially for the working middle class Which will therefore increase employment the reintroduction of reliable well-paying jobs amounts to an effective Distribution of wealth returning economic stability to the middle class This leads to increased purchasing power to the average consumer and increased demand for quality Goods that can be made in the United States These new jobs will increase consumption Increase GDP and facilitate economic growth, which will benefit everybody Reshoring will increase domestic tax collection US corporate profits as a percent of GDP have rapidly been increasing While US corporate taxes as a percent of federal revenue have been steadily declining This disparity is is clearly concerning because if profits are increasing tax revenues should be increasing as well But due to the fact that a majority of our manufacturing is done off-shore The majority of the tax revenue paid by these companies goes to foreign countries instead This recovered lost tax revenue can be used for a number of beneficial government investments Another benefit is increased monitoring and higher quality control Products that have been reshored were found to be of higher quality meeting both company and consumer expectations Not only our products of higher quality, but they're also much more safe because production is monitored more closely Products that have been off-shored have quality issues as well as safety issues for example in 2010 the consumer Product Safety Commission recalled more than two million cribs Made mostly in China Thailand Mexico Indonesia and Croatia for safety defects leading to at least 32 infant deaths These cribs were probably produced for a much cheaper price than they would in the US But at what cost the cost of innocent infant lives Reshoring will bring cheaper more reliable shipping to consumers as well as Significantly decreased shipping costs and shorter supply chains for firms by reducing supply chain sizes. You're reducing inefficiency Reshoring will bring products to the market at a much faster speed by locating closer to their customers and using local suppliers Companies are able to reduce the risk of interruptions to the supply chain two incentives that firms are Experiencing to reshor their manufacturing jobs are cheaper natural gas and avoiding rising wage costs off-shore US has experienced a decline in the cost of natural gas at the same time other countries that we outsource Manufacturing jobs to our experiencing an increase These extremely low natural gas prices give the US an advantage on cheap energy input costs While other countries energy costs are much higher and therefore inefficient compared to energy costs in the US in Recent years manufacturing wages have been steadily increasing in developing countries For example, China has a 17% growth rate compared to the US wages Which have been growing much more modestly at about a 2% growth rate in the early? 2000s it was common for companies in the US to save about 25 to 30 percent on Manufacturing by moving their plants to China This number is no longer a reality as the gap in labor costs has narrowed down to nearly one-third of what it once was China isn't the only country whose manufacturing wages have increased Mexico and many other countries Manufacturing wages are also increasing these increases have become a clear trend in the countries We used to turn to for the cheapest labor costs the differential factor between Factory wages in developing countries in the US is expected to eventually disappear The future cost of operating overseas will soon be equal and may even eventually exceed the cost of operating domestically You can see on the graph that by 2025 there is an extremely small gap between the Manufacturing wages of China and the US and you can also see that those two lines will intersect eventually While wages may be higher in the US right now When a company considers all of the current and future costs of operating overseas the domestic costs may in fact be lower When you think about bringing back manufacturing jobs, this might be what you think of But we're talking about not bringing back old jobs, but modernizing manufacturing. These are jobs For an educated workforce. We propose a committed public investment in our future in our infrastructure and education systems In our ports highways water treatment systems and airports All of these are necessary to regrow and secure a healthy economic future We are currently facing historically low interest rates and that with rising overseas wages as Jackie just demonstrated Make today the right time to invest in ourselves Because investment in these basic infrastructures creates growth twice immediately by creating jobs to do the rebuilding and later because only with a functioning foundation Can we expect domestic commerce to thrive? Instead Investment infrastructure is falling. We're facing massive funding gaps unable to even maintain the infrastructure. We have let alone build better in modernized infrastructure if Despite public neglect private companies were finding reasons to begin reshoring Wouldn't that be strong evidence that perhaps with a little support efforts to create more manufacturing at home? Are pretty economically sound? Some companies in fact are despite our crumbling infrastructure because the benefits are becoming apparent Here's how it's already underway in the private sector Companies are investing in their own supply chains. They call what they're doing co-innovation. It's a cooperative tight-knit partnership Between original equipment manufacturers and their suppliers This looks a lot like information sharing Collaborative problem-solving a relinking of research with development rather than someone at a desk in the United States designing a product Without