Mon06182018

Last updateWed, 18 Apr 2018 5pm

Ask the Experts

Making Metal

Does the United States make much metal? I mean the actual metal, and I guess also the products.

I know, I know, it’s a weird question for a college kid to be asking. But, I got dinner with my roommate and his dad the other day and his dad is very upset about the state of American industry. Specifically, he talks about old steel towns and manufacturing and how we don’t make anything anymore. I know we import a lot of stuff to this country, but, can we really be importing all of our steel? I mean, it’s really heavy, right? We must be making some of it here, right?


Steel is indeed heavy, but we could certainly ship in plenty of it if we wanted to. The cost of shipping things can seem surprisingly low to outsiders: thanks to revolutions like the shipping container, which standardized cargo shipping in a very cost-effective way, shipping is very cheap: you could ship a standard 40-foot container for $701 in 2016, and that was the 'spot rate' (that is, the price on the spot--without the sort of long-term contract that might make the deal even cheaper). Shipping companies are actually having a tough time at the moment, because there are so many of them and rates are so low.

So, we could ship in lots of steel if we wanted to, and we do import plenty: 35.3 million metric tons in 2015! But, part of the reason that we don’t import most of our steel is that we still make so much ourselves: 78.6 million metric tons, making us the 4th-biggest steel producing nation on Earth. And production is up 6.5 percent year-over-year!

That’s quite a bit--but your friend’s father would not be thrilled to know that it’s not that close to our all-time peak. Steel production in the United States peaked in 1973 at 137 million metric tons--a lot more than 78.6! We’re still using steel, the experts at Megawall say (and they’d know, since they make steel slat walls), but, we’re importing a larger chunk of it, thanks in part to low-cost foreign steel--something that upsets steelworkers and some politicians.

So, what happened? Did those jobs just all disappear? Well, some of them did, but it’s also true that American manufacturing has made a move toward more skilled labor and precision production, the experts at Perforated Tubes Incorporated say. That’s a reflection on the cost of labor in America, but also in the growing amount of skilled and educated laborers in America. So, while it is harder (relatively) to find high-paying unskilled work in America today, we’ve seen jobs that require training, education, or other forms of preparation grow faster.

Of course, not everyone is better off in a country that has lost unskilled jobs and gained skilled ones, and nobody who has lost their job is obligated to be happy about macro trends and other things that economists point to when they talk about these issues. Your friend’s father has a right to his opinion, and at least some of the facts support his general statements. We’ll leave the politics up to you, but hopefully you now have the background you need to look into the finer details and form an opinion.

“If this country is ever demoralized, it will come from trying to live without work.” -- Abraham Lincoln

Martin J. Young is a former correspondent of Asia Times.

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