contact with the people in the day-to-day manufacturing Aspects of supply are working together to reach greater flexibility and a competitive edge Some companies in the process of reshoring have developed programs with community colleges Near their plants to create certification programs that offer education with the promise of gainful employment If private industry is doing this surely governmental support and educational programs could step up to support these desperately needed routes from college To actually having a job besides a job in the service industry For instance here is an engineering program at Tulsa Community College Tulsa, Oklahoma is home to high value Manufacturing industries such as aerospace transportation and electrical equipment Which makes sense because United States laborers are on average significantly more productive than their overseas counterparts Imagine what we could achieve with a public commitment to investment in Manufacturing infrastructure supporting a trend already proving viable to the private sector We propose research and development funding Tax breaks for manufacturing investments and preferential financing arrangements such as loan guarantees We would focus on historically manufacturing communities because the infrastructure does exist outdated as it may be And also because damage is done by neglect such as high local unemployment rates could be undone We would hope to see a burgeoning middle-class with a Increased quality of life. There's an expected 25% wage increase for jobs moving from service industry to manufacturing This is an increased purchasing power and it's employment for college educated Workers, which I think we all know we desperately need. Thank you All right friends family alumni professors fellow students good afternoon On behalf of our group. It is not in America's best interests for manufacturing jobs to return I would like to thank the economics department for having us here today And without further ado, I will begin by introducing our position So today we're discussing the topic of whether or not it is in the United States best interests To bring back the jobs that have already left or that have been replaced with automation Whether or not manufacturing jobs could have been saved in the past today They are almost entirely not coming back. How do we know this? Well in recent years some factories have been coming back But the jobs haven't because of rising wages in China And the need for shorter supply chains are growing number of companies have shifted some production back to the u.s Such as Boeing Chevrolet and google to name a few However The factories that they built here are heavily automated and they only employ a small fraction of the workers that they would have a generation ago This displays how labor intensive manufacturing is rapidly Disappearing and modern high value manufacturing requires few workers It's understandable that the u.s citizens in places like eerie pennsylvania To be angry that their manufacturing job jobs are being replaced with automation But the fact of the matter is we are going a major structural shift in our economy This has happened throughout america's history. For example in the early 20th century We switched from an agricultural company agricultural based economy to an industrial economy During that time farmers were first forced to bear the burden of change Today we are switching from an industrial economy to a service based economy And industrial workers are now getting burdened with that change Our group however Acknowledges this dilemma and will offer solutions to the job loss So I will now turn our presentation over to my colleague chris Who will explain the topic of structural shifts that our economy has to overcome all right I'd like to introduce our first main argument that our economy is Structurally changing and not exactly failing. We've shifted from Previously in the past. We had shifted from an agricultural economy to an industrial economy and now we have shifted from The industrial economy to a post industrial or service economy services Since world war two have grown at a much faster rate Than manufacturing And has grown steadily with the only slowdown during the great recession in 08 And while the economy has shifted away from manufacturing other other industries are growing such as service industries As you can see there And services have eclipsed manufacturing and growth since about 1958 And manufacturing has become A smaller portion of our economy. It's basically stagnated at a below 20 or 20 million workers Over the past 70 years The only recent drop has been during the recession The service and at service employment though has grown at Parallel rates to all non-farm employees This kind of shows our comparative advantage where we're no longer really Industrial manufacturing economy and more of a service-based economy Today 3.5 million more americans work in retail than in manufacturing. This shows A direct shift from an industrial economy to a service-based economy Employment manufacturing Basically since world war two has stayed stagnant until about 1998 when They were Retail and manufacturing were roughly equal And then since then Retail has overtaken manufacturing This shows how this shows how We have really shifted from industrial to a service economy and they only shift we can See in or drop in Employment in the manufacturing sector came around the dot-com crisis and dot-com bubble So that leads into Lee in this point So In in the introduction my opponent brings up manufacturing research and development This is the result of manufacturing research and development This is a charlie chaplain with a hammer meeting the hydraulic press So manufacturing value added between 2008 and 2015 the u.s. Is value added manufacturing adjusted for inflation It was 2.3 percent In 2015 it was 12 percent of gdp I'd like to bring up canada brazil Japan the united kingdom Are these failing economies? Are these economies in decline? No Now there are we they're going slower than we are In terms of uh their manufacturing growth is slower than ours and Manufacturing clearly does not a strong economy make all right. So you just heard a lot about employment I'm going to talk a little bit more about output um All employees manufacturing that blue line. That's one you saw in the previous uh for chris's slides um These are index 2005 so the crossing line doesn't really matter. It's just to compare these two sets of data I want you to really pay attention to though to the directions and rates of these two. It's very clear Employees down manufacturing up. We saw this in their intro slides This is I mean from this graph you might even think that the fewer employees the higher output Um, should we bring manufacturing jobs back? Not if we care about output Or employment as we saw because clearly there's not the correlation. They're not the factor of growth In these economies in this economy And finally we can zoom out to the big picture. This is output usa And manufacturing output as you can see Like we mentioned it's still growing manufacturing output has not declined since uh 2008 and It is only rising it is rising though at From this graph it looks to be about just about half the rate of total uh gross output Um, and these are also indexed so don't pay attention to the fact that it looks like it's 60% of output is manufacturing As we saw before it's only 12 percent um Manufacturing clearly has stagnated Services are where our country is growing And if our goal it really is to prop up our stagnant manufacturing industry We'd have to do one of two things. We'd have to either one sacrifice on labor Standards on labor standards to make ourselves more competitive on the global market Or to employ damaging policies at the expense of our successful service industry Like protectionism or tax favoritism here to talk about just how bad those ideas are Harry So far we've explored a lot of the uh, why manufacturing jobs need are out Need not return. Let me touch on what the how of return would entail So there are a handful of tools which have been employed in the past to encourage a return of jobs domestically And they all say are they all aimed for the same ill advised goal and they all fail to achieve that goal Uh with the president's campaign promises in mind. Uh, let me start on the problems facing the protectionist approach Uh a 1984 report to the f t c uh reported that the us economy was losing 12.7 billion dollars due to its level of protectionism Which is about 31 billion dollars in today's uh, today's money At that point in time the average tariff rate on industrial goods was about 4 And so this you can get a broad view of the us's history for context Trump's protectionist plan has evolved the blanket 10 tariff rate and he even offered about one point a Suggestion of a 35 tariff levied on mexico Now 35 might be unrealistically high but 10 might actually be necessary to facilitate a return of jobs in this manner And the costly 1984 tariff is a fraction of either of these amounts That could have cost the us economy in the hundreds of billions Or threaten a trade war specifically with china The idea behind protectionism is to artificially make foreign goods more expensive in comparison to domestic goods dangerous for the same reason that's that it's affected It has an immediate and tangible effect on prices in theory This could make domestic domestic manufacturing competitive though high prices could cause appreciation and a higher demand for imports So more perhaps moderate option as it's considered is uh tax incentives at the end of last year There was much talk about the regarding the success of the president elect and securing the return of 800 jobs from mexico to india Carrier agreed to bring these jobs back for seven million dollars in tax tax breaks tax incentives The burden on the taxpayers of indiana might be excused if it was funding an effective solution Uh to decreased employment However carrier actually has since downsized and has used that seven million to fund the construction Of a new automated factory that will make it profitable for them to operate in indiana Which is the point No profit maximizing firm as any us manufacturer must be will relocate to the us if it isn't profitable Self reports make it clear to self reports to this institution Their firms set up automated factories which lowered production costs and then as an added bonus They can label their products made in america and slap on an additional mark up to their prices And the majority of these jobs that do return aren't manufacturing at all For example sprint relocated a call center from india to the us which added 5 000 jobs, but all in service jobs So reshoring is not some patriotic silver bullet answer for a structural shift and Apple is a multinational corporation working with nine firms mastic and foreign whose title Employee in total employ over half a million people The upfront cost to relocate all of these would be astronomical and broadly infeasible as apple couldn't operate on the same Scale unless it increasingly automates in the fashion of other firms, which is self defeating Aside from that there would be irreparable damage done both economically and socially to the relations between the us and the world The best interest of the united states involved more than a short-sighted concern for employment in a stagnant sector of Its economy and now to further this point. I turn over to lizzie perum The number of people employed by the manufacturing sector is not a measure of us strength as a whole nor does it show Yes The number of people employed by the manufacturing sector is not a measure of strength of the us as a whole Nor does it show the strength of the us on the world market As stelliana pointed out whether or not those manufacturing jobs Can come back doesn't matter because they're really not going to come back Instead the us is going a basic structural shift like we did in the 19th century from an agrarian When we went from an agrarian economy to an industrial economy The united states and the world would not benefit much from protectionist trade policies This is because Manufacturing is improving the rest of the world And that's a thing that we shouldn't overlook When the us builds trade agreements They build labor provisions into those trade agreements into those laws As you can see from this graph according to the international labor organization the ilo The percent of trade agreements With labor agreements has been increasing overall every year Countries like bungledash are increasing stakeholder involvement, which has led to improved labor inspections In countries like cambodia the cambodia us bilateral textile agreement of 1999 Created positive incentives that decreased the gender wage gap But overall these labor provisions in free trade agreements have increased female labor force participation As you can see in developed countries the trend is up and for not developed countries The trend is also up for female labor force participation This affects people like shumi and minu Shumi and minu work operating sewing machines at deluxe fashions limited in chitagong bungledash I found them on npr's planet money t-shirt project and they each now make about 80 a month When shumi and minu were growing up sometimes there wasn't enough food to eat Now shumi and minu are able to send money home It's not a lot of money. They make 80 dollars a month, but it makes a big difference in their village Now they can eat whatever they want Their quote and their parents have enough money to build a new house This time made of bricks not bamboo their brother Is now staying and minu dreams for her daughter and she's hopeful that her daughter can also stay in school If goals for a world include increasing global wealth increasing quality of life and increasing freedoms in democratic institutions Then it is clear that the u.s. Should not increase manufacturing jobs within our borders Instead the u.s. Should encourage free trade around the world helping its own citizens retrain to better jobs Thank you Okay, so now we're going to take five minutes for the teams to craft rebuttals because the Affirmative team went first In the first round they will go second in second round. So you guys will have your rebuttals first There will be three rebuttals three minutes each all right Now we're going to hear A series of rebuttals from each team starting with the negative So as we heard from the affirmative team, they brought up the concerns of off-shoring And how reshoring uh would increase employment So even if reshoring picks up steam, uh, manufacturing is very unlikely to Recapture the height of 1950s manufacturing employment when more than one in three Americans were employed working the line Now insourcing's potential isn't so much about new manufacturing jobs New advances in technology have also made american production cheaper With increasing productivity and shrinking the labor as a share of total costs So even if we do reshor these jobs that have left we're only reshor reshoring a fraction of the number of jobs They could go into service jobs rather than manufacturing jobs So instead of hiring low-cost chinese workers companies now use even more low-cost american machines. So automation 3d printing for example is a part of a hot new trend in additive manufacturing Where 3d objects are built through successive layering of materials from a computerized blueprint Now not only does this technology erase the lag time that you guys brought up between thinking and making and It's important. It's portable and it's absurdly cheap For about $1,500 a desktop 3d printer can eliminate the need for a chinese factory Along with its attendant headaches like you brought up So I think she really touched on the effects of employment The effects it wouldn't have on employment I talked about reshoring having increased increasing the gdp consumption and growth, which is Fine it but that again it would not be jobs because those companies that do reshor Do it through automation which is being said Tax collection as well How if tax breaks are the reason that companies are returning? How would that increase tax collection? That uh, according to the balance.org over 50 percent of corporations usually called escorts Pay no taxes whatsoever in the u.s. Already and through tax incentives The corporate tax rate which is currently 38 percent, but it has an effective tax rate of 15 percent It's already incredibly low And we've seen that this is it does not actually stimulate further investment past a certain point It would not encourage companies to come back except to take advantage of those tax breaks Again because they need to be profitable. They're not going to bring it back unless they're making money off someone else and that would generally be through their lower Uh through lower tax rates Being offered to them. That would be just a burden. It would be the u.s. Public propping up propping up these companies which otherwise could not make a profit or again They would not at all increase jobs It would just it could possibly in a short term increase manufacturing production or the number of firms But not jobs, which is the key point Turn over to Liam My points are two fold and brief One just on the supply chain question diversification of a supply chain having your factories in many different places around the globe is actually an important part of Intelligence supply chain design Due to weather and political conditions in different countries such as the monstons using in southeast asia It's not smart for most companies to have factories all in one place That's why moving them around and having multiple across the globe is More common in the manufacturing industry and on the point of the our imports and The times to receive things in the u.s. The united states actually has one of the most inefficient Shipping industries or import industries in the world Related to our size and that is because of the very very powerful shoreman's union Now if you want low automation There you have it the reason that we have such a long wait time between getting things from abroad is because the shoreman's union Has political clout and keeps automation at bay making things more less efficient Also a final point In the opening slides from the opponent There was a graph that looked something like this And it's not important that you see exactly what it says, but it's a gradual uptick in In wages in manufacturing in china and the usa way above it at a line straight line That graph is misleading because it only shows up to about 2015 Where it chinese Wages are about a little just a little five dollars and then assumes it's going to increase exponentially so China's wages are increasing up to five dollars. They're less than five dollars in 20 in uh, so yeah 2015 If they will increase increase exponentially Then yes, it's reasonable to bring jobs back otherwise That's fabrication. I'd like to first start off by saying that graph went up to 2025 Not 2015 So that's 10 years later Okay, so that's predicted data Okay, so All right. I'm also going to talk about the service-based economy Um, they say that we have shifted to a service-based economy, but I don't think it has to be like that um You see today even though they have decreased Um, we still employ agricultural workers here in the united states I don't know. I just drove past like a bunch near that farm over there I don't know if you saw them, but they're still here. They're still here So I believe that we can also keep manufacturing jobs here and not just the automated ones the ones where real people come back um If there is this shift from service to service jobs and not a loss, why is there not adequate pay for these workers? Um, for example the federal minimum wage for waiters and waitresses is just above two dollars I don't think that that is a viable shift I think that that shift is happening and it is there and it is true, but I don't think it's a good shift um And I don't think this economy is failing as they stated I think it's slowly bouncing back from a recession and I think that it would be in our best interest to bring jobs back And that would help us bounce back from that recession So as Jackie just said there still is a role for agriculture in our economy today And we do foresee an equally important role for manufacturing, but just not the role that it has currently um That's not the rebuttal i'm here to talk to you about but um In their slides harry brought up that there were potentially damaging policies that would result From bringing manufacturing jobs back under a protectionist regime mainly increased tariffs But that's not what we're proposing and those are not the jobs that we want to bring back Industrial policies should promote should aim to promote technological innovation And what are the policies that we're suggesting are increased r and d funding for manufacturing jobs high value manufacturing jobs, which we can do well Um, which would spur innovation um, also preferentially preferential financing arrangements like Loan guarantees or things like national loans to many two municipalities, which would then further spur investment on multiple levels So these are not damaging policies that would be enacted These are policies that would spur Our government and create the kind of jobs that we want to create which are high value Technologically advanced manufacturing jobs Thank you When it comes to automation, uh, we aren't talking about suppressing artificially suppressing technology You say there's no jobs in manufacturing and then you go talk about labor protection for manufacturing workers abroad Which as we talked about with our wages are we don't need to suppress our wages to stay competitive We need to stay steady like we are because these developing countries wages are rising so rapidly um Because america is such a large consumer and because of the costs of importing It makes a lot of sense If wages are relatively similar To be producing at home We've already talked about Shipping times It's very expensive to keep high inventories in order to be flexible with shipping times It creates a higher barrier to entry in the market for new suppliers and it would be more efficient If we were able to cut that down by having producers locally domestically Uh So that's the end of the presentation portion of the debate at this point the judges have a few questions for the teams Okay So I have a question for the negative Which is um About the relationship between the service industry as not necessarily a replacement but a shift from a manufacturing industry So can they be considered? um a one-to-one shift and if not either What needs to be done to? bring The actual standard of living and the wages of the workers Up to a comparable level Or if there are additional benefits to the service industry now, what are they and what are their broader implications? Oh I'm gonna if you yeah So you're talking about a one-to-one shift specifically and how wages can increase correct just to make sure I have every point I Think but partially it's been this has been the key point of maybe miscommunication between ourselves and our opposition We're not saying that Manufacturing jobs That we should just forget about those jobs But it's it's important to say we're not losing the total number of jobs There are more jobs available than ever But they are high skilled jobs and those jobs that would return If they are returned. I'm not saying directly through tariffs. That was just one point, but tax incentives are voluntarily however they return Just because of operating costs. They're not going to be the blue collar average everyday jobs They are going to be as you said high value high technology jobs Those are not low skill jobs. Those are not the same thing So to get back to what you're saying more jobs are being created than lost But there is this skills gap that is growing that's going to be the real question What we really should be talking about is how do we close that gap? How do we get all of these jobs that are available? In the hands of these workers service jobs don't just mean you chose a very specific example of a a waiter or a waiter a waitress who does not accept a minimum wage That is not First of all, that is not characteristic of most service jobs and again the service jobs are It's a difference between a high skill job and a low skill job. That's what the the gap is manufacturing jobs leaving are not It's not that people are being deprived of opportunities. They once had it's now There are new opportunities of a different factor and you have we have to get workers to meet them through various training programs such as there's tech higher communities that are going across the u.s it's not so It's not exactly a uh, we're not in a bad situation Which is hopefully what we've shown so far the manufacturing sector is strong. It's productive. It just doesn't offer jobs anymore These workers will still have opportunities And it's just it again. It's education. It's not a loss of Opportunity or lowering standards. It's the standards are higher. We have to make sure that workers can meet them Thank you Hi, I'd like to compliment both teams for very really excellent presentations. Thanks. I enjoyed them a lot I have questions are sort of two faces of the same coin So I want to pose a question to the affirmative side I would like to pose to you the question of um, you said a number of times that the losses are irreversible Once gone, why do you think we should just why do you think they're irreversible? Don't you think we could just you know not have manufacturing now But have manufacturing again later if the if the time were ripe And the other side of that coin is I want to ask Oh, I'm sorry. I want to ask you their reversibility question Because I want to ask you their reversibility question Do you do you think that the losses are reversible because I wanted to ask the affirmative side and ask when will we be done? you've proposed policies to Save to secure manufacturing Are we're going to run these forever? They sound pretty expensive Do you think there's a time when we'll when we'll be done or does the manufacturing need kind of constant cultivation and constant Possibly expensive upkeep. So, sorry. Let me clarify the question for the negative Side was on irreversibility. Do you believe that the losses are irreversible or that maybe manufacturing will come back when the time is right? So on the point of manufacturing being coming back Of course, it's possible anything is possible. The red sox won the world series. Um, it's It's uh, whatever Whatever I That too We've seen structural shifts in our economy over The grand history of the united states from agrarian to industrial to manufacturing to services What's beyond we don't know could it go back to manufacturing sure it could go back to agrarian too But that's just it's not relevant at this point because right now we're facing this shift and we're seeing opposition to that shift Um Bringing them back Is will some come back? Yes. Is it something that we should artificially? induce No, we should let the passage of time Take its toll where it needs to and bring us boons where it will and Whatever comes in the future. We will let that happen too. We need to adjust. We can't force The world to adjust for us Thank you I just want to make sure that I address every point. Could you just repeat the question one more time? Right, definitely so The point that we're arguing is that we want to bring many we want to increase the manufacturing jobs here now And the point is is that we have a Severe lack of public infrastructure there We saw with our slides that the amount of public spending on these areas is lacking We need renovations in these sectors and as well as there are future opportunities for manufacturing in the united states in things such as transportation and high value Manufacturing like we've been saying um For the future We want to invest in these sorts of high value manufacturing that can see growth over the future We don't want to be bringing back these textile jobs that have course sort of run their route And now it's a race to the bottom and these companies are just trying to produce as cheaply as possible Those aren't the jobs that we want. We want jobs that can grow and that can produce growth over time like these investments in infrastructure and our public transportation system which Badly needs the investment and would produce manufacturing jobs Those are the kind of manufacturing jobs that we're talking about and that we want to see bring back And there is a future for that if we want to be getting around publicly. Thank you Okay, I have a question for the affirmative and the negative as well um standard trade theory going back to riccardo would say that Comparative advantage countries should specialize in whatever it is that they're relatively good at so The united states is relatively good at making disney movies. We should make disney movies and we should let china Make cheap plastic things that break all the time So to the affirmative What's wrong with this theory? I mean Let mexico make cucumbers china make cheap plastic things and will make higher education and disney to the negative Do you really think that this describes the world where The united states has a multi hundred billion dollar trade imbalance the rest of the world loves getting our dollars and giving us real things for it countries manipulate their currencies and Build roads to facilitate production in different places. Um, so Yeah, if comparative advantage theory is wrong then maybe they're right If comparative advantage is right, then Maybe you're wrong. I'll let you deal with that. Thank you Thank you for your question um, I agree that comparative advantage is A thing that we use in our economy and it does help us out with certain things But I do not agree that buying cheap plastic things that break made from china Is a very good use of comparative advantage. I believe that the u.s. Could have a comparative advantage in many different Factors and ways and it doesn't just have to be service industry It doesn't just have to be making disney movies if we want the u.s. To thrive and we want to be the best economy in america We should try to have a comparative advantage at everything and I think that especially having a comparative advantage with manufacturing Like we used to I believe that we could do that again and I believe that would be definitely viable and The reason china makes cheap plastic goods that break is because people want to buy cheap plastic goods that break and so the question isn't Should these be made the question is who is going to make them? And so the question is do we want our People in the united states to build these cheap plastic goods or do we want people in china to build these cheap plastic goods? If in the u.s. We were to make these we would have to lower our labor standards It would be too expensive to build cheap plastic goods whereas in china as their Wages increase as was shown by the other side They can make those cheap plastic goods and people can still buy them furthermore trade imbalances are not necessarily something that is bad just because we define gdp and economic growth as Imports and exports doesn't mean that it's actually a good measure of why the economy is strong or weak Just because we bring in stuff from other countries doesn't mean that we're weak We produce 90 percent of the rice consumed in japan alone Things like this are the reason that The u.s. Economy is strong and we should not continue to make cheap Chinese goods, but instead we can use cheap chinese goods So I just spoke to the judges and we're actually running a little ahead of schedule So we wanted to open it up and see if anyone in the audience has a question that they'd like to ask Sure, come up Corporate greed and increased profitability That was a factor in an incentive to move jobs from the united states overseas Sure, so the question was about whether the teams had looked into uh, what factor Corporate greed and increased profitability played in uh, the moving of Of jobs overseas. Uh, I guess I'll give each you a chance to respond Yeah, we we didn't necessarily use the words corporate greed. We definitely looked into it. Um, it's just very briefly Yeah corporate greed That's what it is uh, corporations want to make money if they can make the most money in Vietnam or indonesia producing chashkis they will um And it's not necessarily even greed if a corporation is very well-meaning and still wants to produce chashkis Or that's their industry. Um, unless they want to switch industries, they're going to be run out of the business unless they produce Um, where they're going to be making the most money. So That's kind of the way we looked at it corporate greed definitely plays a huge role in this debate, but It's more of a question on the efficiencies of capitalism rather than the efficiencies of bringing manufacturing back Um, but specifically with regards to how it relates to manufacturing Um, it plays a huge role in these outsourcing and off-shoring of jobs um Companies want to avoid corporate taxes and so they move their plants out And also we see that because profit is the main incentive of our capitalist system That the markets do have a lot of inefficiencies We saw third as I think jackie said 32 children were killed after two million cribs were recalled that were poorly made in china taiwan and other Third world manufacturer Developing countries manufacturing So there are definitely flaws in our system But it's it's more a question pertaining to how should we reform the system itself to kind of internalize these these negative effects of Of profit as the main motive rather than Manufacturing but there are definitive flaws. Yes All right. So since that's the end of the questions, uh, we're then going to go into final statements Each team will have five minutes to present their final statement Starting with the affirmative Hello again So through our presentation, we have tried to show the cost of off-shoring These costs are higher semi permanent unemployment loss of intellectual capital A loss of manufacturing capacity which leads to loss of innovation domestically Supply chain inefficiencies as well as as you saw with our stark pictures The decay of modern or postmodern manufacturing cities like detroit that are now in that are not dilapidated So we're not trying to bring back these jobs. I think you guys got the gist of that now We don't want these textile jobs in america. That's not what we're trying to do when we say we should bring manufacturing jobs back to the united states The u.s. Has a role to play with high-value manufacturing Services may be a burgeoning part of our economy now and we may be shifting to a service-based economy Manufacturing is has lost its heyday, but there still is a vital role for manufacturing jobs to play domestically We won't reach past levels one in three workers won't be working the line as it was in 1950 and this is partly due to off-shoring partly due to automation and With regards to automation was so that which was a large part of their debate We wouldn't advocate to have a person work And toil when we could have a machine do it for us and be more efficient doing it Those aren't the kinds of jobs that we're talking about Um Through initiatives like the industrial policies we've outlined It is possible to create these manufacturing jobs domestically that we so desperately need We need investments into infrastructure and into public transportation That would increase economic growth and bring a lot of these manufacturing jobs back to united states As I said, these are not the textile jobs that we Used to have these are new jobs that we so desperately need Thank you I don't think anybody said it yet, but globalization lowers prices And if the goal for our world includes increasing global wealth Increasing quality of life around the world increasing freedoms and democratic institutions Then it is clear that the u.s. Should not artificially increase manufacturing jobs Within our borders instead the u.s. Should be encouraging free trade around the world and helping its own citizens To retrain to better jobs On the topic of corporate greed Uh, I studied abroad last semester in vietnam And there I learned that 60 percent of small businesses are running at a loss This means that when you go and get your lunch every day that all of those small businesses aren't making a profit That small families are going into debt To be their surface economy However with people like shumi and minu who happen to still be behind me They're 80 dollars a day means that they are making money This means that for them globalization has helped them out In terms of research and development The u.s. Has been stagnant in terms of research and development for manufacturing While the rest of the world, uh Have been responsible for 85 90 percent of r&d the u.s. Is only about 70 However, this statistic reverses when we talk about service economy research and development The research and development done in the u.s. Far surpasses the rest of the world when it comes to service economy research and development furthermore corporate tax breaks are Very problematic when it comes to improving, uh Jobs around the world according to martin neal bailey and barry p posworth Uh in their article u.s. Manufacturing understanding its past and its potential Uh corporate tax break policies are hard to enforce and invitation to arbitrageers Who seek ways to campaign to capture the gains from such subsidies with little or no change in real behavior this ends up with uh Uh lots of uh issues with This ends up with lots of issues with uh races to the bottom where countries around the world Compete countries like britain france and the united states compete for the lowest taxes Uh, you're right. Uh, there is an agricultural economy in the u.s. It says here in my notes that it accounts for 30 percent of the u.s. Economy. However that Uh 29.6 percent is heavily subsidized by the u.s. Economy and therefore runs at a large loss It used to be believed that increased technology would mean an increase in inequality. This was a really famous curve Back in the 80s. I'm sure uh michael ash or jerry freedman can help me out with the name of this curve What is it? I'm not going to try that The whose nest curve uh was then uh Proven to be wrong within uh 20 years of it being made people looked at it and they started looking at the way the world was actually Forming and they said maybe post world war two. This is how the world worked, but in uh more globalized economy This isn't how it works and for my final point I'd like to say that um if we are trying to increase Or if we're trying to look at detroit and trying to stop things like detroit from happening There are things that the u.s. Can do that do not involve globalization Things like michelle obama's initiative to lower regulation and barriers of entry for Accreditations would really change things regulations in the terms of uh Getting uh accredited in things like Cutting hair really mostly affect people like The servicemen people who are troops and the way that works is troops go from City to city to city around the u.s. And their spouses who are great at cutting hair have to get new beautician places Everywhere they go So if we want to help places like detroit, we can help regulations like that The u.s economy faces deep structural challenges We all agree stagnant wages rising inequality falling employment Rates and other things outsourcing presents an easy scapegoat And manufacturing in particular embodies something that seems to be disappearing in today's economy Jobs with a decent pay Thanks everyone the judges will now deliberate and they'll be back in a minute with uh their verdict Excuse me. Yeah. Thank you. Yeah, um God, I mean I've been watching these debates for a bunch of years and these two teams are the I don't mean to criticize your team when you Apparently at the time I was told I was sitting there in the front row making faces And disturbing people I'm I'm still sorry for that But these these guys did great both teams deserve to win But the judges after serious consultation with each other and everybody who was walking by in the halls Awarded to the affirmative Congratulations